Goods and Service Tax – GST – By: – Deepak Aggarwal – 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. There will be a set off from the producer s point to the retailer s point. Also
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gested 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 recommended. 10th Question- Mechanism of Concurrently taxation by centre and states on a particu
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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 imports. The incidence of tax will be destination of goods and services and the tax revenue in case of SGST will accrue th
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