Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 31-12-2016 Last Replied Date:- 2-1-2017 – Services contribute over 57 percent to Indian Economy (GDP) which is the highest. The services sector is not only the dominant sector in India s GDP, but has also attracted significant foreign investment flows, contributed significantly to exports as well as provided large-scale employment. India s services sector covers a wide variety of activities such as trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, business services, community, social and personal services, and services associated with construction. Key Impact Areas for Services Following areas can be identified to have direct bearing on services / service providers- Territory GST law shall extend to whole of India and SGST law would apply to respective States. Presently, Service Tax law extends to whole of India except the State of Jammu & Kashmir. Therefore, rend
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artments i.e., service tax and VAT /CST Departments. Service providers paying service tax are getting notices from VAT /CST Department and dealers who are paying VAT /CST are get notices from service tax Department in case of overlapping transaction. With the introduction of one single tax-GST on supply of goods and /or services including supplies as per Schedule II, GST is likely to put an end to the double taxation of services like software, works contract etc. which are treated as goods and services both. Taxable Person Taxable Person means a person who is registered or liable to be registered under Schedule-V of the Act. According to Schedule-V, every supplier shall be liable to be registered under the Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds rupees 10 lakhs in North-East States including Sikkim and hilly area and rupees 20 lakhs for othe States. Therefore, threshold limits of rupees 20/10 l
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ount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the services. Incidental expenses Interest or late fee or penalty for late payment of any consideration of supply. Subsidies directly linked to the price excluding subsidies provided by the Central and State Governments But shall not include(exclusion): Discounts- Post-supply discounts will not be included in the transaction value if it is established as per the agreement and is known at, or before, the time of supply. Year-end discounts and discounts offered on achieving a target will also be excluded if they could be specifically linked to relevant invoices against which discount has been offered. Therefore, it is important that the proper disclosure of discount should be made for the exclusion under transaction value. It is advisable to draft a proper discount policy for smooth calculation and disclos
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of next FY Refund Time limit for making application for refund is two years from the relevant date in prescribed form and manner. In some cases, the refundable amount shall, instead of being credited to the Fund, be paid to the applicant such as in case of export of services etc. It would be important to note that the persons would need to deal with both, the Centre and State Governments, and therefore there would be duplication of the refund procedures. However, refund provisions specifically provide for sanction of 90% of refund to exporter of services. This will be a great relief for the industries or sectors, given that refund claims are often not processed for long periods. For balance 10%, prescribed procedure need to be followed. Refund application has to be disposed by way of a proper order within 60 days from the date of receipt of application (which is complete in all respects), else the authorities would be required to pay interest on delay beyond 60 days. Issues could arise
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