Goods and Services Tax – GST Dated:- 3-7-2019 – 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 01st July, 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; ever
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has been paved making India an economic union. 2. CONSTITUTIONAL 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 wa
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electricity tax ((entry 53 of the State List). CST was also an important source of revenue 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 cour
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y with one-to-one correlation between input and manufactured goods for eligibility to take input tax credit. The comprehensive 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
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ed in States since independence. Sales tax was plagued by some serious flaws. It was levied by States in an uncoordinated manner 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 lead
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ing Committee of State Finance Ministers was constituted, as a result of meeting of the Union Finance Ministers and Chief Ministers in November, 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 as
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entities (Brazil, Russia). While a centralized structure reduces fiscal autonomy for the States, a decentralized structure enhances compliance 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
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till not been subsumed in the VAT. Further, there has also not been any integration of VAT on goods with tax on services at the State level with removal of cascading 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 up to 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
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troduction of a comprehensive tax on all goods and service 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 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 introdu
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28, 2007, and the States were also requested to communicate their observations on the report in writing. On the basis of these discussions in the EC and the written observations, certain modifications were considered 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 disc
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lace. The existing VAT regime was based on origin principle where Central Sales Tax was assigned to the State of origin where production or sale happened and not to the State where consumption happened. Many manufacturing States expressed 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 jurisdict
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e years of implementation of GST. 7.3.1 A Committee headed by the Chief Economic Adviser Dr. Arvind Subramanian on possible tax rates under GST suggested RNR (Revenue Neutral Rate). The term RNR refers to that single rate, which preserves revenue 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
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iament and the State Legislatures. The Constitution (One Hundred Twenty Second Amendment) Bill, 2014 departed from the previous GST amendment bill and proposed that the Goods and Services Tax Council may decide about the modalities to resolve disputes arising out of its 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 petrol
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tribution, and both goods and services. The scheme of the Constitution did not provide for any concurrent taxing powers to the Union as well as the States and for the purpose of introducing goods and services tax amendment of the Constitution conferring simultaneous power on Parliament as 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 11.03.2011. The Bill was referred to the Standing Committee on Finance on 29.03.2011. 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 19.12.2014. The Constitution Amendment Bill was passed by
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n services. As tax on services has been brought under GST, such a provision was no longer required. c) Article 269A has been inserted which provides for goods and services tax on supplies in the course of inter-State trade or commerce which shall be levied and collected by the 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, surcharg
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, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for five years. k) In case of petroleum and petroleum products, it has been provided that these goods shall not be subject to the levy of Goods 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 12.09.2016. 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
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l. While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services. 9.3 One half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings. The Goods and Services 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 meeti
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1.2 Rules on composition, registration, input tax credit, invoice, determination of value of supply, accounts and records, returns, payment, refund, assessment and audit, advance ruling, appeals and revision, transitional provisions, anti-profiteering, E-way Bill, inspection, search and seizure, demands and recovery and offences and penalties have been recommended. 9.4.2 Registration and Threshold: 9.4.2.1 Threshold limit of aggregate turnover for exemption from registration and payment of GST for suppliers of services would be ₹ 20 lakhs and ₹ 10 lakhs in the States of Manipur, Mizoram, Nagaland and Tripura. 9.4.2.2 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
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lled till 31.03.2019. The application for revocation can be filed till 22.07.2019. 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 details to the jurisdictional nodal officer was extended till 31.01.2019. Also, the due date for furnishing FORM GSTR-3B and FORM GSTR-1 for the period July, 2017 to February, 2019 / quarters July, 2017 to December, 2018 by such taxpayers was extended till 31.03.2019. 9.4.4 Composition Scheme: 9.4.4.1 Composition scheme has been formulated for small businessmen being supplier of goods and supplier of restaurant services. Under the scheme, person with annual turnover up to ₹ 1.5 crore (₹ 75 lakhs in States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripur
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9.4.4.5 The GST Council in its 35th meeting held on 21.06.2019 decided that the last date for filing of intimation, in FORM GST CMP-02, for availing the option of payment of tax under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, be extended from 30.04.2019 to 31.07.2019. 9.4.4.6 Composition scheme shall not be available to inter-State suppliers and specified category of manufacturers. 9.4.5 E-way bill system 9.4.5.1 The generation of e-way bill would be barred if a supplier or recipient does not file GST returns for 2 consecutive tax periods. This will be made applicable from 21.08.2019. 9.4.6 Tax Administration: 9.4.6.1 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 turno
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o. 07/2019- Central Tax (Rate) dated 29.03.2019 has been issued which prescribes that the promoter shall pay tax on reverse charge basis w.e.f. 01.04.2019 on following supplies received from unregistered suppliers – a. such supplies which constitute the shortfall from the minimum value of goods or services or both required to be purchased by a promoter for construction of a project as prescribed in notification No. 11/2017-Central Tax (Rate) dated 28.06.2017; b. cement which constitute the shortfall from the minimum value of goods or services or both required to be purchased by a promoter for construction of project as prescribed in notification No. 11/2017- Central Tax (Rate); and c. capital goods supplied to a promoter for construction of a project on which tax is payable or paid at the rate prescribed in notification No. 11/2017- Central Tax (Rate). 9.4.8.2 Earlier the reverse charge mechanism under sub-section (4) of section 9 of th
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amount payable through the electronic cash ledger. This would be implemented once the law is amended. 9.4.10 Exemption: 9.4.10.1 Supply from GTA to unregistered persons has been exempted from tax. 9.4.11 Refunds: 9.4.11.1 A scheme of single authority for disbursement of the refund amount sanctioned by either the Centre or the State tax authorities would be implemented soon. The modalities for the same are being finalized. 9.4.11.2 All the supporting documents/invoices in relation to a claim for refund in FORM GST RFD-01A shall be uploaded electronically on the common portal at the time of filing of the refund application itself, thereby obviating the need for a taxpayer to physically visit a tax office for submission of a refund application. 9.4.11.3 Fully automated refund module is being developed and will be deployed soon. 9.4.12 Return: 9.4.12.1 All taxpayers, except those register
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er 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. 9.4.14 New Return System: 9.4.14.1 The new return system is simple with two main annexures. One for reporting details of outward supplies (FORM GST ANX-1) and the other for availing input tax credit (FORM GST ANX-2) based on invoices, etc. uploaded by the supplier. 9.4.14.2 Invoices can be uploaded continuously by the supplier and can be continuously viewed and locked by the recipient for availing input tax credit. This process would ensure that very large part of the return is auto-populated based on the invoices uploaded by the buyer and the supplier. Simply put, the process would be UPLOAD LOCK PAY for most tax payers. 9.4.14.3 Taxpayers would have the facility to create his profile based on nature of supplies made and received. The information which a taxpayer
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eturn as it will help save interest liability for the taxpayers. 9.4.14.7 In order to give ample opportunity to taxpayers as well as the system to adapt, the GST Council in its 35th meeting held on 21.06.2019 has decided to introduce the new return system in a phased manner, as described below: a. Between July, 2019 to September, 2019, the new return system (FORM GST ANX-1 FORM GST ANX-2 only) to be available for trial for taxpayers. Taxpayers to continue to file FORM GSTR-1 FORM GSTR-3B as at present; b. From October, 2019 onwards, FORM GST ANX-1 to be made compulsory. Large taxpayers (having aggregate turnover of more than ₹ 5 crores in previous year) to file FORM GST ANX-1 on monthly basis whereas small taxpayers to file first FORM GST ANX-1 for the quarter October, 2019 to December, 2019 in January, 2020; c. For October and November, 2019, large taxpayers to continue to file FORM GSTR-3B on monthly basis and will file firs
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as extended till 31.08.2019. 9.4.16 TDS/TCS: 9.4.16.1 TDS/TCS provisions shall be implemented from 01.10.2018. 9.4.16.2 Further, to provide some more time to TDS deductors to familiarize them with the new system, last date for furnishing return in FORM GSTR-7 for the months of October, 2018 to December, 2018 and January, 2019 was extended up to 28.02.2019. Further, exemption from TDS for been made for supply made by Government / PSU to another Government /PSU. 9.4.17 Export: 9.4.17.1 E-Wallet Scheme shall be introduced for exporters from 01.04.2020 and till then relief for exporters shall be given in form of broadly existing practice. 9.4.17.2 Supply of services to Nepal and Bhutan shall be exempted from GST even if payment has not been received in foreign convertible currency such suppliers shall be eligible for input tax credit. 9.4.17.3 Supply of services to qualify as exports, even if paymen
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itute 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. 9.4.20.3 The amount of IGST not apportioned to the Centre or the States/UTs may, for the time being, on the recommendations of the Council, be apportioned at the rate of fifty per cent. to the Central Government and fifty per cent. to the State Governments or the Union territories, as the case may be, on ad-hoc basis and this amount shall be adjusted against the amount finally apportioned. 9.4.20.4 Fifty per cent. of such amount, as may be recommended by the Council, which remains unutilized in the Compensation Fund, at any point of time in any financial year during the transition period shall be transferred to the Consolidated Fund of India as the share of Centre, and the balance fifty per cent. shall be distributed amongst the States in the ratio of their base year revenue. 9.4.20.5 In case of sho
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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). 9.4.21.4 Conditions for new tax rate: a. Input tax credit shall not be available b. 80% of inputs and input services [other than capital goods, TDR/ JDA, FSI, long term lease (premiums)] shall be purchased from registered persons. On shortfall of purchases from 80%, tax shall be paid by the builder @ 18% on RCM basis. However, Tax on cement purchased from unregistered person shall be paid @ 28% under RCM, and on capital goods under RCM at applicable rates. 9.4.21.5 GST exemption on TDR/ JDA, long term lease (premium), FSI: Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such residential property on which GST is payable. 9.4.21.6 The new rate has become applicable fro
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a-state supply of goods by taxable person to an unregistered person in respect of supplies specified in TABLE under sub-clause (2) of clause 14 of the Kerala Finance Bill, 2019. The said cess would be levied from 01.08.2019. 9.4.23.3 The Kerala government has also decided to allow local bodies to collect entertainment tax on movie tickets up to 10 per cent. 9.4.24 Electronic Invoicing 9.4.24.1 The Council in its 35th meeting held on 21.06.2019 decided to introduce electronic invoicing system in a phase-wise manner for B2B transactions. 9.4.24.2 The Phase 1 is proposed to be voluntary and it shall be rolled out from Jan 2020. 9.4.25 Recent Law amendments w.e.f. 01.02.2019: 9.4.25.1 Scope of input tax credit has been widened, and it would now be made available in respect of the following: a. Most of the activities or transactions specified in Schedule III; b. Motor vehicles for transport
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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. 9.4.25.6 Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year. 9.4.25.7 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. 9.4.25.8 Recovery can be made from distinct persons, even if present in different State/Union territories. 9.4.26 Others: 9.4.26.1 In principle approval has been given for creation of a Centralized Appellate Authority for Advance Ruling (AAAR) to deal with cases of conflicting decisions by two or more State
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ds by retail outlets established at departure area of the international airport beyond immigration counters when supplied to outgoing international tourist against foreign exchange has been introduced w.e.f. 01.07.2019. 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 t
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-State transactions. b) No upfront payment of tax or substantial blockage of funds for the interState supplier 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 a
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etc. However, any revenue among these taxes arising related to supply of alcohol for human consumption, and five specified petroleum products, 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 01.04.2018. As regards intraState supplies, option was given to States to choose any date on or before 03.06.2018. All States have notified e-way bill rules for intra-State supplies last being NCT
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Authority shall cease to exist after the expiry of two years from the date on which the Chairman enters upon his office unless the Council recommends otherwise.10.6.2 The Authority may determine whether any reduction in the rate of tax or the benefit of input tax credit has been passed on to the recipient by way of commensurate reduction in prices. It can order 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 fo
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d, Sikkim, Tripura and Uttarakhand) needs to pay tax equal to 1% to 5% on his turnover and needs to file his returns annually with quarterly payment from FY 2019-20. Composition scheme has also been formulated for supplier of services (to those who are not eligible for the presently available composition scheme). Under the scheme, person with turnover up to ₹ 50 lakhs needs to pay tax equal to 6% 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 payin
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Further the SGST portion of IGST collected on B2C supplies would also be transferred by Centre to the destination State. The transfer of funds would be carried out on the basis of information contained in the returns filed by the taxpayers. 10.13 Modes of Payment: Various modes of payment of tax available to the taxpayer including internet banking, debit/ credit card and National Electronic Funds Transfer (NEFT) / Real Time Gross Settlement (RTGS). 10.14 Tax Deduction at 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.
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d and its adjudication in normal cases. Limitation period for raising demand is five (5) years from the due date of filing of annual return or from the date of erroneous refund for raising demand for short-payment or non-payment of tax or erroneous refund and its adjudication in case of fraud, suppression or willful mis-statement. 10.18 Recovery of Arrears: Arrears of tax to be recovered using various modes including detaining and sale of goods, movable and immovable property of defaulting taxable person. 10.19 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
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ng, cesses and surcharges insofar as they related to supply of goods or services were subsumed. 11. GST LEGISLATIONS: 11.1. Four Laws namely CGST Act, UTGST Act, IGST Act and GST (Compensation to States) Act were passed by the Parliament and since been notified on 12.04.2017. All the other States (except J K) and Union territories with legislature have passed their respective SGST Acts. The economic integration of India was completed on 08.07.2017 when the State of J K also passed the SGST Act and the Central Government also subsequently 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) A
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nd extension of last dates for filling up various forms, etc. 12. ROLE OF CBIC: 12.1. CBIC is playing an active role in the drafting of GST law and procedures, particularly the CGST and IGST law, which will be exclusive domain of the Centre. This apart, the CBIC has prepared itself for meeting the implementation challenges, which are quite formidable. The number of taxpayers has gone up significantly. The existing IT infrastructure of CBIC has been suitably scaled up to handle such large volumes of data. Based on the legal provisions and procedure for GST, 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, par
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12.5. CBIC has been instrumental in handholding the implementation of GST. It had set up the Feedback and Action Room which monitored the GST implementation challenges faced by the taxpayer and act as an active interface between the taxpayer and the Government. 13. GOODS SERVICES TAX NETWORK: 13.1. Goods and Services Tax Network (GSTN) has been set up by the Government as a private company under erstwhile Section 25 of the Companies Act, 1956. GSTN would provide three front end services to the taxpayers namely registration, payment and return. Besides providing these services to the taxpayers, 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 tax
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hrough identified applications like registration, return, view ledger etc. The tax official having jurisdiction, as per GST law, can access the data. Data can be accessed by audit authorities as per law. No other entity can have any access to data available with GSTN. 14. GST: A GAME CHANGER FOR INDIAN ECONOMY: 14.1. GST will have a multiplier effect on the economy with benefits accruing to various sectors as discussed below. 14.2. Benefits to the exporters: The subsuming of major Central and State taxes in GST, complete and comprehensive setoff of input goods and services and phasing out of Central Sales Tax (CST) 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. Ben
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ndustry: GST will give more relief to industry, trade and agriculture through a more comprehensive and wider coverage of input tax set-off and service tax set-off, subsuming of several Central and State taxes in the GST and phasing out of CST. The transparent and complete chain of set-offs which will result in widening of tax base and better tax compliance may also lead to lowering of tax burden on an average dealer in industry, trade and agriculture. 14.5. Benefits for common consumers: With the introduction of GST, the cascading effects of CENVAT, State VAT and service tax will be more comprehensively removed with a continuous chain of set-off from the producer s point to the retailer 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 t
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minating rate arbitrage between neighboring States and that between intra and inter-State supplies. Average tax burden on companies is likely to come down which is expected to reduce prices and lower prices mean more consumption, which in turn means more production thereby helping in the growth of the industries. This will create India as a Manufacturing hub . 14.7. Ease of Doing Business: Simpler tax regime with fewer exemptions along with reduction in multiplicity of taxes that are at present governing our indirect tax system will lead to simplification and uniformity. Reduction in compliance costs as multiple record-keeping for a variety of taxes will not be needed, therefore, lesser investment of 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
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No. of applications approved 70,68,269 4. No. of applications rejected 12,15,592 5. Total No. of taxpayers; new + migrated (1 + 3) 1,36,93,346 6. No. of taxpayers who have opted for composition scheme 17,74,379 7. No. of GSTR-3B returns filed for July, 2017 65,89,550 8. No. of GSTR-3B returns filed for August, 2017 71,78,987 9. No. of GSTR-3B returns filed for September, 2017 75,28,488 10. No. of GSTR-3B returns filed for October, 2017 72,87,
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o. of GSTR-3B returns filed for June, 2018 81,53,447 19. No. of GSTR-3B returns filed for July, 2018 82,48,209 20. No. of GSTR-3B returns filed for August, 2018 83,41,877 21. No. of GSTR-3B returns filed for September, 2018 84,14,843 22. No. of GSTR-3B returns filed for October, 2018 84,60,420 23. No. of GSTR-3B returns filed for November, 2018 83,65,673 24. No. of GSTR-3B returns filed for December, 2018 84,07,332 25. No. of GSTR-3B returns filed for January, 2019
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No. of GSTR 1 returns filed for October, 2017 26,54,530 34. No. of GSTR 1 returns filed for November, 2017 26,99,654 35. No. of GSTR 1 returns filed for December, 2017 70,56,169 36. No. of GSTR 1 returns filed for January, 2018 27,11,068 37. No. of GSTR 1 returns filed for February, 2018 27,24,503 38. No. of GSTR 1 returns filed for March, 2018 72,82,239 39. No. of GSTR 1 returns filed for April, 2018 28,62,517 40. No. of GSTR 1 returns filed for May, 2018
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No. of GSTR 1 returns filed for January, 2019 28,54,755 49. No. of GSTR 1 returns filed for February, 2019 27,88,482 50. No. of GSTR 1 returns filed for March, 2019 67,71,009 51. No. of GSTR 1 returns filed for April, 2019 25,00,936 52. No. of GSTR 1 returns filed for May, 2019 22,05,052 53. No. of GSTR 2 returns filed for July, 2017 25,72,552 54. No. of GSTR 4 returns filed for quarter JulySeptember, 2017 10,13,901 55. No. of GSTR 4 returns filed for quarter October
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1. July, 17 21,572 2. August, 17 95,633 3. September, 17 94,064 4. October, 17 93,333 5. November, 17 83,780 6. December, 17 84,314 7. January, 18 89,825 8. February, 18 85,962 9. March, 18 92,167 10. April, 18 1
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97,247 21. March, 19 1,06,577 22. April, 19 1,13,865 23. May, 19 1,00,289 24. June 19 99,939 25. Total 22,32,112 16. CHALLENGES FUTURE AHEAD: 16.1. Any new change is accompanied by difficulties and problems at the outset. A change as comprehensive as GST is bound to pose certain challenges not only for the government but also for business community, tax administration and even common citizens of the country. Some of these challenges relate to the unfamiliarity with the new regime and IT systems, legal challenges, return filing and reconciliations, passi
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been generated till 31.05.2019. 16.3. NAA 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, transparent and technology driven tax regime. It will integrate India into a single, common market by breaking barriers to inter-State trade and commerce. By eliminating cascading of taxes and
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