Goods and Services Tax – GST Dated:- 5-4-2019 – News – GOODS AND SERVICE TAX (GST) CONCEPT STATUS CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC) DEPARTMENT OF REVENUE MINISTRY OF FINANCE GOVERNMENT OF INDIA AS ON 1st April, 2019 The uniform system of taxation, which, with a few exceptions of no great consequence, takes place in all the different parts of the United Kingdom of Great Britain, leaves the interior commerce of the country, the inland and coasting trade, almost entirely free. The inland trade is almost perfectly free, and the greater part of goods may be carried from one end of the kingdom to the other, without requiring any permit or let-pass, without being subject to question, visit, or examination from the revenue officers. This freedom of interior commerce, the effect of uniformity of the system of taxation, is perhaps one of the principal causes of the prosperity of Great Britain; every great country being necessarily t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
STITUTIONAL SCHEME OF INDIRECT TAXATION IN INDIA BEFORE GST : 2.1 Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. As per Article 246 of the Constitution, Parliament has exclusive powers to make laws in respect of matters given in Union List (List I of the Seventh Schedule) and State Government has the exclusive jurisdiction to legislate on the matters containing in State List (List II of the Seventh Schedule). In respect of the matters contained in Concurrent List (List III of the Seventh Schedule), both the Central Government and State Governments have concurrent powers to legislate. 2.2 Before advent of GST, the most important sources of indirect tax revenue for the Union were customs duty (entry 83 of Union List), central excise duty (entry 84 of Union List), and service tax (entry 97 of Union List). Although entry 92C was inserted in the Union List of the Seventh Schedule of the Constitution by the C
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
nue though the same was levied by the Union. 3. HISTORICAL EVOLUTION OF INDIRECT TAXATION IN POSTINDEPENDENCE INDIA TILL GST: 3.1 In post-Independence period, central excise duty was levied on a few commodities which were in the nature of raw materials and intermediate inputs, and consumer goods were outside the net by and large. The first set of reform was suggested by the Taxation Enquiry Commission (1953-54) under the chairmanship of Dr. John Matthai. The Commission recommended that sales tax should be used specifically by the States as a source of revenue with Union governments' intervention allowed generally only in case of inter-State sales. It also recommended levy of a tax on inter-State sales subject to a ceiling of 1%, which the States would administer and also retain the revenue. 3.2 The power to levy tax on sale and purchase of goods in the course of interState trade and commerce was assigned to the Union by the Constitution (Sixth Amendment) Act, 1956
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
prehensive coverage of MODVAT was achieved by 1996-97. 3.4 The next wave of reform in indirect tax sphere came with the New Economic Policy of 1991. The Tax Reforms Committee under the chairmanship of Prof. Raja J Chelliah was appointed in 1991. This Committee recommended broadening of the tax base by taxing services and pruning exemptions, consolidation and lowering of rates, extension of MODVAT on all inputs including capital goods. It suggested that reform of tax structure must have to be accompanied by a reform of tax administration, if complete benefits were to be derived from the tax reforms. Many of the recommendations of the Chelliah Committee were implemented. In 1999-2000, tax rates were merged in three rates, with additional rates on a few luxury goods. In 2000-01, three rates were merged into one rate called Central Value Added Tax (CENVAT). A few commodities were subjected to special excise duty. 3.5 Taxation of services by the Union was introduced in 1994 bring
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ner the consequences of which were different rates of sales tax on different commodities in different States. Rates of sales tax were more than ten in some States and these varied for the same commodity in different States. Inter-state sales were subjected to levy of Central Sales Tax. As this tax was appropriated by the exporting State credit was not allowed by the dealer in the importing State. This resulted into exportation of tax from richer to poorer states and also cascading of taxes. Interestingly, States had power of taxation over services from the very beginning. States levied tax on advertisements, luxuries, entertainments, amusements, betting and gambling. 3.7 A report, titled Reform of Domestic Trade Taxes in India , on reforming indirect taxes, especially State sales tax, by National Institute of Public Finance and Policy under the leadership of Dr. Amaresh Bagchi, was prepared in 1994. This Report prepared the ground for implementation of VAT in States. Some of the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
mber, 1999, to deliberate on the design of VAT which was later made the Empowered Committee of State Finance Ministers (EC). Haryana was the first State to implement VAT, in 2003. In 2005, VAT was implemented in most of the states. Uttar Pradesh was the last State to implement VAT, from 1st January, 2008. 4. INTERNATIONAL PERSPECTIVES ON GST / VAT: 4.1 VAT and GST are used inter-changeably as the latter denotes comprehensiveness of VAT by coverage of goods and services. France was the first country to implement VAT, in 1954. Presently, more than 160 countries have implemented GST / VAT in some form or the other. The most popular form of VAT is where taxes paid on inputs are allowed to be adjusted in the liability at the output. The VAT or GST regime in practice varies from one country to another in terms of its technical aspects like ‗definition of supply , ‗extent of coverage of goods and services , ‗treatment of exemptions and zero rating etc. However,
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
burden for the taxpayers. Canada is a federal country with unique model of taxation in which certain provinces have joined federal GST and others have not. Provinces which administer their taxes separately are called ‗non- participating provinces , whereas provinces which have teamed up with the Federal Government for tax administration are called ‗participating provinces . 4.3 The rate of GST varies across countries. While Malaysia has a lower rate of 6% (Malaysia though scrapped GST in 2018 due to popular uproar against it), Hungary has one of the highest rate of 27%. Australia levies GST at the rate of 10% whereas Canada has multiple rate slabs. The average rate of VAT across the EU is around 19.5%. 5. NEED FOR GST IN INDIA: 5.1 The introduction of CENVAT removed to a great extent cascading burden by expanding the coverage of credit for all inputs, including capital goods. CENVAT scheme later also allowed credit of services and the basket of inputs,
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
scading effect of service tax. 5.3 CST was another source of distortion in terms of its cascading nature. It was also against one of the basic principles of consumption taxes that tax should accrue to the jurisdiction where consumption takes place. Despite remarkable harmonization in VAT regimes under the auspices of the EC, the national market was fragmented with too many obstacles in free movement of goods necessitated by procedural requirement under VAT and CST. 5.4 In the constitutional scheme, taxation powers on goods was with Central Government but it was limited upto the stage of manufacture and production while States have powers to tax sale and purchase of goods. Centre had powers to tax services and States also had powers to tax certain services specified in clause (29A) of Article 366 of the Constitution. This sort of division of taxing powers created a grey zone which led to legal disputes. Determination of what constitutes a goods or service is difficult becau
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
tax on all goods and services with complete set off in all stages of making of a product. 6.2 In the year 2000, the then Prime Minister introduced the concept of GST and set up a committee to design a GST model for the country. In 2003, the Central Government formed a taskforce on Fiscal Responsibility and Budget Management, which in 2004 recommended GST to replace the existing tax regime by introducing a comprehensive tax on all goods and services replacing Central level VAT and State level VATs. It recommended replacing all indirect taxes except the customs duty with value added tax on all goods and services with complete set off in all stages of the value chain. An announcement was made by the then Union Finance Minister in Budget (2006-07) to the effect that GST would be introduced with effect from April 1, 2010 and that the EC, on his request, would work with the Central Government to prepare a road map for introduction of GST in India. After this announcement, the EC decid
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
onsidered necessary and were discussed with the Co-conveners and the representatives of the Department of Revenue of Union Finance Ministry. With the modifications duly made, a final version of the views of EC on the model and road map for the GST was prepared (April 30, 2008). These views of EC were then sent to the Government of India, and the comments of Government of India were received on December 12, 2008. These comments were duly considered by the EC (December 16, 2008), and it was decided that a Committee of Principal Secretaries/Secretaries of Finance/Taxation and Commissioners of Trade Taxes of the States would be set up to consider these comments, and submit their views. These views were submitted and were accepted in principle by the EC (January 21, 2009). Based on discussions within the EC and between the EC and the Central Government, the EC released its First Discussion Paper (FDP) on GST in November, 2009. This spelled out the features of the proposed GST and has formed
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
pressed concerns over the loss of revenue on account of shift from origin based taxation to destination based taxation. 7.2.1 An argument put forward on behalf of producing states in support of origin based taxation is that they need to collect at least some tax from inter-State sales in order to recover the cost of infrastructure and public services provided by the State Governments to the industries producing the goods which are consumed in other states. This line of reasoning is based on the assumption that in the absence of a tax on inter-State sales, the location of export industries within their jurisdiction would not contribute to the tax revenues of the exporting state. This view was missing the fact that any value addition in a jurisdiction necessarily means extra income in the hands of the residents of that jurisdiction. Spending of this income on consumer goods expands the sales tax base of the producing states and thereby contributes to their revenues. In fact, to the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
evenue at desired (current) levels. This would differ from the standard rate, which is the rate that would apply to a majority of goods and services. In practice, there will be a structure of rates, but for the sake of analytical clarity and precision it is appropriate to think of the RNR as a single rate. It is a given single rate that gets converted into a whole rate structure, depending on policy choices about exemptions, what commodities to charge at a lower rate and what to charge at a very high rate. 7.3.2 The Committee recommended RNR of 15-15.5% (to be levied by the Centre and States combined). The lower rates (to be applied to certain goods consumed by the poor) should be 12%. Further, the sin or demerit rates (to be applied on luxury cars, aerated beverages, pan masala, and tobacco) should be 40%. 7.4 Dispute Settlement: A harmonized system of taxation necessarily required that all stakeholders stick to the decisions taken by the supreme body, which was later con
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ts recommendations. 7.5 Alcohol and Petroleum products: Alcoholic liquor for human consumption and petroleum products are major contributor to revenue of States. As States were uncertain about impact of GST on their finances and moreover loss of autonomy in collection of tax revenue, States unanimously argued for exclusion of these products from the ambit of GST. In the 115th Amendment Bill alcoholic liquor for human consumption and five petroleum products namely crude petroleum, high speed diesel, motor spirit or petrol, aviation turbine fuel and natural gas were kept out of GST. But in the 122nd Amendment Bill, only alcoholic liquor for human consumption was kept outside GST and above mentioned five petroleum products were proposed to be brought under GST from a date to be recommended by the Council. The Central Government has also retained its power to tax tobacco and tobacco products, though these are also under GST. Thus, to ensure smooth transition and provide fiscal buff
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
well as the State Legislatures to make laws for levying goods and services tax on every transaction of supply of goods or services was necessary. 8.2 The Constitution (115th Amendment) Bill, 2011, in relation to the introduction of GST, was introduced in the Lok Sabha on 11th March, 2011. The Bill was referred to the Standing Committee on Finance on 29th March, 2011. The Standing Committee submitted its report on the Bill in August, 2013. However, the Bill, which was pending in the Lok Sabha, lapsed with the dissolution of the 15th Lok Sabha. 8.3 The Constitution (122nd Amendment) Bill, 2014 was introduced in the 16th Lok Sabha on 19th December, 2014. The Constitution Amendment Bill was passed by the Lok Sabha in May, 2015. The Bill was referred to the Select Committee of Rajya Sabha on 12th May, 2015. The Select Committee submitted its Report on the Bill on 22nd July, 2015. The Bill with certain amendments was finally passed in the Rajya Sabha and thereafter by Lok Sab
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
he Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. It also provides that Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. d) Article 270 has been amended to provide for distribution of goods and services tax collected by the Union between the Union and the States. e) Article 271 has been amended which restricts power of the Parliament to levy surcharge under GST. In effect, surcharge cannot be imposed on goods and services which are subject to tax under Article 246A. f) Article 279A has been inserted to provide for the constitution and mandate of GST Council. g) Article 366 has been amended to exclude alcoholic liquor for human consumption from the ambit of GST, and s
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ds and Services Tax till a date notified on the recommendation of the Goods and Services Tax Council. 9. GOODS SERVICE TAX COUNCIL: 9.1 As provided for in Article 279A of the Constitution, the Goods and Services Tax Council (the Council) was notified with effect from 12th September, 2016. The Council is comprised of the Union Finance Minister (who will be the Chairman of the Council), the Minister of State (Revenue) and the State Finance/Taxation Ministers as members. It shall make recommendations to the Union and the States on the following issues: a) the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed under GST; b) the goods and services that may be subjected to or exempted from the GST; c) model GST laws, principles of levy, apportionment of IGST and the principles that govern the place of supply; d) the threshold limit of turnover below which the goods and services may be exempted from G
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Tax Council shall determine the procedure in the performance of its functions. Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely: – a) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and b) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting. 9.4 The Council has met for 34 times and no occasion has arisen so far that required voting to decide any matter. The following major recommendations have been made by the Council: 9.4.1 Legal/Rules: 9.4.1.1 Recommending GST laws, namely CGST Law, UTGST Law, IGST Law, SGST Law and GST Compensation Law paving the way for implementation of GST. 9.4.1.2 Rules on composition, registration, input tax credit, invoice
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
obtaining registration: a. Suppliers of services, having turnover up to ₹ 20 lakh, making inter State supplies; b. Suppliers of services, having turnover up to ₹ 20 lakh, making supplies through e-commerce platforms. 9.4.2.4 Taxpayers may opt for multiple registrations within a State/Union territory in respect of multiple places of business located within the same State/Union territory. 9.4.2.5 Mandatory registration is required for only those e-commerce operators who are required to collect tax at source. 9.4.2.6 Registration to remain temporarily suspended while cancellation of registration is under process, so that the taxpayer is relieved of continued compliance under the law. 9.4.3 Migration: 9.4.3.1 One more window for completion of migration process is being allowed. The due date for the taxpayers who did not file the complete FORM GST REG-26 but received only a Provisional ID (PID) till 31.12.2017 for furnishing the requisite det
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
to ₹ 50 lakhs. They would be liable to file one Annual Return with quarterly payment of taxes. This has been made effective from 01.04.2019. 9.4.4.3 Composition scheme shall not be available to inter-State suppliers and specified category of manufacturers. 9.4.5 Tax Administration: 9.4.5.1 In order to ensure single interface, all administrative control over 90% of taxpayers having turnover below ₹ 1.5 crore would vest with State tax administration and over 10% with the Central tax administration. Further all administrative control over taxpayers having turnover above Rs.1.5 crore shall be divided equally in the ratio of 50% each for the Central and State tax administration. 9.4.5.2 Powers under the IGST Act shall also be cross-empowered on the same basis as under CGST and SGST Acts with few exceptions. 9.4.5.3 Power to collect GST in territorial waters shall be delegated by Central Government to the States. 9.4.5.4 Power to take enforcement
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
low cash back to an amount equal to 20% of GST paid or ₹ 100/-, whichever is lower for cases where payment is made by BHIM or Rupay card. The necessary infrastructure is being developed and soon the scheme would be implemented on pilot basis in State of Assam and few other States which volunteer for the same. 9.4.8.3 In principle approval has been given for amendment of section 50 of the CGST Act to provide that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger. This would be implemented once the law is amended. 9.4.9 Exemption: 9.4.9.1 Supply from GTA to unregistered persons has been exempted from tax. 9.4.10 Refunds: 9.4.10.1 A scheme of single authority for disbursement of the refund amount sanctioned by either the Centre or the State tax authorities would be implemented on pilot bas
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e FORM GSTR-1, FORM GSTR-3B FORM GSTR-4 for the months / quarters July, 2017 to September, 2018 are furnished after 22.12.2018 but on or before 31.03.2019. 9.4.12.2 From October 2017 onwards, the amount of late fee for late filing of GSTR-3B payable by a registered person is as follows: a. whose tax liability for that month was ‗NIL will be ₹ 20/- per day instead of ₹ 200/- per day; b. whose tax liability for that month was not ‗NIL will be ₹ 50/- per day instead of ₹ 200/- per day. 9.4.13 New Return System: 9.4.13.1 The new return filing system shall be introduced on trial basis from 01.04.2019 and mandatory basis from 01.07.2019. 9.4.13.2 All taxpayers excluding small taxpayers and a few exceptions like ISD etc. shall file one monthly return. 9.4.13.3 The new return system is simple with two main tables. One for reporting outward supplies and one for availing input tax credit based on invoices uploaded by the s
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
sons small traders making only B2C supply or making B2B + B2C supply. For such taxpayers, simplified returns have been designed called Sahaj and Sugam. In these returns, details of information required to be filled is lesser than that in the regular return. 9.4.13.8 The new return design provides facility for amendment of invoice and also other details filed in the return. Amendment shall be carried out by filing of a return called amendment return. Payment would be allowed to be made through the amendment return as it will help save interest liability for the taxpayers. 9.4.14 ITC: 9.4.14.1 ITC in relation to invoices issued by the supplier during FY 2017-18 may be availed by the recipient till the due date for furnishing of FORM GSTR-3B for the month of March, 2019, subject to specified conditions. 9.4.14.2 The due date for submitting FORM GST ITC-04 for the period July 2017 to March 2019 was extended till 30.06.2019. 9.4.15 TDS/TCS: 9.4.15.1 TDS/TCS pro
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ayments and delayed refund has been recommended. 9.4.18 MSME: 9.4.18.1 A Group of Ministers has been constituted to look into the issues being faced by MSMEs and to provide solutions for the same. 9.4.19 Revenue Mobilization: 9.4.19.1 A Group of Ministers has been constituted to study the revenue trend, including analyzing the reasons for structural patterns affecting the revenue collection in some of the States. The study would include the underlying reasons for deviation from the revenue collection targets vis a vis original assumptions discussed during the design of GST system, its implementation and related structural issues. 9.4.19.2 The Group of Ministers will be assisted by the committee of experts from Central Government, State Governments and the NIPFP (National Institute of Public Finance and Planning), who would study and share the findings with GoM. The GoM in turn would give its recommendation to the GST Council. 9.4.19.3 The amount of IGST not app
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
and the States as recommended by the Council, shall be recovered from the Centre and the balance fifty per cent. from the States in the ratio of their base year revenue. 9.4.20 Real Estate: 9.4.20.1 The GST Council in its 33rd 34th meetings held on 24.02.2019 19.03.2019 respectively have made following decisions with respect to the real estate sector: 9.4.20.2 GST shall be levied at effective rate of 5% on residential properties outside affordable segment and 1% on affordable housing properties. 9.4.20.3 Definition of affordable housing: A residential house/flat of carpet area of up to 90 sqm in non-metropolitan cities/towns and 60 sqm in metropolitan cities having value up to ₹ 45 lacs (both for metropolitan and non-metropolitan cities). Metropolitan Cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, and Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR). 9.4.20.4 Conditions for new tax rate:
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
een completed by 31.03.2019. Real estate firms can communicate their option till 10th May, 2019 to the jurisdictional officers. 9.4.21 Lottery: 9.4.21.1 The GST Council in its 32nd Meeting held on 10.01.2019 constituted a Group of Ministers to examine the GST Rate Structure on Lotteries. 9.4.22 Natural Calamity Cess: 9.4.22.1 GST Council in its 32nd Meeting held on 10.01.2019 approved levy of Cess on Intra-State Supply of Goods and Services within the State of Kerala at a rate not exceeding 1% for a period not exceeding 2 years. Kerala Government has, accordingly, decided to levy one per cent. Kerala Flood Cess on value of intra-state supply of all goods by registered dealers, at the last supply point, coming within the GST tax bracket of 12%, 18% and 28%. 0.25% flood cess will be levied on all goods coming under the fifth schedule including gold, silver and platinum ornaments on the value of supply. All services will attract one per cent. cess. The Kerala government
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
two years, respectively. 9.4.23.4 Place of supply in case of job work of any treatment or process done on goods temporarily imported into India and then exported without putting them to any other use in India, would be outside India. 9.4.23.5 The following transactions to be treated as no supply (no tax payable) under Schedule III: a. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India; b. Supply of warehoused goods to any person before clearance for home consumption; c. Supply of goods in case of high sea sales. 9.4.23.6 Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year. 9.4.23.7 Amount of pre-deposit payable for filing of appeal before the Appellate Authority and the Appellate Tribunal capped at ₹ 25 crore and ₹ 50 crore respectively. 9.4.23.8 Recovery can be made from dist
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ation with GSTN and the Accounting authorities. 9.4.24.6 Free Accounting and Billing Software shall be provided to Small Taxpayers by GSTN. 10. THE DESIGN OF INDIAN GST: 10.1 Concurrent dual model of GST: India has adopted dual GST model because of its unique federal nature. Under this model, tax is levied concurrently by the Centre as well as the States on a common base, i.e. supply of goods or services or both. GST to be levied by the Centre would be called Central GST (Central tax / CGST) and that to be levied by the States would be called State GST (State Tax / SGST). State GST (State Tax / SGST) would be called UTGST (Union territory tax) in Union Territories without legislature. CGST SGST / UTGST shall be levied on all taxable intra-State supplies. 10.2 The IGST Model: Inter-State supply of goods or services shall be subjected to integrated GST (Integrated tax / IGST). The IGST model is a unique contribution of India in the field of VAT. The IGST Model envi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
upplier or recipient. c) No refund claim in exporting State, as ITC is used up while paying the tax. d) Self-monitoring model. e) Model takes ‗Business to Business as well as ‗Business to Consumer transactions into account. 10.3 Tax Rates: Owing to unique Indian socio-economic milieu, four rates namely 5%, 12%, 18% and 28% have been adopted. Besides, some goods and services are exempt also. Rate for precious metals and affordable housing are an exception to ‗four-tax slab-rule and the same has been fixed at 3% and 1% respectively. In addition, unworked diamonds, precious stones, etc. attracts a rate of 0.25%. A cess over the peak rate of 28% on certain specified luxury and demerit goods, like tobacco and tobacco products, pan masala, aerated water, motor vehicles is imposed to compensate States for any revenue loss on account of implementation of GST. The list of goods and services in case of which reverse charge would be applicable has also be
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
oducts, will not be accounted as part of the base year revenue. A GST Compensation Cess is levied on the supply of certain goods and services, as recommended by the GST Council to finance the compensation cess. 10.5 E-Way Bill System: The introduction of e-way (electronic way) bill is a monumental shift from the earlier Departmental Policing Model to a Self- Declaration Model . It envisages one e-way bill for movement of the goods throughout the country, thereby ensuring a hassle free movement for transporters throughout the country. The e-way bill system has been introduced nation-wide for all inter-State movement of goods with effect from 1st April, 2018. As regards intra-State supplies, option was given to States to choose any date on or before 3rd June, 2018. All States have notified e-way bill rules for intra-State supplies last being NCT of Delhi where it was introduced w.e.f. 16th June, 2018. 10.6 Anti-Profiteering Mechanism: Implementation of GST in many countri
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
r reduction in prices, imposition of penalty, cancellation of registration and any other decision as may deem fit, after inquiry into the case. 10.7 Concept of Supply: GST would be applicable on supply of goods or services as against the present concept of tax on manufacture of goods or on sale of goods or on provision of services. It includes all sorts of activities like manufacture, sale, barter, exchange, transfer etc. It also includes supplies made without consideration when such supplies are made in certain specified situations. 10.8 Threshold Exemption: Threshold limits of aggregate turnover for exemption from registration and payment of GST for the suppliers of goods would be ₹ 40 lakhs and ₹ 20 lakhs (in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand) with effect from 01.04.2019. Threshold limit of aggregate turnover for exemption from registration and payment of GST for
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
% on his turnover and needs to file his returns annually with quarterly payment from FY 2019-20. 10.10 Zero rated Supplies: Export of goods and services are zero rated. Supplies to SEZs developers and SEZ units are also zero-rated. The benefit of zero rating can be taken either with payment of integrated tax, or without payment of integrated tax under bond or Letter of Undertaking. 10.11 Cross-utilization of ITC: IGST credit can be used for payment of all taxes. CGST credit can be used only for paying CGST or IGST. SGST credit can be used only for paying SGST or IGST. The credit would be permitted to be utilized in the following manner: a) ITC of CGST allowed for payment of CGST IGST in that order; b) ITC of SGST allowed for payment of SGST IGST in that order; c) ITC of UTGST allowed for payment of UTGST IGST in that order; d) ITC of IGST allowed for payment of IGST, CGST SGST/UTGST in that order. ITC of CGST cannot be used for payment of SGST
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Source: Obligation on certain persons including government departments, local authorities and government agencies, who are recipients of supply, to deduct tax at the rate of 1% from the payment made or credited to the supplier where total value of supply, under a contract, exceeds two lakh and fifty thousand rupees. The provision for TDS has been operationalized w.e.f. 01st October, 2018. Exemption from the provisions of TDS has been given to certain authorities under the Ministry of Defence. 10.15 Refunds: Refund of tax to be sought by taxpayer or by any other person who has borne the incidence of tax within two years from the relevant date. Refund of unutilized ITC also available in zero rated supplies and inverted tax structure. 10.16 Tax Collection at Source: Obligation on electronic commerce operators to collect ‗tax at source , at such rate not exceeding two per cent of net value of taxable supplies, out of payments to suppliers supplying goods or services through
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
0.19 Appellate Tribunal: Goods and Services Tax Appellate Tribunal would be constituted by the Central Government for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority. States would adopt the provisions relating to Tribunal in respective SGST Act. 10.20 Advance Ruling Authority: Advance Ruling Authority would be constituted by States in order to enable the taxpayer to seek a binding clarity on taxation matters from the department. Centre would adopt such authority under CGST Act. 10.21 Transitional Provisions: Elaborate transitional provisions have been provided for smooth transition of existing taxpayers to GST regime. 10.22 Subsuming of taxes, duties etc.: Among the taxes and duties levied and collected by the Union, Central Excise duty, Duties of Excise (Medicinal and Toilet Preparations), Additional Duties of Excise (Goods of Special Importance), Additional Duties of Excise (Textiles and Textile Products), Additional Du
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
bsequently extended the CGST Act to J K. 11.2. In its 28th meeting held in New Delhi on 21.07.2018, the GST Council recommended certain amendments in the CGST Act, IGST Act, UTGST Act and the GST (Compensation to States) Act. These amendments have been passed by Parliament and have been enacted w.e.f. 01.02.2019, as the Central Goods and Services Tax (Amendment) Act, 2018, the Integrated Goods and Services Tax (Amendment) Act, 2018, the Union Territory Goods and Services Tax (Amendment) Act, 2018 and the Goods and Services Tax (Compensation to States) Amendment Act, 2018, respectively. 11.3. On 22nd June, 2017, the first notification was issued for GST and notified certain sections under CGST. Since then, 170 notifications under CGST Act have been issued notifying sections, notifying rules, amendment to rules and for waiver of penalty, etc. 19, 34 and 2 notifications have also been issued under IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Further,
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
T, the content of work-flow software such as ACES (Automated Central Excise Service Tax) would require re-engineering. The name of IT project of CBIC under GST is ‗SAKSHAM involving a total project value of ₹ 2,256 Cr. 12.2 Augmentation of human resources would be necessary to handle large taxpayers base in GST scattered across the length and breadth of the country. Capacity building, particularly in the field of Accountancy and Information Technology for the departmental officers has to be taken up in a big way. A massive four-tier training programme has been conducted under the leadership of NACIN. This training project is aimed at imparting training on GST law and procedures to more than 60,000 officers of CBIC and Commercial Tax officers of State Governments. 12.3 CBIC would be responsible for administration of the CGST and IGST law. In addition, excise duty regime would continue to be administered by the CBIC for levy and collection of central excise dut
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
xpayers, GSTN would be developing back-end IT modules for 27 States who have opted for the same. Infosys has been appointed as Managed Service Provider (MSP). GSTN has selected 73 IT, ITeS and financial technology companies and 1 Commissioner of Commercial Taxes (CCT, Karnataka), to be called GST Suvidha Providers (GSPs). GSPs would develop applications to be used by taxpayers for interacting with the GSTN. The diagram below shows the work distribution under GST. 13.2 Central Government holds 24.5 percent stake in GSTN while the state government holds 24.5 percent. The remaining 51 per cent are held by nonGovernment financial institutions, HDFC and HDFC Bank hold 20%, ICICI Bank holds 10%, NSE Strategic Investment holds 10% and LIC Housing Finance holds 10%. The GST Council in its 27th meeting held on 04.05.2018 has approved the change in shareholding pattern of GSTN. Considering the nature of ‗state function performed by GSTN, the GST Council felt that GSTN b
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost. 14.3 Benefits to small traders and entrepreneurs: GST has increased the threshold for GST registration for small businesses. Those units having aggregate annual turnover more than ₹ 20 lakhs (Rs. 10 lakhs in certain cases) in case of supplier of services and ₹ 40 lakhs (Rs. 20 lakhs in certain cases) in case of supplier of goods have be registered under GST. Unlike multiple registrations under different tax regimes earlier, a single registration is needed under GST in one State. An additional benefit under Composition scheme has also been provided for businesses with aggregate annual turnover up to ₹ 1.5 crore (Rs. 75 lakhs in certain cases) in case of
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
tailer s point than what was possible under the prevailing CENVAT and VAT regime. Certain major Central and State taxes will also be subsumed in GST and CST will be phased out. Other things remaining the same, the burden of tax on goods would, in general, fall under GST and that would benefit the consumers. 14.6 Promote Make in India : GST will help to create a unified common national market for India, giving a boost to foreign investment and Make in India campaign. It will prevent cascading of taxes and make products cheaper, thus boosting aggregate demand. It will result in harmonization of laws, procedures and rates of tax. It will boost export and manufacturing activity, generate more employment and thus increase GDP with gainful employment leading to substantive economic growth. Ultimately it will help in poverty eradication by generating more employment and more financial resources. More efficient neutralization of taxes especially for exports thereby making our products
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
resources and manpower in maintaining records. It will result in simplified and automated procedures for various processes such as registration, returns, refunds, tax payments. All interaction shall be through the common GSTN portal, therefore, less public interface between the taxpayer and the tax administration. It will improve environment of compliance as all returns to be filed online, input credits to be verified online, encouraging more paper trail of transactions. Common procedures for registration of taxpayers, refund of taxes, uniform formats of tax return, common tax base, common system of classification of goods and services will lend greater certainty to taxation system. 15. EXPERIENCE OF REGISTRATION, RETURN FILING REVNUE: 15.1 Registration Returns Snapshot : S. No. Details As on 31 st March, 2019 1. No. of transited (migrated) taxpayers 66,25,077
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
72,72,643 11. No. of GSTR-3B returns filed for November, 2017 73,63,558 12. No. of GSTR-3B returns filed for December, 2017 74,49,906 13. No. of GSTR-3B returns filed for January, 2018 75,65,896 14. No. of GSTR-3B returns filed for February, 2018 76,89,206 15. No. of GSTR-3B returns filed for March, 2018 77,96,536 16. No. of GSTR-3B returns filed for April, 2018 78,59,111 17. No. of GSTR-3B returns filed for May, 2018 79,99,938 18. No. of GSTR-3B returns filed for June, 2018 80,98,132 19. No. of GSTR-3B returns filed for
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
R 1 returns filed for August, 2017 25,35,102 29. No. of GSTR 1 returns filed for September, 2017 68,51,313 30. No. of GSTR 1 returns filed for October, 2017 26,15,196 31. No. of GSTR 1 returns filed for November, 2017 26,54,010 32. No. of GSTR 1 returns filed for December, 2017 69,51,848 33. No. of GSTR 1 returns filed for January, 2018 26,58,601 34. No. of GSTR 1 returns filed for February, 2018 26,64,859 35. No. of GSTR 1 returns filed for March, 2018 71,19,259 36. No. of GSTR 1 returns filed for April, 2018 28,03,367 37.
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
. No. of GSTR 1 returns filed for February, 2019 22,72,076 47. No. of GSTR 2 returns filed for July, 2017 25,72,552 48. No. of GSTR 4 returns filed for quarter JulySeptember, 2017 10,06,040 49. No. of GSTR 4 returns filed for quarter OctoberDecember, 2017 15,16,184 50. No. of GSTR 4 returns filed for quarter JanuaryMarch, 2018 15,74,383 51. No. of GSTR 4 returns filed for quarter April-June, 2018 15,46,101 52. No. of GSTR 4 returns filed for quarter JulySeptember, 2018 15,00,898 53. No. of GSTR 4 returns filed for quarter SeptemberDecember, 2018 14,15,038 15.2 Revenue Colle
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
12. June, 18 95,610 13. July, 18 96,483 14. August, 18 93,960 15. September, 18 94,442 16. October, 18 1,00,710 17. November, 18 97,637 18. December, 18 94,726 19. January, 19 1,02,503 20. February, 19 97,247 21. March, 19 1,06,577 22. Total 19,18,019 16. CHALLENGES FUTURE AHEAD: 16.1 Any new change is accompanied by difficulties and problems
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
2018. As regards intra-State supplies, option was given to States to choose any date on or before 3rd June, 2018. All States have notified e-way bill rules for intra-State supplies last being NCT of Delhi where it was introduced w.e.f. 16.06.2018. 16.3 NAPA has initiated investigation into various complaints of anti-profiteering and has passed orders in some cases to protect consumer interest. 16.4 To expedite sanction of refund, electronic filing of refunds, along with all supporting documents/invoices, has been enabled on the common portal. Clarificatory Circulars and notifications have been issued to guide field formations of CBIC and States in this regard. The government has put in place an IT grievance redressal mechanism to address the difficulties faced by taxpayers owing to technical glitches on the GST portal. 16.5 The introduction of GST is truly a game changer for Indian economy as it has replaced multi-layered, complex indirect tax structure with a simple,
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =