Goods and Service Tax – GST – By: – Ravi Kumar Somani – Dated:- 30-9-2015 Last Replied Date:- 30-9-2015 – Constitutional amendment bill for levying Goods and services tax has already been passed in loksabha. Had it not been for the rigid stand of the opposition the same would have been passed in the monsoon session of the parliament held in august 2015. Past apart, with the current business mood along with support from the states and sheer determination of the central government to bring the revolutionary tax reform at the earliest date possible, it seems that the current parliament logjam is not there to be subsisting for too long. Once the constitution bill is passed, lot of clean-up action including the future optimization plans has to be worked around to re-engineer the entire business model in accordance with the new tax regime. If tremendous efforts are required to completely plan, implement and execute the new business models under the strictures of the GST law, then the major
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entries in the books of accounts; Treatment for transactions covered under Purchase tax/reverse charge; Pending refund claims; Filing of returns, completion of assessments, audits, appeals etc. This article focuses on the transitional issues that shall be faced in respect of Obtaining registration under GST and the immediate action that needs to be taken by the business entities to ensure smooth registration process. Transitional issues in registration under GST Transitional provisions are required to provide the process for conveniently obtaining a new registration certificate from the GST authorities of both centre and state and to surrender an existing registration certificates pertaining to various taxes subsumed. For smooth transition to registration requirements, following is expected: Registration process is expected to be online wherein, registration number will be allotted immediately on making an online application without submission of any documents or proofs and without an
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or any other fixed or permanent establishment. Single centralized registration is expected to be issued covering all the units, branches of the assessee within that state and the jurisdiction shall be decided based on the principal place of business within that state. A nominal fee may be charged for grant of registration certificate in the GST regime to recover the administrative costs of physical inspection etc. All the existing registration certificates are expected to be continued for the purpose of filing of periodical returns, payment of dues, completion of assessments/appeals/audit, refunds, generation of requisite forms etc. The same are expected to be phased out over a period of time. Separate application for surrendering the old registration certificates may not be provided for. No separate registration certificate may be required under the IGST act. The registrations under CGST & SGST is expected to be equally applicable for all the compliance requirements under IGST. No
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ncept of Group registration that is prevalent in few of the world s major economies, Such concept of group registration if brought in India can have following benefits: Reduction in the compliance costs; Simplified administration for supplies between the group companies; One GST return & one payment for the entire group. This is especially useful for businesses with a centralized accounting function. Cash flow benefits in the form of real cash savings for taxable supplies made between the group especially for the supplies made to the partially exempt group members. Summary of the group registration concept as is prevalent in few developed countries is tabulated below for ease of reference: United Kingdom Australia New Zealand Canada Corporate bodies that are under common control and are established or have a fixed establishment in the United Kingdom may apply to register as a VAT group. A VAT group is treated as a single taxable person. The group members share a single VAT number a
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making supplies outside the group must issue tax invoices. The representative group member must account for GST with respect to all group members taxable activities and file returns. Group members must adopt the same tax periods and accounting basis for GST purposes. Group members are also jointly and severally liable for all GST liabilities. Transactions between group members are not generally liable to GST. This measure applies on the condition that the supply is made to a group member that would have been entitled to input tax recovery if the supplier had not been a member of the group. Group registration is allowed for corporations or other taxable persons that are under common control. Although, GST/HST group registration is not permitted in Canada. Legal entities that are closely connected must register for GST/ HST individually. However, closely related corporations and partnerships may elect to deem supplies made between members of the group as being made for no consideration
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