Author: admin_gst

Section 16A – Draft-Bills-Reports – INPUT TAX CREDIT – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 16A – 16A. Taking input tax credit in respect of inputs sent for job work (1) The principal referred to in section 43 A shall, subject to such conditions and restrictions as may be prescribed, be entitled to take credit of input tax on inputs sent to a job-worker for job-work if the said inputs, after completion of job-work, are received back by him within one hundred and eighty days of their being sent out: Provided that the principal shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job worker for job-work without their being first brought to his place of busin

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Section 17 – Draft-Bills-Reports – INPUT TAX CREDIT – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 17 – 17. Manner of distribution of credit by Input Service Distributor (1) The Input Service Distributor may distribute, in such manner as may be prescribed, the credit of CGST as IGST and IGST as IGST, by way of issue of a prescribed document containing, inter alia, the amount of input tax credit being distributed or being reduced thereafter, where the Distributor and the recipient of credit are located in different States. (CGST ACT) (1) The Input Service Distributor may distribute, in such manner as may be prescribed, the credit of SGST as IGST, by way of issue of a prescribed document containing, inter alia

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the amount of input tax credit being distributed or being reduced thereafter, where the Distributor and the recipient of credit, being a business vertical, are located in the same State. (SGST Act) (3) The Input Service Distributor may distribute the credit subject to the following conditions, namely: (a) the credit can be distributed against a prescribed document issued to each of the recipients of the credit so distributed, and such invoice or other document shall contain such details as may be prescribed; (b) the amount of the credit distributed shall not exceed the amount of credit available for distribution; (c) the credit of tax paid on input services attributable to a supplier shall be distributed only to that supplier; (d) the credi

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Section 16 – Draft-Bills-Reports – INPUT TAX CREDIT – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 16 – CHAPTER V INPUT TAX CREDIT 16. Manner of taking input tax credit (1) Every registered taxable person shall, subject to such conditions and restrictions as may be prescribed and within the time and manner specified in section 35, be entitled to take credit of input tax admissible to him and the said amount shall be credited to the electronic credit ledger of such person. (2) A person who has applied for registration under the Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall, subject to such conditions and restrictions as may be prescribed, be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provi

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nvoice relating to such supply. (4) The amount of credit under sub-section (2), (2A) or sub-section (3) shall be calculated in accordance with generally accepted accounting principles in such manner as may be prescribed. (5) Where the goods and/or services are used by the registered taxable person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business. (6) Where the goods and / or services are used by the registered taxable person partly for effecting taxable supplies and partly for effecting non-taxable supplies, including exempt supplies but excluding zero-rated supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the taxable supplies including zero-rated supplies. (7) The Central or a State Government may, by notification issued in this behalf, prescribe the manner in which the credit referred to in sub

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beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as leave or home travel concession, when such goods and/or services are used primarily for personal use or consumption of any employee; (c) goods and/or services acquired by the principal in the execution of works contract when such contract results in construction of immovable property, other than plant and machinery; (d) goods acquired by a principal, the property in which is not transferred (whether as goods or in some other form) to any other person, which are used in the construction of immovable property, other than plant and machinery; (e) goods and/or services on which tax has been paid under section 8; and (f) goods and/or services used for private or personal consumption, to the extent they are so consumed. (10) Where the registered taxable person has claimed depreciation o

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lments, the registered taxable person shall be entitled to the credit upon receipt of the last lot or instalment. Explanation.-For the purpose of clause (b), it shall be deemed that the taxable person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such taxable person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise. (12) Where any registered taxable person who has availed of input tax credit switches over as a taxable person for paying tax under section 8 or, where the goods and / or services supplied by him become exempt absolutely under section 10, he shall pay an amount, by way of debit in the electronic credit or cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date o

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Section 14 – Draft-Bills-Reports – TIME AND VALUE OF SUPPLY – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 14 – 14. Change in rate of tax in respect of supply of services (1) Notwithstanding anything contained in section 13, the time of supply, in cases where there is a change in the effective rate of tax in respect of services, shall be determined in the following manner, namely:- (a) in case the taxable service has been provided before the change in effective rate of tax – (i) where the invoice for the same has been issued and the payment is also received after the change in effective rate of tax, the time of supply shall be the date of receipt of payment or the date of issue of invoice, whichever is earli

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ent; or (ii) where the invoice has been issued and the payment is received before the change in effective rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or (iii) where the invoice has been issued after the change in effective rate of tax but the payment is received before the change in effective rate of tax, the time of supply shall be the date of issue of invoice. Explanation.- For the purpose of this section, the date of receipt of payment shall be the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account, whichever is earlier: Provided that the date of receipt of payment shal

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Section 15 – Draft-Bills-Reports – TIME AND VALUE OF SUPPLY – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 15 – 15. Value of taxable supply (1) The value of a supply of goods and/or services shall be the transaction value, that is the price actually paid or payable for the said supply of goods and/or services where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. (2) The transaction value under sub-section(1) shall include: (a) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods and/or services;

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he IGST Act; (e) incidental expenses, such as, commission and packing, charged by the supplier to the recipient of a supply, including any amount charged for anything done by the supplier in respect of the supply of goods and/or services at the time of, or before delivery of the goods or, as the case may be, supply of the services; (f) subsidies provided in any form or manner, linked to the supply; (g) any reimbursable expenditure or cost incurred by or on behalf of the supplier and charged in relation to the supply of goods and/or services; (h) any discount or incentive that may be allowed after the supply has been effected: Provided that such post-supply discount which is established as per the agreement and is known at or before the time

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Section 13 – Draft-Bills-Reports – TIME AND VALUE OF SUPPLY – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 13 – 13. Time of supply of services (1) The liability to pay CGST/SGST on services shall arise at the time of supply, as determined in terms of the provisions of this section. (2) The time of supply of services shall be:- (a) the date of issue of invoice or the date of receipt of payment, whichever is earlier, if the invoice is issued within the prescribed period; or (b) the date of completion of the provision of service or the date of receipt of payment, whichever is earlier, if the invoice is not issued within the prescribed period; or (c) the date on which the recipient shows the receipt of services

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ade by the recipient of service, whether or not any invoice has been issued or any payment has been received by the supplier of service; (b) where the due date of payment is not ascertainable from the contract, each such time when the supplier of service receives the payment, or issues an invoice, whichever is earlier; (c) where the payment is linked to the completion of an event, the time of completion of that event; (4) For the purposes of sub section (3) above, the Central or a State Government may on the recommendation of the Council, specify, by notification, the supply of services that shall be treated as continuous supply of services; (5) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis

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Section 12 – Draft-Bills-Reports – TIME AND VALUE OF SUPPLY – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 12 – CHAPTER IV TIME AND VALUE OF SUPPLY 12. Time of supply of goods (1) The liability to pay CGST / SGST on the goods shall arise at the time of supply as determined in terms of the provisions of this section. (2) The time of supply of goods shall be the earliest of the following dates, namely,- (a) (i) the date on which the goods are removed by the supplier for supply to the recipient, in a case where the goods are required to be removed or (ii) the date on which the goods are made available to the recipient, in a case where the goods are not required to be removed; or (b) the date on which the suppli

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tion (2), the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment. Explanation 4.- For the purpose of clause (c) of sub-section (2), the date on which the supplier receives the payment shall be the date on which the payment is entered in his books of accounts or the date on which the payment is credited to his bank account, whichever is earlier. (3) In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the time of supply shall be the date of expiry of the period to which such successive statements of accounts or successive payments relate. If there are no successive statements of account, the date of issue of the

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(5), the date on which the payment is made shall be the date on which the payment is entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account, whichever is earlier. (6) If the goods (being sent or taken on approval or sale or return or similar terms) are removed before it is known whether a supply will take place, the time of supply shall be at the time when it becomes known that the supply has taken place or six months from the date of removal, whichever is earlier. (7) In case it is not possible to determine the time of supply under the provisions of subsection (2), (3), (5) or (6), the time of supply shall (a) in a case where a periodical return has to be filed, be the date on whic

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Section 11 – Draft-Bills-Reports – LEVY OF, AND EXEMPTION FROM, TAX – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 11 – 11. Remission of tax on supplies found deficient in quantity (1) The Central or a State Government may, by rules made under this sub-section, provide for remission of tax on such supplies which are found to be deficient in quantity due to any natural causes. (2) Any rules made under sub-section (1) may, having regard to the nature of the supply,

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Section 9 – Draft-Bills-Reports – LEVY OF, AND EXEMPTION FROM, TAX – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 9 – 9. Taxable person (1) Taxable Person means a person who carries on any business at any place in India /State of ____ and who is registered or required to be registered under Schedule III of this Act: Provided that an agriculturist shall not be considered as a taxable person. Provided further that a person who is required to be registered under paragraph 1 of Schedule III of this Act shall not be considered as a taxable person until his aggregate turnover in a financial year exceeds [Rs ten lakh] Provided further that a person who is required to be registered under paragraph 1 of Schedule III

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Section 10 – Draft-Bills-Reports – LEVY OF, AND EXEMPTION FROM, TAX – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 10 – 10. Power to grant exemption from tax (1) If the Central or a State Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendation of the Council, by notification, exempt generally either absolutely or subject to such conditions as may be specified in the notification, goods and/or services of any specified description from the whole or any part of the tax leviable thereon. Explanation.- Where an exemption under sub-section (1) in respect of any goods and/or services from the whole of the tax leviable thereon has been granted absolutely, the taxa

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Section 8 – Draft-Bills-Reports – LEVY OF, AND EXEMPTION FROM, TAX – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 8 – 8. Composition Levy (1) Notwithstanding anything to the contrary contained in the Act but subject to subsection (3) of section 7, on the recommendation of the Council, the proper officer of the Central or a State Government may, subject to such conditions and restrictions as may be prescribed, permit a registered taxable person, whose aggregate turnover in a financial year does not exceed [fifty lakh of rupees], to pay, in lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but not less than one percent of the turnover during the year: Provided that no such

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Section 6 – Draft-Bills-Reports – ADMINISTRATION – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 6 – 6. Powers of officers under the Central Goods and Services Tax Act (1) Subject to such conditions and limitations as the Board may impose, an officer of the Central Goods and Services Tax may exercise the powers and discharge the duties conferred or imposed on him under this Act. (2) An officer of Central Goods and Services Tax may exercise the powers and discharge

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Section 7 – Draft-Bills-Reports – LEVY OF, AND EXEMPTION FROM, TAX – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 7 – CHAPTER III LEVY OF, AND EXEMPTION FROM, TAX 7. Levy and Collection of Central/State Goods and Services Tax (1) There shall be levied a tax called the Central/State Goods and Services Tax (CGST/SGST) on all intra-State supplies of goods and/or services at the rate specified in the Schedule . . . to this Act and collected in such manner as may be p

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Section 5 – Draft-Bills-Reports – ADMINISTRATION – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 5 – 5. Appointment of officers under the Central Goods and Services Tax Act (1) The Board may appoint such persons as it may think fit to be officers under the Central Goods and Services Tax Act. (2) Without prejudice to the provisions of sub-section (1), the Board may authorize a Principal Chief Commissioner/Chief Commissioner of Central Goods and Services Tax or a Pr

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Section 4 – Draft-Bills-Reports – ADMINISTRATION – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 4 – CHAPTER II ADMINISTRATION 4. Classes of officers under the Central Goods and Services Tax Act (1) There shall be the following classes of officers under the Central Goods and Services Tax Act, namely; (a) Principal Chief Commissioners of CGST or Principal Directors General of CGST, (b) Chief Commissioners of CGST or Directors General of CGST, (c) Principal Commissi

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Section 2 – Draft-Bills-Reports – PRELIMINARY – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 2 – 2. Definitions In this Act, unless the context otherwise requires,- (1) actionable claim shall have the meaning assigned to it in section 3 of the Transfer of Property Act, 1882; (2) address of delivery means the address of the recipient of goods and/or services indicated on the tax invoice issued by a taxable person for delivery of such goods and/or services; (3) address on record means the address of the recipient as available in the records of the supplier; (4) adjudicating authority means any authority competent to pass any order or decision under this Act, but does not include the Board, the First Appellate Authority and the Appellate Tribunal; (5) agent means a person who carries on the business of supply or receipt of goods and/or services on behalf of another, whether disclosed or not and includes a factor, broker, commission agent, arhatia, del cred

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ings or plants; Explanation.- For the purpose of this clause, the expression forest means the forest to which the Indian Forest Act, 1927 applies. (8) agriculturist means a person who cultivates land personally, for the purpose of agriculture; (9) "Appellate Tribunal" means the National Goods and Services Tax Appellate Tribunal constituted under section 81; (10) appointed day means the date on which section 1 of this Act comes into effect; (11) appropriate Government means the Central Government in case of the IGST and the CGST, and the State Government in case of the SGST; (12) assessment means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgement assessment; (13) "associated enterprise" shall have the meaning assigned to it in section 92A of the Income Tax Act, 1961; (14) audit means detailed examination of records, returns and other documents maintained or furnished

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supply or acquisition of goods including capital assets and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members, as the case may be; (f) admission, for a consideration, of persons to any premises; and (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (18) business vertical shall have the meaning assigned to a business segment in Accounting Standard 17 issued by the Institute of Chartered Accountants of India; (19) capital assets shall have the meaning as assigned to it in the Income Tax Act, 1961 (43 of 1961) but the said expression shall not include jewellery held for personal use or property not connected with the business; (20) capital goods means: – (A) the following goods, namely:- (i) all goods falling wit

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on of inputs and capital goods used for supply of service; or (iii) supply of courier agency service; (C) motor vehicle designed to carry passengers including their chassis, registered in the name of the supplier of service, when used for supplying the service of- (i) transportation of passengers; or (ii) renting of such motor vehicle; or (iii) imparting motor driving skills; (D) Components, spares and accessories of motor vehicles which are capital goods for the taxable person. (21) casual taxable person means a person who occasionally undertakes transactions involving supply of goods and/or services in the course or furtherance of business whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business; (22) CGST means the tax levied under the Central Goods and Services Tax Act, 2016; (23) chartered accountant means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949); (24) commissioner mean

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oods and/or services, whether by the said person or by any other person; (b) the monetary value of any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of goods and/or services, whether by the said person or by any other person: Provided that a deposit, whether refundable or not, given in respect of the supply of goods and/or services shall not be considered as payment made for the supply unless the supplier applies the deposit as consideration for the supply; (29) continuous journey means a journey for which a single or more than one ticket or invoice is issued at the same time, either by a single supplier of service or through an agent acting on behalf of more than one supplier of service, and which involves no stop over between any of the legs of the journey for which one or more separate tickets or invoices are issued; Explanation.- For the purposes of this clause, stopover means a place where a passenger can disembar

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Council means the Goods and Services Tax Council established under Article 279A of the Constitution; (35) credit note means a document issued by a taxable person as referred to in sub-section (1) of section 24; (36) debit note means a document issued by a taxable person as referred to in sub-section (2) of section 24; (37) deemed exports , as notified by the Central Government/State Government on the recommendation of the Council, refer to those transactions in which the goods supplied do not leave India, and payment for such supplies is received either in Indian Rupees or in convertible foreign exchange; (38) document includes written or printed record of any sort and electronic record as defined in the Information Technology Act, 2000 [21 of 2000]; (39) earlier law means any of the following laws, that is to say, (a) . . . (b) . . . (c) . . . as amended from time to time and includes enactments which have validated anything done or omitted to be done under any of the above mentioned

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ted in India, (b) the recipient of service is located outside India, (c) the place of supply of service is outside India, (d) the payment for such service has been received by the supplier of service in convertible foreign exchange, and (e) the supplier of service and recipient of service are not merely establishments of a distinct person; Explanation.- For the purposes of clause (e), an establishment of a person in India and any of his other establishment outside India shall be treated as establishments of distinct persons. (45) First Appellate Authority means an authority referred to in section 79; (46) fixed establishment means a place (other than the place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs; (47) fund means the Consumer Welfare Fund established under section 40; (48) goods means every kind of movable property oth

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is located outside India, (b) the recipient of service is located in India, (c) the place of supply of service is in India, and (d) the supplier of service and the recipient of service are not merely establishments of a distinct person; Explanation 1.- An establishment of a person in India and any of his other establishment outside India shall be treated as establishments of distinct persons. Explanation 2.- A person carrying on a business through a branch or agency or representational office in any territory shall be treated as having an establishment in that territory. (53) India means,- (a) the territory of the Union as referred to in clauses (2) and (3) of Article 1 of the Constitution; (b) its territorial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976); (c) the seabed and the subsoil underlying the territorial waters; (d) th

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or such other document as prescribed for the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST paid on the said services to a supplier of taxable goods and / or services having same PAN as that of the office referred to above; Explanation.- For the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST, Input Service Distributor shall be deemed to be a supplier of services. (57) "input tax" in relation to a taxable person, means the {IGST and CGST}/{IGST and SGST} charged on any supply of goods and/or services to him which are used, or are intended to be used, in the course or furtherance of his business and includes the tax payable under sub-section (3) of section 7; (58) input tax credit means credit of input tax as defined in section 2(56); (59) intangible property means any property other than tangible property; (60) invoice shall have the meaning as assigned to it under section 23; (61) inward supply in relation to a

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a Regional Council constituted under Article 371A of the Constitution; (64) location of recipient of service means: (i) where a supply is received at a place of business for which registration has been obtained, the location of such place of business; (ii) where a supply is received at a place other than the place of business for which registration has been obtained, that is to say, a fixed establishment elsewhere, the location of such fixed establishment; (iii) where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and (iv) in absence of such places, the location of the usual place of residence of the recipient; (65) location of supplier of service means: (i) where a supply is made from a place of business for which registration has been obtained, the location of such place of business ; (ii) where a supply is made from a place other than

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money order, postal or electronic remittance or any such similar instrument when used as consideration to settle an obligation or exchange with Indian legal tender of another denomination but shall not include any currency that is held for its numismatic value; (69) non-resident taxable person means a taxable person who occasionally undertakes transactions involving supply of goods and/or services whether as principal or agent or in any other capacity but who has no fixed place of business in India; (70) non-taxable territory means the territory which is outside the taxable territory; (71) notification means notification published in the Official Gazette and the expressions notify and notified shall be construed accordingly; (72) output tax in relation to a taxable person, means the CGST/SGST chargeable under this Act on taxable supply of goods and/or services made by him or by his agent and excludes tax payable by him on reverse charge basis; (73) outward supply in relation to a perso

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); (m) trust; and (n) every artificial juridical person, not falling within any of the preceding sub-clauses; (75) place of business includes (a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, provides or receives goods and/or services; or (b) a place where a taxable person maintains his books of account; or (c) a place where a taxable person is engaged in business through an agent, by whatever name called; (76) prescribed means prescribed by the rules, regulations or by any notification issued under this Act; (77) principal means a person on whose behalf an agent carries on the business of supply or receipt of goods and/or services; (78) principal place of business means the place of business specified as the principal place of business in the certificate of registration where the taxable person keeps and maintains the accounts and records as specified under section 42 ; (79) prop

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e by the Board/Commissioner under any provision of the Act on the recommendation of the Council; (82) persons shall be deemed to be related persons if only – (a) they are officers or directors of one another's businesses; (b) they are legally recognized partners in business; (c) they are employer and employee; (d) any person directly or indirectly owns, controls or holds five per cent or more of the outstanding voting stock or shares of both of them; (e) one of them directly or indirectly controls the other; (f) both of them are directly or indirectly controlled by a third person; (g) together they directly or indirectly control a third person; or (h) they are members of the same family; Explanation I. – The term "person" also includes legal persons. Explanation II. – Persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related. (83) remo

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ble claim but does not include money. (89) SGST means the tax levied under the State Goods and Services Tax Act; (90) Special Economic Zone shall have the meaning assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 [28 of 2005]; (91) supplier in relation to any goods and/or services shall mean the person supplying the said goods and/or services and shall include an agent acting as such on behalf of such supplier in relation to the goods and/or services supplied; (92) supply shall have the meaning as assigned to it in section 3; (93) tangible property means any property that can be touched or felt; (94) tax means goods and services tax levied on the supply of goods and/or services under this Act and includes any amount payable under section 8; (95) tax period means the period for which the tax return is required to be filed; (96) taxable person shall have the meaning as assigned to it in section 9 of this Act; (97) taxable supply means a supply of goods an

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abour, or (b) by the labour of one s family, or (c) by servants on wages payable in cash or kind (but not in crop share) or by hired labour under one s personal supervision or the personal supervision of any member of one s family; Explanation 1. – A widow or a minor or a person who is subject to any physical or mental disability or is a serving member of the armed forces of the Union, shall be deemed to cultivate land personally if it is cultivated by her or his servants or by hired labour. Explanation 2. – In the case of a Hindu Undivided Family, land shall be deemed to be cultivated personally, if it is cultivated by any member of such family. (104) turnover in a State means the aggregate value of all taxable and non-taxable supplies, including exempt supplies and exports of goods and / or services made within a State by a taxable person and inter-state supplies of goods and / or services made from the State by the said taxable person excluding taxes, if any charged under the CGST A

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Section 3 – Draft-Bills-Reports – PRELIMINARY – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 3 – 3. Meaning and scope of supply (1) Supply includes (a) all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business, (b) importation of service, whether or not for a consideration and whether or not in the course or furtherance of business, and (c) a supply specified in Schedule I, made or agreed to be made without a consideration. (2) Schedule II, in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply

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Short title, extent and commencement – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – PRELIMINARY – Goods and Services Tax – Section 1 – CHAPTER I PRELIMINARY 1. Short title, extent and commencement (1) This Act may be called the Central / State Goods and Services Tax Act, 2016. (2) It extends to the whole of India / State s name. (3) It shall come into force on such date as the Central or a State Government may, by notification in the Official Gazette, appoint in this behalf: Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. – Statutory Provisions, Acts, Rules, Regulations, Taxation

 

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Section 1 – Draft-Bills-Reports – PRELIMINARY – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 – Draft June 2016 – Section 1 – CHAPTER I PRELIMINARY 1. Short title, extent and commencement (1) This Act may be called the Central / State Goods and Services Tax Act, 2016. (2) It extends to the whole of India / State s name. (3) It shall come into force on such date as the Central or a State Government may, by notification in the Official Gazette, appoint in this behalf: Provided that different d

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Goods and Services Tax – GST – By: – Bimal jain – Dated:- 15-6-2016 Last Replied Date:- 17-6-2016 – Dear Professional Colleague, Draft Model GST Law on public domain The much talked about Goods and Services tax ( GST ) regime – Single biggest tax reform since Independence has been creating a buzz amongst all stake holders, eagerly waiting for the monsoon session of the Parliament to commence with the hope that the much awaited Constitutional (122nd Amendment) Bill, 2014 on GST ( 122nd CAB or GST Bill ) will be passed, which will pave the way for GST in the Country. GST is a destination based consumption tax levied at multiple stages of production and distribution of goods and services, with taxes on inputs credited against taxes on output. GST is going to be big game changer and will be one of the most significant tax reforms in the fiscal history of India to consolidate present multiple layers of Indirect taxation. The implementation of GST will have a far-reaching impact on almost a

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ignalling that the GST might mark its advent from April 1, 2017. Virtually all states have supported the idea of GST except Tamil Nadu which has some reservations , Finance Minister Arun Jaitley said after the meeting of Empowered Committee on the long awaited indirect tax reform. The Draft GST Law is a model which the Central Government and each of the State Governments would use to draft their respective Central and State GST Acts. Further, a Draft of the Integrated GST Act, 2016, which will govern levy of GST on inter-State supplies by the Central Government, is also issued. The Draft Model GST Law provides an insight on the governing provisions regarding levy and collection of GST. The Draft Model GST Law states that the Act shall be referred as the Central/ State Goods and Services Tax Act, 2016. The Draft Model GST Law consists of 162 clauses divided into 25 Chapters along with 4 schedules and Rules as to Valuation under GST. Further, the Draft Integrated GST Act, 2016 consists o

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s; Time and value of supply: Under the proposed GST regime, all the major taxes levied under the Indirect taxation i.e. Central Excise, Service tax, VAT/CST etc., are proposed to be brought under the ambit of GST. Hence, the prevailing concepts of manufacturing of Goods/ provision of Services/ sale of Goods will no longer be relevant and common base has to be arrived at for levy and collection of GST in all cases; Scheme of input tax credit including manner of taking Input tax credit, credit in case of input sent for job works, manner of distribution of credit by Input service distributor etc.; Transfer of input tax credit Payment of tax, interest, penalty and other amounts; Tax invoice, credit and debit notes Returns and related compliances Demands/ recovery; Refund; Transitional provisions The availability of Draft Model GST Law enables the Trade and Industry to plan the transition from the existing Indirect tax regime to the GST regime. It is important that a thorough analysis of th

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Goods and Services Tax – MODEL GST LAW – The proposed draft of GOODS AND SERVICES TAX ACT, 2016 – As per the draft there will be three laws (1) CGST Act, (2) SGST ACT and (3) IGST Act – Each state to have its own SGST Act – TMI Updates – Highlights

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MODEL GST LAW – Goods and Services Tax – GST – Dated:- 14-6-2016 – MODEL GST LAW – GOODS AND SERVICES TAX ACT, 2016 THE INTEGRATED GOODS AND SERVICES TAX ACT, 2016 ( IGST Act) GST Valuation (Determina

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Income Tax – Direct Tax Code – DTC – By: – CA DEV KUMAR KOTHARI – Dated:- 14-6-2016 Last Replied Date:- 30-12-1899 – Relevant portions of S.206C regarding obligation for collection in simplified manner. Section 206C for Tax collection at source: In Chapter XVII sub-chapter BB- Collection at source was inserted w.e.f. 01.06.1988. S.206C is about obligations and related liabilities for TCS. The provisions have been amended too many times. In any standard book or website we find more than 50 foot notes about amendments. Related Rules have also been inserted and / or amended many times. To simply convey about new obligations related with TCS on sale of goods and providing services an attempt has been made to put the provisions in simple manner. In the table, in left column relevant provision has been reproduced with highlights for easy analysis and understanding. In right column, main points are mentioned in simple language. Income-tax Act, 1961 [BB.-Collection at source Simplified main p

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(ii), or any service, exceeds two hundred thousand rupees: Rs. two lakh is limit. On reading of provisions, limit seems applicable to each case of receipt of consideration in cash. Provided that no tax shall be collected at source under this subsection on any amount on which tax has been deducted by the payer under Chapter XVII-B.] If tax has been deducted by payer than TCS will not apply- this is presently only for contracts and many services. 1E) Nothing contained in sub-section (1D) in relation to sale of any goods (other than bullion or jewellery) or providing any service shall apply to such class of buyers who fulfil such conditions, as may be prescribed. Exceptions will be as may be prescribed. (1F) Every person, being a seller, who receives any amount as consideration for sale of a motor vehicle of the value exceeding ten lakh rupees, shall, at the time of receipt of such amount, collect from the buyer, a sum equal to one per cent. of the sale consideration as income-tax.] Sale

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Failure to collect tax shall not absolve from liability- amount collectible will have to be paid, whether collected or not. [(6A) If any person responsible for collecting tax in accordance with the provisions of this section does not collect the whole or any part of the tax or after collecting, fails to pay the tax as required by or under this Act, he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax: Full or partial failure in collection and payment will lead the treatment of assessee in default in respect of the tax: (7) Without prejudice to the provisions of sub-section (6), if the [person responsible for collecting tax] does not collect the tax or after collecting the tax fails to pay it as required under this section, he shall be liable to pay simple interest at the rate of [one] per cent per month or part thereof on the amount of such tax from the date on which such tax was collectible to the date

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rate than the relevant rate specified in sub-section (1) 33[or sub-section (1C) 42[or sub-section (1D)]]. Application by buyer / service receiver and grant for TCS at lower rate. (10) Where a certificate under sub-section (9) is given, the person responsible for collecting the tax shall, until such certificate is cancelled by the Assessing Officer, collect the tax at the rates specified in such certificate. Lower TCS certificate will prevail unless cancelled.(or limit expires- if it is granted for limited period) (11) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub-section (9) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith.] Rules will govern application, and grant for lower TCS certif

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2016 (6) TMI 452 – ITAT MUMBAI – TMI – Reopening of assessment – Deduction under section 80IB(10) allowed excessively to the extent that it is beyond the amount of income under the head ‘business or profession’ – CIT(Appeals) allowing assessee’s claim for deduction under section 80IB(10) to the extent of gross total income and not restricting the same to extent of income under the head ‘business and profession’ – Held that:- It is a trite law that ‘reason to believe’ referred to in Sec. 147 of the Act is one which is prudent and plausible in law and not based on any misconception either in law or on facts. In the present case, the reasons recorded clearly suggest that Assessing Officer is under a misconception in inferring that there is an excessive grant of deduction u/s 80IB(10) of the Act. Ostensibly, the proposition in the mind of the Assessing Officer is not borne out of the bare phraseology of the relevant provisions, as we have seen in the earlier part of this order, and rathe

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turn arises out of an order passed by Assessing Officer under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short the Act ) dated 06/12/2012. 2. In its appeal the solitary grievance of the Revenue is against the action of the CIT(Appeals) in allowing assessee s claim for deduction under section 80IB(10) of the Act to the extent of gross total income of ₹ 71,99,25,721/- and not restricting the same to ₹ 68,18,56,583/- i.e. to extent of income under the head business and profession . 3. In brief, the relevant facts are that assessee is a company incorporated under the provisions of the Companies Act, 1956 and is, inter-alia, engaged in the business of construction and property development. In an assessment finalized under section 143(3) of the Act dated 24/12/2009, the total income was determined at ₹ 10,59,17,950/- which, inter-alia, included relief under section 80IB(10) of the Act amounting to ₹ 71,99,25,721/-. Consequently, the Assessing Officer re

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ction under section 80IB(10) of the Act. There is no dispute between assessee and the Revenue that the quantum of deduction under section 80IB(10) of the Act is ₹ 71,99,25,721/-. In its return of income, assessee claimed a deduction of ₹ 71,99,25,721/- under section 80IB(10) of the Act as it was within the limit of its gross total income amounting to ₹ 82,58,43,666/-. However, in the impugned assessment the Assessing Officer restricted the claim of deduction to ₹ 68,18,56,583/-, i.e., to the extent of income under the head income from business and profession instead of allowing deduction/s. 80IB(10) of the Act to the extent of the gross total income. 5. Before us, the Ld. Departmental Representative contended that the deduction allowable under section 80IB(10) of the Act is with respect to the business income and not against the income assessable under the other heads. It is sought to be pointed out that profit from the housing project was to the extent of &#837

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77; 71,99,25,721/-. In the impugned assessment finalized u/s 143(3) r.w.s. 147 of the Act, the gross total income (before allowing deduction under Chapter VI-A) was arrived at ₹ 82,55,23,592/- which comprised of (i) income from house property – ₹ 13,51,076/-, (ii) income from business – ₹ 68,18,56,583/-; and, income from other sources – ₹ 14,23,15,933/-. The total taxable income has been computed by the Assessing Officer at ₹ 14,36,67,009/- after allowing deduction u/s 80IB(10) of the Act of ₹ 68,18,56,583/-. The dispute between the assessee and the Revenue is in respect of the claim allowed by the Assessing Officer of ₹ 68,18,56,583/- instead of ₹ 71,99,25,721/- sought by the assessee. The point raised is as to whether the claim u/s 80IB(10) of the Act is to be restricted to gross total income as contended by the assessee or it is to be restricted to the extent of income from business or profession. 7. Sec. 80IB of the Act prescribes for

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llowable. For that matter, sub-section (1) of Sec. 80A prescribes that in computing the total income there shall be allowed from the gross total income, deductions specified in Sec. 80C to 80U of the Act subject to the conditions prescribed therein. The claim of the assessee is u/s 80IB(10) which is also liable to be governed by the prescription of Sec. 80A(1) of the Act. Sub-section (2) of Sec. 80A further prescribes that the aggregate amount of deductions under Chapter VI-A shall not, in any case, exceed the gross total income of the assessee. Furthermore, the gross total income has also been defined in Chapter VI-A by way of Sec. 80B(5) to mean the total income computed in accordance with the provisions of the Act before making any deductions under Chapter VI-A. The aforesaid clearly implies that in order to deduce the amount of deduction entitled to the assessee u/s 80IB(10) of the Act, the starting point is the determination of the gross total income. Along with it, the eligible a

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estricted to the extent of income from business or profession. 8. We find that the aforesaid conclusion of the CIT(Appeals) is in consonance with the parity of reasoning laid down by the Hon'ble Bombay High Court in the case of M/s. J.B. Boda & Co. P. Ltd. in Income Tax Appeal No. 3224 of 2009 dated 18.10.2010. In the said case, the amount of eligible deduction u/s 80-O of the Act (which is also a part of Chapter VI-A) was determined at ₹ 1,29,41,830/- but the Assessing Officer restricted the claim to ₹ 69,70,000/- being the income under the head business or profession . The assessee, on the other hand, sought the deduction to the extent of the gross total income referred to in Sec. 80B(5) of the Act. The Tribunal noted that Sec. 80-O of the Act or Sec. 80A did not provide for any such restriction and allowed the claim of the assessee for deduction u/s 80-O of the Act to the extent of gross total income. The Hon ble Bombay High Court affirmed the view of the Tribuna

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se property – ₹ 13,51,076/-, (ii) income from business – ₹ 68,18,56,583/-; and, income from other sources – ₹ 14,23,15,933/-. While computing the total income at ₹ 10,59,17,945/-, the Assessing Officer allowed deduction u/s 80IB(10) of the Act to the extent of ₹ 71,99,25,721/-, as claimed by the assessee. Subsequently, the Assessing Officer recorded reasons and issued notice u/s 148 of the Act dated 6.7.2012 reopening the assessment on the ground that certain income chargeable to tax had escaped assessment inasmuch as the deduction u/s 80IB(10) of the Act was liable to be restricted to ₹ 68,18,56,583/- being the income under the head business or profession . In the ensuing assessment the claim for deduction was scaled down, which we have dealt with on merits in the earlier part of this order. 11. Apart from assailing the action of the Assessing Officer on merits, the assessee company also canvassed before the CIT(Appeals) that issuing of notice of re

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o be pointed out that the impugned reassessment would tantamount to a mere change of opinion, which is impermissible in law. Further, the learned representative also pointed out that the reasons recorded by the Assessing Officer are on a wrong footing and therefore there is no justification for initiation of proceedings u/s 147/148 of the Act. In the course of arguments, reliance has been placed on the following decisions to assail the initiation of proceedings u/s 147/148 of the Act :- i) Sharp Designers and Engineers India Pvt. Ltd., ITA No. 525/PN/2013 dated 24.11.2014 (ITAT, Pune) ii) Shri Amitabh Bachchan, 349 ITR 76 (Bom) 13. On the other hand, the Ld. DR appearing for the Revenue has pointed out that there is no infirmity in the initiation of proceedings by issuance of notice u/s 147/148 of the Act inasmuch as the reasons have been duly recorded and further, at the stage of recording of reasons, the Assessing Officer has only to formulate a prima facie opinion. 14. We have caref

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r.w. s. 153C of the I. T. Act 1961, on 24.12.2009, assessing the total income of ₹ 10,59,17,950/- after allowing the deduction u/s 801B(10) of ₹ 71,99,25,721/-. The assessee has claimed deduction of ₹ 71,99,25,721/- u/s 80IB(10) of the Income Tax Act 1961 in the return. The assessee had income of ₹ 68,18,56,583/- under the head Business and Profession. Therefore the assessee has claimed and has been allowed deduction in excess of its business income. The amount of the excess deduction is ₹ 3,80,69,138/-. The total income of the assessee has therefore been underassessed by the same amount. The deduction u/s 80IB(10) of the I.T. Act 1961, is allowable only against the business income of the assessee. The said deduction is allowable in the case of undertaking, developing & building housing projects approved before the 31st day of March 2008 by local authority subject to compliance of specific terms and conditions as provided in sub-clauses of the said se

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r profession . It is a trite law that reason to believe referred to in Sec. 147 of the Act is one which is prudent and plausible in law and not based on any misconception either in law or on facts. In the present case, the reasons recorded clearly suggest that Assessing Officer is under a misconception in inferring that there is an excessive grant of deduction u/s 80IB(10) of the Act. Ostensibly, the proposition in the mind of the Assessing Officer is not borne out of the bare phraseology of the relevant provisions, as we have seen in the earlier part of this order, and rather, it is contrary to the legal position approved by the Hon ble Bombay High Court in the case of J.B. Boda & Co. Pvt. Ltd. (supra). At this point, we may note that the aforesaid view of the Hon ble Bombay High Court is also in consonance with its decisions in the case of Eskay K N IT (India) Ltd. vide ITA No. 184 of 2007 dated 25.3.2010 and in the case of Tridoss Laboratories Ltd., 328 ITR 448 (Bom). 15. In vie

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 18-5-2016 Last Replied Date:- 30-12-1899 – Frequently Asked Questions (FAQs) on GST and their answers which would help the readers to know and understand about the concept and nuances of proposed Goods and Services Tax (GST) and its models. These FAQs have been compiled with sole objective of providing a means of better understanding of GST. For details, readers may refer to Government portals / literature. Q.37 In GST regime, Information Technology network will be crucial as most of the procedures would be automated. How it will be done? Well-designed and well-functioning Information Technology (IT) infrastructure facility would be a precondition and pre-requisite for smooth administration of taxpayers, processing of returns, controlling collections, making refunds, auditing taxpayers, levying penalties etc. in the new regime. On the IT front, all stakeholders had agreed for a common PAN-based taxpayer ID, a common ret

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on tax payers and tax authorities availing its services. The GSTN will provide a front end portal to administer the Inter – State Taxation (IGST). The above network will work as a clearing house mechanism which will pool all the information about taxes levied on the Inter-State transactions and provide data on the amounts to be transferred to the destination state for ensuring seamless input tax credit. GSTN has been entrusted with the responsibility to develop, operate and maintain a common GST portal which would provide a common and shared IT infrastructure between Central and State Governments, Banks, CBEC, Reserve Bank of India etc. For the purpose of simplicity for taxpayer, uniformity of tax administration, it is also proposed to have digitization of all documents and automation of related processes such as common PAN-based registration; common standardized return for all taxes (with different account heads for CGST, SGST, IGST); common standardized challan for all taxes (with di

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ion had been taken on this. For a decision, this provision also requires a two-third majority in the Empowered Committee. However, Sub-committee on GST rates headed by CEA( MOF) has not found favour with proposed additional tax. Q.40 Are there any disadvantages of additional tax ? Ans. The 1% tax will increase cost of inter-state job work of goods. The 1% tax will increase cost of inter-state transactions and hence, to that extent, will discourage inter-state movement of goods. Thus, it will be hindrance to inter-state movement of goods. It is yet to be seen whether 1% additional tax will be imposed only at the initial movement from originating State or at each inter-state movement of same goods. Q.41 Will cross utilization of credits between goods and services be allowed under GST regime? Ans. Cross utilization of credit of CGST between goods and services would be allowed. Similarly, the facility of cross utilization of credit will be available in case of SGST. However, the cross util

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l also be phased out, the final net burden of tax on goods, under GST would, in general, fall. Since there would be a transparent and complete chain of set-offs, this will help widening the coverage of tax base and improve tax compliance. This may lead to higher generation of revenues which may in turn lead to the possibility of lowering of average tax burden. Q.43 In case of transfer of business (change in the constitution), whether the input tax credit would be available to transferee? Ans. Where there is a change in the constitution of a taxable person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provision for transfer of liabilities, the said taxable person shall be allowed to transfer the input tax credit that remains unadjusted in its books of accounts to such transferred, sold, merged, demerged, leased or amalgamated business in the manner prescribed. Q.44 If any loss to states arises due to the introduction of GST , wou

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