Goods and Service Tax – GST – By: – CA. Chitresh Gupta – Dated:- 24-7-2015 – In continuance of our earlier series titled GST Knowledge Series# 1, Understanding the Mechanics of Goods & Service Tax, we have discussed the basic DNA of Goods & Service Tax popularly known as GST. These features as applicable to India were: DUAL GOODS AND SERVICE TAX APPLICABILITY OF GST TO ALL TRANSACTIONS DESTINATION BASED MULTI POINT LEVY COMPUTATION OF GST ON THE BASIS OF INVOICE CREDIT METHOD PAYMENT OF GST UNIFORM PROCEDURE FOR COLLECTION OF GST In this Article, we will take the discussion forward and discuss in detail about other Salient Features of GST. THRESHOLD LIMIT The present threshold limits prescribed in different State VAT Acts below which VAT is not applicable varies from State to State. A uniform State GST threshold across States is desirable and, therefore, it is considered that a threshold of gross annual turnover of ₹ 10 lakh both for goods and services for all the States
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tain GST registration number. The taxable entities with lower turnover will also have the option to register. As per First Discussion paper, each taxpayer would be allotted a PAN-linked taxpayer identification number with a total of 13/15 digits. This would bring the GST PAN-linked system in line with the prevailing PAN-based system for Income tax, facilitating data exchange and taxpayer compliance. There will be single GST registration number for all branches in a State. Therefore, a dealer having branches across States will have as many GST registration numbers as the number of States in which he operates. 4. INPUT TAX CREDIT (ITC) SET OFF Since the Central GST and State GST are to be treated separately, taxes paid against the Central GST shall be allowed to be taken as input tax credit (ITC) for the Central GST and could be utilized only against the payment of Central GST. The same principle will be applicable for the State GST. Further, the rules for taking and utilization of credi
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PORTS Imports will be brought under the scope of GST with necessary Constitutional Amendments. They will treated at par with inter-state transactions and Integrated goods and service tax (IGST) will be levied on imports. The incidence of tax will follow the destination principle and the tax revenue will accrue to the State where the imported goods and services are consumed. Full and complete set-off will be available on the IGST paid on import on goods and services. 9. SPECIAL INDUSTRIAL AREA SCHEME After the introduction of GST, the tax exemptions, remissions etc. related to industrial incentives should be converted, if at all needed, into cash refund schemes after collection of tax, so that the GST scheme on the basis of a continuous chain of set-offs is not disturbed. 10. MAINTENANCE OF RECORDS A taxpayer or exporter would have to maintain separate details in books of account for availment, utilization or refund of Input Tax credit of CGST, SGST and IGST. 11. PERIODICAL RETURNS The
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ll procedures under CGST and SGST should be uniform. The Central Government will be responsible for establishing a taxpayers information network (TINXYS) keeping in view the information requirement of CBEC and the State tax administration. The TIN will be shared between the Centre and the States. The information furnished through periodical returns shall be stored in a common database with access to both the CBEC and the State tax administrations.Since the tax base will be common, there should be a common appellate authority. Similarly, the Authority for Advance Ruling will also be common. No authority should have any power to make preventive detention for the purposes of CGST and SGST. 14. GOODS AND SERVICE TAX COUNCIL As per the Constitution Amendment Bill, 2014 ( Bill ), there will be a Goods and Service Tax Council who shall make recommendation to the Union and the States. The Bill provides that the administration of GST would be the responsibility of the GST Council which would th
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