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Goods and Service Tax – GST – By: – CA Akash Phophalia – Dated:- 9-9-2015 – Introduction Prior to 01.04.2011 service tax was deposited to the credit of Government in the month following the month in which payment was received. In other words service tax was payable on receipt basis. Thereafter, in 2011 in order to achieve a closer fit between the present service tax regime and its predecessor GST regime a need of shift from cash basis to accrual basis was felt and the same was implemented. Existing Provision under Service Tax In the present law the point of taxation depends upon the three factors viz. date of completion of service, date of payment of service tax and the date of issue of invoice. General Rule including continuous supply of services Situation Point of Taxation Advances received Date of receipt of such advance Invoice issued within stipulated period, and – No payment is received before issue of invoice Payment is received before the time of issue of invoice Payment is re

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the said period of three months. Point of taxation for Associated Enterprises – In case of associated enterprises where the person providing the service is located outside India, the point of taxation shall be the date of debit in the books of accounts of the service receiver or the date of payment, whichever is earlier. Special provision for Individuals/partnership firms/LLP – Where aggregate value of taxable service provided by the individuals and partnership firms from one or more premises is ₹ 50 lakhs or less in the previous financial year, the service provider has the option to pay service tax on cash basis on the taxable services upto the total of ₹ 50 lakhs in the current financial year Point of taxation in case of change in effective rate of tax – Date of completion of service Date of issue of Invoice Date of Payment Point of taxation Before Before After Date of issue of Invoice Before After Before Date of Payment Before After After Date of issue of invoice or paym

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basis of supply of goods and supply of services. However, this article is emphasizing the point of taxation on the overlapping transactions to provide harmony in pre-GST and post-GST regime. Overlapping transactions It is proposed to consider only two factors for identifying the point of taxation in post-GST regime – Completion of service, and Issue of Invoice. The taxability will be expected to be determined as under (service is taxable in both pre-GST and post-GST regime):- Completion of Service Raising of Invoice Point of Taxation Pre-GST Pre-GST Pre-GST Post-GST Pre-GST Post-GST Pre-GST Post-GST Post-GST In case the service is not taxable in pre-GST regime and taxable in Post-GST regime or vice-versa, the possible point of taxation event is the completion of provision of service irrespective of the date of issue of invoice or date of payment. In case of continuing services, the point of taxation in post-GST is expected to be on similar lines as in the current regime. However, these

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Goods and Service Tax – GST – By: – CA. Chitresh Gupta – Dated:- 7-9-2015 – GST is commonly described as indirect, comprehensive, broad based consumption Tax. The Dual GST which would be implemented in India will subsume many consumption taxes. The objective is to remove the multiplicity of tax levies thereby reducing the complexity and remove the effect of Tax Cascading. The objective is to subsume all those taxes that are currently levied on the sale of goods or provision of services by either Central or State Government. Subsumation of large number of taxes and other levies will allow free flow of larger pool of tax credits at both Central and State level. 1. PRINCIPLES OF TAX SUBSUMATION The various Central, State and Local levies were examined to identify their possibility of being subsumed under GST. While identifying, the following principles were kept in mind: Taxes or levies to be subsumed should be primarily in the nature of indirect taxes, either on the supply of goods or o

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y, commonly known as Countervailing Duty (CVD) Special Additional Duty of Customs – 4% (SAD) Surcharges and Cesses levied by Centre are also likely to be subsumed wherever they are in the nature of taxes on goods or services. This may include cess on rubber, tea, coffee, national calamity contingent duty etc. Central Sales Tax to be phased out. 3. STATE TAXES TO BE SUBSUMED IN GST Following State taxes and levies would be, to begin with, subsumed under GST: VAT / Sales tax Entertainment tax (unless it is levied by the local bodies) Luxury tax Taxes on lottery, betting and gambling State Cesses and Surcharges in so far as they relate to supply of goods and services Octroi and Entry Tax Purchase Tax 4. TREATMENT OF SPECIFIC GOODS The Central Government tabled the 122nd Constitution Amendment Bill, 2014 ( Bill ) on the introduction of Goods and Services Tax ( GST ) before the lower house of Parliament on December 19, 2014. On analysis of the Bill, the Bill contains the following treatment

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t of States to tax alcohol products is intended to remain unaltered in the near future. 4.2 TAX ON TOBACCO PRODUCTS Tobacco and tobacco products would be subjected to GST. However, it can be subjected to a separate excise duty by the Centre. 4.3 TAX ON PETROLEUM CRUDE/ HIGH SPEED DIESEL/ MOTOR SPIRIT/ NATURAL GAS/ AVIATION TURBINE FUEL The States would continue as per the current laws to impose Value Added Tax (VAT) on Petroleum Crude/ High Speed Diesel/ Motor Spirit/ Natural Gas/ Aviation Turbine Fuel on intra-state sales while inter-state sales would continue to attract Central Sales Tax (CST). These products would be transitioned into the GST regime from a future date to be notified by the GST Council. It is currently unclear from the schematics of the Bill whether States would fully discontinue collecting VAT/ CST on these products from this notified date, or whether the transition would be gradual. The Bill however also states that these products can be subjected to an excise duty

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Goods and Service Tax – GST – By: – ashish chaudhary – Dated:- 5-9-2015 Last Replied Date:- 7-9-2015 – Goods and Service Tax (GST) upcoming in India is likely to result in widening the tax base substantially by covering large number of potential taxpayers who are hitherto not covered in the tax net either due to their activity not being in the nature of taxable or due to some exemption being claimed. It is talked that the present assessee base on Central side itself is expected to rise to approximately 60 lacs assessees from existing base of apprx. 15 lacs. One of major contributor in this rise would be job workers who may not be required to get registered under present taxation system. The paper writer has analysed impact on job workers in the proposed GST regime viz a viz current taxation system. The manufacturing industries now-a-days stick to their core competencies and get most jobs done on outsourced basis. The sending of raw materials/semi-finished materials for some process as

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e job worker/ so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for the aforesaid process. If one were to go by the definition of the term job work , it is evident the raw materials have to be supplied by another person. In Prestige Engineering India Ltd v CCE Meerut, – 1994 (9) TMI 66, the Supreme Court held that when the job worker contributed his own material to the goods supplied by the customer and engaged in manufacturing, the activity was not one of job work. However, minor additions by the job worker would not take away the fact that the activity was one of job work. B. Job Work and Manufacture (under Central Excise) Since excise duty is on manufacture , duty liability arises only when the goods are manufactured during job work. The test as to whether the process amounts to manufacture or not would be determined as per section 2(f) of Central Excise Act, 1944 which defines manufacture as

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e required to charge duty of excise. The goods must be used in manufacturing process by principal manufacturer which should result in a dutiable product being manufactured on which duty of excise is being charged. The activity undertaken by job worker would not be liable to service tax also as any process amounting to manufacture or production of goods is covered by Negative list. Process does not amount to manufacture:Where the processing undertaken by the job worker does not amount to manufacture, the said job worker could be liable to service tax.But before determining the same, one need to examine the exemption provided in Notification No. 25/2012 ST 20.06.2012 (called as Mega Exemption Notification). As per the said Notification, job work in relation of any goods on which appropriate duty is payable by the principal manufacturer, is exempted. Appropriate duty means duty payable on manufacture or production under a Central Act or a State Act, but shall not include Nil rate of duty

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h provides for valuation as follows: Goods directly sold from job worker premise:Where the goods are sold by the raw material supplier/principal manufacturer from the factory of job worker – the value would have to be the transaction value of the goods so sold by the raw material supplier/principal. This will apply only when the raw material supplier and the buyer of the goods are not related and price is the sole consideration for the sale and the goods are sold for delivery at the time of removal from the job worker's factory. Illustration: Let the value of raw materials supplied by principal be ₹ 1,00,000 and the job workers conversion cost be ₹ 15,000 and his profit margin be ₹ 5,000. If the principal sells the goods processed by the job worker at ₹ 1,50,000. Then assessable value would be ₹ 1,50,000 (that is the price charged by the principal for sale of the processed goods). Goods not sold from job worker premise: In a case where the goods are no

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s works contract, value would be arrived at as per options provided under Rule 2A of Service Tax (Determination of Value) Rules, 2006. 2. Provisions under CST/VATAct A. Interstate job work:The goods may be sent outside state for job work.In the absence of any sale, there would be no liability on principal manufacturer to charge CST. The material may be sent along with a declaration that the goods have been sent on job work. The work undertaken by job worker may or may not involve use of material. Where no material is used, there is no liability to charge CST as there is no transfer of property involved.When the job worker uses materials there would be a transfer of property in goods involved and the transaction would be taxable. The taxability would depend upon the following: Material Billed separately: This would be a divisible contract in which job worker would charge the applicable CST on the materials transferred by him. He would also bill pure labour charges. In such cases the wor

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ood clearly to be service by the Court s by applying dominant motive test and consequently there is no liability to charge CST. B. Job work within state: Where principal manufacturer and job worker are located within same state, there would be no liability on principal manufacturer to charge VAT in the absence of sales. The liability charge VAT would be same as discussed above in case of interstate job works. 3. Applicability of GST on job work Having discussed the impact under Central Excise, Service Tax and CST/VAT, now we shall discuss the taxability under proposed GST regime. The taxable events under present laws are manufacture (Central Excise), provision of service (Service Tax) and sale (CST/VAT) respectively for applicability of different kind of taxes. Under proposed GST regime, all these concepts would lose relevance and the taxable event would only be supply of goods and supply of services . The goods supplied by principal supplier to job worker would be supply of goods char

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rd. Similarly, job worker may charge duty based on intrinsic value of goods in the form in which it is supplied by him after processing. This can be done based on the price at which supplied by principal supplier + his job work charges (including material and labour). Nature of taxes and credit: In case of job work within state, both principal supplier and job worker would be required to charge CGST and SGST. In case of inter-state movement, IGST would be charged. The tax charged by one party would be eligible as credit to another which may be adjusted against discharging their output liability. Treatment of additional 1 % tax: In case of interstate supply of goods, additional 1% tax would also be levied for initial 2 years. However, it is proposed not to levy this tax where supply of goods is other than on account of sales. Hence, principal supplier would not be required to charge this additional tax on supply of goods to job worker. Similarly, the job worker needs not to charge this

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bmission of forms: Under present law, the principal supplier and job worker is required to transfer the material on the basis of Annexure -II challan, delivery challan, forms under CST/VAT Act etc. All these requirements are expected to be done away under proposed GST regime. Though there could be some documentary evidence/format which may be prescribed to capture the transactions other than of supply. Booking of revenue in books of account: The distinction between supply and sale will continue in the post GST regime also. All supply may not be considered sales. As the transaction would not be on account of sale, it shall not be recorded as revenue in the books of principal supplier as well as job worker as revenue can be booked only when there is transfer of property in goods which is guided by Accounting Standards issued by ICAI. If all supplies are treated as revenue in the books of account, the revenue would be inflated in the books of both principal supplier as well as job worker

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 5-9-2015 Last Replied Date:- 26-12-2015 – Introduction:- Goods and Service Tax (GST) has been a topic of debate in the recent past. With the NDA government looking firm to bring in the GST, the members of Rajya Sabha still have a number of objections to raise, and for their very reasons. Finance Minister Arun Jaitley has been strongly contending that the implementation of GST would remove cascading effect of taxes thereby making way for a business-friendly economy. However, on close observation of Clause 18 of the Constitution (122nd Amendment) Bill, it appears that things are quite different than what is being projected. This clause seeks to impose the most talked 1% additional levy by the Centre on supply of goods in course of inter-state trade or commerce. In this article, an effort is being made to analyze this levy and criticism faced by it. What is 1% additional levy? The provisions relating to 1% additional levy have b

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. The period of two year can be revised by GST Council. The proceeds from this levy will be assigned to the State in which the supply of goods originates. Further, provisions contained in sub-clause 2 to 4 to the clause 18 are explained as follows:- Sub- clause no. Provision contained 2 Collection from this levy shall not form part of consolidated fund of India and will be deemed to be assigned to the State from where the supply originates. Only the proceeds attributable to Union territories shall be credited to Consolidated Fund. 3 Centre may prescribe list of goods on which this levy will not be applicable. 4 The law related to principles for determining the place of origin (from where the supply of goods takes place) shall be formulated by Parliament. Need of such levy:- Since GST is a destination based tax, it is said that initially the manufacturing states or the states where the production of goods is done; will suffer loss. The purpose of this 1% additional tax is to compensate

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is is against the very basic objective of GST. Even the main feature of GST as popularized by the ruling party is that there will be no cascading effect. When the Credit of this levy will not be allowed where will it go? Definitely, it will be included in the cost of the goods that will further be subject to tax. Thus, cascading effect will be there. Also, it is mentioned that this 1% Additional tax shall be levied for a period of two years or such other period as the Goods and Services Tax Council may recommend. By these features, this levy seems to be replica of Central Sales Tax (CST) levied currently. Also, this levy has most of the inherent features of CST. At the time of introduction of VAT, CST was levied and it was said that it will be reduced year by year and ultimately it will be abolished. This promise was kept in the initial years and rate of CST was reduced from 4% to 3% and from 3% to 2% respectively. However, there was no reduction thereafter and still after around 9 yea

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to Delhi. Such finished goods are then consigned to Maharashtra for sale. In this way, by the time they reach Maharashtra, they would be laden with an additional tax burden of 3-4%, being 1% for each state. It would be more feasible for the dealer in Maharashtra to import such goods rather than getting them from Delhi. On one hand, the government has been laying emphasis on Make in India campaign, wherein, special efforts are being made to ensure the free flow of goods and services in the economy. On the other, additional duty of such kind is being levied. It is beyond our understanding- how such additional duty shall contribute to the free flow of goods and services? Rate of GST is already high, why 1% extra with no credit facility? Scope of GST would be much wider than any other indirect tax structure. Thus, a no. of goods and services which are not taxable under present structure would also come under the ambit of tax. Also, the rate of GST is already proposed to be around 18-22% wh

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he basic principles of GST. Also, the provision of compensation of loss and this 1% additional levy is basically drafted for loss making states during transitional period of GST. When we talk of clause 19, it would result in no profit no loss situation since whatever the loss state is making will be compensated by Centre. However, when it comes to 1% additional levy, though the states making losses will have some income from this tax but the states already making profit or under no profit no loss situation will definitely gain extra. This seems to be against the basic principles of introducing this levy as the states gaining will gain more and that too with the cost of other states which shall have to bear the cost of this 1% additional levy. While parting:- Going by the progressions, it wouldn t be wrong to state that Modi Sarkar has actually lost the basic sight of GST. What was depicted to be the most simple taxation system is now being turned into a cobweb of complications. They ne

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Goods and Service Tax – GST – By: – Bimal jain – Dated:- 4-9-2015 – Even though Parliament s Monsoon Session could not turn into success, the Indian Government did not step-back and has been significantly working towards the success of Goods and Services Tax ( GST ) to be able to meet the April, 2016 deadline. The Government has pressed the pedal on the much needed administrative ground work for rolling out the ambitious Indirect tax reform on time. IT Infrastructure As per the Revenue Minister, the IT Infrastructure for GST implementation is being kept ready, so that as soon as the legislation gets approved, the revenue department will be in a position to take the necessary follow-up actions in terms of ordinary legislations and executive

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three committees, one has already finalised the draft, and the other two are expected to finish by September 15. The Two Verticals Two dedicated verticals are being created to deal with policy and implementation of the new tax regime by the CBEC. As stated by VS Krishnan, a CBEC member, Work is going on full steam…Sub-groups under our officials and that from states are working on the law and procedures… directorate forservice tax will make way for a directorate for GST with two verticals . The said verticals are being set up for performance management and taxpayer services respectively to be able to respond timely to the GST requirements, keeping in mind the Government s resolve of maintaining ease of doing business. The new directorat

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te 2/3 majority in Rajya Sabha where the NDA is in a minority. As per senior Ministers, the Session is expected to be a two and a half day or three day affair. Congress s take on convening the Special Session Even though most of the parties are on board for the GST Bill, Congress wants the tax rate at 18% to be incorporated into the law. The same has been found difficult by the Government to accept as this decision should be left to the GST Council. Also the reduction in Centre s weightage in the council is not agreeable. The Government is trying to rally support and put Congress under pressure by arguing that, it would be in national interest to back the reform to help India avoid a blowback from the Chinese crisis. Source: Compilation fro

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Goods and Service Tax – GST – By: – ashish chaudhary – Dated:- 2-9-2015 – India is on behest of implementing Goods and Service Tax (GST) which is said to be biggest tax reform since Independence. One important aspect under GST would be to deal with transitional provisions especially in relation to ongoing contracts which have been entered into pre GST but not completed at the time of GST introduction. Present discussion is confined to transitional challenges on the contracts entered into by service providers only. The conditions in contract and their legal enforcement is a subject matter of civil law. However, under the concepts of consensus ad idem or offer and acceptance it is better that the parties to the contract consider and factor the future GST in the contracts. If consciously and knowingly one enters into a contract in pre-GST period, then when GST is introduced, there would be no question of additional tax being paid in an inclusive contract. In case, GST is not considered,

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the very survival of the entity. Apart from this, there could be exemption under existing service tax law on services provided to government say construction of road, canal, dam or other irrigation works etc. These contracts are of significant value and include the value of both material as well as services. It is very unlikely that theexemption will be continued in the GST regime on these type of contracts and if charged to standard rate of tax say 22%, you can think of what would happen to service provider. None of such infrastructural projects have that much margin. Following could be few suggestions which could safeguard interest of service provider: It must be clearly mentioned in the contract that the tax imposed under GST would be charged and recovered separately. Proper records must be maintained evidencing the extent of work completed before introduction of GST. The point of taxation under GST regime is also expected to be based on completion of 2 out of 3 events (completion o

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to be incorporated in the service to avoid levy of additional 1% tax. Proper reconciliation must be prepared for revenue arising from these contracts booked in profit & Loss A/c viz a viz shown inST-3 returns. 2. Contract for services presently exempted/abated/covered by negative list: Service provider may presently be engaged in providing services which are covered by exemption notification or by negative list. Most of the exemptions presently granted are expected to be phased out in the GST regime. This could make the service provider to expose with the indirect taxation system for the first time in the GST regime. These service providers are most likely to hit as the tax rate presently from zero is expected to be in the range of 20-24%, directly affecting the cost especially in cases of B2C cases where end consumer may not be eligible to take the set off of tax charged by service provider. In case of ongoing contracts expected to overlap in GST regime, following could be guidin

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is could directly affect the service exporters as the service receiver located abroad may not be concerned with the changes of tax structure in India and may straightforward deny for reimbursing additional tax cost especially where tax clause is not mentioned in the contract. The exporter of service could take following actions to safeguard against possible consequences of imposition of tax: All existing and running contracts must be relooked to examine the tax clause. If not mentioned, modify existing agreement or enter into supplement agreement to provide for GST in case transaction ceases to be export of service. Refund claim must be filed for all credit accumulated till the time GST is introduced especially in cases where it could be possible that the services presently covered under export of services could be taxed as per revised place of supply rules. Clear demarcation should be established as regards to services rendered but not billed as on the date of GST introduction. Sugges

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ditional tax @1% during initial 2 years period etc. Internationally accepted practice in few countries is to treat all composite supply to be considered as supply of service notwithstanding it involves material portion also.This obviate need to segregate the consideration towards goods and services. It is not certain as of now what would be supply principle of works contract, yet following aspects could assist a service provider engaged in ongoing works contract during transition to GST. Specify all components of tax i.e. VAT, service tax clear in the agreement/work order so that additional cost arising under GST do not eat into the margin of service provider. It could be possible that existing contracts are exempted which may be brought under tax net in GST regime. In order to avail the exemption benefit extended during pre GST regime, proper documentary records must be mentioned clearly mentioning the stage of completion of contract. Certificate from chartered engineer as to stage of

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Goods and Services Tax – GST Dated:- 1-9-2015 – News – Dr. Hasmukh Adhia (IAS:GUJ (1981) took over as the Revenue Secretary, Ministry of Finance, Goverrnment of India here today. Earlier Dr. Adhia was holding the charge of Secretary, Department of Financial Services (DFS) in the same Ministry. Dr. Adhia had also earlier worked as the Finance Secretary in his cadre i.e. in the State of Gujarat. Later speaking to the media persons, Dr. Adhia said that his priorities among others would be to

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Goods and Service Tax – GST – By: – CA Akash Phophalia – Dated:- 1-9-2015 – This article is prepared to know about the proposed scheme of availing unutilized credit available with the assessee in pre-GST regime. The article also deals with the fate of credit for pre-GST unregistered assessees who will register in post-GST regime. Current provisions relating to input credit are different in case of central excise, service tax and other tax laws. Further, many of the state laws are different in relation to input credit provision. Possible methods which the Govt may adopt w.r.t to credit transition stocks could be as under: Fully allow deduction/refunds/carry forwards Fully deny deduction/refunds/carry forwards (of certain restricted goods) F

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ication of such inputs and transfer of credits. Burden of proof would be on claimant. Purchase invoice along with appropriate stock records duly certified by CA may be asked. Credit of Semi Finished and Finished goods lying in stock Credit on input goods used in semi finished/finished goods would have already been taken in tax records. Thus, no separate exercise. Require an appropriate mechanism to identify and allow taxes paid, based on records maintained. Credit of Capital Goods Must be allowed to carry forward the taxes paid in respect of eligible capital goods lying in stock. Subject to certain conditions as may be prescribed. These should also be allowed to take credit of capital goods that has suffered appropriate tax in pre GST regim

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Goods and Service Tax – GST – By: – CA Akash Phophalia – Dated:- 28-8-2015 – REGISTRATION IN GST (Proposed) Registration No can be PAN based followed by alphabets, numerals etc. (Eg. 10 digit PAN, 2 digit State code, 1 alphabet indicating nature of activities of an assessee and numerals indicating number of state registrations) GST is a destination based tax and as a result of State code, revenue can be allocated between states easily. There will be online Application form and it may provide link with the existing registrations. Original/digital signature of authorised person. Uniformity in documents throughout India. Government is proposing to charge a fee for registration under GST. Registration Number will be provided immediately to ass

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Goods and Service Tax – GST – By: – CA Akash Phophalia – Dated:- 25-8-2015 Last Replied Date:- 31-8-2015 – As per recommendations by Joint Working Group appointed by Empowered Committee in 2007, the GST in India may have four components in its tax structure as – (a) Central tax on goods upto retail level, (b) Central Service Tax, (c) State Vat tax on goods, and (d) State VAT on services. As far as tax rate structure is concerned each of the above four components may have four-rate categories. The Central GST will be administered by the Central Government and the State GST will be administered by the State Governments. The different taxes will be subsumed as under :- Subsumed in Central Tax Subsumed in State Tax Central Excise Duties (CENVA

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ion between State GST and Central GST is not expected to be allowed. This is just for your reference. It does not constitute our professional advice or recommendation. – Reply By Srikanthan S – The Reply = Dear Mr Akash Phophalia, thanks for the summary.However, you have mentioned that 'taxable event will shit to sale rather than manufacture'. Is it not 'supply' of goods/services which will be taxable event? That's why industries are looking at the fate of 'stock transfers or branch transfers' on which there could be a levy. Do kindly clarify.Regards,S.Srikanthan – Reply By KASTURI SETHI – The Reply = Taxable event will be on supply and Supply will be defined. It will include Stock transfer, branch transfer. – Re

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Goods and Services Tax – Started By: – ASHOK AMIN – Dated:- 24-8-2015 Last Replied Date:- 21-12-2015 – Dear Sir, Please let me know if GST is implemented will there be any change in record keeping for excise units. Can they combine trading & manufacturing activity under same place. Regards – Reply By YAGAY AND SUN – The Reply = Dear Ashok,Do not worry on things which are not in existence at present scenario. Government is working on this aspect to get it pass in Rajya Sabha and if passed in this financial year, then, there would a paradigm shift in Indirect Taxation and would also give boost to our country's economy/GDP between 1% to 2%. However, the double entry system and accounting principles would not be disturbed.So cheer up M

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nalized.It is subject to so many changes. You will have to wait for. – Reply By ASHOK AMIN – The Reply = Dear Sir,Ok. Noted. Thanks. – Reply By Ganeshan Kalyani – The Reply = The Empowered Committee has released Draft on registration, return, payment and refund. However these are draft and it will keep changing until it is finalized. – Reply By KASTURI SETHI – The Reply = Sh.Ganeshan Kalyani Ji, You are right, Sir. Draft GST will keep changing as now BJP has opened Pandora's box which has stalled the proceedings in Rajya Sabha. Now chances for passage of GST bill in Rajya Sabha are slim. GST Bill will be in doldrums. The winter session in Parliament ends on 23.12.15. Only 10 days have left. They should have opened Pandora's box afte

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Finance Minister to Inaugurate Two Day Annual Conference of Chief Commissioners / Director Generals of Customs, Central Excise and Service Tax on Monday, 24th August, 2014; Conference to Focus on Emerging Areas such as Taxpayers Services, Ease of Doing Business, Make in India and Goods and Services Tax Among Others; Dr. Arvind Panagariya, Vice Chairman, Niti Aayog to Deliver the 4th B.N. Banerji Lecture. – Dated:- 21-8-2015 – The Union Minister of Finance Shri Arun Jaitley will inaugurate the two day Annual Conference of the Chief Commissioners and Directors General of Customs, Central Excise and Service Tax on Monday, 24th August 2015 in the national capital. Shri Jaitley will deliver the keynote address on the occasion. This session will

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esults will be shared and discussed in the conference. Other new initiatives taken by CBEC in the area of simplifying procedures, promoting ease of doing business, facilitating trade, import & export and use of information technology to re-engineer business processes will also form part of the discussions with the Chief Commissioners. The Conference will commence with revenue analysis and strategies to achieve the Budget Estimates for the current Financial Year. Theme based interactive sessions with the Chief Commissioners will focus on areas such as on Infrastructure and HRD issues , Capacity Building , Taxpayers Services , Ease of Doing Business , and MIS System . Dr. Arvind Panagariya, Vice Chairman, NITI Aayog will deliver the 4th B

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Atal Pension Yojana (APY) Modified to Increase the Acceptability of the Scheme Amongst Informal Sector Workers and Make the Scheme More Viable; Subscribers Would Now Have an Option to Make the Contribution on a Monthly, Quarterly, Half Yearly Basis Instead of on a Monthly Basis Earlier; Discontinuation of Payment of Contribution Provision Substantially Modified in Favour of the Subscriber; Penalty on Delayed Payment has Been Simplified – Dated:- 20-8-2015 – The Atal Pension Yojana (APY) was launched by the Prime Minister Shri Narendra Modi at Kolkata on 9th May, 2015. APY provides a minimum guaranteed pension of ₹ 1000 per month or ₹ 2000 per month or ₹ 3000 per month or ₹ 4000 per month or ₹ 5000 per month, at

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is earlier Discontinuation of payment of contribution provision has been substantially modified in favour of the subscriber. The account will not be deactivated and closed till the account balance with self-contributions minus the Government co-contributions becomes zero due to deduction of account maintenance charges and fees Also the penalty on delayed payment has been simplified to Rs. One (1) per month for contribution of ₹ 100, or part thereof, for each delayed monthly payment instead of different slabs given earlier Similarly, premature exit from the scheme before sixty years of age was not permitted earlier except in exceptional circumstances, i.e., in the event of the death of the beneficiary or terminal disease. Now the modif

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Goods and Services Tax – Started By: – SANDESH SHINDE – Dated:- 18-8-2015 Last Replied Date:- 14-12-2015 – Dear Sir, Please explain us when there is stock transfer within state which GST would be levied, IGST or CGST & SGST and additional 1% will leaviable.Please explain, thanks & regards. – Reply By KASTURI SETHI – The Reply = If stock transfer is within State it would attract tax under CGST or SGST depending upon the product whether scheduled under CGST or SGST. No additional 1 % will

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VAT and Sales Tax – Exemption granted on Invalid F-Form – Invocation of revision jurisdiction – KGST – If there was error resulting in revenue losing tax, it would be prejudicial to interests of Reven

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Goods and Service Tax – GST – By: – Bimal jain – Dated:- 17-8-2015 – Dear Professional Colleagues, Rajya Sabha adjourns sine die without passing the GST Bill With the Prime Minister Shri. Narendra Modi Government going hammer and tongs using its majority in Lok Sabha to clear legislative agenda, Shri. Modi's reform agenda suffered a major blow on Thursday, August 13, 2015, when the lawmakers ended the Monsoon Parliament session without approving the much awaited Constitution (122ndAmendment) Bill, 2014 on Goods and Services Tax ( GST Bill or 122nd CAB ) aimed at boosting economic growth by harmonising a mosaic of State and Central levies replacing a chaotic structure that inflates costs. The Monsoon session of the Parliament, which saw protests between the Government and the Opposition, has been a complete washout. However, on the second day of the session, i.e. on July 22, 2015, Select Panel of the Rajya Sabha managed to submit its Report on the GST Bill amid Opposition furore ov

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advice of the Government for the purpose of deliberating and voting on the Bill . There are, however, three caveats: If a Bill passed by one House but rejected by the other; or If disagreement between the two Houses on amendments to the Bill; or When more than six months have lapsed after the date of receipt of the Bill by the other House without passing it. Thus, calling a Joint session to make up the difference is not an option for two reasons viz. GST Bill was struck in the Rajya Sabha with Oppositions neither saying yes or no and for a Constitutional Amendment Bill, it needs to be passed separately in each house by a 2/3rd majority of the members, present and voting. Extending the session after break Still keen to ensure passage of the GST Bill, the Centre has kept its option open of reconvening the session with the Cabinet Committee on Parliamentary Affairs on Thursday deciding not to recommend immediate prorogation of the Houses after they are adjourned sine die. Special session

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by External Affairs Minister Sushma Swaraj and Finance Minister Arun Jaitley. GST Bill hangs midway: April, 2016 deadline under mist The virtual closing of the Monsoon session without any major business being transacted is a blow to the Government which was looking to get major pending legislations, including the GST bill, passed in both houses of the Parliament so as to get the economy back on track. The delay in the passage of the GST bill has put a question mark on the planned roll out of the GST era by the appointed date of April 1, 2016 which now seems to be cumbersome task for the Government to meet a self-imposed deadline. The GST Bill which will subsume all Indirect taxes into one uniform levy across the Country, has to be first passed in the Rajya Sabha with 2/3rd majority followed by its ratification by at least 50% of the States before it becomes law of the land. Following this, the Government will set up the GST Council within 60 days from the date of commencement of 122nd

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Dated:- 12-8-2015 – Under the proposed GST regime, both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on supply of goods and services. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the States Goods and Service Tax (SGST) on all transactions within a State. The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. The proceeds

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Income Tax – Withholding of tax – The software has been purchased from Microsoft, the cost of which has been distributed amongst all the group entities. It is pure case of reimbursement of cost and ad

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Companies Law – Manipulative, fraudulent and unfair trade practices – Circular trading – not in dispute that six clients of Appellant acted in collusion amongst each other in synchronized / circular /

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GST KNOWLEDGE SERIES # 4: COMPARISON OF GST BILL 2014 AND RECOMMENDATIONS OF SELECT COMMITTEE OF RAJYA SABHA,2015 – Goods and Service Tax – GST – By: – CA. Chitresh Gupta – Dated:- 5-8-2015 Last Replied Date:- 30-12-1899 – The Constitution (122nd Amendment) Bill, 2014 was introduced in Lok Sabha on December 19, 2014 and was passed by it on May 6, 2015. The Bill was referred to a Select Committee of Rajya Sabha for examination which submitted its Report on July 22, 2015. The Report contained various recommendations along with three Notes of Dissent submitted by Congress, AIADMK and CPI. The Table below compares the provisions of the 2014 Bill with the recommendations of the Select Committee and the Notes of Dissent. Constitution (122nd Amend

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al 1% tax, states should be permitted to retain 4% of centre s share of IGST on all inter-state supplies of goods. Compensation to states (Clause 19) Parliament may provide for compensation to states for a maximum period of five years 100% Compensation to be for a five year period. 100% compensation to be provided for five years. Compensation must be deposited in a GST Compensation Fund, under the GST Council. Coverage of GST (Clauses 12, 14 and 17) Alcoholic liquor for human consumption to be exempt from GST. GST is to be levied on petroleum crude, high speed diesel, motor spirit, natural gas, aviation turbine fuel at a later date. GST to be imposed on tobacco. Centre to impose additional levy on tobacco. No Changes Proposed Tobacco and to

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of GST rates (over the floor rate) within which CGST and SGST may be levied on specific goods or services or class of good or services. Voting: No changes proposed A statutory GST Council is not required. A body like Empowered Committee of state Finance Ministers is adequate. A ceiling of 18% must be imposed on GST rates. Special consideration to be given to states or Union Territories whose population does not exceed 20 lakh, (ex. Goa or Puducherry). Voting: States must have 3/4 of the weighted votes, and the centre must have 1/4. GST is by far one of the most important and voluminous Indirect Taxation reform in India which has far reaching effects. GST Knowledge Series is an attempt to spread awareness of the Proposed GST Regime in clear

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Goods and Service Tax – GST – By: – Pradeep Jain – Dated:- 4-8-2015 Last Replied Date:- 6-8-2015 – Introduction:- The Goods and Services Tax (GST) is the most awaited reformation in the indirect tax structure of India which is planned to be implemented w.e.f. April 1, 2016. It has been the most happening topic in the parliament since December 19, 2014 when The Constitution (122nd Amendment) (GST) Bill, 2014 was first presented by the Finance Minister, Mr. Arun Jaitley in the Lok Sabha. In this piece of writing, the authors have made an attempt to give an insight of merits and probable threats in GST proposals. About GST:- GST is a Value Added Tax proposed to be levied in lieu of manufacture, sale and consumption of goods and services. It will replace all indirect taxes whether levied on goods and services by the Central and State governments including Central Excise Duty, Countervailing Duty, Service Tax, Value added tax, Octroi and entry tax, luxury tax, etc. It will be implemented c

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indirect tax is kept keeping in view the cascading effect and due provisions are framed to lower down the same. However, more the no. of taxes, more the cascading effect. When we talk of excise duty, service tax or VAT, there are Cenvat credit rules which allow the credit of input tax/duty suffered by the material or service so used. Still there are cases where the cascading effect is clearly visible but there is no mechanism in the law to deal with it. For eg. entry tax, octroi, etc. Almost every goods are subject to these taxes but no credit is allowable as these are collected normally by local bodies. Thus, ultimately these taxes form part of the cost of product which is further subject to excise duty or service tax or VAT. Thus, cascading effect do exists. This particularly happens when the same goods or service suffers a no. of taxes and no set off facility is available. Implementation of GST will bring drastic reduction in the cascading effect as most of the indirect taxes prevai

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ards. In the year 2006, Supreme Court gave a landmark judgment in the case of M/s BSNL and others wherein it was held that if the sale of the SIM card is merely incidental to the service being provided and facilitates the identification of the subscribers, their credit and other details, it would not be assessable to sales tax. While giving this decision, Supreme Court held that both the taxes cannot be levied on single transaction. But interestingly, even after this judgment there are several transactions which are subject to both service tax and excise duty. Further, there is a concept of works contract, both in the VAT law as well as in service tax. Though in both the laws, there is a provision of abatement or composite scheme, still there is part of total value which is subject to both VAT and service tax. All these problems will come to an end after implementation of GST. Rationalization of tax structure & simplification of compliance procedure:- At present, there are multiple

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be maintained by employing man, money and energy. This ultimately leads to inefficient utilization of nation s resources. Increase in product competitiveness in international market:- With the implementation of GST, in long run, there will be reduction in overall cost of products manufactured in India. This will make Indian products more competitive in International market. It is worth mentioning here that many of our top competitors in the international market have already switched to GST. Implementing GST in India will be a step forward in making our product more cost effective in international market. PROBABLE THREATS IN GST PROPOSAL:- Lots of publicity has been made about the benefits of implementing GST. However, on going through the GST proposal, it is found that there are some grey areas which sighs that it is nothing but a carry forward of VAT, excise duty and service tax in new name and fame. Let s have a look on these areas of negativity of GST:- Rate of GST: It s on higher

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It has been proposed that Decision in GSTC 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 onefourth of the total votes cast, and (b) The votes of all the State Governments taken together shall have a weightage of three-fourth of the total votes cast, in that meeting. And the vote of each state shall have a weightage proportionate to the population of that State. [emphasis supplied] Thus, while assigning the weightage to vote, the population has been made the prime criteria. It is worthwhile to mention here that there are certain states which have very less population but their share in taxes is on much higher side. Such states, though contributing more, will lag behind in the decision making process taking place at GST Council. 1% additional tax on supply of goods:- It has been propose

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may not take effective steps for smooth run of GST as they are being compensated for the losses. It is also possible that the actual loss is much lower than that shown on records in order to get higher compensation. The Central Government will have to take steps to ensure that this proposal in the GST bill is not misused by the States. GST Proposal: Not friendly to important service sector like banks:- It is much hyped that GST will bring Indian goods a step forward in the International market. The reasons so given are that the GST will make Indian products cheaper in long run and thus will promote exports. In this regard, it is to be noted that the banking sector pays an important role in the exports. Whether it is export of service or export of goods, the role of banks is vital. It is worthwhile to mention here that at present service tax @ 14% is being levied on the banking transactions. On introduction of GST, this rate will be on much higher side as predicted. This will ultimatel

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s proposal which was explained by the Government that if any separate body is constituted for dispute resolution, it will hamper the working of GSTC in general and of legislature in particular. However, even after this explanation, there are possibilities that the decision taken on the disputes are not true and fair, particularly when they relate to small states which possess lower voting power (since voting weightage is based upon population). If any separate body is not constituted, the task of laying down the dispute resolution mechanism will be the toughest one. While parting:- The introduction of GST along with other government initiatives like the make in India programme have the potential to drastically bring down costs, re-define and re-shape the economy of India. The benefits of implementing GST have been much talked but the probable threats have only been popularized as opposition party s publicity stunts to hamper the implementation of GST. Whatever be the case, the fact is

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Goods and Services Tax – GST Dated:- 3-8-2015 – News – F. No. A-11013/18/2015-Ad.IV Government of India Ministry of Finance Department of Revenue (Central Board of Excise Customs) 6 th Floor, HUDCO Vishala Building, Bhikaji Cama Place, R.K. Puram, New Delhi, dated 31.07.2015 ORDER No. 01/Ad.IV/2015 Consequent upon, the decision of the Board to create a GST Directorate in Delhi by shifting the headquarters of DGST, Mumbai to Delhi, it has been decided that Directorate General of Service Tax (DGST) will henceforth be re-named as Directorate General pf Goods Service tax (DGGST) w.e.f. 01.08.2015. 2. It has also been decided that the headquarter of DGGST will be shifted to Delhi from Mu

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d in DGST Mumbai, Kolkata and Chennai (other then the AD who is loan basis to DGCEI) are to be placed at the disposal of Chief Commissioner, Service Tax, Mumbai, Chief Commissioner Service Tax, Kolkata and Chief Commissioner service Tax, Chennai respectively w.e.f. 1.08.2015on loan basis for one year. (b) The Services of Group B C and D officers posted in DGST Mumbai, Kolkata and Chennai are placed at the disposal of respective cadre controlling Chief Commissioners for a period of one year. (c) The officers posted at DGST New Delhi will be treated as the officers posted to DGGST New Delhi w.e.f. 01.08.2015. 4. The issues with approval of IFU vide their U.No. 466/2015/IFU-II dated 31.07.2015. – News – Press release – PIB Ta

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Dated:- 31-7-2015 – The State Governments have not objected to the proposed formula of the Union Government for sharing of revenue with States that would be earned as Goods and Service Tax (GST). Under the proposed GST regime, both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and services for consideration. Centre would levy and collect Central Goods and Services Tax (CGST) and States would levy and collect the State Goods an

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VAT – Delhi – Public Notice – Dated:- 30-7-2015 – DEPARTMENT OF TRADES & TAXES VYAPAR BHAWAN IP ESTATE DELHI PUBLIC NOTICE Dated 30/07/2015 It is envisaged that GST is likely to be rolled out with effect from 01st April 2016. Accordingly all the TINs of dealers shall be replaced with the GSTIN on the basis of their declared PAN details in the department. Department has observed that in respect of various registered dealers the PAN details are either not available in the database of the Depa

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Goods and Service Tax – GST – By: – CA. Chitresh Gupta – Dated:- 29-7-2015 Last Replied Date:- 30-12-1899 – One of the crucial issue for successful implementation of GST relates to the determination of the GST rate. Since the GST is primarily intended as an exercise in reforming the consumption tax in India and not an exercise for additional resource mobilisation through discretionary changes, the CGST and SGST rates should be such rates which would yield the same revenue as collected from the various taxes which will be subsumed in the CGST and SGST (hereafter such rates shall be referred to as 'revenue neutral rates' or 'RNR'). The RNR for the CGST and the SGST is determined in accordance with the formula- RNR = R X 100 B Where; RNR : Revenue Neutral Rate for the Centre or the States as the case may be; R : Collection from the Central or State taxes, as the case may be, which are proposed to be subsumed in the CGST and SGST; B: Estimated Tax base of the GST [A] WHAT

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the government is not able to arrive at consensus for the threshold. Currently, under Excise it is ₹ 1.50 Crores, under Service Tax it is ₹ 10 lacs and under various Vat Act, it ranges from ₹ 5 lacs to ₹ 20 lacs. Thus unless the government has clarified the above, the exact tax base which will be liable to GST can t be estimated. Consequently, determination of GST rate will be herculean task. [B] WHAT WILL BE RATE STRUCTURE UNDER GST? As per the First Discussion Paper released by The Empowered Committee, it has been decided to adopt a two-rate structure -a lower rate for necessary items and goods of basic importance and a standard rate for goods in general. There will also be a special rate for precious metals and a list of exempted items. For upholding of special needs of each State as well as a balanced approach to federal flexibility, and also for facilitating the introduction of GST, it is being discussed whether the exempted list under VAT regime including

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nt. However, in order to provide for an alternate buoyant source of revenue to the third-tier of Government. The rate of CGST and SGST on all non-SIN goods is recommended by Task Force at the single rate of 5 percent and 7 percent, respectively. For SIN goods comprising of emission fuels, tobacco products and alcohol, both the Central government and the State government may continue to levy taxes as at present, in addition to CGST and SGST. The empowered committee of state finance ministers has virtually trashed the Thirteenth Finance Commission task force s Goods and Services Tax (GST) report. They question the methodology applied by the committee to arrive at the 12 per cent revenue neutral rate. The states have expressed reservations on the methodology and the approach of the taskforce. It (the rate suggested by the taskforce) does not tally with the estimates made by the government, the National Institute of Public Finance and Policy, and the states. We will like them to review the

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sal in rates across various States compromises the objectives of a single common market significantly. The matter becomes even more complex if such variation in rates is permitted in the case of services. Services, being intangible, are difficult to be related to geographical locations and pose significant challenges in deciding the precise place where they are liable to be taxed. If the autonomy is permitted only in respect of goods, (and not services), it leads to different problems of distinguishing between goods and services, which is not easy in a modern economy where such distinctions are withering away fast. Moreover, variations in rates across States lead to arbitrage opportunities, resulting in evasion and distortion in production and supply chain. Thus the benefits of keeping harmonized structure far outweigh the desire to provide unrestricted autonomy. On floor rates, Dr. Parthasarathi Shome, Director & Chief Executive, Indian Council & Research on International Econ

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goods, not exceeding one percent in the course of inter-State trade or commerce. This additional tax will be collected by the Government of India for a period of two years, and assigned to the States from where the supply originates. Recently, the Select Committee of Rajya Sabha known to be suggesting that this additional @ 1% tax on inter-state supply of goods should be confined to inter-state movement of goods for consideration only. Sub Penal of Empowered Committee Recommended the revenue neutral rate 27% (SGST 13.91% and CGST 12.77%). This has been referred to the National Institute for Public Finance and Policy (NIPFP), as these were on the revenue estimates of 2011-12. COMMENTS A Select Committee of Rajya Sabha (which is examining the GST Constitutional 122nd Amendment Bill 2014) has observed that Standard GST rate should be within 20%, while the lower one should not cross 14%. It also suggested that the proposed GST council may opt for a broad based and moderate rate as the high

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