Author: admin_gst

Corrigendum to Trade Circular 5T of 2017 dt. 27-02-2017 and release of Phase 3 of GST Enrollment.
6T of 2017 Dated:- 4-3-2017 Maharashtra SGST – Circular
GST – States
Office of the Commissioner of sales Tax,
Maharashtra State,
8th Flr., Vikrikar Bhavan,
Mazgaon, Mumbai-400010
TRADE CIRCULAR
No. JCST/Mahavikas/GST Enrollment/2016-17/B-1322-Mumbai, Dt, 04/03/2017
Trade Circular No. 6 T of 2017
Subject: Corrigendum to Trade Circular 5T of 2017 dt. 27-02-2017 and release of Phase 3 of GST Enrollment.
As per Trade Circular 5 T of 2017, dated 27-02-2017, last dates related GST Enrollments are communicated to Trade.
Following words from the second paragraph of point B of Trade Circular 5 T of 2017, dated 27-02-2017, related to d

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Model GST Bill to go for 20% peak tax, slabs intact for now
GST
Dated:- 2-3-2017

New Delhi, Mar 2 (PTI) The GST Council has proposed to raise the peak tax rate to 20 per cent, from the current 14 per cent, in the model goods and services tax Bill to preclude the requirement of approaching Parliament for any change in rates in future.
The change in the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28 per cent agreed upon last year, but is only a provision being built into the model law to take care of contingencies in future, two officials in the know told PTI.
The revised draft of model GST law, which was made public in November 2016, provides for a maximum rate of tax under the new regime at 14 per cen

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"For the moment, we will not tinker with the rate structure of 5, 12, 18 and 28 per cent. The GST Council has decided to keep the upper cap higher at 20 per cent so that in future in case of need to hike tax rate, there is no need to approach Parliament for a nod and the GST Council can raise it," the officials said.
This means the central GST and state GST can be up to 20 per cent each, leaving the scope for a maximum levy at 40 per cent.
"The 4-tier rate structure that has been decided will hold for now. By keeping the upper cap at 20 per cent, we are just keeping an enabling provision which the Council can exercise at a later date after deliberation," the official added.
Mirroring the model GST law, the CGST, SGST

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Migration to GST of existing Central Excise / Service Tax Assessees
GST
Dated:- 2-3-2017

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE & CUSTOMS
NORTH BLOCK. NEW DELHI-110001
Tel. : +91-11-23092628 Fax : +91-11-23092346
D.O.No. IV (33) 16/2016 – Systems
28th February, 2017
My Dear Colleague,
Subject: reg.
Please refer to my DO letter IV(33) 16/2016-Systems dt. 27th Jan, 2017 on the above subject regarding setting up GST Migration Seva Kendras for smooth transition of existing taxpayers to GST.
2. The process of migration to GST has been going since 20.01.2017 in Central Excise (when all Provisional IDs were made available to taxpayers via ACES website) and since 09.02.2017 i

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6.3%
Other zones
60,651
2,282
3.8%
Total
16,32,116
1,34,106
8.22%
Total
1,10,495
3,244
2.94%
4. It is a matter of serious concern, that while the migration figure is in range of 50% to 90% for majority of States/UTs, the migration with respect of Central Excise/Service Tax assessees through CBEC is a paltry 2.94% in C.E. & 8.22% in S.T.
5. The information on migration of CE/ST Assessees is available on CBEC Antarang portal with Zone wise list of all CE/ST taxpayers who have been issued provisional IDs and list of taxpayers who have enrolled on GST. The enrolment list is updated on a daily basis.
6. I would urge all field formations to conduct more seminars and training in local language to encourage taxpayers to mi

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Preliminary Steps
Query (Issue) Started By: – Aitha RajyaLakshmi Dated:- 1-3-2017 Last Reply Date:- 13-3-2017 Goods and Services Tax – GST
Got 10 Replies
GST
Can anyone say what are the preliminary steps and cautions to be taken to get ready for GST.
Reply By KASTURI SETHI:
The Reply:
Update yourself with daily dose of GST on TMI and wait for enactment. Uncertainty is still there.Any change can take place before enactment of GST.
Reply By YAGAY AND SUN:
The Reply:
You may enlist all your transactions which are being conducted in current scenarios and simulate it in GST scenarios to know the effect and savings etc. Say on stock transfer, in GST you would have to pay the IGST. Further, if stock are lying in the Depot more than of one year then you cannot pass on the taxes. Start collecting all statutory forms. Submit timely proof of export. Make changes in Power of attornies to incorporate the phrase GST. Attend seminars, trainings etc. Check the feasibilities of the ver

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for the same. However final version of the GST Impact Analysis would be submitted when the final GST Law will come in force.
Regards,
YAGAY & SUN
Reply By KASTURI SETHI:
The Reply:
Dear All Experts,. One nation, one tax does not mean 5 slabs. What ever may be reason or basis or background. Peak rate 20 % for IGST 20 % for CHEST. 40 %. When GST implemented, chaos is feared. So many registrations. How justified ? So many problems are in the offing.
Reply By KASTURI SETHI:
The Reply:
Let us see which way the wind blows. Whether it proves 'ease of doing business' or disease of doing business ?
Reply By KASTURI SETHI:
The Reply:
Rectification pl.
Pl. read SGST in place of CHEST.
Reply By Ganeshan Kalyani:
The Reply:
I agree with Sri Kasturi Sir's view.
Further, the big corporates are getting tax impact study done from consultants who are charging good amount. The fun is they do the work in assumptions. Why are they assuming? Simple the law is on draft stage. Only

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ortal to help traders and other stakeholders' transition to the upcoming Goods and Services Tax (GST) regime has been launched. Through the portal, businesses can ascertain the impact of GST on their business, profits and revenues and also understand steps for smooth transitioning to the new indirect tax regime that is likely to be rolled out from July, Reina Consulting, which has launched the website, said in a release.
By using free basic tools, small traders, service providers and manufacturers can determine their financial gains under GST on a real-time basis by simply inserting their existing purchase and sale details, Ankur Jain, the Partner of the firm, said. Large businesses can use advanced tools on the portal, gstimpact.com, for obtaining a detailed report on GST's impact, the company said.
The report highlights various factors contributing to the gains apart from advisory on vendor negotiation, logistics management, and vendor re-negotiation under GST regime. Reina Con

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Zero rated supply and consequences of charging IGST in place of CGST and SGST
By: – Sanjeev Singhal
Goods and Services Tax – GST
Dated:- 1-3-2017

What is Zero rated supply and what is the benefit and implication of the such supply. Just look at the provision of the same provided in Revised GST Law and IGST Law
As per revised GST Law Zero rated Supply has been provided in Section 2(111)
” Zero rated supply ” means supply of any goods and /or services in terms of section 15 of the IGST Act, 2016; and ”
As per revised IGST Law how the Zero rated supply has been defined in Section-2(29) ” Zero rated supply” shall have the meaning assigned to it under Section 15 ; and ”
But there is typographical error in both the definitions under both laws as the “Zero rated Supply” is defined in Section 16 of the IGST Act, 2016.
Zero Rated Supply [ Section- 16 ]
* It means that taxable supply of goods and/ or services namely ;
* Export of goods and / or services
* Supply of go

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* Taxable person who considered the transaction as intra-state and later found to be inter State shall not be liable to pay any interest on the amount of IGST.
Law is silent on the first mistake where TP has paid tax under IGST and where he need to pay SGST and CGST . Whether he need to pay interest on amount of tax payable as SGST and CGST.
About the Author:
Author is practicing chartered accountant in Gurgaon and having specialization in Service Tax and Haryana VAT. He can be reached at sanjeev.singhal@skaca.in. WWW. skaca.in
Reply By Ramanujam Varadarajan as =
As regards consequence of tax wrongly deposited, my understanding of Sec.70 of Draft law, is different from the the position explained in the article. In other words,
a. On a transaction where IGST is paid instead of CGST/SGST, no interest will apply on CGST/SGST payable. No clarity as to whether IGST wrongly paid can be availed as refund or it can be appropriated as CGST/SGST liability.
b. On a transaction where CG

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wish that both the provision should have been embedded in draft law in one place (one section) in order to avoid any misinterpretation.
Dated: 4-3-2017
Reply By Ramanujam Varadarajan as =
Sec.70 of SGST/CSGT law and Sec.19 of IGST law jointly read together confirms the view that if any tax is wrongly paid as inter-state instead of intra-state and vice versa, no interest would apply on payment of tax correctly.
Only point which requires further clarity is if IGST is wrongly paid instead of CGST/SGST (or vice versa), the provision states that the tax wrongly paid is to be granted as refund, subject to conditions. In other words, there is NO automatic appropriation provided for tax wrongly paid against tax correctly payable. While tax correctly payable is to be paid again, tax wrongly paid is to be claimed as refund as per provisions (working capital blockage!).
Dated: 6-3-2017
Reply By Sanjeev Singhal as =
Yes there is automatic appropriation . it will be refunded on one hand an

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SMALL BUSINESSES UNDER GST (PART-II) (Composition Scheme)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 1-3-2017

Composition Levy
Composition levy has been in vogue in indirect taxes to address the compliance issues vis-a-vis revenue in case of small business units or specific business units having complexity in determination of valuation of taxable amount.
Under GST regime, there is also a concept of composition levy. An alternate levy for small businesses, whose aggregate turnover in financial year doesn't exceed ₹ 50 lakh, composition levy in lieu of tax will be payable at a rate not less than 2.5 per cent in case of manufacturer and 1 per cent for others (basically traders).
Under GST regime, 'aggregate turnover' includes the aggregate value of-
* all taxable supplies,
* exempt supplies,
* exports of goods and/or services and
* inter-State supplies of a person having the same PAN,
to be computed on an all India basis

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ver limit of ₹ 50 lakh.
Example
Mr. A, a taxable supplier supplied goods valuing ₹ 30 lakh. He also supplied exempt goods valuing ₹ 10 lakh. He also supplied goods in inter-State valuing ₹ 10 lakh. During this period, Mr. A returned goods valuing ₹ 5 lakh to the supplier from whom he had received such goods.
In this case, the outward turnover of A would be ₹ 55 lacs (30 + 10 + 10 + 5). Whereas his aggregate turnover would be ₹ 50 lacs i.e ₹ 55 lacs – ₹ 5 lacs.
Registration under Composition
Registration as taxable person is compulsory to opt for the scheme. Minimum exemption limit under GST will be ₹ 20 lakh and for special category states (north eastern and hill States), it will be ₹ 10 lakh. Further, composition levy is to be applied on an all India basis as per PAN. It would mean that all the registrations across India belonging to same PAN shall have to avail the scheme. If the aggregate turnover exceeds ₹

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opt for composition)
Composition scheme only for supply of goods
Section 9 of the Model GST Law (version-II) specifically allowed the composition scheme only to supply of goods and not services. It may be noted that as per Schedule II, all the supplies effected as works contract (including real estate, construction contracts) would be regarded as services and not goods.
For the small dealers in majority of states who are already operating within the existing turnover limit of ₹ 50 lakh, the impact may not be much. Assessees may find composition scheme beneficial where turnover is upto ₹ 50 lakh. However, turnover includes exempt turnover and exports. It is not taxable turnover. Business with multi-State business under the same PAN may find it difficult to compute aggregate turnover correctly. Works contracts shall be treated as services in GST and as such, will not be allowed composition levy whereas presently, works contracts are allowed composition under VAT and abatem

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Format of ARN
Query (Issue) Started By: – Aitha RajyaLakshmi Dated:- 28-2-2017 Last Reply Date:- 28-2-2017 Goods and Services Tax – GST
Got 1 Reply
GST
Can any one say the meaning of Check sum digit (last number of Application reference number) under GST migration.
Reply By YAGAY AND SUN:
The Reply:
A check digit is a form of redundancy check used for error detection on identification numbers, such as bank account numbers, which are used in an application where they will at least

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SMALL BUSINESSES UNDER GST (PART-I)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 28-2-2017

There are more than sixty million business enterprises in India with about just one million incorporated and few thousand listed companies. The majority of business are covered under SME or MSME segment including traders & retailers. This sector is mainly specialized in the production, trading and retailing of consumer commodities and providing services to consumers. The implementation of GST is certainly going to affect this sector and the employees associated with it.
Under the present excise laws, no duty is required to be paid by a manufacturer having a turnover of less than ₹ 150 lakh. Under Service Tax laws threshold exemption scheme is available for small service providers having aggregate value of ₹ 10 lakh in the preceding financial year. Under Vat laws such exemption varies from State to State. Therefore currently small scale providers enjo

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spective, is going to be beneficial to the small business as in GST many taxes will be subsumed leading to lesser taxes, lower compliance cost and above all, there will be no tax cascading.
Taxable Territory
Unlike the present Service Tax law, GST law shall extend to whole of India including the State of J & K. Therefore, if small traders/retailers supply goods/services in state of J&K, then it will subject to levy of GST. Likewise supply of goods/services to SEZ and exports shall be considered as zero rated supply. However, it is proposed that import of goods / services shall be subject to Integrated GST (IGST).
Therefore, supply of goods and services by traders and retailers like electronic equipments, apparels, event management related services etc. in state of Jammu & Kashmir shall also be subject to levy of GST.
Taxable Person
For GST, 'taxable person' means a person who is registered or liable to be registered under Schedule-V of the model law. A person, who has obtained or

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tion of ₹ 10 lakhs based on the aggregate threshold limit of ₹ 10 lakh and no Service Tax is payable in such cases. In the GST regime, the limit of threshold exemption will be enhanced to ₹ 20 lakh on all India basis except in case of north-eastern and hilly States (total 11 States) where it will be ₹ 10 lakhs. These States are Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim, Himachal Pradesh, Jammu & Kashmir and Uttarakhand. For this purpose, definition of 'aggregate turnover' has been provided in section 2(6) of the GST law which is different from the existing one. Since under GST regime, the limit of threshold exemption gets reduced from ₹ 1.50 crore to ₹ 10 lakh or 20 lakh, it may adversely affect the small scale traders & retailers in case of goods. However, for services, it is beneficial.
Small business may not be directly impacted by GST as there is a threshold exemption to businesses up to an annual t

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s 20 or 10 lakh is available for registration under GST. A taxable person can also opt for composition scheme if his aggregate turnover is more than rupees 20 or 10 lakh and less than rupees 50 lakh.
Further, importer, exporter, and any person who make inter-state supplies shall also be considered as a taxable person and is required to be registered under GST irrespective of threshold limits.
Under GST regime every person who is liable to be registered under the Act, shall have to apply for State-wise registration for supply of goods / services from different States. There is no concept of single centralized registration under GST regime as is presently done. Small traders & retailers may opt for different registrations state wise in case of multiple branches or business verticals if they are engaged in supply of goods or services from such place or have different verticals.
Business vertical means a distinguishable component of an enterprise that is engaged in supplying an individu

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Filing returns under GST
Query (Issue) Started By: – Aitha RajyaLakshmi Dated:- 28-2-2017 Last Reply Date:- 1-3-2017 Goods and Services Tax – GST
Got 5 Replies
GST
In case of GST, statement of both Inward and outward supplies has to be uploaded in for each and every Tax period.
In case of an Assessee had only supply of Services, whether he need to upload the details of the Inward and Outward Supplies?
Reply By KASTURI SETHI:
The Reply:
Yes. See Section 34.
Reply By Ganeshan Kaly

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(a) Last date for Disabling Provisional Id and Access Token of Non-Compliant Phase 1 & Phase 2 dealers, (b) Distribution of Provisional Id and Access Token for Phase 3 dealers and (c) Last date for submission of signed Enrollment Applications.
5T of 2017 Dated:- 27-2-2017 Maharashtra SGST – Circular
GST – States
Office of the Commissioner of sales Tax,
Maharashtra State,
8th Flr., Vikrikar Bhavan,
Mazgaon, Mumbai-400010
TRADE CIRCULAR
No. JCST/Mahavikas/GST Enrollment/2016-17/B-1215 Mumbai, Dt. 27/02/2017
Trade Circular No. 5 T of 2017
Subject: (a) Last date for Disabling Provisional Id and Access Token of Non-Compliant Phase 1 & Phase 2 dealers, (b) Distribution of Provisional Id and Access Token for Phase 3 dealers and (c) Last date for submission of signed Enrollment Applications.
Reference: 1) Trade Circular 35 T of 2016 dt. 12-11-2016
2) Trade Circular 2 T of 2017 dt. 06-01-2017
A. Introduction:
As per the above referred Trade Circular 35 T of 2016, dt.

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uploading of necessary documents and final submission of signed application using Digital Signed Certificate (DSC) or e-Sign.
During the period of last three and half month, around 85% of the dealers of Phase 1 and Phase 2 have collected provisional Ids from MSTD, around 79% of the dealers of Phase 1 and Phase 2 have activated their accounts on GST portal whereas only 11% of the dealers of Phase 1 and Phase 2 have submitted signed applications on GST Portal.
The Nodal Officers from MSTD are in continuous communication with the dealers of Phase 1 and Phase 2 for completion this entire process, either through personal visits, phone calls, emails and SMSs. Wide publicity has already been given to this entire activity either through department's web-portals and through News Papers by State as well as Central Government departments. Specialized Registrations Camps are also being taken across the MSTD Offices.
Even after taking all these efforts, there are some dealers, who are not c

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vated account on GST Portal are hereby requested to collect Provisional Id from MSTD and activate their account on GST Portal on or before 06-03-2017.
If any active dealer from Phase 1 and Phase 2, who will not collect Provisional Id from MSTD and will not activate their account on GST Portal on or before 06-03-2017, then it will be assumed that, this dealer is not willing to enroll for GST for any reason and his Provisional Id and Access Taken presently available with MSTD as well as in GSTN will be disabled/deleted permanently. If, in future, such dealers, wants registration under GST Act, they may apply for the same after the implementation of GST Act, but needless to say, such dealers will not be eligible for the benefits of transitional Provisions under the GST Act.
If any dealer is willing to enroll for GST, but due to any technical difficulties, it is not possible for him to either collect Provisional Id from MSTD or activate their account on GST Portal, then such dealer shoul

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alers is expected to start very soon. Once this process is started, the list of all such dealers will be published under What's New Section of MSTD's portal www.mahavat.gov.in.
For this Phase 3, dealers registered as on 14th February 2017 with valid PAN are considered If any PAN/TIN is already covered in the list, published along-with the Trade Circular 2T of 2017, and the same is not corrected as on 14th February 2017, then the concerned dealer is also not considered for Phase 3. Such dealers Will be considered in subsequent phases only after necessary corrections.
D. Distribution of Provisional Login Id and Access Token to dealers whose PAN is amended after generation of Provisional Id:
There are cases wherein dealers (from Phase 1 and Phase 2) have noticed that their Provisional Ids has been generated on incorrect PAN, and accordingly they have applied for and amended the PANs in registration database of MSTD. The process of generation and distribution of fresh Provision

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ion With e-sign by login to their account on GST Portal. one can view the submitted application after login by accessing “My Saved Applications” at the GST Common Portal.
For those taxpayers, who do not hold a valid Digital Signed Certificate (DSC), please note the following:
* If the constitution of business is Proprietor, he should provide AADHAAR number of proprietor under promoters/partners tab, if he has not provided it, he can provide it now. Same details will be populated in Authorized signatory section. In case if the proprietor is the only signatory, please don't forget to click on primary Authorized Signatory box in the Promoter's /Partner section.
* In case of constitution of business is other than Proprietor, please provide the AADHAAR number of any authorized signatory in Authorized Signatory section.
following Steps need to be followed to e-Sign the application: –
1. Select the any authorized signatory having AADHAAR,
2. Select Submit with e-Sign button i

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CBEC launches GST mobile app & invites suggestions on AIR Duty Drawback rates under GST
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 25-2-2017

Dear Professional Colleague,
CBEC launches GST mobile app & invites suggestions on AIR Duty Drawback rates under GST
Striving towards implementation of Goods and Services Tax (“GST”) from July 1, 2017, the Central Board of Excise and Customs (“CBEC” or “the Board”) has launched a mobile application for GST, in step with the government's Digital India initiative.
Taxpayers can readily access a host of GST information such as:
* Migration to GST-Approach and guidelines for migration
* Draft Law-Model GST Law, IGST Law and GST Compensation Law
* Draft Rules – Rules rela

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sociations/ Chambers of Commerce on All Industry Rates (“AIR”) of Duty Drawback under the GST framework.
Suggestions in this regard can be submitted by March 15, 2017 via email sent to the mentioned id therein. Further, the list of Export Promotion Councils/ Commodity Boards/ Trade and Industry Associations/ Chambers of Commerce, have been specifically provided, who can submit the suggestions.
It is worthwhile to note that under GST, imports and exports of goods and services would be treated as Inter-State supply of goods or services and thereby, Integrated GST (“IGST”) would be payable along with Basis Customs Duty (“BCD”) on import of goods and IGST on import of services. It is likely that under GST, rate of Duty Drawback could be limit

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Clarification on re-registration of a vehicle
Query (Issue) Started By: – pvj naidu Dated:- 24-2-2017 Last Reply Date:- 24-2-2017 Goods and Services Tax – GST
Got 5 Replies
GST
Sir, I belong to Andhra Pradesh but living in Gujarat. I am planning to purchase a car in Mar 2017 and want to get register in Gujarat only by paying present taxes. But my stay in Gujarat is only temporary and likely to move my state i.e Andhra Pradesh after 6 months and by that time GST will be implemented. Then what tax should I pay to re-register my vehicle there?? Kindly give clarification on this issue please..
Regards
PV Jagaeesh
Reply By YAGAY AND SUN:
The Reply:
As per Motor Vehicle Act read with Rules made thereunder. RTO department will cal

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SERVICES UNDER GST REGIME (PART-III) (Supply, Valuation & Input Credit)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 24-2-2017

Time of Supply of Services
GST shall be payable at the earliest of the following dates, namely:
* the date of issue of invoice by the supplier or the last date on which he is required to issue the invoice with respect to the supply, or
* the date on which the supplier receives the payment with respect to the supply.
The provisions are generally similar to existing Point of Taxation Rules.
Domestic / SEZ Supply
For units located in SEZ having operations across India and providing supply of services to customers located across India, the issue would arises as to where to pay GST, and whether this would require splitting of invoices based on various locations of the service provider or the service recipient. For this purpose, the draft law has prescribed the requirement of determination of the location from where the servi

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ply
Place of supply of services where the location of supplier of service and the location of the recipient of service is in India
In general
Location of recipient of supply, if available otherwise location of supplier of supply.
Place of supply of services where the location of the supplier or the location of the recipient is outside India
In general
Location of recipient of supply, if available otherwise location of supplier of supply.
However, for specific services, place of supply of services provisions have been prescribed in sections 9 and 10 of model IGST law.
Valuation of Services
Transaction value shall be considered for payment of tax, with various inclusions prescribed in the valuation provisions.
This transaction value of supply is subject to specific inclusions or exclusions. Specific inclusions are as follows:
* Any taxes, duties, cesses, fees and charges levied under any statute, other than SGST /CGST/IGST.
* Any amount that the supplier is liable to pay i

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s to be issued.
Payment of Tax
Taxes shall be paid on a monthly basis online. Physical payments have been prohibited. Payment of tax can also be made by debit card / credit card / RTGS etc. Presently, in certain cases, payment of tax is allowed on a quarterly basis. For Government supplies, Tax Deduction at Source (TDS) will be done by the Government. In case of e-commerce, Tax Collection at Source (TCS) will have to be done.
Returns
Under Service Tax law, assessee is required to submit two half yearly returns in a year. However, Model GST law (version-II) provides for more than 30 returns which are required to be submitted by a registered person. Since the number of returns to be filed will be over 30, it would add to cost of compliance and more compliances. GSTN has appointed over 30 GST Suvidha Providers (GSPs) who will be the conduit or interface between the taxpayer and the GST network (GSTN). Service providers can avail the services of GSPs to comply with the GST requirements

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liability. While the GSTN system will enable fulfillment of this requirement based on the matching principle, inserting this as a condition may require discharge of responsibility by the recipient.
A taxable person, being an exporter may claim refund of any unutilized input tax credit at the end of any tax period. In other words, exporter of services shall be eligible to get refund on eligible inputs, capital goods and input services.
'Capital goods' has been liberally defined for being eligible to claim input tax credit in respect of capital goods. 'Capital goods' means goods, the value of which is capitalized in the books of accounts of the person claiming the credit and which are used or intended to be used in the course or furtherance of business. Accordingly, input tax credit will be eligible for capital goods only on those goods, the value of which is capitalized in the books of accounts. This will enable many service providers to claim Cenvat credit.
Input Se

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Suggestions on All Industry Rates (AIRs) of duty drawback under the GST framework
GST
Dated:- 24-2-2017

F.No.609/23/2017-DBK
Government of India
Ministry of Finance, Department of Revenue
Central Board of Excise & Customs
Drawback Division
4th floor, Jeevan Deep Building,
Parliament Street, New Delhi-110001
Dated 23rd February, 2017
To
Export Promotion Councils/ Commodity Boards/ Trade and Industry Associations/Chambers of Commerce
(As per list attached)
Subject – Suggestions on All Industry Rates (AIRs) of duty drawback under the GST framework
As you are aware, Goods and Services Tax (GST) is likely to be implemented by 1st July, 2017. The Model GST Laws are already in public domain. To ensure smooth transition to GST framework, the Drawback Committee is to formulate and recommend revised All Industry Rates (AIRS) of drawback on exports and/ or any other relevant drawback like rebate to be implemented for exports in the context of new GST environment and/or

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H) – New Delhi
12. Gem & Jewellery Export Promotion Council – Mumbai
13. Handloom Export Promotion Council (HEPC) – Chennai
14. Indian Silk Export Promotion Council – Mumbai
15. Indian Oilseeds and Produce Export Promotion Association (IOPEA) – Mumbai
16. Plastic Export Promotion Council – Mumbai
17. Pharmaceutical Export Promotion Council – Hyderabad
18. Project Export Promotion Council – New Delhi
19. Powerloom Development and Export Promotion Council (PDEXCIL) – Mumbai
20. Shellac and Forest Products Export Promotion Council – Kolkata
21. Sports Goods Export Promotion Council – New Delhi
22. Synthetic & Rayon Textile Export Promotion Council (SRTEPC) – Mumbai
23. Wool Industry Export Promotion Council – Mumbai
Commodity Board
24. Agricultural & Processed Food Products Export Development Authority (APEDA) – New Delhi
25. Coffee Board – Bangalore
26. Coir Board – Kochi
27. Jute Manufacturer Development Council – Kolkata
28. Marine Product Export Development Authority

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and Export Association – New Delhi
47. Hand Tools Panel – Jalandhar
48. Indian Bicycle Manufacturers Association – Ludhiana
49. Indian Council of Ceramic Tiles & Sanitaryware – New Delhi
50. Indian Tobacco Association – Guntur
51. Indian Sugar Mills Association (ISMA) – New Delhi
52. Jamnagar Chamber of Commerce & Industry (JCCI) – Jamnagar
53. Manufacturers Association of Information Technology (MAIT) – New Delhi
54. Moradabad Handicraft Exporters Association – Moradabad
55. Punjab Stainless Steel Industries Association – New Delhi
56. Panipat Exporters Association – Panipat
57. Seafood Exporters Association of India – Cochin
58. Society of Indian Automobile Manufacturers (SIAM) – New Delhi
59. Steel Furnace Association of India – New Delhi
60. Steel Wire Manufacturers Association of India – Kolkata
61. Tamilnadu Handloom Industry and Trade Association – Chennai
62. Tirupur Exporters Association – Tirupur
63. Tractor Manufacturers Association (TMA) – New Delhi
64. Wr

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Central Board of Excise and Customs (CBEC) launches a Mobile Application for Goods and Services Tax (GST) to inform the taxpayers of the latest updates on GST among others
GST
Dated:- 23-2-2017

In step with the Government's Digital India initiative, the Central Board of Excise and Customs (CBEC) has launched a mobile application for Goods and Services Tax.
Taxpayers can readily access a host of GST information such as:
* Migration to GST-Approach and guidelines for migration
*

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Returns under GST
Query (Issue) Started By: – Aitha RajyaLakshmi Dated:- 23-2-2017 Last Reply Date:- 25-2-2017 Goods and Services Tax – GST
Got 5 Replies
GST
Whether all (Currently only Service Tax Assesses) are required to file return monthly?
Reply By KASTURI SETHI:
The Reply:
Yes but not only monthly but quarterly, yearly also depending upon the nature and scope of services. Read Section 34 of revised draft Model GST.
Reply By Ganeshan Kalyani:
The Reply: Section 34 : Returns

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SERVICES UNDER GST REGIME (PART-II) (Registration and Supply)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 23-2-2017

Place of Registration / Centralized Registration
In the present service tax regime, there is a concept of centralized registration subject to fulfillment of certain conditions.
Under GST regime, registration may be required in each State from where supplies are being made. Hence, service provider may need to obtain registration in each State where there is a premises (including site office) from where services are being provided. Centralized registration will no longer be available which will increase the cost of compliance for the assessees. It would become an unproductive exercise for multi location enterprises such as banks, insurance company etc.
Supply
'Supply' means:
* all forms of supply of goods and/or services made or agreed to be made for a consideration by a person in the course or furtherance of business,
*

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ce to occupy land,
* Any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly,
* construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly where the entire consideration has been received before issuance of completion certificate or before its first occupation, whichever is earlier.
* works contract including transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract.
Information Technology Sector
Development, design, programming, customization, adaptation, up-gradation, enhancement and implementation of information technology software.
Hospitality
Supply of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred

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entioned services are taxed to service tax as a declared service under section 66E of the Finance Act, 1994. In some services like that of IPR or works contracts or restaurant sales, VAT is also payable. In GST regime, only one tax ,i.e., GST will be charged and moreover, there will be a clarity on to the nature of service. Overall tax rates are also likely to come down which may benefit the consumers of these services.
Inter-State or Intra-State
Any supply of services where the location of the supplier and the place of supply are in different States then, such supply shall be considered as inter-state supply and as such, accordingly, provisions of IGST law will be applicable. On other hand, any supply where the location of the supplier and the place of supply are in same State, then such supply shall be considered as intra-state supply and only CGST / SGST shall be levied.
Presently, all services are subject to central tax, i.e., service tax which applies to whole of India except

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ervice recipient, where the address on record of the recipient exists with the exporter. Hence, it will be critical for exporters to ensure that the address of service recipient on record can be established before the authorities on request.
Import of Services / Reverse Charge
Import of services from outside India shall be taxed in the hands of recipient of services under reverse charge mechanism. Central / State Government will also notify certain cases where tax shall be collected under reverse charge mechanism as is presently done.
Further, any person receiving certain specified services for personal use of value exceeding a specified amount will also be liable to pay GST under reverse charge.
Transactions between head office and branch offices located outside/inside India
Services provided to overseas branch would not be eligible as export of services due to specific exclusion for such transactions in the definition of 'export of service'. This is similar to the exis

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Key takeaways of 10th GST Council meeting – GST Compensation Bill gets nod; IGST, CGST and SGST Laws will be taken up in next meeting on March 4-5
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 22-2-2017

Key takeaways of 10th GST Council meeting:
GST Compensation Bill gets nod; IGST, CGST and SGST Laws will be taken up in next meeting on March 4-5
GST Compensation Bill gets the formal nod
Prospects of Goods and Services Tax (“GST”) becoming a reality from July 1, 2017, brightened further with the GST Council clearing the legally vetted draft of the GST Compensation Bill, in its 10th meeting, held on February 18, 2017 at Udaipur. The GST Compensation Bill seeks to stipulate the manner in which States will be compensated in the event of a loss arising in the first five years, due to the implementation of GST.
“The GST compensation law, that if a state has a loss, then for the first five years they will be compensated, the legally vetted draft has been formally

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and issues related to the definition of agriculture.
“These issues came up during the time of legal vetting of the draft laws, and the legal committee has received its clarifications from the Council….The legal committee will incorporate these changes and on March 4-5, the GST Council will meet again in Delhi and approve these laws.”, Mr. Jaitley said.
Fitment of items under GST rate slabs to be done after passage of laws
The decision on categorisation of goods in tax slabs (5%/12%/18%/28% and 28% with Cess) is not part of the law and will be worked out by the GST Council after the enabling laws are passed. Mr. Jaitley said that they would require one more major meeting of the Council to give its approval to the specific items in each of the slabs.
No discussion on anti-profiteering
Mr. Jaitley said that the issue of anti-profiteering did not come up for discussion during the meeting.
No additional powers to CAG
The Finance Minister added that the GST Council has decided

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16, 2017, had recorded that the States have been given the concession to change the formula over and above the agreed upon 90:10 division of tax assessees below the annual turnover threshold of ₹ 1.5 crore between States and Centre, respectively, and an equal division of assessees for a turnover of above ₹ 1.5 crore, after consultation with the Centre. Also, it had said that the GST Council had approved equal division of new registrants.
Our Comments:
Indeed, the approval to the Draft Compensation Bill, is a positive development, on way to GST implementation, as it was one of the contentious issues. Another good signal was that the political differences over demonetisation that hampered negotiations seem out of the way. All eyes will now be on next meeting of the GST Council on March 4-5 to see formal approval to the Draft Laws. Central laws would then be put up before the Parliament in the second leg of the Budget session, starting on March 9, 2017. Focus shall also rem

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he authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.
Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.
Reply By JAYARAMAN RAMAMURTHY as =
thanks. i have been reading the updated posted by you on every developments. pl continue to do it. it is very much interesting and knowledgeable.
thanks
jrm
Dated: 23-2-2017
Reply By Ganeshan Kalyani as =
Nice information. The main expectation amongst other is the tax rate on various goods and services. The same is said that it will be prepared after the GST law is finalised.

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GST: WAY FORWARD
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 22-2-2017

GST Council met for the tenth time at Udaipur on 18th February, 2017, its first meeting out of Delhi and at Udaipur (Rajasthan). This meeting being at Udaipur for only few hours, being of one day and then due to air connectivity, people were reaching till 12.00 p.m. of same day. While it could have been the last meeting before GST Bills were approved, this could not be done due to various other issues which had to be ironed out. Perhaps there will be few more meetings before GST see the light of the day.
10th GSTC meeting was crucial as it paved the way for many decisions before final approval of draft legislations take place. Though t

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, 2017.
* Fitment of rates in commodities to taken up by GSTC after approval of bills i.e. which item in which slab rate. The group of officers are doing the ground work on the same. (It may be noted that businesses are eagerly waiting for fitment as their impact analysis is dependent on the same).
Unlike earlier few meetings, there was some but vital progress made in moving forward. However, it is learnt that in the opening hours, there were some concerns on the minutes of earlier meeting in which dual administrative control issue between states and centers was decided. However, it was later resolved to the satisfaction of all with some amends.
The clearance of Compensation Bill of GSTC is a welcome step and it was bound to happen. Thi

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hopefully in next GSTC meeting, the approved bills may not be placed in public domain for further comments but may finally go to the Parliament as Bills. It would however, be desirable for the sake of transparency to let the country know what all amendments have been made. After all, India needs a near perfect law (if not perfect)with least of aberrations and inconsistencies. This becomes more important as these Bills may not be referred to any Standing or Select Committee of Parliament since these have been vetted by an all powerful GSTC.
Udaipur, being a romantic city could not romance with GST and the final approval got delayed for a fortnight or so as GST Council's next meeting is now scheduled for 2 days on 4-5 March, 2017 Delhi.

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SERVICES UNDER GST REGIME (PART-I)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 20-2-2017

Services contribute over 57 percent to Indian economy (GDP) which is the highest, followed by industry and agriculture. Services have been growing at the rate of 9-11 percent since last few years which is higher than the GDP growth itself which is growing @ 7-7.9 percent.
The tax on services was introduced in India in 1994 with levy of Service Tax @ 5% on just three services which grew to over 120 services by 2012. It was in July, 2012 that India moved to negative list approach to levy Service Tax on all services except those which are covered in negative list or are specifically exempt. The present rate of Service Tax is 15 % including cesses
Presently, services are defined very comprehensively under section 65B(44) of the Finance Act, 1994. Accordingly, the term 'Service' has been defined in clause (44) of the new section 65B inserted by the Finance Act, 2012

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ive States. Presently, Service Tax law extends to whole of India except the State of Jammu & Kashmir. Therefore, rendition of services in the State Jammu and Kashmir would also cover under the term 'supply' and accordingly, provisions of GST shall be applied to whole of India including the State of Jammu and Kashmir (J & K).
Threshold Exemption
Presently in Service Tax, there is a threshold exemption of ₹ 10 lakhs based on the aggregate turnover limit of ₹ 10 lakh and no Service Tax is payable in such cases. In the GST regime, the limit of threshold exemption will be enhanced to ₹ 20 lakh on all India basis except in case of North-eastern and hilly States (total 11 States) where it will be ₹ 10 lakhs. These States are Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim, Himachal Pradesh, Jammu & Kashmir and Uttarakhand. For this purpose, definition of 'aggregate turnover' has been provided in section 2(6) of the mo

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15 percent. This additional 3 percent increase of tax on supply of services will impact the service users and offset the benefit accruing due to lower rate on goods. If services are taxed at two different rates, say 12% and 18%, it may be some relief. In such case, industrial and luxury services may be taxed at a higher rate while other services may be taxed at 12 percent or lower rate.
Relief from Double Taxation- Sale v. Service
Presently, service providers find it difficult to identify what is service and what is a good facing tax disputes with both the tax Departments i.e., Service Tax and VAT /CST Departments. Service providers paying service tax do receive notices from VAT /CST Department and dealers who are paying VAT /CST get notices from service tax Department in case of overlapping transactions.
With the introduction of one single tax i.e., GST on supply of goods and /or services including supplies as per Schedule-II of GST model law (version-II), GST is likely to put an

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GST
Query (Issue) Started By: – Rajeev Khulbe Dated:- 20-2-2017 Last Reply Date:- 23-2-2017 Goods and Services Tax – GST
Got 6 Replies
GST
मेरे सभी प्रिय विशेषज्ञ को मेरा प्रणाम
कृपया करके आप मुझे ये बता सकते हैं की GST के अंतर्गत सेनवैट क्रेड&#2367

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del GST Act, 2016, taxable person is entitled to take credit on the stock lying on the day immediately before the date of grant of registration.
Reply By Ganeshan Kalyani:
The Reply:
The final draft GST law will have clarifity on such issues. Yes the credit which is disclosed in the last return under current tax regime will be carried forward in the GST and credit would be allowed.
Reply By KASTURI SETHI:
The Reply:
I support the views of Sh.Ganeshan Kalyani, an expert.
Reply By YAGAY AND SUN:
The Reply:
However, if the goods lying in the warehouse/depots/godowns are older than 12 months then no CENVAT Credit would be passed on such goods under GST Model Law.
Reply By MARIAPPAN GOVINDARAJAN:
The Reply:
We are not well versed in Hin

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Minutes of the 10th GST Council Meeting held on 18 February 2017
10th CST Council Meeting Dated:- 18-2-2017 GST Council – Minutes
GST
Minutes of the 10th GST Council Meeting held on 18 February 2017
The tenth meeting of the GST Council (hereinafter referred to as 'the Council') was held on 18 February 2017 in Hotel Radisson Blu, Udaipur, Rajasthan, under the Chairpersonship of the Hon'ble Union Finance Minister, Shri Arun Jaitley. The list of the Hon'ble Members of the Council who attended the meeting is at Annexure 1. The list of officers of the Centre (including the Ministry of Law), the States, the GST Council and the Goods and Services Tax Network (GSTN) who attended the meeting is at Annexure 2.
2. The following agenda items were listed for discussion in the tenth meeting of the Council
1. Confirmation of the Minutes of the 9th GST Council Meeting held on 16 January 2017
2. Approval of the Draft Compensation Law as modified in accordance with the dec

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bers on the draft Minutes of the 9th Council Meeting (hereinafter called the 'Minutes') held on 16 January 2017 before its confirmation.
4.1 The Secretary to the Council (hereinafter referred to as 'Secretary') informed that a letter had been received from the Government of Odisha suggesting that the version of Shri Tuhin Kanta Pandey, Principal Secretary (Finance), Odisha recorded in paragraph 21 of the Minutes be replaced with the following version – “Shri Tuhin Kanta Pandey, Principal Secretary (Finance), Odisha stated that there should be no diffused accountability except for enforcement and that a fixed proportion of dealers should be assigned to the Central and the State tax administrations. He added that option may also be made available to any State if it wishes to be allocated 100% taxpayers below the turnover of Rs. 1.5 crore subject to the overall share/proportion of dealers allocated to a State.” The Council agreed to replace the version of the Principal Se

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trative purposes. The Hon'ble Minister from West Bengal stated that it would be appropriate to insert the word 'all' before the expression 'administrative control' in paragraph 28(ii) of the Minutes as was done in paragraph 28(i). The Hon'ble Minister from Telangana suggested to add the word 'all' before the expression 'administrative control' in paragraph 28(iii) of the Minutes as well. The Council agreed to the suggested changes in the Minutes.
4.3. The Chairman, Central Board of Excise and Customs (CBEC) stated that the Council's decision in its 9th Meeting to vest administrative control of 90% of taxpayers having turnover below Rs. 1.5 crore with the States (recorded in paragraph 28(ii) of the Minutes) led to a highly skewed distribution of work and that there was a perception that this distribution was loaded against the Centre. He informed that this had led to unease and concern in the CBEC cadre and requested that either the distribut

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States decided to adopt their own model of distribution of work, then there was no point in deciding the issue in the Council and that if each State decided to have its own arrangement, then there would be chaos. The Hon'ble Minister from Punjab responded that the principle of 90%:10% division between the States and the Centre respectively, as decided by the Council, shall remain valid and there could be a deviation only when a State agreed for the same. The Hon'ble Minister from West Bengal cautioned that no such window should be kept open.
4.5. The Hon'ble Minister from Kerala stated that the Minutes should reflect the decision of the Council and any new issues could be discussed later. He observed that in the 9th Meeting of the Council, it was agreed that States would have control over 90% of the taxpayers having turnover below Rs. 1.5 crore for audit purpose and that there was no decision in respect of the points recorded in paragraph 28(iv) ('those States wanting

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rore was very large but the revenue yield was not much. This arrangement only gave flexibility to States. The Hon'ble Minister from Bihar stated that such a relaxation was not desirable and it went against the vision of one country, one model, one tax. The Hon'ble Minister from Karnataka stated that the Hon'ble Deputy Chief Minister of Gujarat had suggested in the 9th meeting of the Council that different models for distribution of work between the Centre and the States be kept but this was not agreed upon. He stated that the understanding was that the number of taxpayers to be distributed between the Centre and the States for taxpayers with turnover below Rs. 1.5 crore would be worked out on the basis of the formula of 90%: 1 0% and those above the turnover of Rs. 1.5 crore on the basis of the formula of 50%:50% and that the sum total of this number shall remain fixed. The pattern of distribution of taxpayers between the Central and State tax administration in a State coul

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ered. The Hon'ble Minister from Bihar also stated that the ratio of 90%:10% should not be changed. The Hon'ble Chairperson observed that change in the ratio of distribution for taxpayers with turnover below Rs. 1.5 crore and the corresponding change in distribution of taxpayers with turnover above Rs. 1.5 crore was a flexibility which a State could exercise only upon its consent and in its absence, the distribution ratio of 90%:10% would prevail. The Hon'ble Minister from Jammu & Kashmir suggested that in order to give flexibility in distribution of taxpayers, in paragraph 28(v), after the expression 'stratified random sampling', the following could be added: “or if the State so decides, on a negotiated basis, … ” The Hon'ble Minister from Bihar observed that once numbers were decided, no flexibility should be allowed.
4.7. The Hon'ble Minister from Telangana observed that the tax administrations of the Centre and the States needed to work together and pr

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with increased workload and they could use this flexibility to give a larger number of smaller taxpayers to the Central tax administration. He also observed that such a flexibility could help assuage the feeling of the CBEC cadre and that it was not desirable that one set of bureaucracy remained very unhappy with the distribution of work. He added that any change in work distribution would be subject to agreement by the State and therefore such a flexibility be allowed to the States. The Hon'ble Minister from Kerala observed that if there were practical difficulties at the time of implementation, the decision could be revisited but it could not be inserted into the Minutes in this manner. The Hon'ble Minister from Telangana observed that both the Central and the State administrations needed to work together to increase the revenue and that not much revenue came from the taxpayers below the turnover of Rs. 1.5 crore.
4.8. The Hon'ble Deputy Chief Minister of Delhi informed

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ity across the country. The Hon'ble Chairperson stated that law would be uniform but States could have flexibility in the administrative arrangement.
4.9. The Hon'ble Minister from Karnataka stated that his State agreed with the flexibility proposed by the Hon 'ble Chairperson but that the Secretary's proposal was different. The Hon'ble Chairperson observed that the Secretary's proposal was made from a different point of view. The Hon'ble Minister from Jammu & Kashmir wondered why the Centre was keen to give this flexibility to the States when the States were not keen to have such flexibility. The Hon'ble Chairperson responded that this was to allow flexibility to those States that wanted more taxpayers with turnover above Rs. 1.5 crore in their jurisdiction. The Hon'ble Minister from Jammu & Kashmir suggested that in that case, the formulation that he had suggested earlier could be added to paragraph 28(v) and the decision as recorded in paragraph

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ved that such an apprehension was not correct as even he would not be able to persuade about ten to twelve ministers belonging to his party to change the ratio of distribution for taxpayers with turnover below Rs. 1.5 crore from 90%:10% to 50%:50%. He observed that some States might genuinely not want to focus on smaller taxpayers and they could use such flexibility. The Hon'ble Minister from Kerala observed that it was not so decided in the last Meeting. He informed that the Central Government officers met him in a delegation. He expressed an apprehension that such flexibility would lead to State-level negotiations leading to wrangling. He suggested that GST should be implemented first and based on experience, decisions could be modified and that the final goal should be how to maximise revenue. The Hon'ble Minister from Punjab stated that for modifying a decision, flexibility was needed. He suggested that another alternative could be that for one year, the ratio as decided in

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added that most new registrants would fall in the category of taxpayers with turnover below Rs. 1.5 crore. The Hon'ble Minister from Telangana stated that a new registrant would normally know his turnover at the time of starting his business. The Hon'ble Chairperson stated that it would be more practical that when a new registrant came in the tax-fold, he should be allocated to the Centre and the States in the ratio of 50%:50% and at the end of the year, if its turnover was below Rs. 1.5 crore, its allocation to the Central and State administration would be as per the 90%: 10% formula and if its turnover was above Rs. 1.5 crore, the allocation would be on the basis of 50%:50% formula. He suggested that the Minutes be modified suitably to reflect this arrangement. The Hon'ble Minister from West Bengal supported this suggestion. The Council agreed to the suggestion.
4.12. The Hon'ble Minister from West Bengal stated that the decisions recorded in paragraph 28(vii) ('

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uld be derived out of such switching. The Hon'ble Chairperson stated that vested interests could be created if there was a permanent division. He added that the Council could possibly decide to switch the administrative control of the taxpayers after three years and that this decision would rest with the Council. The Secretary stated that the switching over could be in three years or from time to time as decided by the Council. The Hon'ble Minister from West Bengal stated that switching could take place within the agreed formula. He stated that if a period of time was to be specified for switching or for reviewing the ratio of distribution of the taxpayers between the Centre and the States, it should be three years and not one year as suggested by the Hon 'ble Minister from Punjab. The Hon'ble Minister from Bihar stated that the period for switching or for reviewing the distribution of taxpayers between the Centre and the States should not be specified as the Council ha

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es. The Secretary suggested that since the expression 'all administrative purposes' was used in the decision recorded in paragraph 28(i), the word 'vertical' used in this paragraph could be deleted. The Council agreed to this suggestion.
4.14. The Hon'ble Minister from West Bengal stated that in the previous Meeting of the Council, the decision was only with regard to carve-out for 'place of supply' issues under the Integrated Goods and Services Tax (IGST) Act for the Central administration and that the decision recorded in paragraph 28(x) of the Minutes regarding carve-out relating to import or export of goods or services was not correct. The Hon 'ble Chairperson stated that the Customs domain was out of the States' purview and that while one concession had already been agreed upon in regard to supplies in territorial waters, it would not be possible to agree to another concession regarding delegation of functions under the Customs Act like refund,

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t of the CBEC paper circulated during the 9th Meeting of the Council and the same was recorded in paragraph 14 of the Minutes. The Hon'ble Deputy Chief Minister of Delhi reiterated that this issue needed to be discussed separately and should not be taken as concluded. The Hon'ble Chairperson read out the text of paragraph 14 of the Minutes and pointed out that all import and export-related functions were included in the paper circulated by CBEC. Shri Upender Gupta, Commissioner (GST Policy Wing), CBEC pointed out that presently, the V AT administrations decided the issue of export only up to the penultimate stage of export and not when goods were actually exported from a port.
4.16. The Hon'ble Minister from West Bengal pointed out that in paragraph 22 of the Minutes, while summing up the possible solutions for the agenda item relating to provisions for cross- empowerment to ensure single interface under GST, the Hon'ble Chairperson had indicated that IGST be cross-emp

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were not initially agreeable to allow only IGST to be paid on export and it was accepted subsequently with the understanding that States would also be empowered to administer IGST on exports. He pointed out that for refunding the tax on export, the certification would continue to come from the Customs department which would be accepted by the State administration. He also pointed out that if input tax credit (ITC) was used for paying IGST on export, the State administration would need to examine the input-output ratio for utilization of such ITC. He added that the States had agreed to treat supplies to Special Economic Zones (SEZs) as inter-State supplies on the understanding that the States would have the power to examine such supplies. The Hon'ble Chairperson stated that the CCT, Gujarat could suggest a formulation which would not disturb the powers vested under the Customs Act. Shri Ritvik Pandey, CCT, Karnataka stated that the Customs Department would continue to administer th

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ke refund of tax on export could not be carved out exclusively for the Central tax administration.
4.18. The Hon'ble Minister from West Bengal suggested that this issue could be discussed more thoroughly when the IGST Act was taken up for discussion. Shri Somesh Kumar, Principal Secretary (Finance), Telangana stated that there was large-scale export of pharmaceuticals from his State which involved refund of State VAT of approximately Rs. 350 crore in a year. He stated that the State administration would need the power to examine whether exports had taken place as these medicines could be easily diverted into the local market. He added that as this issue was not discussed, the phrase 'any issue relating to import or export of goods or services' recorded in paragraph 28(x) of the Minutes should be deleted. The Hon'ble Chairperson observed that there should be a formulation under which there should be no encroachment on the powers of the Customs authority or to carry out

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or whether it should be administered only by the Central tax administration. The Hon'ble Minister from West Bengal stated that this issue related to lGST and that refunds on exports would also impact the States and therefore, this issue needed to be examined. The Secretary stated that the objection of the Members related to the expression 'any issue' used in paragraph 28(x) of the Minutes and suggested that this could be replaced by the expression 'such issues of export and import as may be discussed in the Law Committee of officers and brought back to the Council for decision.' The Council agreed to this suggestion.
4.20. The Secretary clarified that the third entry in paragraph 28(x) of the Minutes was discussed in the last Meeting of the Council and it was agreed that where one of the two States which was a party to a dispute regarding the nature of supply (whether inter-State or intra-State) requested the Central administration to adjudicate this dispute, then

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nutes to deem supplies to territorial waters as intra-State supply on the same basis as the supplies to SEZs had been deemed as inter-State supplies The Hon'ble Chairperson observed that the Law Committee and the Union Ministry of Law should be given the flexibility to suitably draft a text to give effect to the decision recorded  in paragraph 28(xi) of the Minutes. The Council agreed to this suggestion.
4.22. The Hon'ble Minister from West Bengal stated that no State officers were involved in the process of drafting the Minutes of the Meetings of the Council and suggested to constitute a Minutes drafting committee in which some State officers should also be inducted. The Hon'ble Chairperson observed that the Minutes were not adopted without discussion. The Hon'ble Minister from West Bengal stated that keeping State officials in the Minutes drafting committee would give more comfort to the States and would avoid lengthy discussion on the Minutes as it happened thi

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State if it wishes to be allocated 100% taxpayers below the turnover of Rs. 1.5 crore subject to the overall share/proportion of dealers allocated to a State.'
5.2. To delete the word 'vertical' in paragraph 28(i) of the Minutes.
5.3 To add the word 'all' before the expression 'administrative control' in paragraphs 28(ii) and 28(iii) of the Minutes.
5.4. To delete the decision recorded in paragraph 28(iv) of the Minutes, which reads as follows: “Those States wanting a different basis of division could do so in consultation with the Centre.”
5.5. To replace the decision recorded in paragraph 28(vi) of the Minutes with the following: 'The new registrants shall be initially divided one each between the Central and the State tax administration and at the end of the year, once the turnover of such new registrants was ascertained, those units with turnover below Rs. 1.5 crore shall be divided in the ratio of 90% for the State tax administration and 10% for

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of the GST Council and as vetted by the Union Ministry of Law
6. Introducing this agenda item, the Secretary stated that the draft Compensation Law that was shared with the States as the agenda note to agenda item 2 had been vetted by both the Department of Legal Affairs and the Legislative Department of the Union Law Ministry. He informed that he had taken a meeting of the Central and State Government officials in Udaipur on 17 February 2017 during which the legally vetted draft Compensation Law was discussed. He stated that during this meeting, certain suggestions were made by the State Government officials and based on this, some changes were made to the draft Compensation Law circulated earlier to the States and that this revised text was placed before the Members for consideration. He stated that the changes shown in red colour in the draft text were those suggested by the Law Ministry and those shown in blue colour were based on the suggestions of the State officials.
6.1. Th

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and Services Act”): A new definition was added which reads as follows –
(r) “Union Territories Goods and Services Tax Act” means the Union Territories Goods and Services Tax Act, 2017;
vi, Section 5(1), Proviso (b) (Base Year Revenue): The expression “any taxes” was replaced with the word “tax”.
vii. Section 7(1) (Calculation and Release of Compensation): A new sub-section (1) was added which reads as follows-
(1) Compensation shall be payable to any State for the transition period.
viii. Section 7(3)(a) [earlier Section 7(2)(a)] (Calculation and Release of Compensation): The Section number mentioned in the sub-section was corrected from Section 0 to Section 6.
ix. Section 7(3)(b) (Calculation and Release of Compensation): The indicated in italics was added in Section 7(3)(b)-
(b) the actual revenue collected by a State in any financial year during the transition period would be the actual revenue from State tax collected by the State and net of refunds given by the said

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axes on account of the taxes levied by the respective State under the Acts specified in sub-section (4) of section 5, net of refunds of such taxes;
xi. Explanation to Section 7 (Calculation and Release of Compensation): In view of correction made at (ix) above, the following explanation at the end of Section 7 was deleted: “Explanation.- For the purposes of this section, the actual revenue collected would include the collection on account of State tax, net of refunds of such tax given by the State under Chapter XI of the concerned State Goods and Services Tax Act, and any collection of taxes on account of the taxes levied by the respective State under the Acts specified in sub-section (4) of section 5, net of refunds of such taxes.”
xii. Section 100) (Crediting proceeds of cess to Fund): The portion indicated in italics was added in Section 10(1)-
(1) The proceeds of the cess leviable under section 8 and such other revenues as may be recommended by the Council shall be credited t

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of this Act.
xv. Section 14 (Power to remove difficulties): The portion indicated in italics was added in Section 14(1)-
(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, on the recommendations of the Council, by order published in the Official Gazette, make such provisions, not inconsistent with the provisions of this Act, as appear to it to be necessary or expedient for removing the difficulty:
6.2. The Hon'ble Chairperson explained that under Section 12 of the Draft Compensation Law, the Rules to implement this law would be made by the Central Government on the recommendation of the Council but, in order to exercise Parliamentary control over subordinate legislation, such Rules would have to be placed before the Parliament and that the Members of Parliament could seek modification of the Rules within a period of 30 working days from the date on which the Rules were tabled in the Parliament. The Hon'ble Minister fro

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e Secretary stated that Section 8(1) of the draft Compensation Law provided that cess could be collected for a period of five years or such period as may be prescribed on the recommendation of the Council. He stated that this implied that the Central Government could raise resources by other means for compensation and this could be then recouped by continuation of cess beyond five years. He stated that the other decisions including the possibility of market borrowing for payment of compensation was part of the Minutes of the 3rd Meeting of the Council (held on 3rd and 4th January, 2017) and need not be incorporated in the Law. The Council agreed to this suggestion.
6.4. The Hon'ble Deputy Chief Minister of Delhi enquired as to why there were two definitions of “State” in Section 2(1) of the draft Compensation Law. He further observed that the definition of “State” was not incorporated in the Central Goods and Services Tax (CGST) Act. The Secretary clarified that the first definiti

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#39;such other revenues', and if borrowing was not defined as 'revenue', it would be more appropriate to use the word 'receipt' instead of the word 'revenue'. CCT, Karnataka stated that another alternative could be to use the word 'amount' instead of the word 'revenue'. The Secretary suggested to use the expression 'such other amounts' or 'such other proceeds' instead of the expression 'such other revenues'. Dr. G. Narayana Raju, Secretary Legislative Department, Union of India pointed out that in Article 266 of the Constitution ofIndia, the term 'revenues' as also 'loans' was used. CCT, Karnataka stated that this supported their point of view as even the Constitution made a distinction between the expressions 'revenues' and 'loans'. The Hon'ble Minister from Kamataka suggested that the Law Committee of officers could look into it. After discussion, the Council agreed to replace the

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39;ble Minister from Kerala observed that collection of cess on GST contradicted the principle of GST. He observed that as per the deliberations, after five years of implementation of GST, cess was to be integrated with the GST rate structure and that cess was to be levied only for compensation purpose. He raised a question whether this understanding should be reflected in the Compensation Law. The Secretary stated that the Compensation Law had broadly two elements: firstly, it created a Compensation Fund which was defined to consist of amount collected as cess or such other amount as might be recommended by the Council; and secondly, it empowered the Central Government to levy cess and Section 8(1) provided that cess could also be levied for a period beyond five years. Shri K. Gnanasekaran, Additional Commissioner, Commercial Taxes, Tamil Nadu stated that Section 10(3) of the draft Compensation Law provided that fifty per cent of the amount remaining unutilised in the Compensation Fun

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at suitable change had already been done by incorporating a new Section 7(1) in the revised draft Compensation Law circulated to the Members just before the start of the Council meeting.
6.8. The Hon'ble Minister from Karnataka stated that in the 8th Meeting of the Council (held on 3 and 4 January, 2017), the Council had decided to examine whether cess should be levied at single point, instead of the presently proposed multi-stage levy and that this aspect was missing in the Compensation Law. He pointed out that aerated beverages and cigarettes on which cess was likely to be levied passed through several retail agents before being finally sold from small retail kiosks and a multi-stage levy would mean that all suppliers in the retail chain would need to comply with the provisions of the Cess Act in addition to the CGST and SGST Acts. He stated that if a single point cess was levied on these two products, it would promote ease of collection and compliance and would curb revenue lea

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specific as well as ad valorem rate.
6.9. CCT, Karnataka stated that aerated drinks and cigarettes were mostly sold on the basis of Maximum Retail Price and therefore loss of revenue was not likely. He further added that a single point cess would help in delinking cess from the return filed by all taxpayers under . GST where 90% of the taxpayers would need to file a nil entry for cess. Shri Udai Singh Kumawat, Joint Secretary, Department of Revenue stated that the computer software could take care of this aspect. The Hon'ble Minister from Karnataka stated that only for two commodities, namely cigarettes and aerated drinks, the small kirana shop owner would need to maintain a ledger for cess. He suggested that the Law Committee should examine this issue thoroughly as this would ease compliance. The Secretary stated that GST was in the nature of a value added tax, and a single point taxation should be avoided. CCT, Kamataka pointed out that cess was to be levied not on the amount of

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evenues' in Section 10(1) of the Compensation Law by the words 'such other amounts'.
7.1. The Hon'ble Chairperson thanked the Council for approving the draft Compensation Law and stated that after the approval of the Union Cabinet, it would be introduced in the Parliament in the session starting from 9 March, 2017.
Agenda Item 3: Approval of the legal provisions in the Model GST Law as per suggestions of the GST Council and vetted by the Union Ministry of Law
8. Introducing this agenda item, the Secretary stated that the entire legally vetted Model GST Law could not be presented before the Council in this meeting because the Union Law Ministry could not take up its vetting before 1 February 2017 due to its preoccupation with the preparations for the Union Budget. He added that the vetted draft had many changes and the Law Committee of officers felt that they needed more time to understand the changes made by the Legislative Department of the Union Law Ministry and wo

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ose suggested by the Law Committee of officers .and the texts in green font were those which were to be incorporated in the SGST Law only. Thereafter, the issues contained in agenda note for agenda item 3 were discussed individually and the important points discussed in respect of these issues are recorded as below-
8.1. Issue No.1 (Provisions relating to Tribunal – Section 104 – Section 121): A presentation on the provisions of the Appellate Tribunal for GST as prepared by GST Policy Wing, CBEC was circulated to all States on 17 February 2017. During the Meeting, the Members expressed that they had gone through the presentation and therefore it need not be made in the Council meeting. Thereafter, discussion on the draft legal provisions took place.
8.1.1. The Hon'ble Deputy Chief Minister of Delhi stated that the provisions contained in Section 106(1)(d) of the Model GST Law regarding three years' experience in tax administration for appointment of Technical Member (State) o

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qualify for appointment to the Tribunal so that officers from non-tax cadres like the lAS could also be selected as a Tribunal Member. He observed that the pool of selection for Tribunal Members should be kept as wide as possible so that officers of high integrity and calibre could be selected. He further suggested that going by the present experience of difficulties faced in getting suitable judges for different tax tribunals, it would be desirable that the retirement age for the Presidents of the National and State Benches of the Tribunal was kept as 70 years instead of the presently proposed 68 years. The Council agreed to both these proposals.
8.1.2. The Hon'ble Minister from West Bengal suggested to delete the provision of Section 106(1)(b)(iii) providing for eligibility of an officer of the Indian Legal Service holding a post not less than Additional Secretary for three years to become Member (Judicial) of the Tribunal. He stated that a similar demand could be made by offic

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inted out that the Chief Justices of the Supreme Court and of the relevant High Court would need to be consulted for appointment of the President of the National Bench and the State Benches but the same might not be required for appointment of Judicial Members as appointment to Tribunals was part of the executive function and Article 50 of the Constitution provided for separation of the judiciary from the executive in the public services of the State. On a query from the Hon'ble Chairperson, the Secretary clarified that presently the Judicial Members of the Customs, Excise and the Service Tax Appellate Tribunal (CESTAT) were appointed in consultation with the judiciary. The CCT, Gujarat stated that Judicial Members of the Gujarat VAT Tribunal were appointed in consultation with the Chief Justice of the Gujarat High Court. The Hon'ble Chairperson stated that a Judicial Member had the flavour of judicial representation and therefore, the High Court of the States should be involve

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he Secretary, Legal Affairs stated that the cadre of Indian Legal Service was relatively small and it had advocates with experience of seven years or more and sometimes even District Judges joined as an officer of the Indian Legal Service. He added that officers in the rank of Additional Secretary in the Indian Legal Service were also discharging quasi-judicial functions as Members of several Tribunals and also working as arbitrators. The Hon'ble Minister from West Bengal stated that his State did not have a strong position on this issue. The Hon'ble Chairperson suggested to retain the provision in the draft Model GST Law that the President and the Judicial Members of the National and State Benches would be appointed in consultation with the Chief Justice of the Supreme Court and the High Court, as the case may be, and that the Technical Members would be appointed by the Central and the State Governments. The Council agreed to this suggestion. The Secretary informed that the ex

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embers as 65 years. The Council agreed to this suggestion.
8.1.5. The Hon'ble Minister from West Bengal stated that in Section 106(l)(d), there should also be a provision for appointment of retired officers as a Technical Member (State) of the Tribunal. The Hon'ble Chairperson agreed with the suggestion and observed that retired officers should also be made eligible for appointment as Technical Member (State) as it would give a chance to good, conscientious retired officers to serve as Technical Member (State) in a Tribunal. The Council agreed to this suggestion.
8.1.6. The Additional Chief Secretary, Uttar Pradesh stated that some officers could become Member (Technical) of the Tribunal at the age of 55 years and could then continue up to 65 years, thus denying a chance to more deserving junior officers to become a Member (Technical) of the Tribunal. The Hon'ble Minister from West Bengal suggested to keep a provision that a Member (Technical) shall serve up to the age of

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nted to the Appellate Tribunal and suggested that he should have a minimum of 2 to 3 years of residuary tenure. The Council did not agree to this suggestion.
8.1.8. The Hon'ble Minister from West Bengal stated that proviso to Section 105(4) was problematic as once the GST Council recommended to constitute a certain number of Area Benches, the Central Government should not have the power to alter this number. He therefore suggested to remove the phrase “as it deems fit” in the proviso. The Additional Secretary, Legislative Department stated that this phrase was used in reference to the Council and not in reference to the Central Government. The Hon'ble Chairperson stated that the drafting of this provision should be suitably modified to reflect this understanding. The Council agreed to this suggestion.
8.1.9. The Hon'ble Chairperson suggested that the Council could consider having a provision in the GST Law that a State Bench of Appellate Tribunal could have jurisdiction o

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mall. He suggested that this amount should be reduced to Rs. 50,000. The Council agreed to the suggestion.
8.1.11. The Hon'ble Minister from West Bengal observed that Section 108 (2) had a provision that the senior most Member of the National Bench shall discharge the functions of the President of the National Bench for a temporary period in case the office of the President fell vacant due to reasons like death or resignation of the President and suggested that a similar provision should be provided in respect of the State Tribunals. The Council agreed to this suggestion.
8.1.12. The Hon'ble Minister from West Bengal raised a question that if place of supply issue was only one of the issues in a dispute and there were other issues in the dispute like valuation or eligibility of input tax credit, then how can the taxpayer segregate the dispute and file one appeal before the National Bench for place of supply issue and another appeal to the jurisdictional State Bench for the ot

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No.2 (Reconciliation of Sections 4 & 5 of Model GST Law): CCT, Gujarat stated that in the 7th  Meeting of the Council (held on 22-23 December, 2016), at the suggestion of the Hon'ble Minister from West Bengal, the Council had decided to address the contradiction between Section 4(2) and Section 5(2) of the Model GST Law in respect of the authority (State Government or the Commissioner) that would specify the jurisdiction of officers other than of the Commissioner, and that in accordance with this decision, the Law Committee had revised the text of Section 5(2) of the SGST Law and proposed deletion of the erstwhile Section 4(2) of the SGST Law. He explained that by this amendment the Commissioner had been authorised to decide the jurisdiction of the VAT officers of the rank below the Additional Commissioner. The Council agreed to the proposed amendment.
8.3. Issue No.3 (power to waive penalty – Section 87 A): The Secretary to the Council explained that in the 7th  Meeting

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sed to waive penalty for certain class of taxpayers, but only on the recommendation of the Council. The Hon'ble Chairperson observed that the revised provision had kept an enabling power for waiver of penalty for a class of people and this could be approved. The Hon'ble Minister from West Bengal and the Hon'ble Deputy Chief Minister of Delhi supported the revised formulation. The Hon'ble Minister from Rajasthan suggested that this provision should also provide for a waiver of interest and fine. CCT, Gujarat stated that under VAT Law, the State Government had the power not to collect penalty or interest under a 'samadhan yojana ', The Secretary observed that inthe GST regime there could be no 'samadhan yojana' without the approval of the Council. CCT, Karnataka observed that the proposed provision was very wide as it provided for waiver of penalty for all types of offences, including for making supplies without issuing invoice. The Secretary observed that

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and emigration and expulsion from India; currency, coinage and legal tender, foreign exchange; trade and commerce with foreign countries, import and export across customs frontiers, inter-State trade and commerce; and maintenance of public order) of Schedule IV could be deleted and be dealt through a notification. He said that keeping this in view, the Law Committee had . suggested a draft formulation making amendments in Section 3(2)(b) of the Model GST Law shown in blue colour in the agenda note. He further explained that in the 5th Meeting of the Council (held on 2-3 December 2016), it was decided to incorporate supplies of works contract (paragraph 5(t) of Schedule-II) and restaurant (paragraph 5(h) of Schedule-II) as composite supply on which all provisions relating to services shall apply. He informed that in view of this decision, a new clause 6 (indicated in blue colour in the agenda note) had been added in Schedule II for the consideration of the Council. He further informed

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ned to them … ” and observed that it therefore followed, that if the context was otherwise, there could be no legal challenge to the definition proposed in Schedule II of the Model GST Law.
8.4.2. The Principal Secretary (Finance), Odisha stated that Section 3(2)(b) provided for notifying activities or transactions undertaken by the Central Government, State Government or any local authority as may be notified by the Central/State Government on the recommendation of the Council and suggested that this Section should also include 'any statutory regulatory or Constitutional authority' to cover the activities of regulators like Securities and Exchange Board of India (SEBI) and Telecom Regulatory Authority of India (TRAI). The Commissioner (GST Policy Wing), CBEC stated that the activities of the statutory regulators could be handled through specific exemptions. The Principal Secretary (Finance), Odisha stated that statutory regulatory authorities and Constitutional authorities

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es) of the Model GST Law. He further stated that these entities should not be kept out of the input tax credit chain and that the Council should be given an option to either tax or exempt statutory regulatory authorities. The Council did not agree to the proposed addition of statutory regulatory authorities or Constitutional authorities in Section 3(2)(b) of the Model GST Law.
8.4.3. The Hon'ble Minister from Karnataka stated that the proposed insertion of clause 6 in Schedule II relating to 'works contract' and 'restaurant', treating them as services would make them ineligible for benefit of the Composition scheme and that this would adversely affect small restaurants and cafes whose annual turnover was below Rs. 50 lakh and who purchased their inputs like masala, etc. mostly from small, unregistered suppliers. The Hon'ble Minister from West Bengal stated that the restaurants should have the benefit of the Composition scheme. The Secretary stated that an excep

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ntly, the Comptroller and Auditor General of India had discussed this issue with the Hon'ble Chairperson and had explained that while CAG had power under its Act [CAG's (Duties, Powers and Conditions of Services) Act, 1971] to call for information, the officers under the GST Law were bound to give the information to ', CAG and where such information was not available with the tax authorities, they must have power under the GST Law to call for such information from the taxpayers. He stated that CAG's advice was to take this enabling power under the GST Law in order to enable GST officers to discharge their obligations vis-a-vis the CAG.
8.5.1. The Hon'ble Deputy Chief Minister of Delhi did not support the proposal and stated that by agreeing to this provision, CAG would be given power over GST officers. The Hon'ble Minister from Bihar stated that CAG derived its power from the Constitution and they should use the same instead of seeking additional power under th

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audit without these powers. He stated that this issue had already been decided in the 6th Meeting of the Council (held on 11 December, 2016) and should not be reopened. The Hon'ble Minister from Kerala stated that having such a provision under GST Law could create problems. The Hon'ble Deputy Chief Minister of Gujarat stated that CAG did not go to taxpayers of any State for auditing. The Additional Chief Secretary, Uttar Pradesh stated that this provision did not give power to the GST officers to get documents from the taxpayers. He observed that this was a very open ended and sweeping provision and could potentially lead to truckloads of documents being called for which would be physically impossible to comply with. The Hon'ble Chairperson observed that it appeared that majority of the States were not in favour of this provision and that the same might have to be dropped. He stated that he would convey the views of the Council to CAG. The Council agreed to this suggestion

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tion to the various sectors of agriculture was to be decided separately and that the proposed definition of 'agriculture' would have denied power to the Council to decide exemptions in the agricultural sector. He recalled that keeping this in view, in the 7th Meeting of the Council (held on 3-4 January 2017), it was decided that Officers of the Law Committee would examine whether or not definition of 'agriculture' and 'agriculturist' was needed in the GST Law. He informed that while working on the revised formulation, the Law Committee took note of the suggestions made in the 7th  Meeting of the Council that the definition of 'agriculture' in GST Law should follow the same approach as in the Income Tax Act, which did not define the word 'agriculture' and only defined the phrase “agricultural income” as the Income Tax Act was concerned only with agricultural income and not with agriculture in general. He explained that the salient feature of

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agricultural and allied products were likely to be exempted, anyone dealing with only exempted items, or having a turnover of less than Rs. 20 lakh would not be required to take registration under GST Law. He added that a person cultivating cash crops like cotton, groundnuts, sugarcane etc., which might not be exempted as they attracted VAT in some States, would be covered by the new definition of the 'agriculturist' and would be exempted from taking registration. He stated that in such a case, GST on supply of these crops by a farmer to a buyer registered under the GST Law would be collected from the registered buyer on reverse charge basis. He also informed that the Union Ministry of Law had vetted the new formulation presented in the agenda note.
8.6.1. The Hon 'ble Deputy Chief Minister of Delhi expressed his agreement with the new formulation. The Hon'ble Minister from Punjab stated that earlier he had raised an issue regarding co-operative societies in which ind

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inister from Punjab suggested to use the word 'any person'. The CCT, Gujarat stated that this term would also cover a company. The Hon'ble Minister from Haryana stated that in his State, the size of land was limited due to the Land Ceiling Act and therefore a company would also have a limited land holding for cultivation. He suggested to adopt a formula for considering a slab based turnover of company for registration under GST as done under the Income Tax Act for applying the rate of income tax. The Hon'ble Minister from Punjab stated that the definition of 'agriculturist' should not be limited in such a manner that co-operative societies got left out of its scope. The CCT, Karnataka stated that if a co-operative society was involved in cultivation of an exempt agricultural product, it would not be required to take registration. He added that the revised definition essentially kept cultivators of taxable agricultural commodities such as cash crops like tea, cof

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e would be covered under clause ( c) of Section 7 (proposed definition of 'agriculturist'). He observed that this provision dealt with cultivation of land by servants on wages in cash or kind and wondered whether share-cropping was a contractual or a master-servant relationship. The Hon'ble Chairperson observed that a share-cropper should be covered under clause (a) i.e. cultivation of land by one's own labour. The CCT, Gujarat stated that a share-cropper would take land on lease and would cultivate it on his own account and would thus be covered under the definition of 'agriculturist'. The Hon'ble Minister from West Bengal stated that they would send a definition of share-cropper for vetting by the Union Ministry of Law.
8.6.4. After discussion, the Council approved the proposed definition of 'agriculturist' and the consequential change in the provision relating to registration and agreed to delete the definitions of 'agriculture' and '

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cy Wing), CBEC explained that the Council in its 7th  Meeting (held on 22-23 December, 2016) had decided not to extend the benefit of input tax credit on pipelines and telecom towers and the deletion of the proviso to Section 16(1) and the Explanation to Section 16(4) was carried out to give effect to this decision. Shri Rajan Khobragade, CCT, Kerala stated that even after deleting the words 'pipelines' and 'telecom towers' in Section 16, there could still be an interpretation that input tax credit on these two items could be taken. CCT, Gujarat explained that the presently drafted definition of capital goods in the Model GST Law needed re-examination as the present explanation below Section 16(4) of the Model GST Law made any apparatus, equipment or machinery fixed to the earth and used for making' outward supply of goods or services eligible for input tax credit and this could potentially cover pipelines and telecom towers. Shri P. K. Mohanty, Consultant (GST

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f capital goods and that the major issue was the telecom towers.
9.2.1. Commissioner, GST Council stated that it was difficult to define plant and machinery and that in most of the VAT laws of the world, the terms machinery, equipment, and apparatus were used. He explained that the difficulty in giving a chapter wise listing of capital goods eligible for input tax credit would be that the list would become too long. He further stated that in case input tax credit was allowed only for goods falling under certain specified chapters of HSN, then many goods used as plant and machinery but not falling within those specified chapters would become ineligible for input tax credit. He therefore suggested to use generic expression and to list out the items on which input tax credit was not to be given. The Council agreed that the Law Committee of officers should re-examine the definition of 'capital goods'.
9.2.2. The Hon'ble Minister from Kerala raised a further issue that there s

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ong time, it should be retained. The Hon'ble Chairperson suggested to call them 'Advisor' to which the Hon'ble Minister from Kerala responded that this appeared to be even more high sounding expression than Tax Practitioner. The Secretary suggested an alternative expression 'GST Mitra '. The Hon'ble Minister from Kamataka stated that the expression 'GST Practitioner' was [me and the same should be retained. The Council agreed to this suggestion.
9.4. SI. No. 52 (Section 142- Disclosure of information required under section 141): CCT, Gujarat pointed out that amendment proposed was for Section 142(3) but it was wrongly indicated as amendment for Section 142(4). The Council agreed to correct the sub-section number of Section 142.
10. Subject to discussion as above, the changes proposed in Annexure-I of Agenda Note for Agenda Item 3 were approved.
10.1. For agenda item 3, the Council approved the proposed changes to the Model GST Law as recorded belo

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e shall not be allowed to come back to his parent cadre. He shall serve as a Member (Technical) in the Appellate Tribunal for a period of 5 years or up to the age of 65 years, whichever is earlier.
(vi) Section 105(4) to be suitably modified to reflect the understanding that the phrase “as it deems fit” used in this Section is in reference to the Council and not in reference to the Central Government. .
(vii) To have a provision in the GST Law that a State Bench of Appellate Tribunal could have jurisdiction over more than one State.
(viii) Section 116(2) to be amended to reduce the presently proposed monetary limit for not admitting an appeal before the Appellate Tribunal from Rs. 1 lakh to Rs. 50,000.
(ix) To incorporate a provision similar to Section 108 (2) (applicable for the National Tribunal) that the senior most Member of the State Bench shall discharge the functions of the President of the State Bench for a temporary period in case the office of the President fell vacan

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y, by order, specify.
10.1.3. Issue No.3 (power to waive penalty – Section 87A):
To add the following new Section 87 A in the Model GST Law:
Section 87 A: Notwithstanding anything contained in the provisions of section 85 or 86 of this Act, any of the penalty referred to in the said sections may be waived in part or full for such class of the taxpayers, under such mitigating circumstances as may be notified by the Central/State Government in this regard, on the recommendation of the Council.
10.1.4. Issues No.4&' 5 (Issues relating to Supply read with Schedules II and IV -Section 3):
(i) To delete Schedule IV of the Model GST Law and to amend Section 3 of the Model GST Law as follows (as indicated below in underlined portion in italics and strikethrough):
Section 3:
For the purposes of this Act, the expression “supply” includes –
(1)  (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made o

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(2), the Central Government may, upon the recommendation of the Council, specify, by notification, the transactions that are to be treated as-
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods. or
(e) neither a supply of goods nor a supply of services.
(ii) To amend Section 3(2)(b) of the Model GST Law by adding a new Clause 6 in Schedule II (as indicated below in underlined portion in italics) and to delete the existing sub-clauses 5(f) and 5(h) of Schedule II of the Model GST Law:
6. The following composite supplies shall be treated as a supply of services-
(a) works contract including transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; and
(b) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor (or human consumption), w

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#39;s own labour, or
(b) by the labour of one 's family, or
(c) by servants on wages payable in cash or kind or by hired labour under one's personal supervision or the personal supervision of any member of one 's family;
Section 23
The following persons shall not be liable to registration. namely: –
(b) an agriculturist. for the purpose of agriculture,to the extent of supply of produce out of cultivation of land.
11. The changes to the various Sections of the Model GST Law proposed in Annexure-I of the Agenda Note relating to Agenda Item 3 was approved by the Council subject to the following observations:
(i) Sl. No. 12, 13 & 14 of Annexure I (Section 9- Composition Levy): In Section 9 of the Model GST Law, the ceiling of turnover for eligibility for Composition scheme shall be provided as Rs. one crore but presently, the Composition scheme would be available only for units upto a turnover of Rs. 50 lakh.
(ii) Issue No. 18 (Section 16- Eligibility and conditions for

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ted that the stakeholders who had been meeting him, had raised certain grey areas like how stock transfer of services would take place; the matters to be treated as supply; and complications in relation to definition of related party. He suggested that in order to address these grey areas, the Law Committee of officers should meet the stakeholders. The Hon'ble Chairperson stated that these suggestions should be given in writing for the Law Committee to consider.
14. The Hon'ble Chairperson observed that the Minutes of all the Council meetings should be made publicly available at an appropriate time so that it could serve as a ready reference to understand the discussion on various issues in the Council.
15. The meeting ended with a vote of thanks to the Chair.
(Arun Jaitley)
Chairperson, GST Council
=============
Document 1
MINUTE BOOK
Annexure 1
List of Ministers who attended the 10th GST Council Meeting on 18 February 2017
S No
State/Centre
Name of the Minister
Cha

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r
CHAIRMAN'S
INITIALS
Page 32 of 36
WRITE A WAY
MINUTE BOOK
Annexure 2
List of Officers who attended the 10th GST Council Meeting on 18 February 2017
S No
State/Centre
Name of the Officer
Charge
1
Govt of India
Dr. Hasmukh Adhia
Revenue Secretary
2 Ministry of Law
Shri Suresh Chandra
3 Ministry of Law
Dr. G. Narayana Raju
4
Govt of India
Shri Najib Shah
Secretary, Legal Affairs
Secretary, Legislative Department
Chairman, CBEC
5 Govt of India
Ms. Vanaja N. Sarna
Member (P&V), CBEC
6
Govt of India
Shri Ram Tirath
7
Govt of India
Shri Mahender Singh
8
Govt of India
Shri P.K. Jain
9
Govt of India
Shri B.N. Sharma
10 Ministry of Law
Dr. Reeta Vasishta
11
Govt of India
Shri P.K. Mohanty
12
Govt of India
Shri Upender Gupta
13
Govt of India
Shri Udai Singh Kumawat
14
Govt of India
Shri Amitabh Kumar
15 Govt of India
Shri G.D. Lohani
16
Govt of India
Shri D.S.Malik
17
17
Ministry of Law
Dr. R.J.R. Kasibhatla
Member (GST), CBEC
Dir

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Sinha
Charge
Joint Commissioner
26
GST Council
Shri Kaushik TG
27
GST Council
Shri Sandeep Bhutani
28
Andhra Pradesh
Shri J. Syamala Rao
29
Andhra Pradesh
Shri T. Ramesh Babu
30 Arunachal Pradesh
Shri Tapas Dutta
31
Arunachal Pradesh
Shri Nakut Padung
32
Assam
Dr. Ravi Kota
33 Assam
Shri Anurag Goel
34
Bihar
Ms. Sujata Chaturvedi
35
Bihar
Shri Arun Kr. Mishra
36 Chhattisgarh
Shri Amitabh Jain
37 Chhattisgarh
Ms. Sangeetha P
38 Delhi
Shri R.K. Mishra
Assistant Commissioner
Superintendent
Commissioner, Commercial Taxes
Additional Commissioner, Commercial
Taxes
Assistant Commissioner, VAT
Superintendent, VAT
Finance Commissioner
Commissioner, Commercial Taxes
Principal Secretary & Commissioner,
Commercial Taxes
Addl. Secretary, Commercial Taxes
Principal Secretary (Finance)
Commissioner, Commercial Taxes
Special Commissioner
39
Delhi
Shri Anand Kumar Tiwari
Additional Commissioner, GST
40
40
Goa
Shri Dipak Bandekar
41
Gujarat
D

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an Khobragade
Commissioner, Commercial Taxes
53 Madhya Pradesh
Shri Raghwendra Kumar Singh
Commissioner, Commercial Taxes
54 Madhya Pradesh
Shri Sudip Gupta
55 Maharashtra
Shri Rajiv Jalota
Deputy Commissioner
Commissioner, Sales Tax
Joint Commissioner, Sales Tax
Assistant Commissioner, Taxes
Commissioner, Taxes
59
Mizoram
Shri Kailiana Ralte
Deputy Commissioner, Taxes
60
60
Mizoram
Shri R. Zosiamliana
Deputy Commissioner, Taxes
61
Odisha
Shri Tuhin Kanta Pandey
Principal Secretary (Finance)
62
62
Odisha
Shri Saswat Mishra
63
33
Odisha
Shri Sahadev Sahu
64 Puducherry
Shri G. Srinivas
65 Punjab
Shri Rajeev Gupta
66 Punjab
Shri Pawan Garg
67 Rajasthan
Shri Prem Singh Mehra
68 Rajasthan
Shri Praveen Gupta
69 Rajasthan
Shri Alok Gupta
70
Sikkim
Shri Manoj Rai
71 Tamil Nadu
Shri K. Gnanasekaran
Shri D. Soundarajpandian
Shri Somesh Kumar
72 Tamil Nadu
73 Telangana
74 Telangana
Shri Anil Kumar
75 Telangana
Shri Laxminarayan Jannu
76

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GST Returns – Furnishing details of inward supplies
By: – Pradeep Jain
Goods and Services Tax – GST
Dated:- 17-2-2017

GST DAILY DOSE OF UPDATION BY CA PRADEEP JAIN
Returns
Section 33: Furnishing details of inward supplies
The proviso in the revised draft reads as follows:
(1) Every registered taxable person, other than an input service distributor or a nonresident taxable person or a person paying tax under section 9, section 46 or section 56, shall verify, validate, modify or, if required, delete the details relating to outward supplies and credit or debit notes communicated under sub-section (1) of section 32 to prepare the details of his inward supplies and credit or debit notes and may include therein, the details of

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n or before the fifteenth day of the month succeeding the tax period in such form and manner as may be prescribed:
PROVIDED that the Commissioner may, for valid and sufficient reasons, by notification, for such class of taxable persons as may be specified therein, extend the time limit for furnishing such details:
PROVIDED FURTHER that any extension of time limit approved by the Commissioner of [Central/State] Goods and Services Tax shall be deemed to be approved by the Commissioner of [State/Central] Goods and Services Tax.
(3) The details of supplies modified, deleted or included by the recipient and furnished under sub-section (2) shall be communicated to the supplier concerned in the manner and within the time as may be prescribed.

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furnished for such tax period:
PROVIDED that no rectification of error or omission in respect of the details furnished under sub-section (2) shall be allowed after furnishing of the return under section 34 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier.
When compared with the old draft, following changes may be noticed:
1. Nonresident taxable person, input service distributor, person paying tax under composite levy scheme, deducting TDS/collecting TCS are not required to furnish the details regarding of input supply of goods & services.
2. Further return is also to be filed after tenth but on or before fifteenth day of

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Supplies under GST
Query (Issue) Started By: – Aitha RajyaLakshmi Dated:- 16-2-2017 Last Reply Date:- 11-8-2017 Goods and Services Tax – GST
Got 4 Replies
GST
What is the difference between Nil rate, Zero percent and Zero rated supplies under GST.
Reply By YAGAY AND SUN:
The Reply:
https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=7231&kw=Definition-of-Turnover-in-a-State-and-Zero-rated-supply
Reply By KASTURI SETHI:
The Reply:
(A) As per Section 2 (44) of drafter Model GST Act, “exempt supply” means supply of any goods and/or services which are not taxable under this Act and includes such supply of goods and/or services which attract nil rate of tax or which may be exempt from tax under section 11 ;

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New Registration
Query (Issue) Started By: – Aitha RajyaLakshmi Dated:- 16-2-2017 Last Reply Date:- 18-2-2017 Goods and Services Tax – GST
Got 6 Replies
GST
Can any one say me when will the GST portal will be active for fresh Registrations i.e., for a new establishment.
Reply By YAGAY AND SUN:
The Reply:
It is already been active. www.gst.gov.in
Reply By Aitha RajyaLakshmi:
The Reply:
Currently only migration is possible through Provisional ID and password.
For a new Establishment how can the Provisional ID and password get?
Reply By YAGAY AND SUN:
The Reply:
Just discuss this aspect with your jurisdictional VAT/Excise Authorities. They will provide you the login ID/Password.
Reply By Ganeshan Kalyani:
The Reply:
Curre

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