The government has set 1 July as the deadline for the rollout of the goods and services tax (GST) from the current indirect tax regime. GST is set to subsume a variety of central and state taxes and make the indirect tax regime in India much simpler. The date for GST has been delayed multiple times for a variety of constitutional and political reasons. However, the meetings of the GST Council (comprising the central and state finance ministers) held on 18 and 19 May were significant and have paved the way for GST implementation by the deadline date.
The GST Council has met several times over the past year and had earlier approved the model GST laws to be adopted by the centre and the states, various rules and administration protocols. The major outstanding issue was the tax rates for individual commodities and services.
While the council had approved a four-band structure of rates – 5%, 12%, 18% and 28% – the application of the rates to specific goods and services was unclear. After the meetings on 18 and 19 May the council unveiled a comprehensive list of goods and services with rates, making the 1 July date for GST rollout a real possibility.
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L Badri Narayanan is a partner and Asish Philip Abraham is a principal associate at Lakshmikumaran & Sridharan.
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