NEW DELHI: India’s biggest tax reform took another key step forward with crucial legislation related to the goods and services tax being introduced in Parliament ahead of the government’s plan to roll it out across the country by July 1.Finance minister Arun Jaitley introduced four items of legislation that, among other things, provide for a peak GST rate of 40% and the setting up of an authority to protect consumers from profiteering by businesses. The four Bills—on Central GST Union Territory-GST and compensation — were tabled in the Lok Sabha and will be taken up for discussion by the House on March 29.The CGST Bill provides for ecommerce companies collecting tax at source at a rate not exceeding 1% of the net value of taxable supplies out of payments to vendors of goods or services through their portals. The passage of the Bills by Parliament will pave way for states to introduce state GST (SGST) Bills in their respective houses.GST is expected to boost GDP growth by about 2% as it removes inter-state barriers and turns India into single market, boosting efficiency and slashing costs.The GST Council decided on a four-tier tax structure of 5%, 12%, 18% and 28% to cover most goods and services. Besides, a cess will be levied on demerit and luxury goods on top of the peak rate to create a fund, the proceeds of which will be utilised to compensate states for revenue losses on account of the GST rollout.However, to obviate the need to approach Parliament for changing tax rates in case of exigencies or when the cess is removed, GST Council decided to keep the peak rate at 40% in the legislation.“The integrated goods and services tax bill provides for… tax on all inter-state supplies of goods and services or both except supply of alcoholic liquor for human consumption at a rate to be notified not exceeding 40%, as recommended by the GST Council,” said the statement of objects and reasons of the IGST bill.The 40% levy will be apportioned equally between the Centre and the states. Afew important changes have been proposed in the bills including zero rating of supplies to special economic zones (SEZs), introduction of duty drawback and the exclusion of Jammu and Kashmir from the definition of ‘India’ for GST purposes.“This is a welcome relief to the units in SEZs given the adverse impact on their cash flows in the absence of upfront exemption,” said Bipin Sapra, partner, EY.As Jaitley introduced the bills in the Lok Sabha, Congress and Trinamool Congress protested, saying this hadn’t been listed on the agenda.Minister of state for parliamentary affairs SS Ahluwalia countered by saying the bills had been uploaded on the website at midnight on Friday. The opposition MPs objected to this, asking how the government could expect members to check the website at midnight and why the issue was not discussed at the meeting of the business advisory committee last week.Dismissing the opposition’s objections, speaker Sumitra Mahajan said the bills had been sent to MPs on Saturday morning and there was nothing wrong in these being tabled on Monday.The GST Council, comprising Jaitley and his state counterparts, approved the four bills over 12 meetings. The Council will meet again on March 31to finalise the rules and formats for the new indirect tax regime. Experts said they were looking for more details.“Clarity is still awaited on certain crucial aspects such as credit of tax paid on opening stock, anti-profiteering provisions, inter-office supplies and so on,” said Pratik Jain, leader (indirect tax), PwC.Deloitte Haskins Sells LLP senior director MS Mani said the introduction of the bills “marks the successful culmination of a series of steps taken by the government since August 2016 and it now appears certain that India is headed for a GST rollout from July 2017.”