The council, headed by Mr Jaitley and which comprises the representatives of all states, chose to levy a five per cent GST rate (2.5 per cent by Centre and 2.5 per cent by states) on small hotels, restaurants and dhabas with an annual turnover of up to Rs 50 lakhs. "If they are approved then, and I have every confidence that they will be, then four out of the five laws will be ready to be placed before the Cabinet for approval and then tabled in Parliament during the second half of the Budget session", he said.
This means the central GST and state GST can be up to 20 percent each, leaving the scope for a maximum levy at 40 percent.
"It looks like it's on track".
The change in the peak rate will not alter the four-slab rate structure of 5%, 12%, 18% and 28% agreed upon previous year, but is only a provision being built into the model law to take care of contingencies in future.
Meanwhile, commenting on the GST Council meet, Delhi's Deputy Chief Minister Manish Sisodia said the central GST and integrated GST legislations have been broadly agreed upon at the meeting today.
The Goods and Services Tax (GST) Council meet, chaired by Union Finance Minister Arun Jaitley, cleared the final raft of C-GST and I-GST law on Saturday.
Earlier this week, the Economic Affairs Secretary Shaktikanta Das (at a platform involving the OECD) said that both the Centre and State governments are working towards implementing GST by July 1, 2017.
Officials said this will now be changed to say the rate will not exceed "20 percent".
After rounds of discussion over revenue loss, the GST Council last month approved a law to compensate states for any loss of revenue from the implementation of the new taxing system.
The government is keen to roll out the new regime from 1 July for which it is likely to hold 12 GST Council meetings in the next week to discuss and get it cleared. States want the higher limit set at 40% to obviate the need to go to Parliament every time taxes have to be raised on certain goods and services. It has not been decided yet which tax rates will apply to which categories of goods.