Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 1-12-2016 Last Replied Date:- 1-12-2016 – In order to compensate the States for the introduction of Goods and Service Tax regime, the Central Government proposed to levy a new cess called as GST Compensation Cess through the Goods and Services Tax (Compensation to the States for loss of Revenue) Bill, 2016. The Government proposes to introduce the said bill in the winter session of Parliament and it may be introduced in the first week of December, 2016. The said bill extends to the whole of India. It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf. GST Compensation Cess Section 8 of the bill provides for the levy and collection of GST compensation cess ( cess for short). The said section provides that there shall be levied and collected in accordance with the provisions of this Act, a cess to be called the GST Compensation Cess . The rate
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turns in such formats, as may be prescribed, along with the returns to be filed under the Model GST law. The taxable person shall pay the amount payable under the Act in the manner as may be prescribed. Refund of Cess paid may be applied in prescribed form. For the purposes of cess, all the provisions, except for the format to be filed, of the Model GST law and the rules made there under shall apply in relation to the levy and collection of the cess. Section 11(1) provides that the provisions of CGST and the rules made there under including those relating to assessment, input tax credit, non levy, short levy, interest, appeals, offences and penalties shall apply mutatis mutandis in relation to the levy and collection of the cess leviable as they apply in relation to the levy and collection of Model law. Section 11(2) provides that the provisions of IGST Act, 2016 and the rules made there under including those relating to assessment, input tax credit, non levy, short levy, interest, app
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4.2017 (a probable date). 3. Section 3 provides the projected growth rate of the State. This section provides that the projected nominal growth rate of revenue subsumed for a State during the transition period shall be 14% per annum. 4. Section 5 provides the calculation of the base year Revenue of a State, i.e., 2015 – 16. The base year revenue of a State shall be the sum of the revenue collected by the State and local bodies during the base year on account of the taxes levied net of refunds with respect to the following taxes imposed by the respective State or Centre, which are subsumed into GST- VAT, sales tax, purchase tax, tax collected on works contract or any other tax levied by the concerned State under the erstwhile Entry 54 of List II of the VII Schedule to the Constitution, prior the Constitution (101st Amendment) Act, 2016 ( amendment for short); Entry tax, octroi, local body tax or any other tax levied by the concerned State under the erstwhile Entry 52 of List II of the V
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State Government to specific entities under the laws to promote industrial investment would be included in the total base year revenue of the State, subject to the conditions as may be prescribed; In respect of any State, if any part of revenue are not credited in the Consolidated Fund of the respective State, the same shall be included in the total base year revenue of the State, subject to the conditions as may be prescribed. 5. Section 5(3) provides that the following shall not be included in the calculation of the base revenue for the State- Any taxes levied under the erstwhile Entry 54 of List II of the VII Schedule prior to amendment on the sale or purchase of petroleum crude, high speed diesel, motor spirit, natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any taxes levied under CST on the sale or purchase of petroleum crude, high speed diesel, motor spirit, natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any cess impo
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ncial year after receipt of the final figure, as audited by C&AG. In case of excess amount has been released in any financial year during the transaction period, the excess amount shall be adjusted against the compensation payable in the subsequent financial year. 9. Section 7(2) provides that the total GST compensation payable shall be calculated as detailed below- The projected revenue for any financial year during the transition period, that have accrued to a State shall be calculated; The actual revenue collectedby a State in any financial year during the transition period net of refunds and the IGST apportioned to that State as certified by C&AG; Total GST compensation payable in any financial year shall be the difference between the projected revenue and the actual revenue collected by the State. 10. Section 7(3) provides that the loss of revenue at the end of any quarter shall be calculated at the end of every quarter as detailed below- The projected revenue till the end
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y the State to the Central Government and such amount shall be credited to the GST Compensation Fund. Disposal of GST Compensation Fund Section10(3) provides the procedure for the disposal of balance of amount in the GST Compensation Fund after the transition period is over and after compensating all the States for the transition period. According to this Section 50% of the amount remaining unutilized in the GST Compensation Fund at the end of the transition period shall be transferred to the Consolidated Fund of India and shall be distributed between the Centre and the State and amongst the States as per provisions of Article 270(2) of the Constitution. The balance 50% shall be distributed amongst the States in the ratio of their total revenues from SGST in the last year of the transition period. – Reply By Ganeshan Kalyani – The Reply = The Compensation cess is over and above IGST , CGST & SGST . It was said that there would be single rate in place of various tax rates that we ha
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