Pard D- First discussion paper on GST- Segment 4 (last)
By: – Deepak Aggarwal
Goods and Services Tax – GST
Dated:- 7-2-2015
GST……Goods and Services Tax
Part-D
First Discussion Paper on GST
* Fourth Segment (annexure) has twenty (20) Frequently Asked Questions and Answers (FAQ) on GST.
* 1st Question- Justification of GST- already covered in earlier articles. In net shell, GST is not simply VAT plus Service tax but a major improvement over the previous current system.
* 2nd Question- Meaning of GST and its working model- already covered in earlier articles. In net shell, GST is a tax on goods and services in which final consumer will be charged only GST charged by the last dealer. There will be no double taxation and tax on tax impact anywhere in supply chain.
* 3rd Question- Logic that GST will reduce the burden of tax, in general- already covered in earlier articles. In net shell, there will be no cascading effect of taxes on goods and services.
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of small traders. Also a composition scheme for small traders and businesses is also suggested in GST model.
* 7th Question- Benefits of GST to the common consumers- Already explained in 3rd Question. In general, burden of tax on goods would fall under GST and would benefit the consumers.
* 8th Question- Salient features of the proposed GST model- Already covered in earlier articles. In net shell, GST will be charged on all goods and services except exempted goods and services. There will be dual GST. One will be charged by the central in the form of CGST and second concurrently will be charged by the States in the form of SGST. For interstate sale, IGST mechanism is introduced. Cross utilization of input tax credit between the CGST and SGST will not be allowed. Each taxpayer will be allotted a PAN linked tax payer identification number with a total of 13/15 digits.
* 9th Question- Requirement of Dual GST- Due to constitutional requirement of fiscal federalism, dual GST model is
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cious metal and a list of exempted items is also suggested.
* 13th Question- Concept of providing threshold exemption for GST- Threshold exemption is provided to keep small traders out of tax net. Also Small traders get advantage over large enterprises on account of lower tax. Same time it is difficult to administer small traders and cost of administering of such traders is very high in comparison to revenue contribution by them.
* 14th Question- Scope of Composition and Compounding scheme- The Composition/ Compounding scheme under GST will have an upper ceiling on gross annual turnover and a floor tax rate. Limit of ₹ 50 lacs of the gross annual turnover and 0.5% floor tax rate is recommended in GST model. Also optional registration will be allowed for the dealers with turnover below the compounding cutoff.
* 15th Question- Mechanism of taxation of Imports under GST- A constitutional amendment is required for taxation of imports. Both CGST and SGST will be levied on import
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utional amendment for introduction of GST- Our Constitution empowered the Central government to tax services and goods up to the stage of production i.e. up to manufacturing level and the State government to tax on the sale of goods. The constitution does not vest express power to levy a tax on the supply of goods and services either to the Central government or to the State government. Also constitution does not empower the states to impose tax on imports.
* 19th Question- Legislative steps being taken for CGST and SGST- A joint working group consisting the officials of Central and State government has constituted to draft legislation for constitutional amendment.
* 20th Question- Framing of rules for administration of CGST and SGST- The joint working group has also been entrusted the task of preparing draft legislation for CGST, SGST and IGST including rules and procedures. It will also address the issues of dispute resolution and advance ruling.
* Happy Voting Delhi…&h
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