Author: admin_gst

RECOVERY OF TAX UNDER MODEL GST LAW
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 6-12-2016

Payment of tax due
Section 71 of the Model GST Law ('Law' for short) provides that any amount payable by a taxable person in pursuance of an order passed under the Act shall be paid by such person within a period of 90 days from the date of service of such order. The proper officer is at his discretion to direct to pay the said amount within such short period as may be specified by him in the interest of revenue. The reasons for such order shall be recorded in writing.
Recovery of tax
Section 72 provides that if the taxable person fails to pay the tax payable consequent on any order within 90 days, the proper officer shall proceed to recover the amount. The amount may be recovered by any one of the following methods-
* The proper officer may deduct or may require any other specified officer to deduct the amount so payable from any money owing to such p

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ny or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made payment is made, notwithstanding any rule, practice or requirement to the contrary;
* If such person fails to make the payment he shall be deemed to be a defaulter in respect of the amount specified in the notice and all the consequences of this Act or rules made there under shall follow;
* The officer issuing such a notice may amend or revoke such notice at any timeor from time to time or extend the time for making any payment in pursuance of the notice;
* Any person making any payment in compliance with a notice shall be deemed to have made payment under the authority of the person in default;
* Such payment being credited to the appropriate Government shall be deemed to constitute a good and sufficient discharge of the liability of such person to the person in default to the extent of the amount s

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f the property remains unpaid for a period of 30 days may sell the property and satisfy the amount for the dues and the remaining amount, if any, may be paid to the taxable person;
* The proper officer may issue a certificate to the District Collect to recover the amountas if it is an arrear of land revenue;
* The proper officer may file an application to the appropriate Magistrate and such Magistrate shall proceed to recover from such person the amount specified there under as if it were a fine imposed by him;
Section 72(2) provides that where the terms of any bond or other instrument executed under the Act or any rules or regulations made there under provide that any amount due under such instrument may be recovered without prejudice to any other mode of recovery;
Section 72(3) provides that where any amount of tax, interest or penalty is payable, the proper Officer of SGST, during the course of recovery of SGST arrears, may recover the amount from the said person as if it were

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not exceeding 24, subject to payment of interest with such restrictions and conditions as may be prescribed. Where there is default in payment of any installment on its due date, the whole outstanding balance payable on such date shall become due and payable forthwith and shall, without any further notice being served on the person, be liable for recovery.
Transfer of property to be void
Section 75 provides that if a taxable person creates a charge on or parts with the property belonging to him or in his possession, in favor of any other person with the intention to defraud the Government revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the said person. Such charge or transfer shall not be void if it is made for adequate consideration and without notice of the pendency of such proceedings under this Act or without notice of such tax or other sum payable by the said person or with the previous permission of the prop

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nt and the recovery proceedings may be continued from the stage at which such proceedings stood immediately before such disposal;
* Where such amounts are reduced in such appeal, revision or in other proceedings, it is not necessary for the Commissioner to serve a fresh notice of demand;
* The Commissioner may inform of such reduction to him and to the appropriate authority with whom recovery proceedings is pending;
* The recovery proceedings may be continued in relation to the amount so reduced from the state at which such proceedings stood immediately before such disposal.
Reply By Ganeshan Kalyani as =
Nice article sir.
Section 72 (3) provides that the proper officer of CGST can collect tac due by the assessee under SGST and credit it to the the appropriate govt. How the said provision would be implemented in practice.
Dated: 7-12-2016
Reply By MARIAPPAN GOVINDARAJAN as =
Rules are to be made in this regard by both Central and State Governments.
Dated: 8-12-2016
S

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Constitutional compulsion to roll out GST from Sep next: FM
GST
Dated:- 3-12-2016

New Delhi, Dec 2 (PTI) Citing constitutional compulsion, Finance Minister Arun Jaitley sought to drive home the point that the Goods and Services Tax has to roll out before September 16 next year as the existing indirect taxes will come to an end by then and it would not be possible to run the country without revenue collection.
He made a pitch for widening the tax base, saying efforts are on to make taxation process far simpler and make rates more reasonable.
For instance, he said, the GST Council is deliberating on ways to reduce the taxation process, including assessment by tax officials.
"Today, each person gets assessed thrice, in ea

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Transaction between such principal and agent
Query (Issue) Started By: – yogesh Panchal Dated:- 3-12-2016 Last Reply Date:- 3-12-2016 Goods and Services Tax – GST
Got 2 Replies
GST
Dear All Expert,
Please guide,
Meaning and scope of “supply” Comparative view under revised model GST law vis-à-vis earlier model GST law. Which published on 26th November 2016.
earlier model GST law term “supply” is contained in sub section (2)(a) of section 3 of the model CGST/SGST act,2016 as

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Meaning and Scope of ‘Supply’ – Comparative view under Revised Model GST Law vis-à-vis Earlier Model GST Law
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 3-12-2016

Meaning and Scope of 'Supply' – Comparative view under Revised Model GST Law vis-à-vis Earlier Model GST Law
Whilst the Government is keen to make Goods and Services Tax (“GST”) a reality by envisaged April 1, 2017 deadline, efforts put in by the Government to look into the voluminous suggestions submitted by various stakeholders, on First cut Model GST Law (put on public domain on June 14, 2016), is indeed commendable. Honest attempt of the Government to eradicate the daunting provisions in the earlier Model GST Law, can be very well seen in the Revised Model GST Law which was made public on November 26, 2016.
Apart from addressing key concerns of the Industry in a very decent manner, the Revised Model GST Law has also proposed an anti-profiteering mechanism to ensure benefit of lowe

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e away in GST, but, simultaneously, the term 'supply' will hold the greatest significance and shall be important in determining the taxability of all transactions, whether commercial or otherwise under GST regime.
Like the Earlier Model GST Law, definition of term 'supply' is contained in Section 3 of the Model CGST/SGST Act, 2016. A comparative view of the provisions is given hereunder for easy digest:
Section
Sub
Earlier Model GST Law
Revised Model GST Law
3
(1)
Supply includes
Supply includes
(a)
all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business
all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business
No changes
* Definition of 'supply' st

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upply
(c)
a supply specified in Schedule I, made or agreed to be made without a consideration
a supply specified in Schedule I, made or agreed to be made without a consideration
No changes
* Concept of supply without consideration still continues but Schedule I revamped to done away with nightmare situations like Business Assets/ services put to private or non-business use, Assets retained after deregistration, FOC Supplies, etc.
(2)
Schedule II, in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services
Schedule II, in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services
No changes
* Supply of goods Vs. Supply of services still continues with minimal changes
(2A)
Where a person acting as an agent who, for an agreed commission or brokerage, either supplies or receives any goods and/or services on behalf

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ublic authorities as specified in Schedule IV, shall be treated neither as a supply of goods nor a supply of services
Gist of the changes
* Certain exclusions have been provided in Schedule III and IV which would be out of taxable net.
* Schedule IV dealing with activities or transactions undertaken by the Central Government, a State Government or any Local Authority in which they are engaged as public authorities, which shall neither be treated as supply of goods nor supply of services, was also present in earlier Model GST Law.
* Schedule III has been now newly added which covers activities or transactions which shall neither be treated as supply of goods nor supply of services like services by an employee to employer in course of or in relation to his employment, services of funeral, burial etc.
(3)
(4)
Subject to sub-section (2), the Central or a State Government may, upon recommendation of the Council, specify, by notification, the transactions that are to be treated as

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he changes
* The provision has been omitted in view of separate provisions inserted for taxability of services supplied through electronic commerce operator under chargeable section. Such persons would be liable to pay tax and supplies made by such persons would not be deemed supplies by them.
(5)
–
The tax liability on a composite or a mixed supply shall be determined in the following manner –
(a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply;
(b) a mixed supply comprising two or more supplies shall be treated as supply of that particular supply which attracts the highest rate of tax
Gist of the changes
* Taxability of composite and mixed supplies: A new incorporation to determine taxability of bundled supplies in following manner:
* Composite supply i.e. supplies naturally bundled à It shall be treated as a supply of principal supply
* Mixed supply i.e. two or more in

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Minutes of the 5th GST Council Meeting held on 2-3 December 2016
5th GST Council Meeting Dated:- 3-12-2016 GST Council – Minutes
GST
Minutes of the 5th GST Council Meeting held on 2-3 December 2016
The fifth meeting of the GST Council (hereinafter referred to as 'the Council') was held on 2-3 December 2016 in Pravasi Bharatiya Kendra, New Delhi under the Chairpersonship of the Hon'ble Union Finance Minister, Shri Arun Jaitley. The list of the Hon'ble Members of the GST Council who attended the meeting is at Annexure. 1. The list of officers of the Centre, the States, the GST Council and the GSTN who attended the meeting is at Annexure 2.
2. In his opening remarks, the Hon'ble Chairperson of the Council welcomed all the members and then took up the agenda items for discussion.
3. The following five agenda items were taken up for consideration:
i. Confirmation of the Minutes of the 4th GST Council Meeting held on 3-4 November, 2016.
ii. Approval of the

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rate on gold should be kept open and it could be considered after the completion of the rate fitment exercise. The Council agreed that no amendment was required in the Minutes on this issue.
ii. The officer from Odisha stated that in paragraph 33 of the Minutes, the version of the Hon'ble Minister from Odisha recorded therein should be replaced with the following – 'The Hon'ble Minister from Odisha supported Option II.'
iii. The Commissioner of Commercial Tax (CCT), Rajasthan stated that in paragraph 15 of the Minutes, the fourth sentence relating to the version of the Hon'ble Minister from Rajasthan recorded in the aforesaid paragraph should be replaced with the following version – 'He further stated that a special rate may be kept for demerit goods and that levying cess for generating revenue for compensation for five years was not desirable. He suggested that instead of deciding the special rate after five years, a special rate of tax for demerit goods ma

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ST Compensation Law
6. The Hon'ble Chairperson invited the members to commence discussion on this agenda item. However, a discussion ensued regarding the order of discussion between agenda items 2 and 3. The Hon'ble Ministers from Uttar Pradesh and Kerala suggested that agenda item 3 (Provision for Cross-Empowerment to ensure Single Interface under GST) be taken up first. The Hon'ble Chairperson stated that the Members needed to converge on a consensus on all issues. He observed that if a provision of law was linked to agenda item 3, then it could be decided along with the agenda item 3. The Hon'ble Chief Minister of Puducherry stated that it was important to get a clear picture in respect of agenda item 3 and then, it would be easier to decide on the law. The Hon'ble Minister from West Bengal strongly suggested to discuss agenda item 3 first as this had already been discussed in three meetings of the Council and in one informal meeting of the Members of the Counci

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le Chairperson emphasized that the officers had worked on the draft model laws and this needed to be discussed and provisions of law linked to agenda item 3 could be looked at separately. The Hon'ble Minister from Kerala observed that if States wanted agenda item 3 to be discussed before agenda item 2, it could be agreed upon, particularly when it was also discussed earlier in an informal meeting of the Council. The Hon'ble Deputy Chief Minister of Delhi observed that as 8 or 9 Members had requested to change the sequence of the agenda, this could be accepted. The Hon'ble Chairperson observed that the art of reaching consensus was to first take up issues that bind the Council rather than those that divide it. He also pointed out that there was no scope to defer implementation of GST beyond 16 September 2017 and that the Council needed to be mindful that the laws needed to be passed in the Parliament and the State Legislatures. He further observed that the laws needed to be

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as of agreement if the intention was to resolve issues. He observed that it was important to look at the larger picture and not to indulge in a political debate. He also observed that Jammu & Kashmir was the most empowered legislature in the country which also levied Service Tax but he was making an effort to implement GST in his State too. He further observed that approval of law was not contingent upon an agreement on the administrative arrangement.
9. The Hon'ble Minister from Kerala observed that after the Constitutional amendment, the States had lost the bargaining power and had been reduced to the level of a municipality but on the administrative issue, power at State level was very important and this could not be compromised. He observed that there was a history of discussion on cross-empowerment and the agenda should have followed that sequence. The Hon'ble Chairperson observed that rights of the Centre were contingent upon States' agreement and vice versa and in t

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agenda item 3. The Hon'ble Minister from Jammu & Kashmir wondered how the issue of cross-empowerment could help improve the status of State Governments, as the power of bureaucracy to administer a tax did not lead to improving the status of States. He added that it was collectively decided to share the power to tax. The Hon'ble Minister from Uttar Pradesh observed that agenda item 3 had implications on several provisions of law. He suggested to give a fixed time for discussion on cross-empowerment and if there was no agreement, then, the discussion could move to agenda item 2. The Hon'ble Chairperson proposed that the draft IGST Law and the agenda item 3 could be taken up together and before that, the draft Central GST/State GST Laws and the Compensation Law could be taken up for discussion. The Council agreed to this suggestion and thereafter, discussion on agenda item 2 was taken up.
Discussion on the Draft Model GST Law
11. Introducing the Draft Model GST Law, the Sec

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dia and the Constitution of Jammu & Kashmir. The Council agreed to this suggestion.
ii. Section 2 (7), 2 (8) and 2 (106) (Definitions): The Hon'ble Minister from Telangana suggested that the definition of agriculturist should not be limited to those who cultivate the land personally as small landholders might give their land to other ryots for cultivation. The Hon'ble Deputy Chief Minister of Delhi observed that tenancy was quite common in India and to make them taxable under GST would be a very big decision which needed to be discussed. The Hon'ble Minister from Uttar Pradesh suggested that the definition of 'agriculturist' should be a broad one. The Hon'ble Minister from Kamataka observed that while tenant farming was widespread, most States had laws against tenancy. He therefore posed a question whether tenancy could be legalized under the Model GST Law. The Hon'ble Chief Minister of Puducherry observed that share-cropping was prevalent in various State

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ide and informed that his State had sent a definition for 'agriculturist' which read as follows – 'means a person not being a company, a firm, a limited liability partnership, any body corporate incorporated by or under the laws of a country outside India, involved in the operations of agriculture, either
1. by one's own labour, or
2. by the labour of one's family, or
3. by servants on wages payable in cash or kind or by hired labour, or
4. through any usufructuary, mortgage or lease or otherwise.
He also suggested to delete the definition of the term 'to cultivate personally' contained in Section 2 (106). The Hon'ble Minister from Uttar Pradesh suggested to add pisciculture and animal husbandry in the definition of 'agriculture'. The Hon'ble Minister from Telangana suggested to keep poultry and dairy as part of the definition of agriculture. The Commissioner of Commercial Tax (hereinafter referred to as 'CCT'), Gujarat stat

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d, then the processed dairy products produced by an agriculturist would also be exempt. The Hon'ble Chief Minister of Puducherry observed that a very small percent of dairying, poultry farming, etc. was carried out by corporates and due to this, the entire sector should not be subject to tax. The CCT, Maharashtra stated that in his State there was no Value Added Tax 01 AT) on primary products, but processed goods like cheese, butter and ghee attracted VAT. The Hon'ble Deputy Chief Minister of Gujarat observed that milk cooperative was a big activity in Gujarat and the practice was to exempt the farmers bringing milk to the cooperative but to tax the subsequent value added products. The Hon'ble Minister from Kerala stated that raw agriculture products were not taxed and as there was an exemption threshold of Rs. 20 lakh, the existing provision was acceptable. The Hon'ble Minister from Haryana stated that 50% of agricultural activity was through share cropping and tenancy

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that the collection of minor forest produce should not be taxed. The Hon'ble Minister from Tamil Nadu suggested to exclude branded, processed and packaged items from the definition of agriculture. The Secretary explained that these categories would not come within the ambit of agriculture. The Hon'ble Minister from Tamil Nadu also suggested to add pisciculture in the definition of agriculture. The Hon'ble Minister from Telangana suggested that in section 2(7), nothing should be excluded from the definition of agriculture. The Hon'ble Deputy Chief Minister of Gujarat cautioned against changing the existing definition of agriculture as this would invite demand for agricultural subsidy from the hitherto excluded sectors. The Hon'ble Minister from Tripura suggested to include rubber plantations and tea in the definition of agriculture. The Hon'ble Minister from Meghalaya suggested to include apiculture (beekeeping) and piggery in the definition of 'agriculture&

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unt-
a) by one's own labour, or
b) by the labour of one's family, or
c) by servants on wages payable in cash or kind [(but not in crop share)] or by hired labour under one's personal supervision or the personal supervision of any member of one's family and to retain the Explanation 1 and 2 under Section 2 (106). However, the Council did not agree to the suggestion from the Hon'ble Minister from Punjab to add a sub-clause (d), namely, 'through any usufructuary, mortgage or lease or otherwise' and to include cooperative societies within the meaning of agriculturist.
iii. The Hon'ble Minister from Punjab suggested that the lease of agricultural land should be exempt from service tax. After discussion; the Council agreed that this would be considered at the time of discussing exemptions from GST.
iv. Section 2 (11) (Definitions): The Hon'ble Minister from Tamil Nadu suggested defining 'State' in the draft IGST Act. The officer from Andh

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est Bengal suggested that the definitions of 'intra-state supply of good;' and of 'intra-state supply of services' should be incorporated in the Model GST Law also instead of only cross-referencing it to the IGST Act. The Hon'ble Deputy Chief Minister of Delhi also supported this proposal. The Council agreed to this suggestion.
vii. Section 2 (63) (Definitions): The Hon'ble Minister from Tamil Nadu suggested that instead of cross-referencing the definition of 'manufacturer' from the Central Excise Act, 1944, the definition should be incorporated in the Model GST Law itself so that the definition in the Model GST Law did not change merely due to change in the definition in the Central Excise Act, 1944. The Hon'ble Deputy Chief Minister of Delhi also supported this proposal. The Council agreed to this suggestion.
viii. Section 3 (2) (Meaning and scope of supply): The Hon'ble Minister from West Bengal suggested that under Article 366 (29A) of th

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the revised version, it had been shifted to the draft IGST Act. He suggested that the definition of 'location of recipient of service' should also be incorporated in the Model GST Law. The Council agreed to this suggestion.
x. Section 7 (Powers of SGSTICGST officers under the Act): The Council agreed that this Section would be discussed later as it related to cross-empowerment.
xi. Section 8 (1) (Levy and Collection of CentraliSt ate Goods and Services Tax): The Hon'ble Minister from Kerala observed that as tax rates were not decided, a 14% cap on rate should not be kept. He further observed that after 5 years, once cess had ceased to exist, the tax rate would exceed 28% if cess was merged with tax. The Hon'ble Minister from Tamil Nadu suggested to keep the tax rate at 20%. The Secretary clarified that under Article 265 of the Constitution, no tax could be levied without the authority of law and therefore, a rate cap was required in the legislation. He further obse

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could be handled through audit or enforcement provisions. The CCT, Karnataka explained that as there were certain conditions that had to be fulfilled by a person opting for the Composition scheme, the provision for permission had been kept. After discussion, the Council agreed that this provision be amended and that the benefit of the Composition scheme shall be availed on the basis of declaration rather than permission, subject to the conditions precedent being fulfilled.
xiii. Section 9 (1) (b) (Composition Levy): The Hon'ble Deputy Chief Minister from Delhi expressed concern in regard to this provision and stated that any grocery store which was selling goods not leviable to tax under OST would get excluded from the benefit of the Composition scheme. The CCT, Gujarat clarified that this provision would only apply to stores selling the 5 petroleum products and potable alcohol which were excluded from GST and they would not be entitled to avail the benefit of the Composition sc

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r a change in its earlier decision. The Hon'ble Minister from Rajasthan observed that the threshold for Composition levy was too low which could be increased or CGST on supplies from small manufacturers could be reimbursed by the Central Government. The Secretary stated that the Central Government could decide separately regarding the issue of reimbursement of CGST to small manufacturers. The Hon'ble Minister from Tamil Nadu strongly argued for a Composition Scheme on the basis of the capacity of a unit instead of its turnover such as that for brick kilns. He observed that this would avoid the need for verification of turnover. The Secretary stated that it would be administratively difficult to fix capacities for different industries. The CCT, Karnataka explained that presently, the capacity based Composition scheme was available to different industries in different States (such as ply board in Haryana, marble in Rajasthan and brick kiln in Tamil Nadu) but in GST, there would b

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dated 22-23 September 2016 as per which manufacturers were not to be extended the benefit of the Composition scheme and agreed to extend the benefit to manufacturers also, subject to clause (e) of Section 9 (1) of the Model GST Law. The Council also agreed that such a scheme should be limited to turnover-based composition rather than capacity based composition.
xv. The Council also discussed the rate oftax under Section 9 (Composition Levy). The Hon'ble Minister from West Bengal observed that a combined tax rate of 5% on manufacturers under the Composition scheme would lead to loss of competitive advantage. The Secretary explained that the Composition scheme would normally be relevant to manufacturers making Business-to-Consumer (B2C) supplies where no input tax credit CITC) was involved. The Hon'ble Minister from Punjab suggested to levy a higher rate of GST for manufacturers as value addition for them would be higher. The Hon'ble Minister from Uttar Pradesh did not fav

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composition levy, manufacturers should be kept out of composition and the Centre should give them reimbursement of the CGST component. The Hon'ble Deputy Chief Minister of Gujarat stated that the benefit of lump sum tax should be limited to traders who were involved in resale and should not be extended to manufacturers. He suggested to consider one of the following two options: (i) Manufacturers should not be entitled to the benefit of lump sum tax; (ii) If it has to be given at all, it should be at the rate of 5% (2.5% CGST and 2.5% SGST) and that if the Government of India decided to extend relief, it should be given from its budgetary provision. The Hon'ble Minister from Tamil Nadu suggested that manufacturers should be levied a combined tax rate of 2% whereas traders should be levied a combined tax rate of 1 %. The Hon'ble Minister from Odisha suggested a combined tax rate of 2% for traders and 3% for manufacturers. The Hon'ble Minister from Assam suggested a combin

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GST) for manufacturers.
xvi. Section 9 (Composition Levy) and Section 8 (Levy and Collection of Central/State Goods and Services Tax): The Hon'ble Minister from West Bengal raised the issue whether tax on reverse charge basis should be levied on Composition dealers only. He added that as the provision was not envisaged for other classes of dealers, there would be no level playing field. The CCT, Gujarat suggested that levy of tax on reverse charge basis should be applied on all supplies from unregistered persons (which is otherwise chargeable to tax) as otherwise, it would create a non-level-playing field between unregistered persons and the registered taxpayers. He further added that without such a provision, it would be beneficial to buy goods from an unregistered person as no tax was paid at the time of receipt of goods even when incidence of tax had arisen. The Council accepted this suggestion and decided that there shall be a reverse charge on all commodities when supplied b

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ensured. However, after discussion, the Council agreed to make suitable modification in the wording of Section 11 to reflect the understanding that applicability of exemptions under CGST, SGST and IGST shall be uniform.
xviii. Section 12(2)(b) (Time of supply of goods): The Hon'ble Minster from West Bengal observed that there was presently no tax on advances received for sale of goods and that the terms of payment should not be made a point of taxation. The CCT, Gujarat explained that even today tax was collected on advances received for provision of services and to have parity, it was also applied to goods. The CCT, Karnataka added that for some goods, there was considerable gap of about 3-4 months between receipt of advance and delivery of goods and that the government should not be deprived of taxes for this period. The Hon'ble Minister from Telangana observed that tax on advances should not be charged as it would create complications in situations where the order of the b

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hall be fixed through this provision. The Secretary suggested to define the term 'voucher' in the Definitions section. The Council agreed to define the term 'voucher' in the Definitions section.
xx. Section 15 (Value of taxable supply): The Hon'ble Minister from West Bengal raised a question as to why the value of reimbursable supply was omitted in the new draft. The Commissioner (GST Policy Wing), CBEC clarified that this provision was covered under Section 15(2)( c) and that this would be supplemented by the Valuation Rules which would have elaborate provisions for situations not covered under the Section. The Hon'ble Minister from West Bengal observed that the principle applied in respect of reimbursable expenditure in Service Tax should be used in GST to which the Commissioner (GST Policy Wing), CBEC clarified that this would be addressed in the Valuation Rules. The Council agreed not to make any change in the provision.
xxi. Section 16(2) (Eligibility a

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ll be increased from three months to six months from the date of issuance of invoice.
xxii. Section 16(1) (Eligibility and conditions for taking input tax credit): The Hon'ble Minister from Tamil Nadu questioned the rationale for allowing deferred input tax credit for pipelines and telecommunication towers but not for other capital goods. The Secretary clarified that credit was being staggered for these two categories of capital goods in view of the large amounts of ITC involved. The Hon'ble Minister from Kamataka observed that no ITC was  given on power transmission lines though GST could be levied on wheeling charges. The Chief Economic Advisor, Government of India suggested to levy a low rate of GST on electricity to allow the blocked ITC in the power sector to pass through and that this would address the problem of high cost of power generation. The Secretary clarified that electricity duty was in Schedule 7 of the Constitution (State List) and that the present value

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credit was spread over three years, it should not adversely impact the compensation to the States. The Chairman, CBEC informed that ITC on capital goods was high and it amounted to about Rs. 25,000 crore and out of this, pipelines and telecommunication towers accounted for about Rs. 10,000 crore. The Hon'ble Deputy Chief Minister of Gujarat observed that for the first five years of GST implementation, it would be beneficial for States if ITC on pipelines and telecommunication towers was given in the first year itself, but it would create problems for them after the expiry of the five-year compensation period. The Hon'ble Minister from Karnataka stated that telecommunication towers and pipelines were being extended the facility of ITC for the first time and if they were also allowed to take this credit in a single year, this would lead to a double bonanza for these two sectors, which should be avoided. The Hon'ble Minister from Uttar Pradesh reiterated that this provision s

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to one or more recipients of credit. The Commissioner (GST Policy Wing), CBEC explained the mechanism of an Input Service Distributor (ISD). The Hon'ble Minister from West Bengal observed that the wordings of Section 22 regarding recovery of excess distribution of credit to one or more recipients of credit could be made clearer. The Council agreed to this suggestion.
xxiv. Section 23 (Registration): The Hon'ble Minister from West Bengal observed that the progress of migration of taxpayers to GST was slow due to server errors and slow login process. He enquired as to what steps were being taken to rectify the situation. The Hon'ble Ministers from Chhattisgarh, Bihar and Jharkhand also expressed concern regarding considerable time being taken for logging in to the system for migration. Shri Navin Kumar, Chairman, Goods and Services Tax Network (GSTN) informed that migration of existing taxpayers to GSTN had commenced from 8 November 2016. He further informed that 62% of de

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ded that the tax element should be shown in B2C invoices as well so that the consumer was aware of the amount of tax he paid for a transaction and that this would enhance transparency. The Hon'ble Chief Minister of Puducherry observed that every consumer should know as to how much tax he paid. The Hon'ble Deputy Chief Minister of Gujarat observed that even today, tax was being shown separately in the invoices. The Council agreed not to make any change in the provision.
xxvi. Section 42 (Levy of late fee): The Hon'ble Minister from Haryana observed  that the maximum late fee of Rs. 5,000 was too low. He also enquired as  why the term 'late fee' was used instead of the term 'penalty'. The CCT,  Karnataka explained that late fee would be charged under all three Acts and effectively, this would come to Rs. 15,000. If a higher late fee was charged, it would be burdensome for small taxpayers. As regards nomenclature, he explained that the expressi

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'ble Minister from Haryana also supported this demand and also suggested that the TDS rate should be higher. The Secretary stated that a higher TDS rate was not desirable as TDS was only meant to create an audit trail. The Hon'ble Minister from Jammu & Kashmir stated that law should not be made to address the errant taxpayers and that imposing TDS for all transactions would become very cumbersome. The Hon'ble Minister from Karnataka also warned that TDS on all Government transactions would create a lot of workload for the officers. The CCT, Karnataka stated that there was an alternative provision in the Draft Model GST Law of giving a Unique Identity Number (UIN) which could be obtained by panchayats, etc. and that they could report their purchases at a fixed periodicity (say one year) and upload it on GSTN for the purpose of matching. He added that this arrangement would be less onerous than TDS for all Government transactions. The Principal Secretary (Finance), Odisha sta

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r TDS under this Section shall be Rs. 2.5 lakh for all categories of supplies and to define the term 'Governmental agencies' III Section 46(1).
12. The Hon'ble Chairperson stated that discussion on the rest of the Sections of the Draft Model GST Law could be deferred for the next meeting of the Council and that some time should be devoted for discussion on agenda item 3 (Provision for Cross-Empowerment to ensure Single Interface under GST). The Council agreed to defer discussion on the remaining provisions of the Draft Model GST Law for the next Council meeting.
13. Accordingly, for agenda item 2, the Council approved the provisions of Chapters I to IX of the Model GST Law (Sections 1 to 46) subject to the decisions/observations recorded below and also subject to changes that might be suggested by the Union Law Ministry during the process of vetting of the draft GST Laws. The Council further agreed that the changes made during the legal vetting would be highlighted and br

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ollection of minor forest produce, raising of man-made forest or rearing of seedlings or plants.
iii. Section 2(8) and Section 2(106) (Definitions): To merge the definitions under these two sections as follows – “agriculturist” means an individual or a Hindu Undivided Family, who carries on any agricultural operation on his own account-
a) by one'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 and to retain the Explanation 1 and 2 under Section 2(106).
iv. To consider the issue of exemption from GST for lease of agricultural land at the time of discussing exemptions from GST.
v. Section 2(11) (Definitions): To discuss the definition of 'State' at the time of discussion on the draft IGST Act.
vi. Section 2(17) (Definitions): To add the following provision in Schedule IV of the Draft Model

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scuss it later as it related to cross-empowerment.
xii. Section 8(1) (Levy and Collection 0/ Centra/IState Goods and Services Tax): To change the rate cap from the existing rate of 14% to 20%.
xiii. Section 9 (Composition Levy): To modify the original decision taken in the 1st GST Council meeting dated 22-23 September 2016 as per which manufacturers were not to be extended the benefit of the Composition Scheme and agreed to extend the said benefit to manufacturers also, subject to clause (e) of Section 9(1) of the Model GST Law, and that such a scheme shall be limited to turnover-based composition rather than capacity based composition.
xiv. Section 9(1) (Composition Levy): To amend the section so as to provide that the benefit of Composition scheme shall be availed on the basis of intimation rather than permission.
xv. Section 9(1) (Composition Levy): To amend the provision by inserting that the aggregate turnover for availing the Composition Scheme shall be such amount as may

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in respect of capital goods till data on the total quantum of ITC availed on capital goods was received from CBEC.
xx.  Section 16(2) (Eligibility and conditions for taking input tax credit): To increase the time period for making payment from three months to six months from the date of issuance of invoice for both goods and services.
xxi. Section 22 (Manner of recovery of credit distributed in excess): To make the wordings of Section 22 clearer regarding recovery of excess distribution of credit to one or more recipients of credit.
xxii.  Section 42 (Levy of late fee): To change the wording in the law suitably to reflect that the maximum late fee shall not be less than Rs. 5,000 or an amount as recommended by the Council.
xxiii. Section 46 (Tax deduction at source): To prescribe the limit for T DS to Rs. 2.5 lakh for all categories of supplies and to define the term 'Governmental agencies' in sub-section (1)
Agenda item 3: Provision for Cross-Empowerment to

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empowerment of IGST was a critical element. The Hon'ble Minister from Karnataka supported the view of the Hon'ble Minister from Tamil Nadu on the issue of cross-empowerment under IGST. He further observed that if one tried to divide the base, the lines of division became very sensitive. The alternative suggestion referred to by the Hon'ble Minister from Tamil Nadu would help to utilise both the administrations optimally without dividing the taxpayer base, but some variation could be made in the suggestion.
15. The Hon'ble Chairperson invited the Chairman, CBEC to express his views on the subject. The Chairman, CBEC stated that there was useful discussion during the officers' meeting. He stated that for smooth working of CGST and SGST, cross-empowerment was essential but it should apply across the value chain without exclusion of any tax administration from any segment as Constitutionally both the administrations were empowered to tax the entire value chain. He expr

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istered under CST but the position would be different under IGST and that the number of taxpayers doing inter-State transaction would be lesser in GST than that in CST. He also observed that IGST being a destination based tax, the place of supply was a very important issue, and the revenue concern would essentially be that of the destination State and the Centre and that the origin State was not concerned with it. The Hon'ble Minister from Tamil Nadu raised a question regarding the relevance of buyer and seller being under CST. The Commissioner, GST Policy Wing, CBEC clarified that in CST, C-forms were given by destination States and thus, the buyers also became registered as inter-State dealers even if their subsequent transactions were only intra-State, whereas under GST, a buying dealer alone would no longer require registration under IGST, unless he was also supplying inter-State.
16. The Hon'ble Minister from Tamil Nadu observed that while legal opinion could be taken on

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this view and observed that in his State, about 50% of dealers were carrying out inter-State transaction and it was necessary to allow State governments to administer IGST. The Commissioner (GST Policy Wing), CBEC clarified the fund settlement procedure under GST. He explained that if IGST was cross-utilised for payment of SGST in a State, the Central government would transfer the equivalent amount of money to that State government and if SGST was used to pay IGST in a State, the concerned State would transfer an equivalent amount to the Centre. He further clarified that as per data received by the GST Council for twenty States, the all-India average of inter-State dealers was only 27%. The Hon'ble Minister from Kamataka stated that the all-India average might be different from State specific numbers as mentioned by the Hon'ble Minister from Tamil Nadu.
17. The Hon'ble Minister from Karnataka observed that the Central Government could allow States to administer IGST on its

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o to the Central administration. The Hon'ble Minister from Tamil Nadu stated that it was essential that the key processes under GST, namely registration, return, scrutiny, audit, enforcement, appeals, refund and demand should be conducted by one authority only, and to achieve such a single interface, a horizontal division was necessary as suggested under Option II.
18. The Hon'ble Deputy Chief Minister of Gujarat observed that the issue of cross-empowerment had been discussed four times but the Constitutionality of eros -empowerment under IGST was being raised for the first time. He suggested dividing the taxpayer base in the ratio of 60% to States and 40% to the Centre. The Hon'ble Minister from Tamil Nadu observed that Article 269A itself gave power to the Council to apportion the IGST between the Union and the States. The Hon'ble Chairperson observed that there was no dispute regarding apportionment but the issue raised by the Chairman, CBEC was whether delegation u

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ortionment of tax between the Centre and the States, which meant sharing a portion. The CCT Gujarat stated that without cross-empowerment under IGST, GST could not be implemented efficiently and the distinction between Origin State and Destination State was an artificial one. He emphasized that the Origin State also had a stake in IGST. The Hon'ble Minister from Rajasthan stated that cross-empowerment was required in all three Acts as otherwise, the aim of single interface would not be achieved. The Hon'ble Chairperson observed that in case there was no Constitutional problem for cross-empowerment under IGST, one needed to look at an optimal solution. The Hon'ble Minister from Karnataka stated that one solution could be to do cross-empowerment and provide for a small percent of audit of taxpayers below Rs. 1.5 crore turnover by the Central administration. The Hon'ble Minister from Tamil Nadu stated that except intelligence based action where both administrations should

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complete access to data regarding scrutiny etc. The Hon'ble Minister from West Bengal stated that to avoid complications for taxpayers below Rs. 1.5 crores, they should remain with the States. The Hon'ble Minister from Kerala supported the suggestion of the Hon'ble Ministers of Uttar Pradesh, West Bengal and Gujarat. The Hon'ble Deputy Chief Minister of Gujarat suggested that for units with turnover below Rs. 1.5 crore, the auditable units could be divided in the ratio of 70:30 for the States and the Centre and for units above Rs. 1.5 crore turnover, it could be 60:40 for the States and the Centre for all purposes, including audit and enforcement. The Hon'ble Minister from Punjab stated that if, for units with turnover below Rs.l.5 crore, audit was done by the Central administration and the other processes was done by the State administration, this would lead to complications about which administration would do adjudication, appeal, etc. The Commissioner (GST Polic

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State administration could draw funds from the Consolidate Fund of India. The Hon'ble Minister from Tamil Nadu observed that the model suggested by the Centre would require creation of more offices of the Central Government. The Chairman, CBEC clarified that the reorganization of CBEC did not envisage any expansion of the manpower and that the entire work would be performed by the existing manpower. He also pointed out that in Service Tax, the Central tax administration had a very significant presence in the taxpayer segment of turnover below Rs. 1.5 crore.
19. The Secretary suggested certain broad parameters as a possible solution for this Issue. He suggested that the enforcement-based action shall lie with both the tax administrations without any restriction and that audit and scrutiny in a year should not exceed 5% of the total taxpayer base. He added that the division of taxpayers should be limited only with reference to this 5% and the proportion of the division could possib

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y, audit of taxpayers with turnover below Rs. 1.5 crore by the Central administration shall not exceed 1 % of the total taxpayer base below Rs. 1.5 crore, but there would be no restriction regarding the intervention by the Centre III respect of taxpayers having turnover above Rs. 1.5 crore and by the States for taxpayers with turnover below and above Rs. 1.5 crore. The Hon'ble Minister from West Bengal wondered why the Centre needed to have any toehold over taxpayers with a turnover below Rs. 1.5 crore. The Hon'ble Minister from Assam observed that the Centre had been administering taxpayers with turnover below Rs. 1.5 crore in Service Tax and suggested to vertically divide the taxpayer base so that the more important portion of taxpayers with turnover above Rs. 1.5 crore did not go to the Central administration. He also pointed out that all States did not unanimously want control over taxpayers with turnover below Rs. 1.5 crore. The CCT, Karnataka explained the proposed soluti

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to defer a decision on this issue and to continue further discussion in the next meeting of the Council.
Agenda item 4: Date of the next meeting of the GST Council
21. After discussion, it was agreed that the next meeting of the Council would be held on 11-12 December 2016 in New Delhi.
Agenda item 5: Any other agenda item with the permission of the Chairperson
22. Some Members of the Council desired to discuss the impact of demonetization. The Hon'ble Chief Minister of Puducherry stated that it was important to discuss how to overcome loss of revenue due to demonetization. The Hon'ble Minister from West Bengal stated that it was important to discuss as to how much revenue would be lost due to deceleration of economic growth both of the Centre and the States and whether Rs. 50,000 crore kept for compensation would be sufficient in the new situation. The Hon'ble Minister from Chhattisgarh stated that this question was hypothetical at this stage and that the Central Gover

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inister from Punjab observed that as the Central Government had decided to compensate the States, the matter should be left to the Centre. The Hon'ble Minister from Uttar Pradesh stated that an assurance was needed that States would continue to be compensated even if there was a shortfall in the revenue collection. The Hon'ble Minister from Rajasthan observed that the Constitutional amendment itself had an assurance regarding the compensation. He suggested that demonetization should be discussed separately with the Hon'ble Union Finance Minister. The Hon'ble Minister from Kerala stated that States were also facing the crisis of currency and there was a need to exchange ideas on how to face the situation. He also observed that revenue of the States had taken a big hit and this also needed to be discussed. The Hon'ble Minister from Telangana observed that demonetization would lead to problems of finances for States due to loss of revenue in the coming few months. The

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losed an hour earlier and then, the impact of demonetization on the States would be discussed informally without the presence of the officers. The Council agreed to this suggestion.
23. The meeting ended with a vote of thanks to the Chair.
(Arun Jaitely)
Chairperson GST Council
=============
Document 1
CHAIRMAN'S
INITIALS
MINUTE BOOK
Annexure-1
S No
State/Centre
1
Govt of India
Shri Arun Jaitley
2
Govt of India
Shri Santosh Kumar Gangwar
List of Ministers who attended the 5th GST Council Meeting on 2-3 Dec 2016
Name of the Minister
Charge
Finance Minister
Minister of State for Finance
3
Puducherry
Shri V. Narayanasamy
Chief Minister
4
Delhi
Shri Manish Sisodia
Deputy Chief Minister
5
Gujarat
Shri Nitin Patel
Deputy Chief Minister
6
Arunachal Pradesh
Shri Chowna Mein
7
84
Arunachal Pradesh
Assam
Shri Honchun Ngandam
Dr. Himanta B. Sarma
9
Bihar
10
11
Chattisgarh
Haryana
13
12 Himachal Pradesh
Jammu & Kashmir
14
Jharkhand
15
Karnataka

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orts & Youth Welfare
Finance Minister
Finance Minister
Minister for Skill Development
Finance Minister
Page 26 of 29
JAYNA BOOK DEPOT
Estd. 1949
MINUTE BOOK
Annexure-2
JAYNA
List of Officials who attended the 5th GST Council Meeting on 2-3 Dec 2016
S No
State
Name of the Officer
Charge
1
Govt of India
Shri Hasmukh Adhia
23
Govt of India
Shri Najib Shah
Govt of India
Shri Arvind Subramanian
4
Govt of India
Shri Ram Tirath
5
Govt of India
Shri P.K. Jain
6
Govt of India
7 0
Govt of India
Shri Vivek Johri
8
Govt of India
Shri PK Mohanty
9
Govt of India
Shri Alok Shukla
10
Govt of India
Shri Upender Gupta
11
Govt of India
12
Govt of India
13
Govt of India
Shri G.D. Lohani
14
Govt of India
Shri Manu Tentiwal
15
Govt of India
Shri Paras Sankhla
16
Govt of India
17
Govt of India
18
Govt of India
19
Govt of India
20
Govt of India
21
Govt of India
22
GSTC Sectt.
23
GSTC Sectt.
Shri Siddharth Jain
Shri Arun Goyal
Shri Shas

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r (GST),
CBEC
Additional Secretary
Commissioner
Commissioner
Joint Commissioner
Joint Commissioner
Deputy Commissioner
28
GSTC Sectt.
Ms. Thari Sitkil
29
GSTC Sectt.
Shri Kaushik TG
Deputy Commissioner
Assistant Commissioner
30
Andhra Pradesh
Shri J. Syamala Rao
Arunachal
32
Pradesh
Shri Marnya Ete
33
Arunachal Pradesh Shri Tapas Dutta
Commissioner, Commercial Tax
Commissioner, Industry
Assistant Commissioner, VATS
CHAIRMAN'S
INITIALS
Page 27 of 29
MINUTE BOOK
Name of the Officer
S No State
34 Assam
Dr. Ravi Kota
35
Assam
Shri Anurag Goel
36
Bihar
Ms. Sujata Chaturvedi
Shri Arun Kumar Mishra
Shri Khemraj Jhariya
Shri H. Rajesh Prasad
Shri R.K. Mishra
Shri Anand Kumar Tiwari
Shri Dipak Bandekar
Shri Tarun Kapoor
Shri Pushpendra Rajput
Shri Navin K. Choudhary
Shri P.I. Khateeb
37
Bihar
38
Bihar
Shri Ajitabh Mishra
39
Chattisgarh
Shri Amit Agrawal
40
Chattisgarh
Ms. Sangeetha P
41
Chattisgarh
42
Delhi
43
Delhi
44
Delhi

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sioner
Secretary, Finance & Commercial
Tax
Commissioner, Commercial Taxes
Additional Commissioner,
Commercial Taxes
Commissioner, VAT
Special Commissioner (Policy)
Joint Commissioner (GST)
Commissioner, Commercial Tax
Commissioner, Commercial Taxes
Secretary (EA), Finance
Additional Chief Secretary
Commissioner, Excise & Taxation
Joint Commissioner, Excise &
Taxation
Principal Secretary, Excise &
Taxation
Commissioner, Excise & Taxation
Finance Secretary
Commissioner, Commercial Taxes
Additional Commissioner,
Commercial Taxes
Joint Commissioner, Commercial
Taxes
Deputy Commissioner, Commercial
Taxes
Commissioner, Commercial Taxes
Additional Chief Secretary, Taxes
Commissioner, Commercial Taxes
Assistant Commissioner
Commissioner, Commercial Taxes
Deputy Commissioner, Commercial
Taxes
Commissioner, Commercial Taxes
Joint Commissioner, Sales Tax
Commissioner, Taxes
Assistant Commissioner, Taxes
Commissioner, Taxes
Superintendent, Taxes
JAYNA BOOK D

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ioner, Taxes
Principal Secretary (Finance)
Commissioner, Commercial Taxes
Joint Commissioner, Commercial
Taxes
Secretary (Finance & Commercial
Tax)
Commissioner, Commercial Taxes
Additional Chief Secretary
(Taxation)
Excise & Taxation Commissioner
Advisor, GST
Additional Commissioner
Assistant Commissioner
Commissioner, Commercial Taxes
Deputy Commissioner, GST
Assistant Commericial Taxes
Officer
Joint Commissioner, Commercial
Taxes
Additional Chief Secretary,
Commercial Taxes
Additional Commissioner, Taxation
Principal Secretary (Revenue)
Commissioner, Commercial Taxes
Deputy Commissioner, Commercial
Taxes
Principal Secretary (Finance)
Commissioner, Commercial Taxes
Special Secretary
Additional Commissioner, Law
Commissioner, Taxes
Additional Commissioner
Commissioner, Commercial Tax
Senior Joint Commissioner,
Commercial Tax
94
95
96
Uttarakhand
Uttarakhand
West Bengal
97
West Bengal
98
GSTN
99
GSTN
Shri Khalid A Anwar
Shri Navin Kumar

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Demonetisation, GST to create cleaner economy
GST
Dated:- 2-12-2016

New Delhi, Dec 2 (PTI) Finance Minister Arun Jaitley today said demonetisation may impact growth "for a quarter or so" but this disruption will not last too long and the move along with GST will help create a larger and cleaner economy.
"I have least doubt in my mind that (one year from now) you will have a bigger economy, higher GDP, cleaner GDP. You will have a higher tax base and more money in banks, and probably interest rates will be more reasonable. Therefore, all these collectively could contribute a lot as far as GDP is concerned," he said at the HT Leadership Summit.
Both the economy and social system will see a major transformat

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, it's certainly going to benefit."
Citing a few economic trends post demonetisation, the Minister said rabi sowing this season has been higher than last year, while auto sales were a mixed bag.
"Of course, you will have some disruption created because of the switchover, in the long run, advantages are going to be huge as far as the relative cost of disruption is concerned," Jaitley said.
Speaking about the various advantages of the demonetisation, the Finance Minister said, it could lead to reduction in interest rates.
"Rates will now hopefully at some stage come down. With more money in the taxation system, our base itself increases," he said.
As far as inflow from demonetisation is concerned, he said it

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Inputs held in the stock on the day of appointed day in case of Trading
Query (Issue) Started By: – yogesh Panchal Dated:- 1-12-2016 Last Reply Date:- 6-12-2016 Goods and Services Tax – GST
Got 2 Replies
GST
Dear All Experts,
We have do two Business (1) manufacturing & (2) Trading, currently we are follow the rule 6(3)a of Cenvat Credit Rules-2004, maintain separate account of manufacturing inputs material & for the trading material also, revert service tax credit at turnover ratio prescribe in the central excise law. In above scenario please guide on following points.
* Trading warehouse material on which we have not take the credit, we have not charged excise duty at the time of sales, not collect duty from our customer, b

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eturn, then how we have save the credit of duty paid goods laying at trading warehouse s closing stock of 31st march-2017.
Reply By Ganeshan Kalyani:
The Reply:
Revised Draft Model GST Law has been published very recently .
Reply By sreemannarayana B:
The Reply:
The revised Section 18 (4) of revised GST Law states as follows:
4) Where an exempt supply of goods or services by a registered taxable person becomes a taxable supply, such person shall, subject to such conditions and restrictions as may be prescribed, be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finishedgoods held in stock relatable to such exempt supply and on capital goodsexclusively used for such exempt

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GST COMPENSATION CESS
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 1-12-2016

In order to compensate the States for the introduction of Goods and Service Tax regime, the Central Government proposed to levy a new cess called as 'GST Compensation Cess' through the Goods and Services Tax (Compensation to the States for loss of Revenue) Bill, 2016. The Government proposes to introduce the said bill in the winter session of Parliament and it may be introduced in the first week of December, 2016.
The said bill extends to the whole of India. It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf.
GST Compensation Cess
Section 8 of the bill provides for the levy and collection of GST compensation cess ('cess' for short). The said section provides that there shall be levied and collected in accordance with the provisions of this Act, a cess to be called the 'GST Compensation C

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furnish such returns in such formats, as may be prescribed, along with the returns to be filed under the Model GST law. The taxable person shall pay the amount payable under the Act in the manner as may be prescribed. Refund of Cess paid may be applied in prescribed form. For the purposes of cess, all the provisions, except for the format to be filed, of the Model GST law and the rules made there under shall apply in relation to the levy and collection of the cess.
Section 11(1) provides that the provisions of CGST and the rules made there under including those relating to assessment, input tax credit, non levy, short levy, interest, appeals, offences and penalties shall apply mutatis mutandis in relation to the levy and collection of the cess leviable as they apply in relation to the levy and collection of Model law.
Section 11(2) provides that the provisions of IGST Act, 2016 and the rules made there under including those relating to assessment, input tax credit, non levy, short l

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ansition date, i.e., 01.04.2017 (a probable date).
3. Section 3 provides the projected growth rate of the State. This section provides that the projected nominal growth rate of revenue subsumed for a State during the transition period shall be 14% per annum.
4. Section 5 provides the calculation of the base year Revenue of a State, i.e., 2015 – 16. The base year revenue of a State shall be the sum of the revenue collected by the State and local bodies during the base year on account of the taxes levied net of refunds with respect to the following taxes imposed by the respective State or Centre, which are subsumed into GST-
* VAT, sales tax, purchase tax, tax collected on works contract or any other tax levied by the concerned State under the erstwhile Entry 54 of List II of the VII Schedule to the Constitution, prior the Constitution (101st Amendment) Act, 2016 ('amendment' for short);
* Entry tax, octroi, local body tax or any other tax levied by the concerned State under the er

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of revenue forgone on account of exemptions given by the State Government to specific entities under the laws to promote industrial investment would be included in the total base year revenue of the State, subject to the conditions as may be prescribed;
* In respect of any State, if any part of revenue are not credited in the Consolidated Fund of the respective State, the same shall be included in the total base year revenue of the State, subject to the conditions as may be prescribed.
5. Section 5(3) provides that the following shall not be included in the calculation of the base revenue for the State-
* Any taxes levied under the erstwhile Entry 54 of List II of the VII Schedule prior to amendment on the sale or purchase of petroleum crude, high speed diesel, motor spirit, natural gas, aviation turbine fuel and alcoholic liquor for human consumption;
* Any taxes levied under CST on the sale or purchase of petroleum crude, high speed diesel, motor spirit, natural gas, aviation

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and released at the end of every quarter and finally calculated for every financial year after receipt of the final figure, as audited by C&AG. In case of excess amount has been released in any financial year during the transaction period, the excess amount shall be adjusted against the compensation payable in the subsequent financial year.
9. Section 7(2) provides that the total GST compensation payable shall be calculated as detailed below-
* The projected revenue for any financial year during the transition period, that have accrued to a State shall be calculated;
* The actual revenue collectedby a State in any financial year during the transition period net of refunds and the IGST apportioned to that State as certified by C&AG;
* Total GST compensation payable in any financial year shall be the difference between the projected revenue and the actual revenue collected by the State.
10. Section 7(3) provides that the loss of revenue at the end of any quarter shall be calculat

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d in case any excess amount has been released in the previous year, the amount shall be refunded by the State to the Central Government and such amount shall be credited to the GST Compensation Fund.
Disposal of GST Compensation Fund
Section10(3) provides the procedure for the disposal of balance of amount in the GST Compensation Fund after the transition period is over and after compensating all the States for the transition period. According to this Section 50% of the amount remaining unutilized in the GST Compensation Fund at the end of the transition period shall be transferred to the Consolidated Fund of India and shall be distributed between the Centre and the State and amongst the States as per provisions of Article 270(2) of the Constitution. The balance 50% shall be distributed amongst the States in the ratio of their total revenues from SGST in the last year of the transition period.
Reply By Ganeshan Kalyani as =
The Compensation cess is over and above IGST , CGST & SGS

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TAX INVOICE UNDER GST
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 1-12-2016

Meaning of 'tax invoice'?
As per section 2(60) read with section 23 of Model GST law, 'tax invoice' is required to be issued by a registered taxable person showing description of goods and/or services, value, tax and other particulars at the time of supply. It is a document evidencing supply of goods and services which becomes the basis for charge of tax.
According to explanation provided under section 23 of Model GST law, 'tax invoice' shall be deemed to include a document issued by an input service distributor(ISD) under section 17, and shall also include any supplementary or revised invoice issued by the supplier in respect of a supply made earlier.
Thus, 'tax invoice' shall be deemed to include-
* a document issued by an input service distributor, and
* any supplementary or a revised invoice issued by the supplier in respect of a supply made earlier.
Invoice is a d

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, determining the time of supply of goods is important.
As per section 23 of Model GST law, a registered taxable person supplying taxable services shall issue a tax invoice, within the prescribed time, showing the description, the tax charged thereon and such other particulars as may be prescribed.
Therefore, a registered taxable person supplying taxable services shall issue a tax invoice-
* within the prescribed time,
* Tax invoice should show-
* description of services,
* tax charged , and
* other details.
Particulars to be shown in a tax invoice
According to section 23 of Model GST law, read with Rule 1 of draft GST Invoice Rules, a tax invoice issued by the supplier shall contain the following details:
* name, address and GSTIN of the supplier,
* a consecutive serial number containing only alphabets and/or numerals, unique for a financial year,
* date of its issue,
* name, address and GSTIN/ Unique ID Number, if registered, of the recipient,
* contain the f

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where applicable along with the date and invoice number of the original invoice, and
* signature or digital signature of the supplier or his authorized representative.
Details required in a tax invoice of supply meant for export
According to proviso to Rule 1 of draft GST Invoice Rules, in case of exports, an invoice shall carry an endorsement 'supply meant for export on payment of IGST' or 'supply meant for export under bond without payment of IGST', as the case may be, and shall, in lieu of the details specified in clause (e) of Q. No. 5 above , contain the following details:
* name and address of the recipient,
* address of delivery,
* name of the country of destination, and
* number and date of application for removal of goods for export in form ARE-1.
Other details required to be mentioned in the invoice
According to proviso to Rule 1 of draft GST Invoice Rules, the Board/Commissioner may issue a notification to specify any of the following additional requirements –

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ice Rules, any tax invoice is required to be issued as per following time frame:
* In case of goods, at the time of supply,
* In case of services, as per time limits indicated below:
* Tax invoice for supply of services- within a period of thirty days from the date of supply of service,
* Tax invoice for continuous supply of services- within a period of thirty days from the date when each event specified in the contract, which requires the recipient to make any payment to the supplier of services, is completed,
* Tax invoice for supplier of service in case of a banking company or a financial institution including a non-banking financial company(NBFC)- within forty five days from the date of supply of service.
Time limits of issue of a tax invoice for services can be summarized as follows :
Types of supply
Time frame
Supply in ordinary course
Within 30 days from the date of supply of services
Continuous supply
Within 30 days from the date when each event specified in th

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how to pay sell tax
Query (Issue) Started By: – Vishal jaiswal Dated:- 30-11-2016 Last Reply Date:- 30-11-2016 Goods and Services Tax – GST
Got 1 Reply
GST
I dont have any idea.I need help please any one know can help me.
Reply By Ganeshan Kalyani:
The Reply:
The Goods and Service Tax (GST ) is yet to be implemented . So as of now the actual payment process is not made public . However, to give a brief idea, i would say that there would be three type of payments to be made viz SG

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registration required
Query (Issue) Started By: – nishant agrawal Dated:- 29-11-2016 Last Reply Date:- 29-11-2016 Goods and Services Tax – GST
Got 1 Reply
GST
hello sir
mera borwells ka business hai .. mere ko tin number lena hoga ki service tax number pls repply thanks
Reply By Ganeshan Kalyani:
The Reply:
Aap borewell se paani nikalkar tanker me bharke fhir bechte honge customer ko, aisa mai samajta hun. Agar aisa hai to aap pani bech rahe ho, to sales tax lagega. sales tax re

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Constitution of the Appellate Tribunal
Section 100-
Bill
APPEALS AND REVISION
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
100. Constit

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PROPOSED ADMINISTRATION OF GST (PART-II)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 28-11-2016

Audit under GST
Audit function will be under the Member (L&J, Audit) of the Board to whom DG Audit, Directorate of Legal Affairs, Principal Chief Commissioners of Regions, Authorized representatives of Tribunal / Settlement Commission / Advance Ruling etc and Appellate Commissioners will report.
The Appellate Commissioners would be reporting to Regional Principal Chief Commissioners for administration and would be reporting to Member for legal issues. The Authorized Representatives (AR) will report to Chief Commissioner and below. As legacy pendency will be very huge and due to new tax regime, in initial years, chances of litigation will be very high. To mitigate this, it is suggested that benches of tribunals may be created in each states and to wipe out legacy issue power of single bench may be increased up to ₹ 5 crore.
The Directorate General o

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and Customs.
It is expected that each GST zone will have following type of Commissionerates-
* GST Commissionerate
* Central Excise Commissionerate & Legacy Commissionerate
* Customs Commissionerate
Zone will be headed by the Chief Commissioner. For better coordination between Centre and States, it is suggested that there will be Apex level and Zonal level Coordination Committee. Principal Chief Commissioner of respective zone and Chief Secretary of States would attend the meeting of apex level committee. Commissioner CGST / IGST and Commissioner SGST will attend the Zonal coordination meeting which will be headed by Zonal Chief Commissioner. GST Commissionerates will further be divided into sub-commissionerates with GST Divisions and Anti-Evasion Wing.
Each GST and Central Excise Commissionerate would be headed by Commissioner. It would have 30 divisions on average. The Anti-Evasion Wing should work from the Commissionerate Head Quarters. The Commissioner shall also liaise w

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15-25%. The functions of the Division would include report of taxes paid, refund given etc., levy and collection of CGST and IGST, stuffing of export containers, refund/rebate for exports, audit, help desk for assesses, aiding the SGST officers in case of joint audit, joint action, etc. The Division head shall report to Commissioner SGST and Additional Commissioner / Joint Commissioner as well whereas the reporting to Commissioner SGST would be for operational requirements, report and data submission. The appraisal would be for 360 degree appraisal. Ranges would be co-terminus with 1000 assessees per 20 sq km area as the case may be. It would be headed by Superintendent.
Adjudication of Cases
The duly appointed adjudicating authorities shall adjudicate the matters other than appeals in the GST regime. As per section 2(4), 'adjudicating authority' means any authority competent to pass any order or decision under this Act, but does not include the Board, the First Appellate Au

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Commissioners of CGST or
Principal Additional Directors General of CGST,
Commissioners of CGST or
Additional Directors General of CGST,
First Appellate Authority,
Additional Commissioners of CGST or
Additional Directors of CGST,
Joint Commissioners of CGST or
Joint Directors of CGST,
Deputy Commissioners of CGST or
Deputy Directors of CGST,
* Assistant Commissioners of CGST or
Assistant Directors of CGST, and
such other class of officers as may be appointed for the purposes of this Act.
Under SGST:
* Commissioner of SGST,
* Special Commissioners of SGST,
* Additional Commissioners of SGST,
* Joint Commissioners of SGST,
* Deputy Commissioners of SGST,
* Assistant Commissioners of SGST, and
* such other class of officers and persons as may be appointed for the purposes of this Act. [List is indicative]
Under IGST:
* Principal Chief Commissioners of IGST or
Principal Directors General of IGST,
Chief Commissioners of IGST or
Directors General

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PERSONS LIABLE TO BE REGISTERED
SCHEDULE V
Bill
SCHEDULES
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
SCHEDULE V
PERSONS LIABLE TO BE REGISTERED
1. Every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds twenty lakh rupees:
PROVIDED that where such person makes taxable supplies of goods and/or services from any of the States specified in sub-clause (g) of clause (4) of Article 279A of the Constitution, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.
(Other than Special Category St

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tration –
(a) any person engaged exclusively in the business of supplying goods and/or services that are not liable to tax or are wholly exempt from tax under this Act;
(b) an agriculturist, for the purpose of agriculture.
3. Subject to the provisions of paragraph 1, every person who, on the day immediately preceding the appointed day, is registered or holds a license under an earlier law, shall be liable to be registered under this Act with effect from the appointed day.
4. Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee, or the successor, as the case may be, shall be liable to be registered wi

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specified under paragraph 1;
(ii) casual taxable persons, irrespective of the threshold specified under paragraph 1;
(iii) persons who are required to pay tax under reverse charge, irrespective of the threshold specified under paragraph 1;
(iv) persons who are required to pay tax under sub-section (4) of section 8, irrespective of the threshold specified under paragraph 1;
(v) non-resident taxable persons, irrespective of the threshold specified under paragraph 1;
(vi) persons who are required to deduct tax under section 46, whether or not separately registered under this Act;
(vii) persons who are required to collect tax under 56, whether or not separately registered under the Act;
(viii) persons who supply goods and/or servi

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ACTIVITIES OR TRANSACTIONS UNDERTAKEN BY THE CENTRAL GOVERNMENT, A STATE GOVERNMENT OR ANY LOCAL AUTHORITY WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES
SCHEDULE IV
Bill
SCHEDULES
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
SCHEDULE IV
ACTIVITIES OR TRANSACTIONS UNDERTAKEN BY THE CENTRAL GOVERNMENT, A STATE GOVERNMENT OR ANY LOCAL AUTHORITY WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES
1. Services provided by a Government or local authority to another Government or local authority excluding the following services:
(i) services by the Department of Posts by way of speed post, express parcel post, life insurance

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relation to any function entrusted to a Panchayat under article 243 G of the Constitution;
(iii) health care; and
(iv) education.
4. Services provided by Government towards-
(i) diplomatic or consular activities;
(ii) citizenship, naturalization and aliens;
(iii) admission into, and emigration and expulsion from India;
(iv) currency, coinage and legal tender, foreign exchange;
(v) trade and commerce with foreign countries, import and export across customs frontiers, interstate trade and commerce; or
(vi) maintenance of public order.
5. Any services provided by a Government or a local authority in the course of discharging any liability on account of any tax levied by such Government or authority.
6. Services provided by a

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to import or export of cargo on payment of Merchant Overtime Charges (MOT).
8. Services provided by Government or a local authority by way of-
(i) registration required under any law for the time being in force; or
(ii) testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, required under any law for the time being in force.
Definitions:
1. Governmental Authority means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W or a Panchayat under article 243G

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ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES
Section SCHEDULE III
Bill
SCHEDULES
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
SCHEDULE III
ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES
1. Services by an employee to the employer in the course of or in relation to his employment.
2. Services by any Court or Tribunal

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MATTERS TO BE TREATED AS SUPPLY OF GOODS OR SERVICES
SCHEDULE II
Bill
SCHEDULES
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
SCHEDULE II
MATTERS TO BE TREATED AS SUPPLY OF GOODS OR SERVICES
1. Transfer
(a) Any transfer of the title in goods is a supply of goods.
(b) Any transfer of goods or of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of services.
(c) Any transfer of title in goods under an agreement which stipulates that property in goods will pass at a future date upon payment of full consideration as agreed, is a supply of goods.
2. Land and Building
(a) Any lease, tenancy, easement, licence to occupy land

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s held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods is a supply of services.
(c) Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless-
(i) the business is transferred as a going concern to another person; or
(ii) the business is carried on by a personal representative who is deemed to be a taxable person.
5. The following

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wing, namely:-
(i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or
(ii) a chartered engineer registered with the Institution of Engineers (India); or
(iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority;
(2) the expression "construction" includes additions, alterations, replacements or remodeling of any existing civil structure;
(c) temporary transfer or permitting the use or enjoyment of any intellectual property right;
(d) development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software;
(e) agreeing to the obligation to

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MATTERS TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION [IN TERMS OF CLAUSE (c) OF SUBSECTION (1) OF SECTION 3]
SCHEDULE I
Bill
SCHEDULES
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
SCHEDULE I
MATTERS TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION
[IN TERMS OF CLAUSE (c) OF SUBSECTION (1) OF SECTION 3]
1. Permanent transfer/disposal of business assets where input tax credit has been availed on such assets

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Transitional provisions for availing Cenvat credit in certain cases
Section 197
Bill
TRANSITIONAL PROVISIONS
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
197. Transitional provisions for availing Cenvat credit in certain cases
Where any Cenvat credit availed for the input services provided under the earlier law has been reversed due to non-payment of the consideration within a period of three months, such credit can be reclaimed

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Deduction of tax source
Section 196
Bill
TRANSITIONAL PROVISIONS
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
196. Deduction of tax source
Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under the earlier law and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 46 shall be made by the deductor under the said sec

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Goods sent on approval basis returned on or after the appointed day
Section 195
Bill
TRANSITIONAL PROVISIONS
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
195. Goods sent on approval basis returned on or after the appointed day
Where any goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shal

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Treatment of branch transfers
Section 194
Bill
TRANSITIONAL PROVISIONS
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
194. Treatment of branch transfers
Notwithstanding anything to the contrary contained in this Act, any amount of input tax credit reversed prior to the appointed day shall not be admissible as credit of input tax under this Act.
(Only in SGST Law)
–
Statute, statutory provisions legislation, law, enactment,

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Tax paid on capital goods lying with agents to be allowed as credit
Section 193
Bill
TRANSITIONAL PROVISIONS
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
193. Tax paid on capital goods lying with agents to be allowed as credit
Where any capital goods belonging to the principal are lying at the premises of the agent on the appointed day, the agent shall be entitled to take credit of the tax paid on such capital goods subject to f

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Tax paid on goods lying with agents to be allowed as credit
Section 192
Bill
TRANSITIONAL PROVISIONS
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
192. Tax paid on goods lying with agents to be allowed as credit
Where any goods belonging to the principal are lying at the premises of the agent on the appointed day, the agent shall be entitled to take credit of the tax paid on such goods subject to fulfilment of the following condi

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Provision for transfer of unutilized Cenvat Credit by taxable person having centralized registration under the earlier law
Section 191
Bill
TRANSITIONAL PROVISIONS
MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016]
191. Provision for transfer of unutilized Cenvat Credit by taxable person having centralized registration under the earlier law
Where a taxable person having centralized registration under the earlier law has obtained a registration under this Act, such person shall be allowed to take, in his electronic credit ledger, credit of the amount of cenvat credit carried forward in a return, furnished under the earlier law by him, in respect of the period ending with the day i

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