Council clears draft law for compensating states' loss

The Finance Minister Arun Jaitley-led GST Council met on Saturday and finalised the Draft Compensation Bill, in a bid to speed up the rollout of Goods and Services Tax by July 1, 2017.

Crucial draft laws pertaining largely to Central GST (CGST), Integrated GST (IGST) and State GST (SGST) were approved by the panel. The Council also cleared the final drafting of the anti-profiteering clause to ensure benefit of lower taxes gets shared with consumers.

The GST Council will now meet next on March 4 and 5 to give final touches to the CGST, IGST and SGST laws. Speaking to reporters after the meeting, Jaitley said all the outstanding issues surrounding these laws would most likely be resolved at the next meeting of the Council.

"The GST's compensation law states that if any state suffers loss it will be covered in first five years. Its legally vetted draft came before the Council and was the first law formally passed," Jaitley said here at a press conference.

"Once all drafts are approved, we will place them in Parliament. In Budget Session's second half (that begins on March 9), all enabling laws under GST constitutional amendment should get approved," he added.

While legal vetting of the draft laws, some issues on the delegation of powers, exemptions during transition phase, work contracts, definition of agriculture, etc. were brought before Council.

"Today GST's legal committee sought explanation on these and the Council gave its opinion. These now have to be incorporated in the draft laws. March 4-5 the legally vetted drafts of these laws will come before the Council, which it will try to approve," Jaitley said.

The draft laws once passed by Council, will have to be passed by Parliament.

Simultaneously, sGST will have to be passed by state legislative bodies. Jaitley said after that the next step will be to slot commodities under the GST tax slabs.

"Each item has to be fitted under a particular slab. After the March 4-5 meeting, officers will start slotting the commodities and we will require another major meeting to give approval to the specific items in each of the slabs," the Finance Minister said.