The government will release the final rules for Goods and Services Tax (GST) on Saturday, moving a step closer to meeting its July 1 rollout target for the new indirect tax regime.
The rules will come out a day after the next meeting of the GST Council on Friday, Revenue Secretary Hasmukh Adhia told BloombergQuint in an interview, adding that these rules will cover areas like refund, registration, return procedures, valuations, invoicing and other such things.
He said the first set of rules are already out and “I don’t think there are any major problems”.
The rules are not so important except for the IT (information technology) system people, including the GSTN (GST Network).Hasmukh Adhia, Revenue Secretary
While the rules will be out by the end of this week, the decision on fitting individual commodities into different rate baskets will take longer. Adhia, however, is of the view that there isn’t much ambiguity on the rates that commodities will be subjected to.
“Rates are already known... the formula is already given. Whatever is the existing incidence of rates that you have, you can fit yourself into the nearest slab. 95 percent of rate fixation will be mechanical. Only in 5 percent cases, there may be reasons for putting it in a different slab compared to the one it is near to,” said Adhia. Rates are unlikely to be a major impediment in the implementation of GST, he said.
The government is looking at rolling out GST by July 1 and Adhia said he is hopeful of meeting the target.
Adhia said that the standard rate for services will be 18 percent. “On services, the present standard rate is about 15 percent... So by the same formula, it would go into the 18 percent band. Services on which some abatement is given at present, in order to take care of those abatements, we may have to fit them in a lower bracket,” he said. One example of this, he explained, is the transport sector where you can’t have a rate as high as 18 percent.
Adhia said that a single GST rate is not possible immediately and the government will move towards it gradually, which may take some years. Discussions on bringing items such as petroleum, real estate and liquor under GST will be taken up by the GST Council at a later stage, he said.
Commenting on the readiness of the system to adapt to the shift to GST, Adhia said that the GSTN is fully prepared and load testings are underway. He, however, said that the industry needs to be ready as well.
“We are more worried about business people’s IT systems being ready... I have been hearing on some TV channels that they need more time but let them say so to us,” Adhia said.
The Lok Sabha cleared the four laws supporting the GST on Thursday. These are: Integrated GST Bill, Central GST Bill, Union Territory GST Bill and the Compensation Bill. The GST council had cleared these laws along with the State GST Bill in its earlier meetings. The State GST bill needs to be cleared by state legislatures.
RECOMMENDED FOR YOU
POPULAR