The Union government has released the draft model laws for the central and integrated goods and services tax (GST) as well as the model law for compensation.
The model CGST law has proposed to include the rate of CGST and State GST and has capped it at 15 per cent.
Such rates as may be notified by the Central/State Government on this behalf, but not exceeding 14 per cent, on the recommendation of the Council and collected in such manner as may be prescribed.
Similarly, the IGST has been capped at 28 per cent in the related draft law.
With 27 chapters and nearly 200 sections, the draft model CGST law has also called for anti-profiteering measures to ensure that consumers get the benefit of lower tax rates under GST.
It has accordingly suggested setting up of an authority to examine whether input tax credits availed or the reduction in price due to lower rate have actually resulted in a commensurate reduction in the prices of goods or services supplied. It has also called for the authority to penalise any defaults.
Government services, including those for health and education as well as posts, have been exempted from payment of CGST.
The IGST draft law has also called for zero rating of exports of goods and services as well as for supplies to special economic zones.
Meanwhile, the draft compensation law has kept a modest revenue growth projection of 14 per cent and has a base year of 2015-16.
It has also called for levy of a GST compensation cess, which will be credited to the GST Compensation Fund.