Goods and Services Tax – GST Dated:- 3-5-2019 – News – GOODS AND SERVICE TAX (GST) CONCEPT STATUS CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC) DEPARTMENT OF REVENUE MINISTRY OF FINANCE GOVERNMENT OF INDIA AS ON 01st May, 2019 The uniform system of taxation, which, with a few exceptions of no great consequence, takes place in all the different parts of the United Kingdom of Great Britain, leaves the interior commerce of the country, the inland and coasting trade, almost entirely free. The inland trade is almost perfectly free, and the greater part of goods may be carried from one end of the kingdom to the other, without requiring any permit or let-pass, without being subject to question, visit, or examination from the revenue officers. This freedom of interior commerce, the effect of uniformity of the system of taxation, is perhaps one of the principal causes of the prosperity of Great Britain; eve
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paved making India an economic union. 2. CONSTITUTIONAL SCHEME OF INDIRECT TAXATION IN INDIA BEFORE GST : 2.1 Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. As per Article 246 of the Constitution, Parliament has exclusive powers to make laws in respect of matters given in Union List (List I of the Seventh Schedule) and State Government has the exclusive jurisdiction to legislate on the matters containing in State List (List II of the Seventh Schedule). In respect of the matters contained in Concurrent List (List III of the Seventh Schedule), both the Central Government and State Governments have concurrent powers to legislate. 2.2 Before advent of GST, the most important sources of indirect tax revenue for the Union were customs duty (entry 83 of Union List), central excise duty (entry 84 of Union List), and service tax (entry 97 of Union List). Although entry 92C was insert
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city tax ((entry 53 of the State List). CST was also an important source of revenue though the same was levied by the Union. 3. HISTORICAL EVOLUTION OF INDIRECT TAXATION IN POSTINDEPENDENCE INDIA TILL GST: 3.1 In post-Independence period, central excise duty was levied on a few commodities which were in the nature of raw materials and intermediate inputs, and consumer goods were outside the net by and large. The first set of reform was suggested by the Taxation Enquiry Commission (1953-54) under the chairmanship of Dr. John Matthai. The Commission recommended that sales tax should be used specifically by the States as a source of revenue with Union governments' intervention allowed generally only in case of inter-State sales. It also recommended levy of a tax on inter-State sales subject to a ceiling of 1%, which the States would administer and also retain the revenue. 3.2 The power to levy tax on sale and purchase of goods in the course of in
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ne-to-one correlation between input and manufactured goods for eligibility to take input tax credit. The comprehensive coverage of MODVAT was achieved by 1996-97. 3.4 The next wave of reform in indirect tax sphere came with the New Economic Policy of 1991. The Tax Reforms Committee under the chairmanship of Prof. Raja J Chelliah was appointed in 1991. This Committee recommended broadening of the tax base by taxing services and pruning exemptions, consolidation and lowering of rates, extension of MODVAT on all inputs including capital goods. It suggested that reform of tax structure must have to be accompanied by a reform of tax administration, if complete benefits were to be derived from the tax reforms. Many of the recommendations of the Chelliah Committee were implemented. In 1999-2000, tax rates were merged in three rates, with additional rates on a few luxury goods. In 2000-01, three rates were merged into one rate called Central Value Added Tax (CENVAT). A few commodi
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was levied in States since independence. Sales tax was plagued by some serious flaws. It was levied by States in an uncoordinated manner the consequences of which were different rates of sales tax on different commodities in different States. Rates of sales tax were more than ten in some States and these varied for the same commodity in different States. Inter-state sales were subjected to levy of Central Sales Tax. As this tax was appropriated by the exporting State credit was not allowed by the dealer in the importing State. This resulted into exportation of tax from richer to poorer states and also cascading of taxes. Interestingly, States had power of taxation over services from the very beginning. States levied tax on advertisements, luxuries, entertainments, amusements, betting and gambling. 3.7 A report, titled Reform of Domestic Trade Taxes in India , on reforming indirect taxes, especially State sales tax, by National Institute of Public Finance and Policy under
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A standing Committee of State Finance Ministers was constituted, as a result of meeting of the Union Finance Ministers and Chief Ministers in November, 1999, to deliberate on the design of VAT which was later made the Empowered Committee of State Finance Ministers (EC). Haryana was the first State to implement VAT, in 2003. In 2005, VAT was implemented in most of the states. Uttar Pradesh was the last State to implement VAT, from 1st January, 2008. 4. INTERNATIONAL PERSPECTIVES ON GST / VAT: 4.1 VAT and GST are used inter-changeably as the latter denotes comprehensiveness of VAT by coverage of goods and services. France was the first country to implement VAT, in 1954. Presently, more than 160 countries have implemented GST / VAT in some form or the other. The most popular form of VAT is where taxes paid on inputs are allowed to be adjusted in the liability at the output. The VAT or GST regime in practice varies from one country to another in terms of its tech
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n the national and sub-national entities (Brazil, Russia). While a centralized structure reduces fiscal autonomy for the States, a decentralized structure enhances compliance burden for the taxpayers. Canada is a federal country with unique model of taxation in which certain provinces have joined federal GST and others have not. Provinces which administer their taxes separately are called 'non- participating provinces , whereas provinces which have teamed up with the Federal Government for tax administration are called 'participating provinces'. 4.3 The rate of GST varies across countries. While Malaysia has a lower rate of 6% (Malaysia though scrapped GST in 2018 due to popular uproar against it), Hungary has one of the highest rate of 27%. Australia levies GST at the rate of 10% whereas Canada has multiple rate slabs. The average rate of VAT across the EU is around 19.5%. 5. NEED FOR GST IN INDIA: 5.1 The introduction of CENVAT re
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ry Tax, Entertainment Tax, etc. which have still not been subsumed in the VAT. Further, there has also not been any integration of VAT on goods with tax on services at the State level with removal of cascading effect of service tax. 5.3 CST was another source of distortion in terms of its cascading nature. It was also against one of the basic principles of consumption taxes that tax should accrue to the jurisdiction where consumption takes place. Despite remarkable harmonization in VAT regimes under the auspices of the EC, the national market was fragmented with too many obstacles in free movement of goods necessitated by procedural requirement under VAT and CST. 5.4 In the constitutional scheme, taxation powers on goods was with Central Government but it was limited upto the stage of manufacture and production while States have powers to tax sale and purchase of goods. Centre had powers to tax services and States also had powers to tax certain services speci
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et Management (FRBM) recommended in 2005 introduction of a comprehensive tax on all goods and service replacing Central level VAT and State level VATs. It recommended replacing all indirect taxes except the customs duty with value added tax on all goods and services with complete set off in all stages of making of a product. 6.2 In the year 2000, the then Prime Minister introduced the concept of GST and set up a committee to design a GST model for the country. In 2003, the Central Government formed a taskforce on Fiscal Responsibility and Budget Management, which in 2004 recommended GST to replace the existing tax regime by introducing a comprehensive tax on all goods and services replacing Central level VAT and State level VATs. It recommended replacing all indirect taxes except the customs duty with value added tax on all goods and services with complete set off in all stages of the value chain. An announcement was made by the then Union Finance Minister in Budget (2006-
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detail in the meeting of the EC on November 28, 2007, and the States were also requested to communicate their observations on the report in writing. On the basis of these discussions in the EC and the written observations, certain modifications were considered necessary and were discussed with the Co-conveners and the representatives of the Department of Revenue of Union Finance Ministry. With the modifications duly made, a final version of the views of EC on the model and road map for the GST was prepared (April 30, 2008). These views of EC were then sent to the Government of India, and the comments of Government of India were received on December 12, 2008. These comments were duly considered by the EC (December 16, 2008), and it was decided that a Committee of Principal Secretaries/Secretaries of Finance/Taxation and Commissioners of Trade Taxes of the States would be set up to consider these comments, and submit their views. These views were submitted and were accepted in principle
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onsumption of the goods or services takes place. The existing VAT regime was based on origin principle where Central Sales Tax was assigned to the State of origin where production or sale happened and not to the State where consumption happened. Many manufacturing States expressed concerns over the loss of revenue on account of shift from origin based taxation to destination based taxation. 7.2.1 An argument put forward on behalf of producing states in support of origin based taxation is that they need to collect at least some tax from inter-State sales in order to recover the cost of infrastructure and public services provided by the State Governments to the industries producing the goods which are consumed in other states. This line of reasoning is based on the assumption that in the absence of a tax on inter-State sales, the location of export industries within their jurisdiction would not contribute to the tax revenues of the exporting state. This view was missing the
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asked for compensation during the first five years of implementation of GST. 7.3.1 A Committee headed by the Chief Economic Adviser Dr. Arvind Subramanian on possible tax rates under GST suggested RNR (Revenue Neutral Rate). The term RNR refers to that single rate, which preserves revenue at desired (current) levels. This would differ from the standard rate, which is the rate that would apply to a majority of goods and services. In practice, there will be a structure of rates, but for the sake of analytical clarity and precision it is appropriate to think of the RNR as a single rate. It is a given single rate that gets converted into a whole rate structure, depending on policy choices about exemptions, what commodities to charge at a lower rate and what to charge at a very high rate. 7.3.2 The Committee recommended RNR of 15-15.5% (to be levied by the Centre and States combined). The lower rates (to be applied to certain goods consumed by the poor) should be 12
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rs would override the supremacy of the Parliament and the State Legislatures. The Constitution (One Hundred Twenty Second Amendment) Bill, 2014 departed from the previous GST amendment bill and proposed that the Goods and Services Tax Council may decide about the modalities to resolve disputes arising out of its recommendations. 7.5 Alcohol and Petroleum products: Alcoholic liquor for human consumption and petroleum products are major contributor to revenue of States. As States were uncertain about impact of GST on their finances and moreover loss of autonomy in collection of tax revenue, States unanimously argued for exclusion of these products from the ambit of GST. In the 115th Amendment Bill alcoholic liquor for human consumption and five petroleum products namely crude petroleum, high speed diesel, motor spirit or petrol, aviation turbine fuel and natural gas were kept out of GST. But in the 122nd Amendment Bill, only alcoholic liquor for human consumption was kept ou
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plete supply chain from production to distribution, and both goods and services. The scheme of the Constitution did not provide for any concurrent taxing powers to the Union as well as the States and for the purpose of introducing goods and services tax amendment of the Constitution conferring simultaneous power on Parliament as well as the State Legislatures to make laws for levying goods and services tax on every transaction of supply of goods or services was necessary. 8.2 The Constitution (115th Amendment) Bill, 2011, in relation to the introduction of GST, was introduced in the Lok Sabha on 11th March, 2011. The Bill was referred to the Standing Committee on Finance on 29th March, 2011. The Standing Committee submitted its report on the Bill in August, 2013. However, the Bill, which was pending in the Lok Sabha, lapsed with the dissolution of the 15th Lok Sabha. 8.3 The Constitution (122nd Amendment) Bill, 2014 was introduced in the 16th Lok Sabha on 19th
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s been omitted. The said article empowered the Government of India to levy taxes on services. As tax on services has been brought under GST, such a provision was no longer required. c) Article 269A has been inserted which provides for goods and services tax on supplies in the course of inter-State trade or commerce which shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. It also provides that Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. d) Article 270 has been amended to provide for distribution of goods and services tax collected by the Union between the Union and the States. e) Article 271 has been amended which
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services which have been subsumed in GST. j) Parliament shall, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for five years. k) In case of petroleum and petroleum products, it has been provided that these goods shall not be subject to the levy of Goods and Services Tax till a date notified on the recommendation of the Goods and Services Tax Council. 9. GOODS SERVICE TAX COUNCIL: 9.1 As provided for in Article 279A of the Constitution, the Goods and Services Tax Council (the Council) was notified with effect from 12th September, 2016. The Council is comprised of the Union Finance Minister (who will be the Chairman of the Council), the Minister of State (Revenue) and the State Finance/Taxation Ministers as members. It shall make recommendations to the Union and the States on the followin
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esel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services. 9.3 One half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings. The Goods and Services Tax Council shall determine the procedure in the performance of its functions. Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely: – a) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and b) the votes of all the State Governments taken t
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and payment of GST for suppliers of services would be ₹ 20 lakhs and ₹ 10 lakhs (in the States of Manipur, Mizoram, Nagaland and Tripura). 9.4.2.2 Threshold limits of aggregate turnover for exemption from registration and payment of GST for the suppliers of goods would be ₹ 40 lakhs and ₹ 20 lakhs (in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand) with effect from 01.04.2019. 9.4.2.3 The following classes of taxpayers shall be exempted from obtaining registration: a. Suppliers of services, having turnover up to ₹ 20 lakh, making inter State supplies; b. Suppliers of services, having turnover up to ₹ 20 lakh, making supplies through e-commerce platforms. 9.4.2.4 Taxpayers may opt for multiple registrations within a State/Union territory in respect of multiple places of business located within the same State/U
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the period July, 2017 to February, 2019 / quarters July, 2017 to December, 2018 by such taxpayers was extended till 31.03.2019. 9.4.4 Composition Scheme: 9.4.4.1 Composition scheme has been formulated for small businessmen being supplier of goods and supplier of restaurant services. Under the scheme, person with annual turnover up to ₹ 1.5 crore (Rs. 75 lakhs in States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand) needs to pay tax equal to 1% to 5% on his turnover and needs to file his returns annually with quarterly payment from FY 2019-20. 9.4.4.2 Composition scheme has been made available for suppliers of services (to those who are not eligible for the presently available Composition Scheme) with a tax rate of 6% (3% CGST +3% SGST) having an annual turnover in the preceding FY up to ₹ 50 lakhs. They would be liable to file one Annual Return with quarterly payment of taxes. This has been m
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5 crore shall be divided equally in the ratio of 50% each for the Central and State tax administration. 9.4.6.2 Powers under the IGST Act shall also be cross-empowered on the same basis as under CGST and SGST Acts with few exceptions. 9.4.6.3 Power to collect GST in territorial waters shall be delegated by Central Government to the States. 9.4.6.4 Power to take enforcement action over entire taxpayer s base would be with both Central as well as State tax administration. 9.4.7 Compensation to States: 9.4.7.1 Formula and mechanism for GST Compensation Cess has been finalized. 9.4.8 Reverse Charge Mechanism (RCM): 9.4.8.1 Levy of GST on reverse charge mechanism on receipt of supplies from unregistered suppliers, to be applicable to only specified goods in case of certain notified classes of registered persons, on the recommendations of the GST Council. In this regard, notification No. 07/2019- Central Tax (Ra
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b-section (4) of section 5 of the IGST Act, 2017 was kept under suspension till 30.09.2019. 9.4.9 Payment of Tax: 9.4.9.1 There shall be no requirement on payment of tax on advances received for supply of goods by all taxpayers. 9.4.9.2 A Group of Ministers constituted for promoting digital payment has recommended to allow cash back to an amount equal to 20% of GST paid or ₹ 100/-, whichever is lower for cases where payment is made by BHIM or Rupay card. The necessary infrastructure is being developed and soon the scheme would be implemented on pilot basis in State of Assam and few other States which volunteer for the same. 9.4.9.3 In principle approval has been given for amendment of section 50 of the CGST Act to provide that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the elec
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ed to file information in FORM GSTR-1 on a quarterly basis. Other taxpayers would have to file FORM GSTR-1 on a monthly basis. 9.4.12.3 The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 2018 shall be extended till 30.06.2019. 9.4.13 Late Fees: 9.4.13.1 Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B FORM GSTR-4 for the months / quarters July, 2017 to September, 2018 are furnished after 22.12.2018 but on or before 31.03.2019. 9.4.13.2 From October 2017 onwards, the amount of late fee for late filing of GSTR-3B payable by a registered person is as follows: a. whose tax liability for that month was 'NIL' will be ₹ 20/- per day instead of ₹ 200/- per day; b. whose tax liability for that month was not 'NIL' will be ₹ 50/- per day instead of &#
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made and received. The fields of information which a taxpayer would be shown and would be required to fill in the return would depend on his profile. 9.4.14.6 NIL return filers (no purchase and no sale) shall be given facility to file return by sending SMS. 9.4.14.7 There shall be quarterly filing of return for the small taxpayers having turnover below ₹ 5 crore as an optional facility. Quarterly return shall be similar to main return with monthly payment facility but for two kinds of registered persons small traders making only B2C supply or making B2B + B2C supply. For such taxpayers, simplified returns have been designed called Sahaj and Sugam. In these returns, details of information required to be filled is lesser than that in the regular return. 9.4.14.8 The new return design provides facility for amendment of invoice and also other details filed in the return. Amendment shall be carried out by filing of a return called amendment retur
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9.4.17 Export: 9.4.17.1 E-Wallet Scheme shall be introduced for exporters from 01.04.2020 and till then relief for exporters shall be given in form of broadly existing practice. 9.4.17.2 Supply of services to Nepal and Bhutan shall be exempted from GST even if payment has not been received in foreign convertible currency such suppliers shall be eligible for input tax credit. 9.4.17.3 Supply of services to qualify as exports, even if payment is received in Indian Rupees, where permitted by the RBI. 9.4.18 Rate of Interest: 9.4.18.1 Rate of interest on delayed payments and delayed refund has been recommended. 9.4.19 MSME: 9.4.19.1 A Group of Ministers has been constituted to look into the issues being faced by MSMEs and to provide solutions for the same. 9.4.20 Revenue Mobilization: 9.4.20.1 A Group of Ministers has been constituted to study the revenue trend, including analyzin
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st the amount finally apportioned. 9.4.20.4 Fifty per cent. of such amount, as may be recommended by the Council, which remains unutilized in the Compensation Fund, at any point of time in any financial year during the transition period shall be transferred to the Consolidated Fund of India as the share of Centre, and the balance fifty per cent. shall be distributed amongst the States in the ratio of their base year revenue. 9.4.20.5 In case of shortfall in the amount collected in the Fund against the requirement of compensation to be released for any two months period, fifty per cent. of the same, but not exceeding the total amount transferred to the Centre and the States as recommended by the Council, shall be recovered from the Centre and the balance fifty per cent. from the States in the ratio of their base year revenue. 9.4.21 Real Estate: 9.4.21.1 The GST Council in its 33rd 34th meetings held on 24.02.2019 19.03.2019 respecti
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id by the builder @ 18% on RCM basis. However, Tax on cement purchased from unregistered person shall be paid @ 28% under RCM, and on capital goods under RCM at applicable rates. 9.4.21.5 GST exemption on TDR/ JDA, long term lease (premium), FSI: Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such residential property on which GST is payable. 9.4.21.6 The new rate has become applicable from 01.04.2019. 9.4.21.7 One time transition option given to real estate firms to continue to pay tax at the old rates (effective rate of 8% or 12% with ITC) on on-going projects (buildings where construction and actual booking have both started before 01.04.2019) which have not been completed by 31.03.2019. Real estate firms can communicate their option till 10th May, 2019 to the jurisdictional officers. 9.4.22 Lottery: 9.4.22.1 The GST Council in its 32nd Meeting held on 1
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1 Scope of input tax credit has been widened, and it would now be made available in respect of the following: a. Most of the activities or transactions specified in Schedule III; b. Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft; c. Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; d. Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force. 9.4.24.2 The order of cross-utilization of input tax credit has been rationalized. 9.4.24.3 Commissioner empowered to extend the time limit for return of inputs and capital sent on job work, up to a period of one year and two years, respectively. 9.4.24.4 Place of supply in case of job work of any treatment or process done on goods
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s. 9.4.25 Others: 9.4.25.1 In principle approval has been given for creation of a Centralized Appellate Authority for Advance Ruling (AAAR) to deal with cases of conflicting decisions by two or more State Appellate Advance Ruling Authorities on the same issue. This would be implemented once the law is amended. 9.4.25.2 Existing tax incentive schemes of Central or State governments may be continued by respective government by way of reimbursement through budgetary route. The schemes, in the present form, would not continue in GST. 9.4.25.3 50% of the GST paid will be refunded to CSD (Defense Canteens). 9.4.25.4 Centralized UIN shall be issued to every Foreign Diplomatic Mission / UN Organization by the Central Government for handling their refund related applications. 9.4.25.5 There would be a single cash ledger for each tax head. The modalities for implementation would be finalized in consultation with GSTN and t
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el envisages that Centre would levy IGST (Integrated Goods and Service Tax) which would be CGST plus SGST on all inter-State supply of goods or services or both. The inter-State supplier will pay IGST on value addition after adjusting available credit of IGST, CGST, and SGST on his purchases. The Exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The person based in the destination State will claim credit of IGST while discharging his output tax liability in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST. The relevant information will also be submitted to the Central Agency which will act as a clearing house mechanism, verify the claims and inform the respective governments to transfer the funds. The major advantages of IGST Model are: a) Maintenance of uninterrupted ITC chain on inter-State transactions. b) No upfront payment of tax or substantial blockage of funds
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in case of which reverse charge would be applicable has also been notified. 10.4 Compensation to States: The Goods and Services Tax (Compensation to States) Act, 2017 provides for compensation to the States for the loss of revenue arising on account of implementation of the goods and services tax. Compensation will be provided to a State for a period of five years from the date on which the State brings its SGST Act into force. For the purpose of calculating the compensation amount in any financial year, year 2015-16 will be assumed to be the base year, for calculating the revenue to be protected. The growth rate of revenue for a State during the five-year period is assumed be 14% per annum. The base year tax revenue consists of the states tax revenues from: (i) State Value Added Tax (VAT), (ii) central sales tax, (iii) entry tax, octroi, local body tax, (iv) taxes on luxuries, (v) taxes on advertisements, etc. However, any revenue among these taxes arising related to
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18. New features in the e-way bill system have been introduced such as the auto calculation of distance based on PIN codes for the generation of e-way bill and blocking the generation of multiple e-way bills against one invoice. 10.6 Anti-Profiteering Mechanism: Implementation of GST in many countries was coupled with increase in inflation and the prices of the commodities. This happened in spite of the availability of the tax credit. This was happening because the supplier was not passing on the benefit to the consumer and thereby indulging in illegal profiteering. Any reduction in rate of tax or the benefit of increased input tax credit should have been passed on to the recipient by way of commensurate reduction in prices. 10.6.1 National Anti-profiteering Authority (NAPA) has been constituted under GST by the Central Government to examine the complaints of non-passing the benefit of reduced tax incidence. The Authority shall cease to exist after the expiry
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ayment of GST for the suppliers of goods would be ₹ 40 lakhs and ₹ 20 lakhs (in case of States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand) with effect from 01.04.2019. Threshold limit of aggregate turnover for exemption from registration and payment of GST for suppliers of services would be ₹ 20 lakhs and ₹ 10 lakhs (in case of States of Manipur, Mizoram, Nagaland and Tripura). A common threshold exemption applies to both CGST and SGST. The benefit of threshold exemption, however, is not available in inter-State supplies of goods. 10.9 Composition Scheme: Composition scheme has been formulated for small businessmen being supplier of goods and supplier of restaurant services. Under the scheme, person with turnover up to ₹ 1.5 crore (Rs. 75 lakhs in States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand) nee
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ould be permitted to be utilized in the following manner: a) ITC of CGST allowed for payment of CGST IGST in that order; b) ITC of SGST allowed for payment of SGST IGST in that order; c) ITC of UTGST allowed for payment of UTGST IGST in that order; d) ITC of IGST allowed for payment of IGST, CGST SGST/UTGST in that order. ITC of CGST cannot be used for payment of SGST/UTGST and vice versa. It has been further provided that IGST balances shall be exhausted for payment of IGST, CGST or SGST, as the case may be, before utilization of CGST or SGST. 10.12 Settlement of Government Accounts : Accounts would be settled periodically between the Centre and the State to ensure that the credit of SGST used for payment of IGST is transferred by the originating State to the Centre. Similarly, the IGST used for payment of SGST would be transferred by Centre to the destination State. Further the SGST portion of IGST collec
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tax to be sought by taxpayer or by any other person who has borne the incidence of tax within two years from the relevant date. Refund of unutilized ITC also available in zero rated supplies and inverted tax structure. 10.16 Tax Collection at Source: Obligation on electronic commerce operators to collect 'tax at source', at such rate not exceeding two per cent of net value of taxable supplies, out of payments to suppliers supplying goods or services through their portals. The provision for TCS has been operationalized w.e.f. 01st October, 2018. 10.17 Self-assessment: Self-assessment of the taxes payable by the registered person shall be the norm. Audit of registered persons shall be conducted on selective basis. Limitation period for raising demand is three (3) years from the due date of filing of annual return or from the date of erroneous refund for raising demand for short-payment or non-payment of tax or erroneous refund and its adjudication in n
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artment. Centre would adopt such authority under CGST Act. 10.21 Transitional Provisions: Elaborate transitional provisions have been provided for smooth transition of existing taxpayers to GST regime. 10.22 Subsuming of taxes, duties etc. : Among the taxes and duties levied and collected by the Union, Central Excise duty, Duties of Excise (Medicinal and Toilet Preparations), Additional Duties of Excise (Goods of Special Importance), Additional Duties of Excise (Textiles and Textile Products), Additional Duties of Customs (commonly known as CVD), Special Additional Duty of Customs (SAD), Service Tax and cesses and surcharges insofar as they related to supply of goods or services were subsumed. As far as taxes levied and collected by States are concerned, State VAT, Central Sales Tax, Purchase Tax, Luxury Tax, Entry Tax, Entertainment Tax (except those levied by the local bodies), Taxes on advertisements, Taxes on lotteries, betting and gambling, cesses and sur
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, the Union Territory Goods and Services Tax (Amendment) Act, 2018 and the Goods and Services Tax (Compensation to States) Amendment Act, 2018, respectively. 11.3. On 22nd June, 2017, the first notification was issued for GST and notified certain sections under CGST. Since then, 176 notifications under CGST Act have been issued notifying sections, notifying rules, amendment to rules and for waiver of penalty, etc. 19, 34 and 2 notifications have also been issued under IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Further, 86, 89, 86 and 9 rate related notifications each have been issued under the CGST Act, IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Similar notifications have been issued by all the States under the respective SGST Act. Apart from the notifications, 106 circulars, 18 orders and 13 Removal of Difficulty Orders have also been issued by CBIC on various subjects like proper officers, ease of exports, and exten
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larly in the field of Accountancy and Information Technology for the departmental officers has to be taken up in a big way. A massive four-tier training programme has been conducted under the leadership of NACIN. This training project is aimed at imparting training on GST law and procedures to more than 60,000 officers of CBIC and Commercial Tax officers of State Governments. 12.3 CBIC would be responsible for administration of the CGST and IGST law. In addition, excise duty regime would continue to be administered by the CBIC for levy and collection of central excise duty on five specified petroleum products as well as on tobacco products. CBIC would also continue to handle the work relating to levy and collection of customs duties. 12.4 Director General of Anti-profiteering, CBIC has been mandated to conduct detailed enquiry on anti-profiteering cases and should give his recommendation for consideration of the National Anti-profiteering Authority. 1
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or interacting with the GSTN. The diagram below shows the work distribution under GST. 13.2 Central Government holds 24.5 percent stake in GSTN while the state government holds 24.5 percent. The remaining 51 per cent are held by nonGovernment financial institutions, HDFC and HDFC Bank hold 20%, ICICI Bank holds 10%, NSE Strategic Investment holds 10% and LIC Housing Finance holds 10%. The GST Council in its 27th meeting held on 04.05.2018 has approved the change in shareholding pattern of GSTN. Considering the nature of ‗state function performed by GSTN, the GST Council felt that GSTN be converted into a fully owned Government company. Accordingly, the Council approved acquisition of entire 51 per cent of equity held by non-Governmental institutions in GSTN amounting to ₹ 5.1 crore, equally by the Centre and the State Governments. 13.3 The design of GST systems is based on role based access. The taxpayer can access his own data through identi
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traders and entrepreneurs: GST has increased the threshold for GST registration for small businesses. Those units having aggregate annual turnover more than ₹ 20 lakhs (Rs. 10 lakhs in certain cases) in case of supplier of services and ₹ 40 lakhs (Rs. 20 lakhs in certain cases) in case of supplier of goods have be registered under GST. Unlike multiple registrations under different tax regimes earlier, a single registration is needed under GST in one State. An additional benefit under Composition scheme has also been provided for businesses with aggregate annual turnover up to ₹ 1.5 crore (Rs. 75 lakhs in certain cases) in case of supplier of goods and restaurant services and ₹ 50 lakhs in case of supplier of services. With the creation of a seamless national market across the country, small enterprises will have an opportunity to expand their national footprint with minimal investment. 14.4 Benefits to agriculture and Industry: GST will give more
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Promote Make in India : GST will help to create a unified common national market for India, giving a boost to foreign investment and Make in India campaign. It will prevent cascading of taxes and make products cheaper, thus boosting aggregate demand. It will result in harmonization of laws, procedures and rates of tax. It will boost export and manufacturing activity, generate more employment and thus increase GDP with gainful employment leading to substantive economic growth. Ultimately it will help in poverty eradication by generating more employment and more financial resources. More efficient neutralization of taxes especially for exports thereby making our products more competitive in the international market and give boost to Indian Exports. It will also improve the overall investment climate in the country which will naturally benefit the development in the states. Uniform CGST SGST and IGST rates will reduce the incentive for evasion by eliminating rate arbitrage betwee
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e tax administration. It will improve environment of compliance as all returns to be filed online, input credits to be verified online, encouraging more paper trail of transactions. Common procedures for registration of taxpayers, refund of taxes, uniform formats of tax return, common tax base, common system of classification of goods and services will lend greater certainty to taxation system. 15. EXPERIENCE OF REGISTRATION, RETURN FILING REVNUE: 15.1 Registration Returns Snapshot: S. No. Details As on 30 th April, 2019 1. No. of transited (migrated) taxpayers 66,25,077 2. Total No. of new applications received for registration 76,98,644 3. No. of application
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11. No. of GSTR-3B returns filed for November, 2017 73,71,650 12. No. of GSTR-3B returns filed for December, 2017 74,58,618 13. No. of GSTR-3B returns filed for January, 2018 75,76,046 14. No. of GSTR-3B returns filed for February, 2018 77,00,842 15. No. of GSTR-3B returns filed for March, 2018 78,10,442 16. No. of GSTR-3B returns filed for April, 2018 78,78,410 17. No. of GSTR-3B returns filed for May, 2018 80,21,065 18. No. of GSTR-3B return
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26. No. of GSTR-3B returns filed for February, 2019 80,51,242 27. No. of GSTR-3B returns filed for March, 2019 72,13,483 28. No. of GSTR 1 returns filed for July, 2017 60,74,768 29. No. of GSTR 1 returns filed for August, 2017 25,45,112 30. No. of GSTR 1 returns filed for September, 2017 68,79,719 31. No. of GSTR 1 returns filed for October, 2017 26,26,933 32. No. of GSTR 1 returns filed for November, 2017 26,67,225 33. No. of
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41. No. of GSTR 1 returns filed for August, 2018 28,77,308 42. No. of GSTR 1 returns filed for September, 2018 74,81,145 43. No. of GSTR 1 returns filed for October, 2018 28,51,678 44. No. of GSTR 1 returns filed for November, 2018 28,14,772 45. No. of GSTR 1 returns filed for December, 2018 72,25,851 46. No. of GSTR 1 returns filed for January, 2019 26,87,331 47. No. of GSTR 1 returns filed for February, 2019 25,37,573 48. No.
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No. of GSTR 4 returns filed for quarter September-December, 2018 14,43,553 56. No. of GSTR 4 returns filed for quarter January-March, 2019 12,52,548 15.2 Revenue Collection Snapshot: S. No. Revenue Collected in the Month of Amount (in Rs. Thousand crore) 1. July, 17 21,572 2. August, 17 95,633 3. September, 17 94,064 4. October, 17 93,333 5. November, 17 83,780 6.
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October, 18 1,00,710 17. November, 18 97,637 18. December, 18 94,726 19. January, 19 1,02,503 20. February, 19 97,247 21. March, 19 1,06,577 22. April, 19 1,13,865 23. Total 20,31,884 16. CHALLENGES FUTURE AHEAD: 16.1 Any new change is accompanied by difficulties and problems at the outset. A change as comprehensive as GST is bound to pose certain challenges not onl
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on or before 3rd June, 2018. All States have notified e-way bill rules for intra-State supplies last being NCT of Delhi where it was introduced w.e.f. 16.06.2018. 16.3 NAPA has initiated investigation into various complaints of anti-profiteering and has passed orders in some cases to protect consumer interest. 16.4 To expedite sanction of refund, electronic filing of refunds, along with all supporting documents/invoices, has been enabled on the common portal. Clarificatory Circulars and notifications have been issued to guide field formations of CBIC and States in this regard. The government has put in place an IT grievance redressal mechanism to address the difficulties faced by taxpayers owing to technical glitches on the GST portal. 16.5 The introduction of GST is truly a game changer for Indian economy as it has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology driven tax regime. It will integrate
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