DRAFT – THE INTEGRATED GOODS AND SERVICE TAX, 2016 – PART I
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 17-6-2016
Introduction
Followed by the model Goods and Service Tax Act, 2016, ('Act' for short) the Finance Ministry brings in its domain the draft 'The Integrated Goods and Service Tax, 2016', which contains XI chapters and 33 sections.
* Chapter I – Preliminary – Sections 1 and 2;
* Chapter II – Principles for determining supply of goods and/or services in the course of interstate trade or commerce – Sections 3 and 3A;
* Chapter III – Levy and Collection of Tax – Section 4;
* Chapter IV – Place of Supply of goods and service – Section 5 and 6;
* Chapter V – Payment of Tax – Section 7;
* Chapter VI – Input tax credit – Section 8 and 9;
* Chapter VII – Apportionment of Tax and Settlement of Funds – Section 10;
* Chapter VIII – Settlement of cases – Section 10 to Section 26;
* Chapter IX – Miscellaneous – Section 27 to 30
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the location of the goods at the time at which the movement of goods terminates for delivery to the recipient;
* where the goods are delivered by the supplier to a recipient or any other person, on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person;
* where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient;
* where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly;
* where the goods are supplied on board a conveyance, such as a vessel, an aircraft, a train or a motor vehicle, the pl
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mmovable property or for carrying out or co-ordination of construction work; or
* by way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, by whatever name called and including a house boat or any other vessel; or
* by way of accommodation in any immovable property for organizing any marriage or reception or matters related therewith, official, social, cultural, religious or business function including services provided in relation to such function at such property;or
* any services ancillary to the services referred to in clause (a), (b) and (c),
shall be the location at which the immovable property or boat or vessel is located or intended to be located.
Where the immovable property or boat or vessel is located in more than one State, the supply of service shall be treated as made in each of the States in proportion to the value for services separately collected or determined, in terms of the contract or agreement entered into in this regard o
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is actually held or where the park or such other place is located.
Section 6(8) provides that the place of supply of services provided by way of-
* organization of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of service in relation to a conference, fair, exhibition, celebration or similar events; or
* services ancillary to organization of any of the above events or services, or assigning of sponsorship of any of the above events,
to
* a registered person, shall be the location of such person;
* a person other than a registered person, shall be the place where the event is actually held.
Where the event is held in more than one State and a consolidated amount is charged for supply of services relating to such event, the place of supply of such services shall be taken as being in the each of the States in proportion to the value of services so provided in each State as ascertained from the terms of the contract or agreement e
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the manner specified in sub-sections (2) or (3), as the case may be.
For the purposes of this sub-section, the return journey shall be treated as a separate journey even if the right to passage for onward and return journey is issued at the same time.
Conveyance
Section 6(11) provides that the place of supply of services on board a conveyance such as vessel, aircraft, train or motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for the journey.
Telecommunications service
Section 6(12) provides that the place of supply of telecommunication services including data transfer, broadcasting, cable and direct to home television services to any person shall-
* in case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna, be the location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services;
* in case of mobile
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es, the place of supply shall be location of the supplier of services.
Insurance Service
Section 6(14) provides that the place of supply of insurance services shall-
* to a registered person, be the location of such person;
* to a person other than a registered person, be the location of the recipient of services on the records of the supplier of services.
Advertisement services to Governments
Section 6(15) provides that the place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for identifiable States, shall be taken as located in each of such States and the value of such supplies specific to each State shall be in proportion to amount attributable to service provided by way of dissemination in the respective States as may be determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other reasonable basis as may be prescribe
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ions of section 5, intra-state supply of goods means any supply where the location of the supplier and the place of supply are in the same State.
Section 3A (2) provides that subject to the provisions of section 6, intra-state supply of services means any supply where the location of the supplier and the place of supply are in the same State.
Levy and Collection of IGST
Section 4(1) provides for the collection of IGST on all supplies of goods and/or services made in the course of inter-State trade or commerce at the rate specified in the Schedule to this Act and collected in such manner as may be prescribed. Section 4(2) provides that the IGST shall be paid by every taxable person in accordance with the provisions of this Act.
Section 4(4) provides that notwithstanding anything contained in sub-section (1) but subject to such conditions as may be notified in this behalf, no tax under this Act shall be payable by any taxable person in respect of such supplies of goods and/or service
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