Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 15-2-2016 – Intangible goods / services Presently, intangible goods / services / rights are taxed as one of the declared services under section 66E(c) under temporary transfer of intangible property right services. Such services are also liable to VAT and often there is a dispute on levy of Service Tax or VAT or both. This is likely to be resolved in GST regime as such services will suffer one common tax, i.e., GST. In many countries, transfer of such assets / services are taxed as a service only. Examples of such services could be copyright (excluded presently), trademarks, designs, patents, good will, IT software etc. Electricity / Power Power to levy tax on the consumption or sale of electricity vets with the State Governments under Entry No. 53 in List-II of Seventh Schedule of the Constitution of India. Though electricity is 'goods', sales tax is not imposed on sale of electricity in India. Therefore, it is
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transaction. Products outside the GST ambit GST shall be applicable across the products and services over the taxing jurisdictions with few exceptions. One such exception is petroleum products. The Centre has decided to keep petroleum production tax out of the taxing jurisdiction of the States while the States have retained the power to tax sale of petroleum products and potable alcoholic liquor with themselves. The reason cited for the same is that petroleum production tax fetches nearly 45% of the Centre's Indirect Tax revenue while sale of petroleum products and potable alcoholic liquor constitutes nearly 55% (35% plus 20%) of the State tax income. This is to provide fiscal security to stages and ensure that there is a minimum guaranteed income under the proposed GST regime. Another such product is tobacco which will come under the GST but from a future date. The exclusion of petroleum, liquor and tobacco, which accounts for nearly 40 per cent of total revenue, has been a point
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bacco Products while the Centre can impose both GST and Excise Duty. Standing Committee on Constitutional Amendment Bill had recommended that keeping in view the requests received from several States and the fact that the States are already levying VAT at very high rate on Tobacco and Tobacco Products, therefore, the States may also be allowed to levy State Excise Duty or any other tax in addition to GST on Tobacco and Tobacco Products. This could be achieved by making amendment in Entry 51 in the State List of Seventh Schedule of the Constitution by incorporating ―(c) tobacco and tobacco products. The Constitution Amendment Bill, 2014 has amended List II of Schedule VII of the Constitution according to which states may continue to levy tax on tobacco products. The proposed entry No. 84 will include duties of excise on the following goods manufactured or produced in India – petroleum crude; high speed diesel; motor spirit (commonly known as petrol); natural gas; aviation turbine
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