Goods and Services Tax – GST – Dated:- 25-4-2017 – Goods and Services Tax (GST) 1. Benefits: GST is a win-win situation for the entire country. It brings benefits to all the stakeholders of industry, government and the consumer. It will lower the cost of goods and services, give a boost to the economy and make the products and services globally competitive. GST aims to make India a common market with common tax rates and procedures and remove the economic barriers thus paving the way for an integrated economy at the national level. By subsuming most of the Central and State taxes into a single tax and by allowing a set-off of prior-stage taxes for the transactions across the entire value chain, it would mitigate the ill effects of cascading, improve competitiveness and improve liquidity of the businesses. GST is a destination based tax. It follows a multi-stage collection mechanism. In this, tax is collected at every stage and the credit of tax paid at the previous stage is available
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
xporters with clean track record will be rewarded by getting immediate refund of 90% of their claims arising on account of exports, within seven days. GST is expected to bring buoyancy to the Government Revenue by widening the tax base and improving the taxpayer compliance. GST is likely improve India s ranking in the Ease of Doing Business Index and is estimated to increase the GDP growth by 1.5 to 2%. GST will bring more transparency to indirect tax laws. Since the whole supply chain will be taxed at every stage with credit of taxes paid at the previous stage being available for set off at the next stage of supply, the economics and tax value of supplies will be easily distinguishable. This will help the industry to take credit and the government to verify the correctness of taxes paid and the consumer to know the exact amount of taxes paid. The taxpayers would not be required to maintain records and show compliance with a myriad of indirect tax laws of the Central Government and the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
base. The GST to be levied by the Centre on intra-State supply of goods or services would be called the Central tax (CGST) and that to be levied by the States including Union territories with legislature/Union Territories without legislature would be called the State tax (SGST)/ Union territory tax (UTGST) respectively. (ii) The GST would apply to all goods other than alcoholic liquor for human consumption and five petroleum products, viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel. It would apply to all services barring a few to be specified. The GST would replace the following taxes currently levied and collected by the Centre: a. Central Excise Duty b. Duties of Excise (Medicinal and Toilet Preparations) c. Additional Duties of Excise (Goods of Special Importance) d. Additional Duties of Excise (Textiles and Textile Products) e. Additional Duties of Customs (commonly known as CVD) f. Special Additional Duty of Customs (SAD) g. S
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ITC) benefits. Taxpayers making inter-State supplies or paying tax on reverse charge basis shall not be eligible for threshold exemption. (vi) Composition levy: Small taxpayers with an aggregate turnover in a financial year up to Rest. 50 lakhs shall be eligible for composition levy. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover during the year without the benefit of ITC. The rate of tax for CGST and SGST/UTGST each shall not exceed – 2.5% in case of restaurants etc 1% of the turnover in a state/ UT in case of a manufacturer 0.5% of the turnover in state/UT in case of other suppliers. A taxpayer opting for composition levy shall not collect any tax from his customers nor shall he be entitled to claim any input tax credit. The composition scheme is optional. Taxpayers making inter-State supplies shall not be eligible for composition scheme. The government, may, on the recommendation of GST Council, increase the threshold for the scheme to up to rupees one cr
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
all use 4-digit code. Taxpayers whose turnover is below ₹ 1.5 crore are not required to mention HSN Code in their invoices. (x) Exports and supplies to SEZ shall be treated as zero-rated supplies. The exporter shall have an option to either pay output tax and claim its refund or export under bond without tax and claim refund of Input Tax Credit. (xi) Import of goods and services would be treated as inter-State supplies and would be subject to IGST in addition to the applicable customs duties. The IGST paid shall be available as ITC for further transactions. 3. GST Council The mechanism of GST Council would ensure harmonization on different aspects of GST between the Centre and the States as well as among States. It has been specifically provided that the GST Council, in its discharge of various functions, shall be guided by the need for a harmonized structure of GST and for the development of a harmonized national market for goods and services. The GST Council shall establish a m
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ayment of tax shall be made electronically through internet banking, or also through credit card and through the modes of Real Time Gross Settlement (RTGS) or National Electronic Funds Transfer (NEFT). Smaller taxpayers shall be allowed to pay tax over the bank counter. All challans for payment of tax shall be generated online on the Goods and Services Tax Network (GSTN). e) The taxpayer shall furnish the details of outward supplies electronically without any physical interface with the tax authorities. Inward supply details would be auto-drafted from the supply details filed by the corresponding suppliers. f) Taxpayers shall file, electronically, monthly returns of outward and inward supplies, ITC availed, tax payable, tax paid and other prescribed particulars. Composition taxpayers shall file, electronically, quarterly returns. Omission/incorrect particulars can be self-rectified before the last date of filing of return for the month of September of the following year or the actual d
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
actice of staggering the credit in more than one installment. Unutilized input tax credit can be carried forward. The facility of distribution of input tax credit for services amongst group companies has been provided for through the mechanism of Input Service Distributor (ISD). 6. Refund Time limit for claiming online refund has been increased from one year to two years. Refund shall be granted within 60 days from the date of receipt of complete application. Interest is payable if refund is not sanctioned within the stipulated period of 60 days. If the refund claim is less than ₹ 2 lakhs, there is no need for the claimant to furnish any documentary evidence to prove that he has not passed on the incidence of tax to any other person. Only a self-certification to this effect would suffice. Refund of input tax credit shall be allowed in case of exports or where the credit accumulation is on account of inverted duty structure (i.e. where the tax rate on output is higher than that on
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e of supply, rate of tax, admissibility of input tax credit, liability to pay tax, liability to take registration and whether a particular transaction amounts to a supply under GST law. b) Advance ruling can be sought not only for new activities but also for existing activities. The facility of appeal, which is not there under the Central law, has been provided in the GST Law. c) The applicants or the Department, if aggrieved by the advance ruling, would henceforth get the opportunity to file an appeal before the Appellate Authority for revision of the ruling. Advance Ruling can be obtained more easily as there will be one Advance Ruling Authority (as also the Appellate Authority) in every State. 9. Other provisions of GST The provisions worth mentioning here are: (i) Valuation of goods shall be done on the basis of transaction value i.e. the invoice price, which is the current practice under the Central Excise and Customs Laws. Taxpayers are allowed to issue supplementary or revised i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =