Goods and Service Tax – GST – By: – CA.Ankit Gulgulia – Dated:- 31-12-2014 Last Replied Date:- 30-12-1899 – One of the major Indirect tax reforms that the country is now on road to witness is the incarnation of a single GST law instead of multiple indirect taxes viz Service Tax, Central Excise, VAT, CST, Local Body Tax, Entry Tax etc. After a round of discussions of Hon ble Finance Minister with State FM s, the Government of India has tabled the GST Bill (No. 192 – Constitutional Amendment), 2014 on 19th December,2014. The clause by clause analysis of GST Bill, 2014 is as under:- Insertion of Clause 246A – To Facilitate the Parliament and States to make laws in regard to Goods and Service Tax Imposed by Union or such State 246A(1) – Notwithstanding anything contained in articles 246 and 254, Parliament, and. subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such state. (2) Parliament has ex
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ase where the service tax / excise was centre s domain in union list and sales tax on goods was state s domain except in case of interstate transactions. Article 246(2) reestablishes the centre s exclusive control on interstate supply of goods and services. Importantly interstate supply of services will mark its separate significance in the proposed GST regime. Article 279A is proposed for setup of GST Council within 60 days of commencement of this Act, 2014. The items proposed in article 279A (5) includes petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel. The date on which GST is to be levied on these items is to be recommended by GST council. Facilitative amendments in Article 248(1), 249(1), 250(1), 268(1), 269(1), 270(1), 286. Omitting Article 268A. BRIEF ANALYSIS Article 248(1) empowers the parliament to make laws on any matters not covered in state list and concurrent list. Hence in a sense this article is giving powers on residual
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the same to be assigned to states. Now, the interstate supply of goods and services has been made an exception to this pure assignment to states since service now covered. A separate article 269A has been inserted to apportionate the taxes. Article 270 provides for apportionment of taxes and duties between Union and State. The Interstate GST has been kept out of this by inserting necessary exception. The reason for this exception is since the apportionment in interstate s case is not to be undertaken as per Article 270 laid mechanism but on recommendations of GST council as facilitated under Article 269A. In other cases of GST levied by government of India, a new clause 270(1A) is inserted and apportionment to be in accordance with normal provisions of Article 270 only. Article 286 imposes restrictions for imposition of taxes on sale or purchases of goods in case of interstate trade, imports or exports or trade outside the state. It empowers the parliament for the same. Now, this is e
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e of interstate trade or commerce would also required to be made a commodity of due apportionment between union and states instead of pure assignment as in cases of goods. This article 269A is inserted precisely to mitigate this aspect. The apportionment shall be undertaken pursuant to GST Council s recommendation. To understand what transaction would constitute interstate trade, the rules of supply, origin and point of incidence would be required to be framed. The same would be in parliament s domain. Surcharge by Parliament not to Apply to GST Article 271 empowers the parliament to increase taxes and duties on articles. The GST has been made an exception to power of parliament. Hence, the parliament cannot impose surcharge on GST. Constituting the GST Council vide Article 279A BRIEF ANALYSIS Article 279A is to be inserted to empower the Hon ble President of India to constitute GST Council . Brief features shall be :- To be incorporated within 60 days of Commencement of Act. Membe
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mir, Manipur; Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and Any other matter relating to the goods and services tax, as the Council may decide. Date of levy of GST on items like petrol, diesel and natural gas. Quorum shall be 50% of members Decision by 75% of total weighted votes of members present and voting. Centre to have 1/3rd of weight of total votes and states to have 2/3rd of total votes cast. Dispute resolution modalities. New Definitions – Article 366 12A) goods and services tax means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption Hence it would exclude alcoholic liquor currently. '(26A) Services means anything other than goods Anything other than goods is service reflects wide interpretation of what constitutes services. Amendments in Union, State List of Schedule VII of Constitution. Also, amendment in Sixth Schedule. BRIEF ANALYSIS Schedule VI Par
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rade or international trade or commerce. Other Modalities An additional tax on supply of goods, not exceeding one per cent. in the course of inter-State trade or commerce shall, notwithstanding anything contained in clause (I) of Article 269A, be levied and collected by the Government of India for a period of two years or such other period as the Goods and Services Tax Council may recommend and such tax shall be assigned to the states in manner as provided hereunder in (b) The net proceeds of additional tax on supply of goods in any financial year, except the proceeds attributable to the Union territories, shall not form part of the Consolidated Fund of India and be deemed to have been assigned to the States from where the supply originates. The Government of India may, where it considers necessary in the public interest, exempt such goods from the levy of tax under clause (1). Key Note: – This is exemption pertaining to the additional tax as referred above. Parliament may, by law
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