New Delhi, Mar 17 (KNN) The Goods & Services Tax (GST) Council, which met on Thursday, cleared the (Union Territory GST) and SGST (state GST) draft bills. With this all the five enabling draft bills have been cleared which increases the possibility of rollout of the new indirect tax regime from July 1 this year.

Finance Minister Arun Jaitley said that the supporting GST laws will now be taken to the Union Cabinet and then to Parliament for approval.

He said the Council will now meet on March 31 for the framing of the rules for the ambitious Goods and Service Tax regime.

"The tax rates for various goods and services will be taken up after the framing of rules. Hopefully GST will be implemented from July 1," Jaitley said.

The cess on demerit goods has been capped at 15 per cent, Jaitley said.

With the approval of the five draft laws, the legislative action of the GST Council will be over, after which there will be another meeting for fixing the tax slabs - 5 per cent, 12 per cent, 18 per cent, 28 per cent.

The Council has approved raising the cGST, sGST peak tax rate from 14 per cent to 20 per cent each, amounting to a peak rate of 40 per cent.

The GST council also agreed on fixing the ceiling on cess that would be imposed under the new regime to fund compensation to states for any revenue loss, with luxury cars, soft drinks and mineral water facing up to 15% levy on top of the 28% GST rate.

The council has opted to levy cess on five category of products - pan masala, chewing tobacco and cigarettes, luxury cars, aerated drinks and mineral water, and coal and lignite - to create a fund with a corpus of around Rs 50,000 crore for meeting a potential liability.

The council has, however, kept the option of adding more items to the list later.

While the exact cess would be decided by the GST council when the rates are finalised, FM Arun Jaitley told reporters that the states and the Centre had given themselves headroom for the levy.

The cess would be applicable for five years, the period for which the Centre has committed to compensate the states for potential revenue losses. This period can be extended by the GST council. At the same time, all other cesses would be subsumed into GST.