Goods and Services Tax

Goods and Services Tax – GST – By: – Ravi Kumar Somani – Dated:- 15-3-2017 – GST is not just a tax reform but it is a business reform. It shall change the way in which business processes are performed and the way in which the business transactions are undertaken. Although, GST will bring with it, both positive and negative aspects. However, the organizations that will plan its business processes better in a manner to best suit the needs of the GST regime, then such organization will have competitive edge over others. Therefore, it is of due importance that business house proactively re-structure its business processes and optimize its tax position to reduce the negative impact of the changing tax environment. Procurements department plays a key role in any business set-up as they directly deal with the cost element. Apart from focusing on volumes and margin of sales, businesses also very keenly track the cost of procurements and efforts are always made to control the costs/ overheads.

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purchases being made from CST vendors as local VAT is not eligible as credit; Purchases being made locally only to avail local VAT credit. It is pertinent to note that above purchases were being made in the current regime to take the benefit of the present taxes. However, such benefits will not be available in the GST regime, therefore in all cases where currently procurement policy is driven by the tax implications, then all such procurements needs to be re-looked into for the other competitive sources. Purchase price/ cost It shall be very important for the businesses to strategies its procurement pricing and procurement cost based on the impact of GST. Below table determines the impact of procurement cost/ price on the purchases based on the various illustrative situations as under: Particulars Impact on purchase price/ cost There will be free flow of credits in the GST regime. Cascading of the taxes will reduce substantially in the GST regime. For instance, CST element is cost in t

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s. It helps to decide what to buy, when and from what sources. Most organizations spend around 20-60% of their money on the materials, supplies, capital equipment, technology, and services that are necessary to keep the enterprise running. Organizations need to transform their operations by aligning resources and technology and taxes thereon to enable organization to make the most cost effective purchases possible. Various elements of the purchase planning that needs to be looked into from GST point of view are as under: Change in EOQ levels, lead times, carrying costs etc. EOQ is the order quantity that minimizes the total holding costs and ordering costs. Under GST regime entire nation will become a one common market and in case the geographical location of the procurement undergoes a change then a corresponding change in the EOQ levels, lead times and the carrying costs must be planned and accordingly the promised delivery times to the customers must be changed. Revision in purchase

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revise the product costing to get better competitive price in the market to edge over others. Changing the purchase forecasts based on impact of GST on sale of a product or on the industry Organizations should consider the changing of the purchase forecasts based on impact of GST on sale of a product or on the industry in the following manner: If the prices of the products increases in the GST regime, the purchases should accordingly forecasted and procured in advance so that consistent survival in the market is possible. How the entire industry in which organization is carrying its operations is impacted due to GST and accordingly change the purchase forecasts. Timing of purchases to be re-visited especially during transitional phase The most important thing that the organizations can do during the transitional phase is timing of purchases. If the rate of GST is going to be high in GST regime when compared to present indirect tax regime then purchase can be pre-poned otherwise it can

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he same. Reduction in Purchases from CST vendors or other sources where credit not available Under GST regime transitional credit is available only when such credit is eligible in present regime and also GST regime as well. Since, CST credit is not eligible credit under present CST law, therefore the same is not eligible to be transferred into the GST regime. Hence, in such situations instead of procuring under CST, organizations may consider to reduce the purchases in the existing regime to the extent which will not affect the current sales. Procurement from un-registered vendor Procurement from unregistered vendors can have implications in the form of reverse charge liability which could have direct impact on the working capital. Therefore, businesses may have to avoid procurements from unregistered dealers especially in a scenario where the credit is not available. Advance payment to vendors Policy with respect advance payment to vendors have to be looked into. Currently, excise dut

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rchases. Managing procurement vendors As prices are expected to come down in GST regime, every customer would like to procure goods/services at a cheaper price. In this aspect, Purchase department of an organization has to be more proactive to manage their procurements/ suppliers better and to crack a better deal from their vendors. GST is nothing but an opportunity for the purchase department to enhance their vendors list and negotiate, this aspect is being discussed below in detail as under: Vendor masters updation, Tax master updation Once GST is implemented, the first and foremost important task is to update the vendor masters and tax masters with the additional information based on the structural changes and the tax changes performed by each businesses in the GST regime. Vendor Performance/ compliance It is very important that every supplier has to comply with GST, as the concept of compliance rating in the GST regime will be playing a crucial role. It not only defines the complia

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ness to follow up with the supplier for taking credits. Therefore, procurement department needs to assess their current vendors and the un-organised/ non-compliance oriented vendors must be trimmed down. Identifying multiple new vendors As GST is a united indirect tax and since it will change the entire dynamics of the businesses, therefore prices of almost all the businesses will undergo a change. Therefore, it gives an opportunity to the businesses consider entire nation as a common market and enhance the geographical purchase horizon and get the quotes multiple new vendors. Therefore, against the current practice of obtaining 3 or 4 quotations, business can identify multiple new vendors and get revised quotations from the existing vendors to obtain for a better and cheaper price at same quality in the GST regime. Conducting vendor education programmes for un-organized vendors Since GST involves compliance from both the supplier and the buyer, procurements from un-organized vendors i

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g information that needs to be updated in the vendor masters. An illustrative list of various information that needs to be immediately collected from the vendors is as under: Name of the Vendor; PAN of the Business; Provisional GSTIN No. in each supplying state; Details of Goods supplied & HSN Code; Software used by your organization for accounting purpose; Vendor IT readiness and support required if any; Understanding of the GST law – trainings Date of last reconciliation? Any open issue? Restriction on issuing of PO if above information not provided. Documentation As one of the criteria for allowing the credit under GST would be proper documentation on the basis of which credit is availed under earlier law. Ensuring that all the details of goods lying in the stock are collated in a master data with the documentary proofs capturing the details such as quantity, value at which such goods are procured, location at which such goods are stored and the amount of credit that is availed

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 15-3-2017 – In its 12th meeting of GST Council (GSTC) on 4th March, 2017, GSTC approved the two Bills, i.e. for Central Goods & Services Tax (CGST) and Integrated Goods and Services Tax (IGST) which now have to be passed and legislated by the Parliament. Two other GST Bills, i.e., State Goods and Service Tax (SGST) and Union Territory Goods and Services Tax (UTGST) are slated to be approved by the GSTC in its next meeting to be held on 16th March, 2017. While SGST will be required to be passed by each of the State legislature Assemblies, UTGST which will administer levy of GST in the Union Territories (except Pondicherry and Delhi) will have to be legislated by the Parliament. All these enactments shall be enforced from a common appointed date which has to be before 16 September, 2017. While approving the draft statutory provisions, GSTC has, inter alia, agreed to the following : Payment of Tax in Installments – In

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as more and more transactions are likely to take place in states territorial waters, especially in the context of increased exploration, drilling for petroleum products and development of new sea-ports in territorial waters. Enhanced peak GST Rate – Against the earlier agreed upon CGST peak rate of 14 percent (14% CGST and 14% SGST aggregating to 28%), GSTC has agreed to a higher ceiling of 20% CGST leading to an aggregate GST rate of 40% (20% CGST and 20% SGST). It is understood that for the present, peak GST rate will be 28% only but this enhanced limit is an enabling provision so that in future, Government does not look at Constitutional amendment whenever GST rates are thought of being increased. This may not be desirable from tax payers view point but at the same time, Governments would have to exercise due restraint from increasing the rates just to get more tax revenue. However, it has to be seen how GSTC will ensure that the decision to enhance GST rates are taken by Centre an

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e, but states had wanted the levy. Registration – A State-wise single registration for a taxpayer for filing returns, paying taxes, and to fulfil other compliance requirements. Most of the compliance requirements would be fulfilled online, thus leaving very little room for physical interface between the taxpayer and the tax official. A business entity with an annual turnover of upto ₹ 20 lakhs would not be required to take registration in the GST regime, unless he voluntarily chooses to do so to be a part of the input tax credit (ITC) chain. The annual turnover threshold in the Special Category States (as enumerated in Article 279A of the Constitution such as Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh, Assam and the other States of the North-East) for not taking registration is ₹ 10 lakhs. Return Filing – A taxpayer has to file one single return state-wise to report all his supplies, whether made within or outside the State or exported out of the country and p

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C accruing to him due to payment of IGST to discharge his tax liability of CGST / SGST / UTGST. Conversely, a taxpayer can use the ITC accruing to him on account of payment of CGST / SGST / UTGST, for payment of IGST. Such payments are to be made in a pre-defined order. In the Services sector, the existing mechanism of Input Service Distributor (ISD) under the Service Tax law has been retained to allow the flow of ITC in respect of input serviceswithin a legal entity. In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the Law. Other measures – To prevent lock-in of capital of exporters, a provision has been made to refund, within seven days of filing the application for refund by an exporter, ninety percent of the claimed amount on a provisional basis. In order to ensure a single administrative interface for taxpayers, a provision has been made to authorise officers of

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 14-3-2017 Last Replied Date:- 14-3-2017 – GST will be levied on supplies and not on sale or service. For the purpose of GST, supply shall include: 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, Importation of service for a consideration, and Services have been specified in schedule I, which shall be considered as a supply even if made without consideration. The present taxable event under service tax is rendition of services which will no longer be relevant and only one event i.e., supply will be relevant for charge of tax. Supply has been defined in an inclusive manner. Tax is on supply of service, therefore, even the supply, as prescribed in Schedule-I, made without consideration will be taxable. In the present scenario, the services provided without consideration i.e., free services are not taxable. Transactions between

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es. Leased assets from outside India shall be subject to levy of IGST. In case of repossession of assets by banks / FIs / NBFC's, same will be treated as supply of goods in term of Schedule-II to the model GST law (version-II). Accordingly, any transfer of the title in goods is supply of goods. Where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person. 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 de

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r of the following events: Date of issue of invoice or on the last date on which invoice is required to be issued. Date on which bank receives payment with respect to such supply. As per place of supply provisions, if banks are required to pay tax on reverse charge basis, then time of supply shall be earlier of the following events: Date on which payment is made or Date immediately following sixty days from the date of issue of invoice by the bank / service provider Place of Supply As per section 9 of IGST law, the place of supply of banking and other financial services including stock broking services to any person shall be the location of the recipient of services on the records of the supplier, where the location of supplier of service and location of service recipient is in India. However, if the location of the recipient of services is not on the records of the supplier, the place of supply shall be the location of the supplier of services. Place of supply of services where the lo

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vy of taxes on real time basis based on address is not possible. In present regime, service tax is charged from account of the customer affecting such RTGS or NEFT on real time basis. Under GST, place of supply provisions provides solution to this issue. It provides for levy of tax in the State in which registered address of customer is mentioned in records (i.e., KYC documents) of the bank. The GST shall be levied on real time basis as in the present regime. Another issue for concern could be in case of multiple addresses for B2B transactions as to what shall be the place of supply. In such case, definition of 'location of recipient of services' shall provide for address of the recipient which shall be as under:- where a supply is received at a place of business for which registration has been obtained, the location of such place of business; where a supply is received at a place other than the place of business for which registration has been obtained, that is to say, a fixed

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 14-3-2017 Last Replied Date:- 14-3-2017 – Introduction In GST all the indirect taxes except customs are going to be subsumed. The Central Excise Act and State VAT Acts deals with the levy of tax on goods. Central Excise levies excise duty on the manufacture of goods and VAT Act levies tax on sales of goods. Therefore there is the possibility of searching by the officers of concerned authorities to intervene in the transit of the goods. If it is found there is any violation of the provisions of the Act or rules made there under then the officers concerned is empowered to seize the goods and on inquiry if it is confirmed the said goods may be confiscated. Once the goods are confiscated they are vest in the respective Government. Penal provisions will also attract for the same. Provisions for seizure and confiscation in the Act Section 90 of the Model Goods and Services Tax Act, 2016 ( Act for short) provides for confisca

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s does not come forward for payment of such tax and penalty; the proper officer detaining or seizing goods and/or conveyances shall issue a notice specifying the tax payable and thereafter, pass an order for payment of tax and penalty. Discharge Section 89(2) provides that on payment of the amount referred to in Section 89(1), all liabilities under Section 89 shall stand discharged in respect of such goods and such conveyance. Confiscation Section 90(1) provides that if any person- supplies or receives any goods in contravention of any of the provisions of this Act or rules made there under with intent to evade payment of tax; or does not account for any goods on which he is liable to pay tax under this Act; or supplies any goods liable to tax under this Act without having applied for registration; or contravenes any of the provisions of this Act or rules made there under with intent to evade payment of tax; or uses any conveyance as a means of transport for carriage of taxable goods i

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goods seized shall be released on a provisional basis upon execution of a bond and furnishing a security, in such manner and of such quantum, respectively as may be prescribed or on payment of applicable tax, interest and penalty payable as the case may be. Redemption fine Section 90 (2) provides that whenever confiscation of any goods or conveyance is authorized by this Act, the CGST/SGST officer adjudging it shall give to the owner of the goods or, where such owner is not know, the person from whose possession or custody such goods have been seized or the owner or the person-in-charge of the conveyance, an option to pay in lieu of confiscation such fine as the said officer thinks fit. Such fine shall not exceed the market value of the goods confiscated less the tax chargeable thereon. The aggregate of such fine and penalty leviable shall not be less than the amount of penalty leviable under Section 89(1) of the Act. Where any such conveyance is used for the carriage of the goods or p

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f Police, on the requisition of such proper officer, shall assist him in taking and holding of such possession. Disposal of confiscated goods Section 90(7) provides that the proper officer may, after satisfying himself that the confiscated goods and conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose such goods and/or conveyances and deposit the sale proceeds thereof with the Government. Confiscation not to interfere with other punishments Section 91 provides that that no confiscation made or penalty imposed under the provisions of this Act or the rules made there under shall prevent the infliction of any other punishment to which the person affected thereby is liable under the provisions of this Act or under any other law. – Reply By Ganeshan Kalyani – The Reply = This is going to be a big concern for the assesse as both the government is going to interfere in a sin

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Goods and Services Tax – Started By: – Mukesh Agarwal – Dated:- 13-3-2017 Last Replied Date:- 13-3-2017 – Hi !I am a dealer /supplier dealing with army units. There is no fixed range or specific items . There are many items and depends on requirements and orders.What HSN Code should be selected in this case for GST MigrationThanks in advance. – Reply By YAGAY AND SUN – The Reply = Trader are facing this issue while enrolling on the GST website. You may fill 2-3 main Tariff Heading in the GST website by checking it on CBEC Website. Say articles of plastic comes under Chapter 39, Paper come under Chapter 48, Aluminium in chapter 76, Iron 73 etc. – Reply By YAGAY AND SUN – The Reply = FIRST SCHEDULEBasic Rate of duty / Classification / Tariff Items Chapter 01 Live animals Chapter 02 Meat and edible meat offal Chapter 03 Fish and crustaceans, molluscs and other aquatic invertebrates Chapter 04 Dairy produce; birds eggs; natural honey; edible products of animal origin, not else- where spec

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ates Chapter 17 Sugars and sugar confectionery Chapter 18 Cocoa and cocoa preparations Chapter 19 Preparations of cereals, flour, starch or milk; pastrycooks products Chapter 20 Preparations of vegetables, fruit, nuts or other parts of plants Chapter 21 Miscellaneous edible preparations Chapter 22 Beverages, spirits and vinegar Chapter 23 Residues and waste from the food industries; prepared animal fodder Chapter 24 Tobacco and manufactured tobacco substitutes Chapter 25 Salt; sulphur; earths and stone; plastering materials, lime and cement Chapter 26 Ores, slag and ash Chapter 27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes Chapter 28 Inorganic chemicals, organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes Chapter 29 Organic chemicals Chapter 30 Pharmaceutical products Chapter 31 Fertilisers Chapter 32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigm

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eof Chapter 44 Wood and articles of wood, wood charcoal Chapter 45 Cork and articles of cork Chapter 46 Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork Chapter 47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard Chapter 48 Paper and paperboard; articles of paper pulp of paper or of paperboard Chapter 49 Printed books, newspapers, pictures and other products of the printing industry; manu- scripts, typescripts and plans Chapter 50 Silk Chapter 51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric Chapter 52 Cotton Chapter 53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn Chapter 54 Man-made filaments Chapter 55 Man-made staple fibres Chapter 56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof Chapter 57 Carpets and other textile floor coverings Chapter 58 Special wo

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al or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin Chapter 72 Iron and steel Chapter 73 Articles of iron or steel Chapter 74 Copper and articles thereof Chapter 75 Nickel and articles thereof Chapter 76 Aluminium and articles thereof Chapter 77 BLANK Chapter 78 Lead and articles thereof Chapter 79 Zinc and articles thereof Chapter 80 Tin and articles thereof Chapter 81 Other base metals; cermets; articles thereof Chapter 82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal Chapter 83 Miscellaneous articles of base metal Chapter 84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof Chapter 85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles Chapter 86 Railway or tramway locomotives, roll

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Goods and Services Tax – Started By: – Aitha RajyaLakshmi – Dated:- 11-3-2017 Last Replied Date:- 13-3-2017 – Sir,It is stated that the Outward supplies of less that ₹ 2.5Lacs need not be uploaded line item wise and can be uploaded consolidated. if this is the case how can the invoice missed if any can be traced by the dealer who purchased the Goods for an amount of below ₹ 2.5 Lacs? – Reply By YAGAY AND SUN – The Reply = Line item wise means, Tariff Heading wise. Support if Invoice

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Goods and Services Tax – Started By: – Aitha RajyaLakshmi – Dated:- 11-3-2017 Last Replied Date:- 17-4-2017 – Sir,What is the position of the credit in case of Purchases in Transit (Including Import), stock with Depot and Stock Transfer which are in Transit on the appointed day? – Reply By KASTURI SETHI – The Reply = Dear Querist, Credit on purchases in transit on the appointed day would be allowed. Regarding the remaining points, no possibility of credit. However, any change in revised model GST Act can take place. Earlier, Sections were changed. So we will have to wait for the enactment of GST for authentic reply to every query on GST. – Reply By Ganeshan Kalyani – The Reply = Let us wait for final version of GST law. – Reply By YAGAY AN

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VAT and Sales Tax – Started By: – Aitha RajyaLakshmi – Dated:- 11-3-2017 Last Replied Date:- 13-3-2017 – Sir,What is the case if we find any Invoice missed in respect of our transactions in the uploaded details of the outward supplies of the Vendor from whom we have purchased?What is the consequence and what are the actions that we have to do? – Reply By YAGAY AND SUN – The Reply = You won't able to avail the Input Tax Credit and within 60 day you would have to reconcile it with your suppli

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 11-3-2017 – Public Servant Section 146 of Model Goods and Services Tax, 2016 ( Act for short) provides that all persons discharging functions under the Act shall be deemed to be public servants within the meaning of Section 21 of the Indian Penal Code. Section 21 of the Indian Penal Code defines the term public servant as denoting a person falling under any of the descriptions as below- Every Commissioned Officer in the Military,Naval or Air Forces of India; Every Judge including any person empowered by law to discharge, whether by himself or as a member of any body of persons, any adjudicatory functions; Every officer of a Court of Justice (including a liquidator, receiver or commissioner) whose duty it is, as such officer, to investigate or report on any matter of law or fact, or to make, authenticate, or keep any document, or to take charge or dispose of any property, or to execute any judicial process, or to admini

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investigate, or to report, on any matter affecting the pecuniary interests ofthe Government, or to make, authenticate or keep any document relating to the pecuniary interests of the Govern­ment, or to prevent the infraction of any law for the protection of the pecuniary interests of the Government; Every officer whose duty it is, as such officer, to take, receive, keep or expend any property, to make any survey or assessment or to levy any rate or tax for any secular common purpose of any village, town or district, or to make, authenti­cate or keep any document for the ascertaining of the rights of the people of any village, town or district; Every person who holds any office in virtue of which he is empowered to prepare, publish, maintain or revise an elec­toral roll or to conduct an election or part of an election; Every person- in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government; in the ser

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ed to be done in good faith under the Act or the rules. No departmental proceedings shall lie against any GST officer for passing any adjudication order or appellate order in good faith under the Act or the rules. Confidentiality of information Section 148(1) provides that all particulars contained in any statement made, return furnished or accounts or documents produced in accordance with the Act or in any record of evidence given in the course of any proceedings under the Act, other than proceeding before a Criminal Court, or in any record of any proceedings under the Act shall, save as provided in Section 148(4), be treated as confidential. GST Officer not to produce information Section 148(2) provides that notwithstanding anything contained in the Indian Evidence Act, 1872, no court shall save as aforesaid, be entitled to require any GST officer to produce before it or to give evidence before it in respect of particulars as referred to in Section 148 (1). Particulars not applicable

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other law for the time being in force authorizing any such authority to exercise any powers there under; or to any officer appointed for the purpose of audit of tax receipts or refunds of the tax imposed by the Act; or where such particulars are relevant for the purpose of any inquiry into the conduct of any GST officer, to any person or persons appointed as inquiry officer under any relevant law; or to an officer of the Central Government or any State Government as may be necessary for the purpose of enabling that Government to levy or realize any tax or duty imposed by it; or when such disclosure is occasioned by the lawful exercise by a public servant or any statutory authority, of his or its powers under any law for the time being in force; or relevant to any inquiry into a charge of misconduct in connection with any proceedings under the Act against- a practicing Advocate; tax practitioner; a practicing cost accountant; a practicing chartered accountant; a practicing company secre

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 11-3-2017 Last Replied Date:- 30-12-1899 – GST Council has approved a Bill for compensation to States for revenue loss arising out of introduction of GST in the country. A Bill called Goods and Services Tax (Compensation to the States for Loss of Revenue) Bill, 20… shall provide for compensation to the States for loss of revenue arising on account of implementation of the goods and Service Tax for a period of five years as per section 18 of the Constitution (101st Amendment) Act, 2016. This will extend to whole of India and shall come into force from a date to be notified. Highlights of Compensation Bill are as follows : Provides for revenue loss compensation to States for five years Nominal growth rate projected revenue has been decided @ 14% Base year to be financial year 2015-16 Revenue will be the sum of revenue collected by the State and local bodies during the base year, taxes levied by the States or Centre net

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te or Centre, net of refunds, with respect to the following taxes imposed by the respective State or Centre, which are subsumed into goods and services tax: Value Added Tax (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 (State List) of the Seventh Schedule to the Constitution, prior to bringing into effect the provisions of the Constitution (101st Amendment) Act, 2016.; Central Sales Tax (CST) levied by the Central Sales Tax Act, 1956; Entry tax, octroi, local body tax or any other tax levied by the concerned State under the erstwhile Entry 52 of List-II (State List) of the Seventh Schedule to the Constitution, prior to bringing into effect the provisions of the Constitution (101st Amendment) Act, 2016; Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling or any other tax levied by the concerned State under the erstwhile Entry 62 of List-II (State L

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not be included in the calculation of the base year revenue for that State: Any taxes levied under any Act made under the erstwhile Entry 54 of List-II (State List) of the Seventh Schedule to the Constitution, prior to bringing into effect the provisions of the Constitution (101st Amendment) Act, 2016, on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any taxes levied under the Central Sales Tax Act, 1956 on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any cess imposed by the State Government on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; and Entertainment tax levied by the State but colle

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inancial year during the transition period, as per the CAG audited figures of revenue collected, the excess amount so released shall be adjusted against the GST compensation amount payable to the State in the subsequent financial year. The total GST compensation payable for any financial year during the transition period to any State shall be calculated as follows: The projected revenue for any financial year during the transition period, that could have accrued to a State in the absence of GST, shall be calculated as per section 6. The actual revenue collected by a State in any financial year during the transition period would be the actual revenue from State Goods and Services Tax collected by the State, net of refunds given by the State under Chapter XI of the SGST Act, and the Integrated Goods and Services Tax apportioned to that State, as certified by the Comptroller and Auditor General of India. Total GST compensation payable in any financial year shall be the difference between

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ught into force. However, no such cess shall be leviable under this section on supplies made by a taxable person permitted to opt for composition levy under section 8 of the GST Law. Salient Features of Compensation Bill The nominal growth rate of revenue subsumed for a State during the transition period is projected at 14% per annum. FY 2016-17 is considered as the base year for calculating the compensation amount payable in any FY during the transition period. The base year revenue for a State will be the sum of revenue collected by the State and local bodies during the base year, taxes levied by the States or Centre, net of refunds, with taxes namely, VAT, CST, Entry tax, Octroi, local body tax, Luxury tax, Advertisement tax, Excise duty on medicinal and toilet preparation and any cess or surcharge levied by State Govt. The Acts of Central and State Govt. under which specific taxes will be subsumed into GST shall be notified. The revenue collected during the base year in a State, ne

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Goods and Services Tax – GST – Dated:- 10-3-2017 – The GST Council in its 9th Meeting held on 16 January 2017 took note of the work to be completed for the rollout of GST and after deliberations, agreed to extend the date for rollout of GST from 1st April 2017 to 1st July 2017. Steps taken to ensure rollout of GST by 1st July 2017 include approval of the Draft GST Compensation Law by the GST Council in its 10th Meeting on 18 February 2017 held in Udaipur, Rajasthan. Subsequently, the Draft CGST Law and Draft IGST Law were approved in the 11th Council Meeting held on 4 March 2017 at New Delhi. The issues of dual control and cross empowerment were resolved in the 9th Meeting of the GST Council held on 16 January 2017 in which a broad agreeme

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ocal bodies), Octroi and Entry tax, Purchase Tax, Luxury tax, and Taxes on lottery, betting and gambling. State cesses and surcharges in so far as they relate to supply of goods and services. GST will simplify and harmonise the indirect tax regime in the country. It is expected to reduce cost of production, thereby making the Indian trade industry more competitive, domestically as well as internationally. It is also expected that introduction of GST will foster a common or seamless Indian market and contribute significantly to the growth of the economy. Further, GST will broaden the tax base, and result in better tax compliance due to robust IT infrastructure. GST Council is presently deliberating on various issues entrusted to it. All the

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Goods and Services Tax – GST – Dated:- 10-3-2017 – The 122nd Constitution Amendment Bill, 2014 has been passed by the Parliament and after ratification by fifty percent of the States, the same has been enacted as 101st Constitution Amendment, Act, 2016. No Goods and Service Tax (GST) Bill has so far been passed. The Central Goods and Services Tax (CGST) Bill, Integrated Goods and Services Tax (IGST) Bill and Union Territory Goods and Services Tax (UTGST) Bill will be passed by Parliament. Each

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Goods and Services Tax – GST – By: – Sanjeev Singhal – Dated:- 10-3-2017 Last Replied Date:- 10-3-2017 – Procedure of Refund in GST is time bound and if not paid in time will be subject to interest. It seems to be simple . Circumstances are defined under which tax payer shall be eligible to file for refund and same shall be process a per the prescribed law. Refund of GST is prescribed in Section- 48 of the Revised GST Law. Applicability and Procedure Any person may make an application to the proper officer of IGST/CGST/SGST for refund of Tax and Interest, if any amount paid by him before the expiry of two years from the relevant date. But any taxable person , claiming any refund of any balance in electronic cash ledger u/s 44[6], may claim the same in return filed u/s 34. Any specialized agency of United Nation Organisation , consulate or embassy of foreign countries or any multilateral Financial Institution or Organization or any person or class of person notified under u/s 49, may c

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realization certificate or copy of FIRC. Documentary or such other evidence to substantiate that such tax and interest has not been passed on to any other person. A statement in Annexure -1 of Form -GST RFD-1 containing the no. and date on invoices received and issued during tax period in case where the claim is for refund of any unutilized ITC u/s 48[3]. It is further provided that if the refund claim is less than Rs.. 5 lacs, the above documentary evidences are not necessary. In that case, applicants by his own self declaration that incidence of tax and interest thereon has not been passed on to any other person. In case refund claim is ₹ 5 lacs or more, Annexure -2 of the Form -GST RFD-1 shall be signed by Chartered Accountant or Cost Accountant to the effect that such tax and interest has not been passed on to any other person. On receipt of application , the proper officer if satisfy, may pass the order for credit of whole or part of the refund and the amount may be credite

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here the claim pertains to refund from Electronic cash ledger ,the proper officer shall provide the Form- GST RFD-2 to the applicant as acknowledgement on the common portal. Claims other than electronic cash ledger, application shall be forward to proper officer who will examine the correctness of the application within 15 days of filing and acknowledge the same on Form-GST RFD -2 clearly stating the date of filing the application. Where any deficiency is noticed, the proper officer shall intimate the same on Form- GST RFD-3 to the applicant. to avoid the holding of capital of exporters, it has been provided to refund the 90% of the claim with in 7 days of the acknowledgment of claim. And will pass Order on Form -GST RFD-4 to the effect [ This has been approved by GST Council on March 4,2017 as well. The proper officer shall issue Form -GST RFD -8 mentioned the amount to be credited to applicant Bank. Relevant Date as mentioned above In case of export of goods out of India. In case of

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2017 (3) TMI 1889 – PUNJAB AND HARYANA HIGH COURT – TMI – Grant of stay against recovery – HELD THAT:- The interim order shall continue till the Tribunal considers the petitioner s application for interim reliefs and for a period of two weeks thereafter in the event of the order being adverse to the petitioner. This, however, is provided that the petitioner files the appeal and takes out an application for interim reliefs before the Tribunal by 31.03.2017. The Tribunal shall consider whether to permit the petitioner to rely upon the pleadings in this petition which includes the replies of the respondents as well. Petition disposed off. – CWP-2790-2016 (O&M) Dated:- 8-3-2017 – HON'BLE MR. JUSTICE S.J. VAZIFDAR, CHIEF JUSTICE

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 7-3-2017 – Power to collect statistics Section 141 of the Model Goods and Services Act, 2016 ( Act for short) gives powers to the Commissioner to collect information for the purposes of the better administration of the Act. Section 141(1) provides that the Commissioner considers that it is necessary so to do, may by notification, direct that statistics be collected relating to any matter dealt with, by or in connection with the Act. Such notification may be issued even by any person authorized by the Commissioner. Section 141 (2) provides that upon such notification, the Commissioner or any person authorized by him in this behalf, may call upon all concerned persons to furnish such information or returns as may be specified therein relating to any matter in respect of which statistics is to be collected. Section 141(3) provides that the form in which the persons to whom or, the authorities to which such information or

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y individual return. This provision is exempted if it is for the purposes of prosecution under this Act. Penalty Section 142 (3) provides that if any person, who is required to furnish any information or return- without reasonable cause fails to furnish such information or return ; willfully furnishes or causes to furnish any information or return which he knows to be false, he shall, on conviction, be punished with fine which may extend to ₹ 100/-. In case of a continuing offence, a further fine which may extend to ₹ 100/- for each day after the first day during which the offence continues may be imposed subject to a maximum limit of ₹ 1,000/-. Punishment Section 142 (4) provides that if any person willfully discloses any information or the contents of any return given or made, otherwise than in execution of his duties under that section or for the purposes of the prosecution of an offence under the Act or under any other Act, he shall, on conviction, be punished wit

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losure Section 148(4) provides that nothing in Section 148 shall not apply to the disclosure of- any such particulars in respect of any such statement, return, accounts, documents, evidence, affidavit or deposition, for the purpose of any prosecution under the Indian Penal Code or the Prevention of Corruption Act, 1988 or any other law for the time being in force; or any such particulars to the Central Government or State Government or to any person acting in the execution of this Act, for verification of such particulars or for the purposes of carrying out the object of the Act; or any such particulars when such disclosure is occasioned by the lawful employment under the Act or any process for the service of any notice or the recovery of any demand; or any such particulars to a Civil Court or Tribunal constituted under any Central law in any suit or proceeding, to which the Government or any authority under the Act is a party, which relates to any matter arising out of any proceeding

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advocate, tax practitioners, a practicing cost accountant, a practicing chartered accountant, a practicing company secretary to the authority empowered to take disciplinary action against the members practicing the profession of a legal practitioner, cost accountant, chartered accountant or company secretary, as the case may be; or any such particulars to any agency appointed for the purposes of data entry on any authorized system or for the purpose of operating, upgrading or maintaining any automated system where such agency is contractually bound not to use or disclose such particulars; any such particulars to an officer of the Central Government or any State Government as may be necessary for the purposes of any other law in force in India; and any information relating to any class of taxpayers or class of transactions for publication, if, in the opinion of the Competent Authority, it is desirable in public interest, to publish such information. Punishment Section 148(3) provides th

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Goods and Services Tax – GST – By: – Pankaj Goel – Dated:- 7-3-2017 – Historically the passive infrastructure (mobile phone towers) sector has been plagued with intense litigation. The sector, though is a backbone for the telecommunication sector, has a huge capital expenditure requirements which inturn resulted into availability of huge CENVAT credit to be adjusted over a period of time. The authorities in the interest of revenue, denied the entire CENVAT credit by holding that the passive infrastructure so constructed is nothing but an immovable property and hence ineligible for credits. Though there were many counter arguments which the assessees are still pursuing the higher courts, this article examines the position in the Revised GST

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additions or alterations or repairs, to the extent of capitalization, to the said immovable property. Explanation 2.- Plant and Machinery means apparatus, equipment, machinery, pipelines, telecommunication tower fixed to earth by foundation or structural support that are used for making outward supply and includes such foundation and structural supports but excludes land, building or any other civil structures. From the plain reading it should be noted that as a general rule the credit of works contract service is not available, the exception is the works contract service for construction of plant and machinery. Furthermore, the way the term plant and machinery is defined is interesting for this discussion. This term is defined in an ambig

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eral has compared to CCR. While CCR required direct relationship with the provision of services, the RGL requires the supply to be used for the purpose of business. Accordingly, extending the argument to the definition it can be well argued that restricting the foundation and structural support only to towers will limit the purpose and hence the second interpretation should prevail. Moreover, the second interpretation is also in line with the stand adopted by the Tribunals under the CCR in relation to availability of credit on support materials. In a nut shell though the RGL, in its present form, will prove boon to the passive infrastructure industry. However, the varied interpretation may lead the revenue authorities to litigate the matter

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 7-3-2017 Last Replied Date:- 7-3-2017 – What is information return? An information return is a tax document that certain persons are required to file with the Internal Revenue Service to report certain business transactions. An information return is not an income tax return; it is used for reporting purposes only. Furnishing of information return under GST Act Section 139 of the Model Goods and Services Tax, Act, 2016 makes it obligation on any person who is responsible for maintaining record of- registration; or statement of accounts; or any periodic return; or document containing details of payment of tax and other details of transaction of goods or services or transactions related to bank account; or consumption of electricity; or transaction purchase, sale or exchange of goods or property or right of interest in a property, shall furnish an information return of the same in respect of such periods, within such time

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rresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and any other financial institution notified by the Central Government in this behalf) or a State Electricity Board; or an electricity distribution or transmission licensee under the Electricity Act, 2003 or any other entity entrusted, as the case may be, with such functions by the Central Government or the State Government; or the Registrar or Sub Registrar appointed under the Registration Act, 1908; a Registrar within the meaning of the Companies Act, 2013; or the registering authority empowered to register motor vehicles under Chapter V of the Motor Vehicles Act, 1988; or the Collector referred to in Section 3© of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; or the recognized stock exchange referred to Section 2(f) of Securities Contracts (Regulations) Act, 1956; or a depository referred t

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ed in the information return is defective, he may intimate the defect to the person who has furnished in such information return with directions to rectify the defect within a period of 30 days from the date of such information or within such further period which, on an application made in this behalf; The prescribed authority may allow and if the defect is not rectified within the said period of 30 days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in the other provisions of this Act, such information return shall be treated as not submitted and the provisions of this Act shall apply; Where a person has not furnished the information return within the time specified, the prescribed authority may serve upon him a notice requiring furnishing of such information return within a period not exceeding 90 days from the date of service of the notice and such person shall furnish the information return. Penalty Section 140 provides that if a per

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 6-3-2017 – Invoicing A registered taxable person supplying taxable services shall, before or after the provision of service but within a period prescribed in this behalf, issue a tax invoice, showing the description, value, the tax payable thereon and such other particulars as may be prescribed. In case of traders or retailers, a memo or bill shall constitute invoice. A registered taxable person shall, on receipt of advance payment with respect to any supply of goods or services by him, issue a receipt voucher or any other document, including therein such particulars as may be prescribed, evidencing receipt of such payment. Returns Under existing tax law, assessee is required to submit two half-yearly returns under service tax, monthly /quarterly return under excise and quarterly returns under VAT laws in a year. Model GST law (version-II) provides for the following returns which are required to be filed by the register

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e required Information Technology support to this sector and as such, there lies a good opportunity for software industry from small businesses and retail trade. GSTN has appointed over 30 GST Suvidha Providers (GSPs) who will be the conduit or interface between the taxpayer and the GST network (GSTN). Small business can avail the services of GSPs to comply with the GST requirements including invoking / return filing etc. Rate of Tax Under GST law, GST Council has proposed four-tier rate structures, i.e., 5%, 12%, 18% and 28%. However, no abatements have been prescribed yet. Therefore, prima facie, it appears that small traders/retailers would need to pay GST at the rate as may be prescribed for the supply of goods and/or services. However, there will be exemption rate (nil) and zero rate for exports. A special rate for gems & jewellery may also be prescribed. A compensation cess is also proposed on demerit / sin goods. Blockage of Working Capital In case traders supply goods or se

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. Most of the forms used in VAT and CST will be withdrawn. On the fillip side, GST may impact small businesses / traders negatively owing to following – Rate of GST may be higher for certain goods / services Most of the exemptions / concessions may be withdrawn or rationalised Stock transfers, unlike present, shall be made liable to GST Return compliances will substantiality increase Job works may be made taxable where as presently, they are exempt against prescribed form. Administrative Control over Small Assessees The States and the Centre have decided on sharing administrative powers wherein taxpayers with an annual revenue of less than ₹ 1.5 crore will be divided between both sides in the ratio 90:10. However, the division will be done in this ratio across four slabs to ensure that the division is uniform – below ₹ 20 lakh, ₹ 20 lakh to ₹ 50 lakh, ₹ 50 lakh to ₹ 1 crore and ₹ 1 crore to ₹ 1.5 crore. Those taxpayers above the ₹ 1

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ating that there will be around 8 million taxpayers under GST initially. Most of the Service Tax assessees are in the range of ₹ 20 lakh to ₹ 1.5 crore and the CBEC will now administer only 10% of them. Way Forward With the implementation of GST, which is likely to be done by July, 2017 now, small traders and retailers will be benefitted as the implementation means a seamless integration of goods and service transaction across the states. It will have benefit at different stages of the value chain. For the procurement of raw materials, movement of goods would become less cumbersome, which opens gates for more suppliers /vendors to merge. Following this, a wider base of distributors would be available as state boundary paperwork will not be a hurdle, resulting to better access and low transportation costs. A favorable environment for a supply chain will help reduce in-transit inventory and further lower the working capital requirement. Simplified taxes and availability of in

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tiate optimal pricing that would lead to incremental savings. Though with the proposed structure of GST, dealing with multiple authorities implementing the law will be challenge for companies. Companies will have to think of procurement in a granular way. Right from third-party contracts to understanding supplier's cost structures to where he will get credits, each aspects will have to be studied minutely. And that would require a deep dive into even vendor supply chains, something that wasn't required till now. Given the prescribed tax credit process, a transition to GST would also required ability to handle a huge amount of transactional level data. To manage that, vendors will have to be trained on how his systems capture the transactions and how tax credits are processed in his system to ensure proper transferability of credits. Leading companies will invest in vendor education and hand-holding programs, to ensure that their entire supply-chain transitions to a GST regime s

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e food wastage and bring down prices. It will not only bring relief to the consumers, but also help retail sector by building supply-chain efficiencies in India in a big way. This is thus going to be a win-win legislative reform for all. The threshold limit of ₹ 10 lakh or 20 lakh will protect the small businesses. The VAT limit currently varies from State to State, limit is currently at ₹ 10 lakh, for Uttar Pradesh it is at ₹ 5 lakh and it is only ₹ 1 lakh in North-Eastern States. There is wide variation among States on current VAT threshold. GST Council decided at ₹ 20 lakh threshold which means any dealer who has turnover of less than ₹ 20 lakh will not be part of tax net. This gives huge relief to small businesses in India. However, companies and business / retailers may face challenges in terms of inventory planning, logistics, budgeting, cash and working capital requirements while transiting to the GST regime. Whether the dealers will have to h

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Goods and Services Tax – Goods and Services Tax GST) Council approves the Central Goods and Services Tax (CGST) Bill and the Integrated Goods and Services Tax (IGST) Bill – TMI Updates – Highlights

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Goods and Services Tax – GST – Dated:- 4-3-2017 – The Goods and Services Tax GST) Council, in its meeting held today in Vigyan Bhawan in New Delhi under the Chairmanship of the Union Minister for Finance & Corporate Affairs, Shri Arun Jaitley has approved the draft CGST Bill and the draft IGST Bill as vetted by the Union Law Ministry. This clears the deck for the Central Government to take these two Bills to the Parliament for their passage in the ongoing Budget Session. Some of the main features of the two Bills, as finalized by the GST Council, are as follows: i. A State-wise single registration for a taxpayer forfiling returns, paying taxes,and to fulfil other compliance requirements. Most of the compliance requirements would be ful

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Special Category States (as enumerated in Article 279A of the Constitution such as Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh, Assam and the other States of the North-East) for not taking registration is ₹ 10 lakhs. iv. A business entity with turnover upto ₹ 50 lakhs can avail the benefit of a composition scheme under which it has to pay a much lower rate of tax and has to fulfil very minimal compliance requirements. The Composition Scheme is available for all traders, select manufacturing sectors and for restaurants in the services sector. v. In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the

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llow the flow of ITC in respect of input serviceswithin a legal entity. viii. To prevent lock-in of capital of exporters, a provision has been made to refund, within seven days of filing the application for refund by an exporter, ninety percent of the claimed amount on a provisional basis. ix. In order to ensure a single administrative interface for taxpayers, a provision has been made to authorise officers of the tax administrations of the Centre and the States to exercise the powers conferred under all Acts. x. An agriculturist, to the extent of supply of produce out of cultivation of land, would not be liable to take registration in the GST regime. xi. To provide certainty in tax matters, a provision has been made for an Advance Ruling A

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Goods and Services Tax – GST – By: – Ganeshan Kalyani – Dated:- 4-3-2017 Last Replied Date:- 10-3-2017 – The introduction of Goods and Service Tax (GST) would be very significant step in the field of indirect tax reforms in India. The Finance Minister announced that GST will be implemented from 1st July 2017. The earlier proposed timeline for the implementation of GST was 1st April, 2017. The benefit of introduction of GST are many – it amalgamates a large number of indirect taxes into a single tax called GST, seamless flow of input tax credit, cost of product would come down in long run, common national market etc. On the other side challenges are also expected to arise, may be – during the phase of transition from current tax regime to the new tax regime, compliance, etc. Out of many one of the challenges would be filing of returns. The same is discussed herein below. The compliance of filing of return under GST is going to be a challenging task. Every registered taxable person, int

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recipient by 17th day of the succeeding month in order to file a monthly return in GSTR-3 by 20th day of succeeding month. The compounding taxpayer is required to file return in GSTR-4, foreign non-resident taxpayer is required to file return in GSTR-5, input service distributor (ISD) taxpayer is required to file return in GSTR-6, tax deductor in GSTR-7 and Annual return is required to be filed in GSTR-8 by 31st December following the end of the financial year. E-commerce entities are required to file return in GSTR-9, Government entities in GSTR-10, Annual return for compounding dealer in GSTR-11 and Final return in GSTR-12. The above types of return is enumerated in the table below for easy reference: Type of return For the purpose of GSTR-1 uploading outward supplies of goods and/or services effected during a tax period GSTR-2 uploading the detail of inward supplies of taxable goods and/or services. The details would get auto populated based on the GSTR-1 filed by suppliers. GSTR-3

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ies are filing return under centralized service tax registration format in which two half yearly returns in Form ST-3 are filed by them. Now, under GST they will have to file 1,708 numbers of returns if they have branches in 28 states across India. The Association of Indian Revenue Services (IRS) officers of Customs and Central Excise has expressed that the multiple returns for service providers will increase compliance cost. Service providers in the banking, insurance, logistics, IT & ITES and aviation sectors are operating under a single centralized registration of service tax at present. That means, at present, they have to file 3 Service Tax returns in one year. In GST era, they will have to file 61 returns per state, per year, after taking registration in each state in which they have presence. So, a major Bank like SBI, which has branches in all 35 states and Union Territories, will end up filing over 2,000 returns annually. This does not seem to be in the spirit of ease of d

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n approved Tax Return Preparer to furnish their return and such other tasks as may be required in connection with filing of return. However, the responsibility of correctness of any particulars furnished in the return by the Tax Return Preparer shall continue to rest with the registered taxable person on whose behalf such return and details are filed. Additionally, taxpayer can also avail facility of third party service provider called GST Suvidha Provider or GSP which are envisaged to provide innovative and convenient methods to taxpayers and other stakeholders in interacting with the GST Systems from registration of entity to uploading of invoice details to filing of returns. The Good and Service Tax Network has recently finalized 34 companies as the GST Suvidha Providers (GSPs), which will offer support and services to help tax payers and businesses in compliance. Though the facility of the Tax Return Preparer and GST Suvidha Provider would be available in GST the responsibility of

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Goods and Services Tax – GST – By: – Vatsalya Bhardwaj – Dated:- 4-3-2017 Last Replied Date:- 6-3-2017 – Levy of taxes in case of composite contracts is a complex phenomenon. Most specifically, levy of tax on works contract has witnessed a plethora of cases. Specifically the chargeability of tax on service vis-à-vis goods has always been a matter of discussion before the courts in the present indirect tax regime. The courts have also taken different-different views and always the matter is being subject matter of confusion / litigations. However, with the introduction of GST it was expected that things will ease and long litigations under Works Contract will end and a definite law would be there. But the reality is far away from our expectations. Issues became more complicated, taxability is again under question and definitions are quite ambiguous. Let s first recall how VAT and Service Tax Laws explained Works Contract in their respective laws. Works Contract as per various St

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greement for carrying out for cash, deferred payment or other valuable consideration, building, construction, fabrication, erection, installation, fitting out, improvement, modification, repair, renovation or commissioning of any moveable or immovable property; In Revised Model GST Law vide, Section 2(110) works contract has been defined as under:- Works contract means a contract wherein transfer of property in goods is involved in the execution of such contract and includes contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property. On comparison of aforesaid definitions in GST Law it can be noted that word movable property is deleted from the definition of works contract under revised Model GST Law. However, it was covered under the Model GST Law. That shows it has been intentionally deleted. Can this be suggested that movable prope

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ng the aforesaid definitions our question is where will repair or maintenance of movable and immovable property will be covered? Will it be a composite supply of goods and services naturally bundled with each other i.e. to say in Repair and maintenance work, goods and services of labour are naturally bundled and supplied together for the purpose of execution of a contract and if not here, then will it be covered under the definition of works contract given under revised Model GST law, that covers transfer in property in goods in execution of such contract and includes repair and maintenance of any immovable property. Now the word includes also leaves the definition as an open vault that may include other terms as well as against the earlier definition of works contract under GST Law which started with means and ended after including both movable and immovable properties. Now firstly it will be strenuous task for the tax professionals to advice their clients that whether it will be a co

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pply of services the dealer pay the necessary tax under GST on raising the invoice or receipt of payment. During the course of assessment proceedings the A.O. may call for details of material used in each of AMC and may take a view that in the cases where substantial material has been used same have to be considered as predominantly for supply of goods and not for services. For example, in case the company has entered into 100 contracts for AMC and has considered the same as contract for supply of services and subsequently the A.O. finds that in, say, 25 contracts the value of material used in rendering services was quite substantial as compared to price charged for AMC, he may take a view that these 25 contracts have to be considered as predominantly supply of material and on the same since rate of tax may be different the A.O. can raise additional demand. Accordingly, this will give a litigation and ambiguity in implementation of law. Case 2- Consideration as works contract. In case

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to litigation. Though, it can be expected that the Government is in the process of further amending the revised Model GST Law and coming out with relevant rules. It is believed that while making further amendments or while drafting rules they will take care of such issues. – Reply By Ganeshan Kalyani – The Reply = Nice Article. In my view works contract is considered as service under GST. In such case why department should term it as composite supply. Composite supply is different from the term works contract service. Hence there should not be much differences.Thanks – Reply By Vatsalya Bhardwaj – The Reply = Sir,Thank you for your views and appreciation. The purpose of this article is to understand why the word 'movable property' has been deleted from the definition of 'works contract' under Revised Model GST Law and if it has been intentionally deleted then whether the work executed in relation to movable property will be covered under Works contract? Secondly, compo

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 4-3-2017 Last Replied Date:- 6-3-2017 – What has changed in last few months that GST Council (GSTC) is said to have made up its mind to escalate GST's peak rate from 28% to 40% ? Perhaps nothing except the economic fallout of demonetization, adverse impact on consumption patterns and lower spending, lesser demand and dropping bottom lines. GDP at 7 percent !! Who is bothered except economists and politicians in power who want to make people feel that all right. GST Council is meeting for two days on 4-5 March 2017, ahead of Budget session of Parliament next week, wherein draft laws are excepted to be approved and recommended to Parliament. The Parliament is the legislati

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nd work for the mandate it has in public and national interest only. If this is allowed, (and cess will continue), no major relief may be there in GST and gradually, GSTC is likely to shift more and more items in 40% slab. If at all 40% tax rate is being thought of, GSTC should be honest enough to enlist the items to which such a rate be subjected to in future. Simple because tax hike in future beyond 28% would require Parliament's nod as reason for this is unwarranted and likely to be misused. This is also going back on earlier promise that rate will not be increased beyond 28%. Even the revised model law stipulates this. In a short span of few weeks, what has changed that the peak rate is being talked about to be enhanced to 40 percen

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the sake of enabling provision. In all fairness, it should not be increased and if done, should be opposed tooth and nail by all stakeholders including apex chambers, professional bodies like ICAI, ICSI, ICWAI and trade bodies. GSTC can not be allowed to take us for granted. – Reply By Ganeshan Kalyani – The Reply = It is really a big concern for stakeholders. GST Council is consists of state finance ministers as its member and union finance minister as chair person. So when they decide about the issue may tend to think about the revenue their respective state should receive. Chair person may be convinced. Thus there should be an independent body apart from state finance ministers to decide on the rate of tax, tax issues etc. – Reply By As

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Goods and Services Tax – GST – Dated:- 4-3-2017 – Mumbai, Mar 3 (PTI) The proposed GST implementation may fuel growth in the USD 39 billion domestic auto ancillary industry following lower taxation of 18 per cent under the new regime, industry experts said. With the upcoming GST regime, the auto ancillary industry will get a boost. The auto ancillary industry's effective rate of tax, which is currently at 28 to 30 per cent, is expected to come down to 18 per cent upon implementation of GST, the experts said. They were speaking at a KDK Softwares-organised panel discussion on the impact of GST on auto ancillary industry. The industry is already reaping benefits of a favourable ecosystem in domestic market and increasing globalisation of

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11th GST Council Meeting Dated:- 4-3-2017 GST Council – Minutes – Circulars – GST – Minutes of the 11 th GST Council Meeting held on 4th March 2017 The eleventh meeting of the GST Council (hereinafter referred to as 'the Council') was held on 4 March 2017 in Vigyan Bhavan, New Delhi 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, 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 eleventh meeting of the Council 1. Confirmation of the Minutes of the 10th GST Council Meeting held on 18 February 2017 2. Approval of the Draft Central Goods and Services Tax (CGST) Law as modified in accordance with the decisions of the GST Council and as vetted by the Ministry of

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dments to the draft Minutes. 4.1. The Hon'ble Minister from West Bengal stated that in paragraph 4.1.1, the word 'above' in the second sentence of his recorded version should be replaced by the word 'below'. The Council agreed to this suggestion. 4.2. The Hon'ble Minister from West Bengal highlighted that four issues recorded in the Minutes, had to be brought back to the Council for decision, namely: (i) carve out of export and import functions exclusively for the Central administration (recorded in paragraph 4.19 of the Minutes); (ii) to deem supplies to territorial waters as intra-State supply (recorded in paragraph 4.21 of the Minutes); (iii) to allow the benefit of the Composition scheme to restaurants, which was a supply of service (recorded in paragraph 8.4.3 of the Minutes); (iv) to examine the provision in Model GST Law for matching annual GST return of the taxpayer with his annual financial statement (recorded in paragraph 9.2.2 of the Minutes).

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Chief Minister of Puducherry stated that in the last Council meeting, the Hon'ble Minister from Karnataka had referred to supply of goods by restaurants. He observed that while a restaurant only supplied food, another connected feature was hotels offering accommodation and giving restaurant service. The Secretary stated that restaurants with annual turnover upto ₹ 20 lakh would be exempt from GST, while those with annual turnover between ₹ 20 lakh and ₹ 50 lakh would be covered under the Composition scheme. He added that hotels providing accommodation and restaurant service would normally have an annual turnover of more than ₹ 50 lakh and would thus pay GST at the normal rate. The Hon'ble Chief Minister of Puducherry stated that presently in his Union Territory, restaurants were charged to tax at the rate of 2% and observed that the proposed tax rate of 5% was on the higher side. 4.4. Shri P. Mara Pandiyan, Additional Chief Secretary (Taxes), Kerala

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me Tax law would be sufficient compliance for the audit report required under the VAT Law. The Council agreed not to change the decision recorded in paragraph 9.2.2. of the Minutes. 4.5. The Hon'ble Minister from Uttar Pradesh pointed out that in paragraph 10.1.1. (iv) of the Minutes, it was recorded that retired officers shall be eligible for appointment as Technical Member (State) in Appellate Tribunal whereas as per their understanding, the same provision would also apply for the appointment of Technical Member (Centre). He suggested that the decision recorded in this paragraph should be amended to read as follows: Retired officers shall be eligible for appointment as Technical Member (State) as well as Technical Member (Centre) in the Appellate Tribunal. The Council agreed to this suggestion. 5. In view of the above discussion, for Agenda item 1 , the Council decided to adopt the Minutes of the 10th Meeting of the Council with the changes as recorded below: 5.1. In

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g. He requested that the Members might also offer comments on these suggested amendments while discussing the draft CGST Law circulated as an agenda note for this meeting. 6.1. The ten amendments circulated during the meeting of the Council on 4 March 2017 are listed below (the changes are indicated in bold and italics and in strikethrough mode): i. Issue No. 1 Section 2 (a) (81) other territory includes territories other than those comprising in a State and those referred to in sub-clauses (a) to (e) of clause (114) of section 2; Note: Clauses (81) to (119) to be consequently renumbered and other consequential changes (referencing) to be carried. ii. Issue No. 2 Section 109(10) – In the absence of a Member in any Bench due to vacancy or otherwise, any appeal may, with the approval of the President or, as the case may be, the State President, be heard by a Bench of two Members: Provided that any appeal where the tax or input tax credit involved or

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security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed in such form as may be prescribed equivalent to the amount payable under clause (a) or clause (b): vi. Issue No. 6 Section 67(2) – Provided that where it is not practicable to seize any such goods, the proper officer, o r any officer authorized by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer: vii. Issue No. 7 Section 67(9) – Where any goods, being goods specified under sub-section (8), have been seized by a proper officer, or any officer authorized by him, under sub-section (2), he shall prepare an inventory of such goods in the manner as may be prescribed. viii. Issue No. 8 Section 168 – Explanation.- For the purposes of this section, the Commissioner specified in sub-section (90) o

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ion and Organization notified under the United Nations (Privileges and Immunities) Act, 1947 (To be handled through notification) x. Issue No. 10 – Section 19 – Tax wrongfully collected and paid to Central Government or State Government. (i) A registered person who has paid integrated tax on a supply considered by him to be an inter-state supply, but which is subsequently held found to be an intra-State supply, shall, be granted refund of the amount of integrated tax so paid in such manner and subject to such conditions as may be prescribed. 6.2. Shri Upender Gupta, Commissioner (GST Policy Wing), Central Board of Excise Customs (CBEC) broadly explained the changes made in the CGST Law between the draft of 26 November 2016 (which was the most recent version of the Draft Laws put in public domain) and the draft of 1 March 2017 presented as an Agenda Note for the 11th Meeting of the Council. These broad changes are recorded in Annexure 3 and were circula

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s required to pay interest only at the rate of 6% for delayed refund under Section 56 of the draft CGST Law. He observed that for late payment of refund, there should be a higher interest liability on the Government at par with what the taxpayer was liable to pay. The Hon'ble Chairperson cautioned that the Government's liability for interest payment should not be too high. The Secretary informed that even at the current rate of 6%, the Government's liability to pay interest for late refund of Income Tax during the last financial year was ₹ 7,000 crore and added that a cautious approach was required with regard to the Government's interest liability. The Hon'ble Minister from Uttar Pradesh observed that this additional burden of ₹ 7,000 crore on the Government was due to its own laxity and by giving refund more promptly, the Government could save ₹ 7,000 core. The Hon'ble Chairperson observed that in the Income Tax Department, the entire tax adm

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id by the Government. The Commissioner (GST Policy Wing), CBEC informed that the clause of interest payment for delayed refund applied when the refund was paid beyond a period of 60 days from the date of filling the application whereas a taxpayer was required to pay interest only after 90 days of confirmation of the tax demand by the assessing officer. He also informed that the rate of interest paid by the Government was linked to its cost of borrowing which was around 6%. Shri Ritvik Pandey, CCT, Karnataka stated that the interest was also payable for refund of pre-deposit paid at the appellate stage. CCT, Gujarat observed that the taxpayer would have collected the amount equivalent to the tax from the buyer and therefore, he was not entitled to keep this amount. He cautioned that for taxpayers, fixing an interest rate below the prevailing bank rate, would lead to indiscipline. 6.2.4. The Hon'ble Chief Minister of Puducherry stated that the Government machinery should be given

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est for the taxpayer and the Government. He stated that if needed, Government could be given additional time of 3 to 4 months to process the refund claim but thereafter the rate of interest for d~layed refund should be the same as the rate of interest for short payment of tax. Shri Manish Kumar Sinha, Commissioner, GST Council stated that differential rate of interest for the Government and the taxpayer was not an equity issue and that the Government rate of interest was linked to the rate at which it placed its funds to the Reserve Bank of India (RBI) or borrowed funds from the RBI. He also stated that the rate of interest for refunding a pre-deposit amount after completion of the litigation process should not be very high. He added that the rate of interest for a taxpayer should be linked to the market rate of borrowing as a taxpayer would have collected from the buyer, the amount equivalent to tax which was in effect Government's money. The Hon'ble Minister from Uttar Prades

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r, it implied that the fault lay with the Government. He added that if the Government bore the implication of errors of judgement of its officers, it would make the administration more accountable. The Hon'ble Minister from Karnataka stated that one way to address this issue could be that the Government could pay a slightly higher rate of interest, say 9%, for certain categories of delayed refund which could be classified as routine delay but for refunds arising out of finalization of litigation process, the rate of interest could be kept at 6%. The Hon'ble Chairperson observed that where the Government did not refund money for 6 to 7 years due to litigation in Court, it retained and used the taxpayers' money for these years and for this, it should be liable to pay interest at the rate at which the Government would have paid ordinarily for its borrowing, i.e. the Government of India Security (G-SEC) rate. He further stated that if the assessee had to pay a confirmed demand,

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power and it had wide resources for generating revenue including borrowing from abroad at a very low rate of interest. He stated that for a private person, the cost of borrowing funds was high as he could not borrow from abroad at a much lower rate. He stated that the Government of India could borrow from abroad at a low rate of say 1.5%, lend it to Banks at the rate of 6% which in turn would lend to the customers at a much higher rate. He stated that this was a classic case in the USA during the decades of the 1960s and the 1970s. The Hon'ble Chief Minister of Puducherry observed that a taxpayer could take money from the consumer, use it and thus enrich himself and deposit it into the Government's account after litigation of 6 to 7 years when the Court ordered him to do so. He informed that more than ₹ 100 crore was not paid by the dealers of petroleum products in his Union Territory due to litigation in the Court. The Hon'ble Minister from Telangana stated that the

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another way to address this issue could be to keep the rate of interest as proposed, but have a mandatory fixed period within which refund must be paid. The Secretary stated that the period for payment of refund was already prescribed in the proposed Law. He suggested that one way to address this issue could be to provide that if the refund was not given within a certain period of the passing of an adjudication or appellate order where the order had acquired finality, the rate of interest for delayed refund would be 9% and in other cases of refund, where interest was payable, it should be paid at the rate of 6%. The Hon'ble Minister from Uttar Pradesh suggested that the rate should be more than 9%. The Hon'ble Chairperson cautioned against keeping the rate of interest too high. The Council agreed to the suggestion of the Secretary. 6.3. Shri Tuhin Kanta Pandey, Principal Secretary (Finance), Odisha stated that in Section 54(12), the reference to Section 50 was erroneous and

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implementing it through a notification. The Hon'ble Minister from Uttar Pradesh supported this suggestion. The Secretary stated that the situations of cross-empowerment would be dynamic in nature and to have flexibility, it need not be put in the Law. He added that the Council had already taken a decision regarding the distribution of taxpayers between the Central and the State administration and that this need not be put in the Law. The Hon ble Chairperson observed that the ambit of Section 6 would be in accordance with the Council's decision and that the content of notification would be as decided by the Council. He added that the Government was to only issue such a notification and not determine its content, which would be determined by the Council. He added that the power to vary the content of the notification should rest with the Council. The Hon ble Minister from West Bengal observed that the complexion of the Council could change in due course and, therefore, sug

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al to the one suggested by the Hon'ble Minister from West Bengal and that the only difference was that the second clause had been made the first clause and the first clause had been made the second clause. He summed up with the observation that there shall be cross-empowerment under the Law and that its extent would be decided from time to time. 6.5.3. The Hon'ble Minister from Tamil Nadu observed that if cross-empowerment was vested on SGST officers through notification, then there was a chance that the decision already taken on dual control might be subject to frequent alterations. He, therefore, suggested that the notification route should be avoided and that, instead, it might be done . through Rules made under the relevant Law. He suggested the following revised formulation for Section 6 of the draft CGST Law: 'Without prejudice to the provisions of this Act, the Government shall, on the recommendations of the Council, and subject to such conditions as may be prescr

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s an order under the SGST Act. He emphasised that it must be ensured that two orders were not passed by two authorities on the same issue and that this could be achieved by incorporating this idea in the Act rather than in the Rules or in a notification. He observed that this would give comfort to taxpayers. The Secretary observed that this formulation could be put in the relevant GST Rule. The Hon'ble Minister from Karnataka stated that it should be put in the Law and gave the following formulation for the same: 'Without prejudice to the provisions of this Act, officers appointed under the State Goods and Services Tax Act shall be authorised to be the proper officers for the purposes of this Act subject to such conditions as may be notified by the Government on the recommendations of the Council.' He further stated that under the cross-empowerment framework, it was essential that officer of only one government acted on an issue and on his doing so, officers of the other go

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s order under this Act.' 6.5.5. The Commissioner (GST Policy Wing), CBEC stated that the formulation suggested by the Hon'ble Minister from Karnataka was broadly the same as the original text in Section 7 the Model GST Law put in public domain in November, 2016. He informed that this provision was removed on the advice of the Union Law Ministry. He stated that the Law Ministry had explained that the CGST Law should not contain what was to be done under another law and that the phrase 'on the recommendations of the Council' was added to ensure that the provisions would be uniform in all the relevant laws. The CCT, Karnataka stated that the present formulation under Section 6 of the CGST Act only empowered the officers under the SGST Act to exercise the powers under the CGST Act but did not provide an assurance that on a dispute, only one officer would pass one order under both the Acts. He stated that it was very important for the public perception to assure that mult

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ainst an order covering demands under both CGST and SGST Acts, there should be a bar in the law for the SGST appellate authority to hear the same appeal. The Hon'ble Minister from Uttar Pradesh stated that the same principle should also apply for refund of taxes. The Secretary stated that the Law Committee should prepare a formulation giving effect to the understanding that that SGST officers shall be cross-empowered under the CGST Act in the Act itself and that only one order shall be passed for one dispute involving taxes under both the CGST and the SGST Act and that if a CGST officer passed an order, which also included demand for tax under the SGST Act, the SGST officer shall be barred from passing' order on the same dispute. The Council agreed to this suggestion. 6.6. The Principal Secretary (Finance), Odisha raised a question in relation to Section 60(5) of the draft CGST Act as to whether an assessee would need to file an application to get refund or whether he would

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ted out that the scope of the expression 'works contract' in Clause 6 of Schedule II of the Draft CGST Law was different from that contained in Section 2(118) of the Draft CGST Law. Shri Narayana Raju, . Secretary, Legislative Department stated that they would examine this issue further to align the wordings in Clause 6 of Schedule II and Section 2(118) of the draft CGST Law. The Council agreed to this suggestion. 6.9. The Hon'ble Minister from Tamil Nadu stated that in the 5th Meeting of the Council (held on 2-3 December 2016), it was decided to incorporate the definitions of 'intra-State supply of goods' and 'intra-State supply of services' in the Model GST Law instead of only . cross-referencing it to the IGST Act but this was not done. Commissioner (GST Policy Wing), CBEC stated that this issue was discussed in the Law Committee of officers and it was noted that the existing definition of 'intra-State supply of goods' and 'intra-State supp

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;intra-State supply of services' in the CGST Act as it was already contained in the IGST Act. 6.1 0. The Hon'ble Deputy Chief Minister of Delhi pointed out that in Section 2(90) of the draft CGST Act, 'Commissioner' was not included in the definition of 'proper officer' and this could mean that in Section 6 of the draft CGST Act (dealing with cross-empowerment), Commissioner would not be a proper officer and therefore could not be cross-empowered. Commissioner (GST Policy Wing), CBEC stated that Sections 3, 4 and 5 of the draft CGST Act had reference to Commissioner. The Hon'ble Chairperson stated that the Law Committee could suitably redefine the term proper officer' in the draft CGST Act to also bring officers of the rank of Commissioner within its ambit. The Council agreed to this suggestion. 6.11. The Deputy Chief Minister of Delhi referred to his letter dated 4 March, 2017 addressed to the Hon'ble Chairperson and copies sent to all the Ho

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during the 7th Meeting of the Council (held on 22-23 December, 2016) where the Central Government strongly argued for levying GST on sale of land and building but the Council did not agree to the same and it was decided to revisit this issue after one year of implementation of GST. 6.12. The Hon'ble Chairperson stated that the points raised by the Hon'ble Deputy Chief Minister of Delhi merited careful consideration and that it was desirable to complete the input tax credit chain by levying GST on sale of land and building and that this would also help in curbing generation of black money. He further observed that this would not impinge upon the existing taxation powers of the States on land and building. The Hon'ble Deputy Chief Minister of Delhi suggested that sale of land and building should be removed from Schedule III of the draft CGST Law and cautioned that if this issue was sealed today, then a big opportunity to curb black money would be lost. The Hon'ble Min

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ough a notification instead of incorporating it in the law. CCT, Karnataka stated that if a decision was taken to bring sale of land and building in GST, then several amendments would be required in the law such as Section 16 dealing with eligibility and conditions for taking input tax credit. He therefore suggested that the entry regarding sale of land and building should not be removed from Schedule Ill. The Hon'ble Chairperson stated that this issue could be taken up for decision after one year of implementation of GST. The Hon'ble Minister from Uttar Pradesh suggested to retain the decision taken in the 7th Meeting of the Council. The Hon'ble Minister from Andhra Pradesh stated that they would further study the proposal made by the Hon'ble Deputy Chief Minister of Delhi. The Council decided to retain the decision taken in the 7 th Meeting of the Council (held on 22-23 December, 2016). 6.13. Shri Shyamal Misra, CCT, Haryana stated that in the 10th Meeting of the

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al. 6.14. CCT, Haryana stated that in the 10th Meeting of the Council (held on 18 February 2017), during discussion on issue No. 4 and 5 of the Agenda Note of Agenda Item 3, it was decided to move the provision contained in Section 7(1)(b), namely, 'import of services for a consideration whether or not in course or furtherance of business' to the IGST Law but the same was not done. Commissioner (GST Policy Wing), CBEC explained that as the whole rovision of supply was in Section 7 of the draft CGST Law, the Law Committee suggested that it was desirable to keep this provision as part of Section 7 of the CGST Law. The Council agreed to this suggestion and accordingly agreed to modify its decision taken in the 10th Meeting of the Council (held on 18 February 2017). 6.15. The Hon'ble Minister from Karnataka stated that tax collection at source by electronic commerce operators [Section 52(1) of the draft CGST Act] was only a tracking mechanism to create a transact

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Law to indicate that the rate of tax collection at source by electronic commerce operators shall be upto 1%. 6.16. The Hon'ble Minister from Jammu Kashmir stated that in the draft CGST Law, there were references to several other laws like the Indian Penal Code (IPC), the Code of Criminal Procedure (Cr.PC.), Contract Act etc. which did not apply to the territory of Jammu Kashmir. On an enquiry from the Hon'ble Chairperson as to how this issue was handled in other Laws, the Secretary, Legislative Department clarified that in the other Laws, it was normally provided that the corresponding Law of the State of Jammu Kashmir shall apply. The Hon'ble Chairperson suggested that a provision could be put in the CGST Law that any reference to any legislation in the CGST Law shall include corresponding law of the State of Jammu Kashmir, if it applied there. The Council agreed to this suggestion. 6.17. CC T, Karnataka suggested that Section 31 and the Proviso to

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pre-deposit at the level of the First Appeal and an additional 20% would be paid as pre-deposit at the level of the Second Appeal making the total pre-deposit as 30% of the disputed tax amount, and the question was whether this amount should be increased to 100% for filing an appeal before the High Court. Shri Rajiv Jalota, CCT, Maharashtra stated that in his State, no part payment of tax was allowed for filing appeal in High Court and that the demand of tax could also not be stayed by the High Court. He added that such demand could, however, be stayed under the High Court's Writ jurisdiction. The Hon ble Chairperson stated that the principle of depositing 100% tax before filing an appeal negated the very right of appeal. He observed that for a high value demand of tax, say ₹ 20 crore, it would be unviable to file an appeal in High Court. He further stated that the taxpayer would then take recourse to filing a Writ petition in the High Court and in all likelihood, th

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eat cases. He further observed that if it was a legal issue, the ratio of the decision could apply across the board. The Secretary stated that this issue was discussed at length in the 10th Meeting of the Council (held on 18 February 2017) and the monetary limit for not admitting an appeal before the Appellate Tribunal was reduced from ₹ 1 lakh to ₹ 50,000 and that this decision should not be revisited. The Council agreed to this suggestion. 6.20. The Hon ble Minister from Uttar Pradesh raised an issue as to how the officers of the States would get representation in the National Tribunal. The Secretary stated that the manner of appointment of the Members of the Appellate Tribunal shall be provided in the relevant GST Rules and the Council could take a decision when discussing the relevant Rules. 6.21. Dr. Reeta Vasishta, Additional Secretary, Legislative Department, Ministry of Law recalled the Council's decision to have a Single Member Bench of the Appellate Trib

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rights and obligations of the citizens without involving a Judicial Member. The Hon'ble Chairperson observed that the Member (Technical) of a Tribunal would generally be appointed from amongst the officers of the level of Commissioner, Chief Commissioner, or a retired senior officer and because of his long experience in taxation maters, he would be as knowledgeable, if not more, than a Judicial Member, many of whom might be drawn from the rank of advocates or Additional District Judges whose exposure to tax matters would be limited. He stated that in this view, there was no justification to insist that a single Member Bench should only consist of a Judicial Member. The Hon'ble Minister from West Bengal stated that there should be no insistence that a single Member Bench should only consist of a Judicial Member. The Council agreed that a single Member Bench of the Appellate Tribunal could consist of either a Member (Technical) or a Member (Judicial). 7. For agenda item 2, t

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[Section 2(91)] to also bring officers in the rank of Commissioner with in its ambit. 7.3. To align the language of the expression 'works contract' in Clause 6 of Schedule II and Section 2(118) of the draft CGST Law. 7.4. The Law Committee to reformulate the existing text of Section 6 of the draft CGST Act taking into account the suggestions of the Hon'ble Minister from West Bengal and the Hon'ble Minister from Karnataka to give effect to the understanding that SGST officers shall be cross-empowered under the CGST Act in the Act itself and that only one order shall be passed for one dispute involving taxes under both the CGST and the SGST Act and that if a CGST officer passed an order, which also included demand for tax under the SGST Act, the SGST officer shall be barred from passing order on the same dispute. 7.5. To modify the decision taken in the 10th Meeting of the Council (held on 18 February 2017), in respect of Issue No. 4 and 5 of the Agenda Note of

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ion 56. 7.10. To modify Section 56 to provide that if refund is not given within thirty days of the passing of an adjudication or appellate order where the order has acquired finality, the rate of interest for delayed refund would be 9% and in other cases of refund, where interest is payable, it shall be paid at the rate of 6%. 7.11. In the proviso to Section 67(2), to add the words as indicated in bold italics below: Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorized by him , may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer: 7.12. In Section 67(9), to add the words as indicated in bold italics below: Where any goods, being goods specified under sub-section (8), have been seized by a proper officer , or any officer authorized by him , under sub-section (2), he shall prepare a

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il taken in its 10th Meeting and not to have a Proviso to Section 110(2) for the State Bench similar to that for the National Tribunal. 7.16. In Section 110(1 1), to add the clause as indicated in bold italics below: The Technical Member (Centre) or Technical Member (State) of the Appellate Tribunal shall hold office for a term of five years from the date on which he enters upon his office, or until he attains the age of sixty-five years, whichever is earlier and shall be eligiblefor re- appointment. 7.17. In Section 1 18(1), to carry out the editorial correction as indicated in bold italics and strikethrough mode below: An appeal shall lie to the Supreme Court- (a) from any order passed by the National Bench and or Regional Benches of the Appellate Tribunal; or… 7.18. In Section 129(l)(c), to make the amendment as indicated in bold italics and strikethrough mode below: upon furnishing a security equivalent to the amount payable under clause (a) or clause (b)

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he course or furtherance of business: Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services. 7.21. To delete Clause 4 of Schedule Ill which reads as follows and this matter to be handled through notification: 4. Services by a foreign diplomatic mission located in India or any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947 7.22. To modify the decision of the Council taken in its 5th Meeting (held on 2-3 December 2016) and not to incorporate the definitions of 'intra-State supply of goods' and 'intra-State supply of services' in the CGST Act as it was already contained in the IGST Act. 7.23. To incorporate a provision in the CGST Law that any reference to any legislation in the CGST Law shall include c

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n Territories without Legislature. He stated that according to Article 366(26B) of the Constitution, State with reference to Articles 246A, 268, 269, 269A and Article 279A of the Constitution included a 'Union territory with Legislature;' and considering that Article 366 (26B) of the Constitution included only Union Territory with Legislature within the meaning of State, Union Territory without Legislature could not be considered as a State for the purpose of Goods and Service Tax. He added that since, Article 366 (26B) of the Constitution had a reference to Article 246A, 269A and 279A, 'Union Territory without Legislature' could not be covered by the SGST/IGST Act. He further stated that the other fact was that Section 2(102) of the CGST Act had defined State as State including a 'Union territory with Legislature'. 8.2. The Commissioner, GST Council stated that the power to levy GST was derived from Article 246A of the Constitution and under it, the Ce

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', it would be covered in the definition of Union of India and therefore he did not visualize any legal difficulty in levying GST in Union Territories without Legislature. The Council agreed with this view. 8.3. The Hon'ble Minister from Jammu Kashmir stated that the definition of SGST Act contained in Section 2(21) of the draft IGST Law had a reference to Article 246A of the Constitution, which was not applicable to the State of Jammu Kashmir. He stated that Section 5 of the Constitution of Jammu Kashmir (relating to the extent of executive and legislative power of the State of Jammu Kashmir) provided that the executive and legislative power of the State of Jammu Kashmir extended to all matters except those with respect to which the Parliament of India had power to make laws for the State of Jammu Kashmir under the provisions of the Constitution of India. The Additional Secretary, Legislative Department suggested to modify the definition of the term 'State G

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1975 and this implied that it would be levied on the value inclusive of Basic Customs duty. 8.6. The Hon'ble Minister from West Bengal stated that there appeared to be a contradiction between Section 12(8) and Section 13(9) of the draft IGST Law as the former referred to 'place of supply of services by way of transportation of goods, including by mail or courier… ', whereas the later referred to 'place of supply of services of transportation of goods, other than by way of mail or courier…'. He stated that mail or courier was included in Section 12(8) but was excluded in Section 13(9). Shri G.D. Lohani, Commissioner, CBEC explained that Section 12(8) of the draft IGST Law dealt with supplies within the country whereas Section 13(9) dealt with supplies where either the supplier of services or the recipient of services was located outside India. He explained that under the current Service Tax law, couriers dealing with international supply were not treated as tr

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to tourists was very cumbersome and required a lot of paperwork and procedural formalities. The Secretary stated that one option could be to remove this provision altogether but if it had to be retained, it could be operated only on the basis of the IGST model. The Hon'ble Chairperson stated that another option could be to restrict the facility of refund to international tourists to jewellery purchases. The Hon'ble Minister from Uttar Pradesh observed that there was no provision in the United States of America for refund of duties paid by an international tourist. CC T, Gujarat stated that several countries had a provision to refund the taxes paid by international tourists and that it would be desirable to retain enabling provision for it in the GST Law. The Council agreed to this suggestion. 9. For agenda item 3, the Council approved the draft IGST Law with the changes/decisions as recorded below. The Council also authorised the Law Committee of Officers to make minor corr

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pection of goods in movement and that it provided that the Government might specify a document or a device to be carried by a person in charge of a conveyance who carried goods exceeding a certain prescribed value. He recalled that this provision (the then Section 80 of the Model GST Law) was discussed in the 6th Meeting of the Council (held on 11 December, 2016), particularly in the context of having check-posts at the State borders and it was felt that in the GST regime, check-posts need not be kept at the borders to physically check goods but it was necessary to record information regarding movement of goods across the State borders. He added that it was also discussed that the movement of goods, whether within or across the State, would be with a meta-permit and that the vehicles could be checked anywhere and not necessarily at the borders. He stated that keeping this in view, GSTN needed authorisation for development of an e-Way Bill Application System. He stated that by using thi

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was deliberated in the Officers' Meeting held on 3 March 2017 and the general view that emerged there was that the Central and the State Governments should bear this cost. The Council agreed with this proposal. 10.2. Ms. Sujata Chaturvedi, CC T, Bihar stated that the Ministry of Road Transport and Highways (MoRTH) should also be consulted while developing the e-Way Bill System. The Secretary stated that a separate meeting would be held with MoRTH as also with the other relevant Ministries like Environment, Railway and Shipping, to discuss this issue and for not having check posts at the State borders. 11l. For agenda item 4, the Council approved the proposal to create Electronic Way Bills System Module as part of the GST System through GSTN and the cost for developing and operating the same would be borne by the Central and State Governments. Agenda Item 5: Date of the next meeting of the GST Council 12. The Hon'ble Chairperson stated that another meeting of t

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. The Hon ble Chairperson expressed his deep appreciation for the hard and long working hours put in by the officers of the Law Committee, which enabled the CGST and IGST Laws to be passed by the Council in this meeting. He observed that this was a milestone in the Centre-State relationship as, on an important issue like taxation, State officers played a very prominent role in drafting the law and correcting the language. The Hon'ble Chief Minister of Puducherry stated that the House placed on record its deep appreciation of the stellar role played by the Hon'ble Chairperson in steering the successful completion of the discussion on the CGST and IGST Laws. The Hon'ble Minister from West Bengal placed on record his appreciation for the hard work of the officers of the Law Committee and, in particular thanked the two co-convenors, Shri P.K. Mohanty, Consultant (GST), CBEC and Dr. P.D. Vaghela, CC T, Gujarat. He also placed on record his appreciation of the important role play

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rincipal Commissioner, Authorised Representative, CESTAT 3. Shri Upender Gupta, Commissioner (GST Policy Wing), CBEC 4. Shri G. D. Lohani, Commissioner of Central Excise, Faridabad 5. Shri Neeraj Prasad, Additional Commissioner (GST Policy Wing), CBEC 6. Shri Vishal Pratap Singh, Deputy Commissioner (GST Policy Wing), CBEC 7. Shri Ravneet Singh Khurana, Deputy Commissioner (GST Policy Wing), CBEC 8. Shri Siddharth Jain, Assistant Commissioner (GST Policy Wing), CBEC Ministry of Law 1. Ms. Rita Vashishtha, Additional Secretary, Legislative Department, Ministry of Law 2. Shri R. Srinivas, Additional Legislative Counsel, Legislative Department, Ministry of Law Goods Services Tax Network 1. Shri Jagmal Singh, Vice President, GSTN 15. The meeting ended with a vote of thanks to the Chair. (Arun Jaitley) Chairperson, GST Council – Circular – Trade Notice – Public Notice – Instructions – Office orders Tax Management India – taxm

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