Goods and Services Tax

Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 21-1-2017 – Prologue The Gems and Jewellery sector play a significant role in the Indian economy, contributing to over 5 % of the country s GDP. As one of the fastest growing sectors, it is highly export- oriented and labour intensive. Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as one of the focus area for export promotion. India is considered to be the hub of the global jewellery market because of its low costs and availability of high-skilled labour. The industry generated US$ 38.6 billion of revenue from exports in 2015-16, making it the second largest exporter after petro-chemicals. (Source: www.ibef.org) Currently, gems and jewellery sector is exposed to various indirect taxes, viz. Excise Duty, Service Tax and VAT/Sales Tax. The current indirect tax regime in India provides for a complex tax environment due to multiplicity of taxes, elab

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t on input services is eligible), or 12.5% with Cenvat credit of inputs, input services, and capital goods. VAT is levied at the rate of 1% or different rates (may vary from State to State) for sale in India. Under the model GST law, lowest approved GST rate is proposed to be 5%. If gems and jewellery item will be classified under the lowest tax slab, then this will become a major concern for this sector paying excise duty @1%. As a result they may have to pay CGST/SGST @5% instead of what they are paying in existing taxation laws, i.e., 2% (1+1). This shall increase the prices of gems and jewellery. However, this will be subject to availing Cenvat Credit of tax paid on inputs. For assessees who are paying excise duty @12.5%, if gems and jewellery is taxed @5%, then this will be a relief for them. However, classification of goods and/ or services is still pending for taxability of GST rate. Therefore, more clarifications are being looked at. Taxable Person For GST, taxable person means

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(on own or through job worker) cleared domestically has not crossed ₹ 1.5 crores. (all goods manufactured including silver jewellery). Under GST regime, the threshold limit of ₹ 10/20 lakhs is provided for payment of GST. Since, under GST regime limit of threshold exemption will be reduced to ₹ 10/20 lakhs, it will adversely affect the manufacturers. Shift in Taxable base from Service/Manufacturing/Sale to Supply In service tax law, rendering of service is a taxable event for levy of Service Tax. Similarly, in the case of central excise, manufacturing is a taxable event for levy of central excise duty and sale is a taxable event under VAT laws for levy of VAT/Sales Tax. However, in GST regime, Supply will be considered as a taxable event under GST. Supply shall include: all forms of supply of goods and/or services made or agreed to be made for a consideration by a person in the course or furtherance of business, Importation of service for a consideration, and Services

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eration, then such supply would also be covered under supply. Time of Supply of Goods and/or Services CGST/SGST/IGST shall be payable at the earliest of the following dates, namely: the date of issue of invoice by the supplier or the last date on which he is required to issue the invoice with respect to the supply; or the date on which the supplier receives the payment with respect to the supply. Valuation Transaction value shall be considered for payment of tax, with various inclusions prescribed in the valuation provisions/ rules. Certain inclusions in the valuation are as follows: Any taxes, duties, cesses, fees and charges levied under any statute (like Basic Custom Duty and Anti-dumping Duty), other than SGST /CGST/IGST. Any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the services. Incidental expenses Interest or late fee or penalty for lat

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 21-1-2017 – DAILY DOSE OF GST UPDATE BY CA PRADEEP JAIN Definition of Input Service Distributor and Money Taking further to our discussion, we are continuing our discussion the definitions given under Section 2 of revised GST law and comparing the same with old model GST law to know the changes made in revised law:- 2(54) Input Service Distributor: The new definition reads as follows: Input service distributor means an office of the supplier of goods and/or services which receives tax invoices issued under section 28 towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST paid on the

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had to file returns prescribed for supplier of services; he would have to also comply with the provisions meant for supplier of services. Thus the explanation has been deleted to avoid such interpretation by the department. 2(68) Money: the new definition reads as follows: Money means Indian legal tender or any foreign currency, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveler cheque, money order, postal or electronic remittance or any other instrument recognized by the Reserve Bank of India when used as consideration to settle an obligation or exchange with Indian legal tender of another denomination but shall not include any currency that is held for its numismatic value. The amendment carried out i

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Goods and Services Tax – GST – By: – Sanjeev Singhal – Dated:- 20-1-2017 Last Replied Date:- 21-1-2017 – Supply is wider term used in GST law as the GST is based on Supply only. Now the question arises what is supply. Supply is transfer of goods and services on which GST will be imposed. Supply has been mainly defined in Section 3 of GST law subject to Schedule- I to IV. Supply has been further elaborated in IGST law whether the supply is interstate supply or Intra-State supply. This is important because if the supply is Intra- State,then CGST and SGST will be attracted otherwise if the supplly is Inter State then IGST will be levied. To understand whether the transaction is Inter State or Intra-State or Import or Export, it is important to understand the provision of Place of Supply which has been narrated in Section- 3 to 4 and 7 to 10 of the IGST Law. Supply has been defined in Section 2[26] of IGST Law as follows; Supply shall have the meaning as assigned to it in Section 3 of the

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frontier of India. Intra State supply of services means any supply of services where the location of supplier and place of supply is in the same State but does not include supply to or by SEZ Developer or SEZ unit. Place of Supply of Goods other than import and export [ Section-7 ] Situation Place of Supply 1.Movement of goods by supplier or recipient. Where the movement of goods terminate for delivery to recipient. 2. where the goods are delivered to recipient or any person on the direction of third person by way of transfer of title or otherwise, it shall be deemed that third person has received the goods shall be principal place of business of such person 3. where there is no movement of goods either by supplier or recipient Location of such goods at the time of delivery to recipient 4. where goods are assembled or installed at site Shall be where the goods are assembled or installed 5. where the goods are supplied on board a conveyance, like vessel, aircraft, train or motor vehicle

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rk b] lodging accommodation by hotel, inn, guest house, home stay, club or campsite, house boat or other vessel c] accommodation in immovable property for marriage or reception or matter related therewith , official, social , cultural , religious or business function including service for such functions. d] ancillary to above services in a, b and c Location of Immovable property, boat or vessel If immovable property, boat or vessel is located outside India then location of the recipient. If the services are provided in more than one State, proportion of service provided in each State. 4. restaurant and catering service, personal grooming , fitness, beauty treatment, health services including cosmetic and plastic surgery Where the services are actually performed 5. training and performance appraisal Location of registered person. Location where the service are performed in case of unregistered person. 6. Admission to cultural, artistic, sporting ,scientific, educational or entertainment

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chedule departure point of the conveyance 11.telecommunication including data transfer, broadcasting, cable and DTH television services a] fixed line, leased circuit , internet lease circuit, cable or dish antenna- b] Mobile connection for telecommunication, internet on post paid basis- c] Mobile connection for telecommunication, internet and DTH on prepaid basis- i] through selling agent or reseller or distributor of SIM or recharge voucher ii] by any person to the final subscriber d] any other case other than b and c above Where it is installed Billing Address Address of seller , reseller or distributor as per the record of supplier Where prepayment is received or voucher is sold Address of recipient as per the record of supplier Where the address of the recipient is not known , location of supplier. If prepaid service or recharge is made on internet banking, address of recipient. 12. banking and other financial services including stock broking Location of recipient of services, if r

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ent of service or person acting on behalf of recipient which required the physical presence of receiver. Location where the services are performed. Location where the Goods are situated. This clause shall not apply in services supplied in respect of goods temporarily imported in to India and are exported after repair. Location where the service are performed 3. services in relation to immovable property including services in this regard by expert and estate agent, supply of hotel accommodation by hotel, inn, guest house, home stay, club or campsite, grant of right to use immovable property, services for carrying out or coordination of construction work, including Architect or interior decorator. Location of Immovable property. 4. admission to or organizing of a cultural, artistic, sporting ,scientific, educational or entertainment, exhibition, conference, fair, celebration or similar events Where the event is actually held 5. where the services referred to in 2,3 and 4 is supplied at m

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ceiving such services shall be deemed to be located in taxable territory, if following two condition are being satisfy i]location of address presented by the recipient via internet ii] payment settle by recipient by any card has been issued in taxable territory iii]billing address of recipient of service is in taxable territory iv] internet address protocol of the device used by recipient is in taxable territory v] the bank of recipient of service is in taxable territory vi] country code of SIM used by recipient of service is in taxable territory vii]location of the fixed land line use by recipient is in taxable territory Location of recipient of services Disclaimer : The contents of this article are solely for information and knowledge and does not constitute any professional advice or recommendation. Author does not accept any liability for any loss or damage of any kind arising out of this information set out in the article and any action taken based thereon. About the Author: Autho

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es in other cases. Question 1. If the advertiser is located in other state and not registered in Maharashtra which tax will be applicable (a) IGST or (b) SGST & CGST2. We organise exhibitions in different states. Currently we have centralised registration of Services tax having principle place of business in Mumbai.Question 1. If the Exhibition is organised in Mumbai where we will be registered under GST, Exhibitors participating from other states which are not registered in Maharashtra, which Tax will be applicable (a) IGST or (b) SGST & CGST. 2.If we organise an Exhibition in other state where we have branch office. Do we need to take registration in that state? 3. If we organise an Exhibition in other state where we do not have branch office – Do we need to take registration as Casual Taxable Person or regular registration?In case of Casual Taxable person, the estimated liability is required to be paid in advance and the registration is valid for 90 days only, which can be e

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Bill to – Ship to Model – IGST Act – Version 2 dated 25 November 2016 – Goods and Services Tax – GST – By: – Ramnarayan Balakrishnan – Dated:- 20-1-2017 Last Replied Date:- 20-1-2017 – Chapter IV, Section 7(3) of the draft IGST Act reads as below (verbatim): Where the goods are delivered by the supplier to a recipient or any other person, on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person. While the First Leg of the Transaction is reasonably cle

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Act, is located in the same state as the supplier but issues instructions for delivery of the goods on inter-state basis (which ideally should trigger IGST), then, regardless of the actual movement of goods, his location would be deemed to be the place of supply and result in triggering of CGST + SGST. The aspects discussed above are only in relation to the first leg of the transaction, i.e. between the Supplier of goods and the third person , whether located within or outside the state. B. The Second Leg of the Transaction The next point to reckon with would be the nature of the second leg of the transaction, i.e. between the third person and the ultimate customer who receives the goods. Whether a transaction triggers IGST or CGST+SGST is

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fecting the second leg of the sale transaction, The goods might have reached the ultimate customer. In which case, the place of supply would be the destination of the ultimate customer. Going back to Section 7(3), in this transaction of bill to – ship to , it is deemed that the third person is the recipient of the goods, even though the actual recipient is the ultimate customer. This concept could further complicate the process of determining the actual place of supply. Correspondingly, there would be implications from the input credit perspective also. Thoughts on the above are most welcome. – Reply By Somil Bhansali – The Reply = Sir as per my interpretation the Second leg of Transaction will be as per Section 7(4) of IGST Act where suppl

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 20-1-2017 Last Replied Date:- 23-1-2017 – Section 12 of the Constitution (One hundred and first Amendment) Act, 2016 proposes to insert a new Article 279A after Article 279 which deals with Goods and Service Tax Council. Section 12 came into force with effect from 12.09.2016, vide Notification No. S.O. No. 2915(E), dated 10.09.2016. Constitution of GST council Article 279A (1) provides that the President shall, within 60 days from the date of the commencement of the Act, by order, constitute a Council to be called the Goods and Services Tax Council. Article 279A(2) provides that the GST council shall consist of the following members- Union Finance Minister – Chairperson; The Union Minister of State in charge of Revenue or Finance- Member; The Minister in charge of Finance or Taxation or any other Minister nominated by each State Government – Members. The members shall, as soon as may be, choose one amongst themselves t

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riat, the entire cost for which shall be borne by the Central Government. The GST Council Secretariat shall be manned by officers taken on deputation from both the Central and State Governments. Vide Notification No.SO 2957(E), dated 15.09.2016 the President of India constituted the GST Council containing the above members in the council. The GST Council is headed by Union Finance Minister Arun Jaitley and includes representatives of all the 29 states and 2 union territories. Functions of GST Council Article 279A (4) provides that GST council shall make recommendations to the Union and the States on- the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be submitted in the goods and services tax; the goods and services that may be subject to, or exempted from the goods and services tax; model Goods and Services Tax Laws, principal of levy, apportionment of Goods and Services Tax levied on applies in the course of inter-State trade or commerce u

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he 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- the vote of the Central Government shall have a weightage of one third of the total votes cast; and the votes of all the State Governments taken together shall have a weightage of two thirds of the total votes cast in that meeting. 50% of the total number of Members of the Council shall constitute the quorum of the meeting. No act or proceedings of the Council shall be invalid merely by reason of- any vacancy in, or in any defect in, the constitution of the Council; or any defect in the appointment of a person as a Member of the Council; or any procedural irregularity of the Council not affecting the merits of the case. Adjudication of dispute The Council shall establish a mechanism to adjudicate any dispute- between the Government of India and one or more States; or between the Government of India and a

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meeting. Five rules framed for the purpose of GST have been taken up and approved by the Council. Third GST council meeting The GST Council, in the meeting held on 03.11.2016 finalized the GST tax rate structure. The Council has opted for a four tier rate structure of 5%, 12%, 18% and 28%. The essential items like food grains will have a zero rate. According to the decision, 150 essential items in the consumer price index basket will attract zero tax. 5% tax – For mass consumption goods like butter, ghee; 12% tax – It is one of the standard rate; 18% tax – It is another standard rate; 28% tax – Luxury goods will attract this tax; 0% tax – 50% of Consumer Price Index basket items, food grains like rice and wheat, spices The above tax rate must be approved by the Parliament in the Winter Session which is going to be held on 19.11.2016 but not able to get approved. A committee of officers/Secretaries will finalize the exact tax rate on each item and bring it to the slab closet to the cur

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as the Central GST and State GST, Integrated GST, and a law detailing compensation to states for loss of revenue in the first five years of the roll-out. Sixth meeting of GST council The 6th meeting was conducted in the shadow of demonetization, whose fallout has put a serious question mark on implementing GST by 01.04.2017, the target fixed by the Central Government. This two day meet focused on finalizing three legislations viz., Central GST, State GST and compensation bill but the same has not been achieved except up to Sections 99 of Model GST law have been discussed Seventh meeting of GST council Primary draft of CGST and SGST bills were cleared; Redrafting of one clause in the draft compensation bill. Compensation is to be paid to States on a bi-monthly basis instead of on quarterly basis as in the draft bill. Eighth meeting of GST Council he deadlock over the GST continued in this meeting with the Centre and State refusing to budge from their respective positions on issues like

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Goods and Services Tax – GST – By: – Bimal jain – Dated:- 19-1-2017 Last Replied Date:- 19-1-2017 – Dear Professional Colleague, 9th GST Council inks breakthrough on dual control over tax payers, rollout deferred to July 1, 2017 In an attempt to try and bridge differences on the contentious issues such as administrative control over taxpayers under the Goods and Services Tax ( GST ), the all-powerful GST Council headed by the Hon ble Finance Minister, Mr. Arun Jaitley met for the ninth time in a row to clear all gathered clouds over the GST and brightening its prospects of implementation soon. With the conclusion of the 9th GST Council meet on January 16, 2017, the gist of the key takeaways from the meeting of the GST Council are as under:

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e remaining would be controlled by the Centre. For tax payers with more than ₹ 1.5 crore annual turnover, the States and the Centre will control and administer them in a 50:50 ratio. However, intelligence based enforcement power will be with both the Centre and States. Further, the Hon ble Finance Minister said that each assessee would be assessed only by one authority. He also said that You won't have to jump from authority to authority, that's the advantage of GST ……… Once you evolve numerically a lot more will come from state to the centre, because the percentage is 50:50 in higher category and 90:10 in lower category. The computer programming would be done in a manner so that there is no discretion. Tax on economic a

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ervices Tax ( IGST ) will be vested with it solely, agreed to make a special provision in law by which the States will also be cross empowered. Contentious issues between the conflicting States to be taken up by the Centre The Hon ble Finance Minister said that in exercise of IGST, where there are contentious issues between conflicting States with regard to place of supply etc., then those assessment would take place by the Centre. As the discussions made in the 9th GST Council meet would have an impact on the IGST Law, Compensation Law and correspondingly, on the Central Goods and Services Tax/State Goods and Services Tax Law, accordingly the Draft of IGST Law and other supporting legislations including Rules will be tabled again in the ne

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Goods and Services Tax – Started By: – Partha Sarkar – Dated:- 18-1-2017 Last Replied Date:- 23-1-2017 – We have a manufactured unit I Odisha sometimes we have to delivered service (other than supply) in different states. Please guide me the registration of service tax to be taken for different sates where service to be delivered. – Reply By MARIAPPAN GOVINDARAJAN – The Reply = The service tax is subsumed into GST. Therefore there is no separate registration for service tax. If the service provided is made more than one State you have to get registration for each State. If you are already registered with the Department you have to migrate to GST. Otherwise you have to register as per the procedure in the GST Rules. – Reply By Partha Sarkar

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 18-1-2017 Last Replied Date:- 20-1-2017 – DAILY DOSE OF GST UPDATE BY CA PRADEEP JAIN DEFINITION OF AGRICULTURE: As the GST law has been revised, it is pertinent to note down what all issues still remain un-tackled or untouched. Also certain provisions are there which are yet again drafted in such a way that they would attract litigation. Here we are discussing two such provisions: Starting with the definition of agriculture, its scope has been restricted largely in the GST regime. The proposed definition is reproduced here below: 2(7) agriculture with all its grammatical variations and cognate expressions, includes floriculture, horticulture, sericulture, the raising of crops, gr

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urther given under Section 2(106) about cultivate land personally which is as under:- (106) to cultivate personally means to carry on any agricultural operation on one s own account- (a) by one s own labour, or (b) by the labour of one s family, or (c) by servants on wages payable in cash or kind [(but not in crop share)] or by hired labour under one s personal supervision or the personal supervision of any member of one s family; Explanation 1. – A widow or a minor or a person who is subject to any physical or mental disability or is a serving member of the armed forces of the Union, shall be deemed to cultivate land personally if it is cultivated by her or his servants or by hired labour. Explanation 2. – In the case of a Hindu Undivided

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n of Composite Supply appearing in Section 2(27), Mixed Supplies in Section 2(66) and Principle supply in 2(78). The definitions are reproduced here below for ready reference: composite supply means a supply made by a taxable person to a recipient comprising two or more supplies of goods or services, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; www.capradeepjain.com – Reply By Ganeshan Kalyani – The Reply = Nice article. – Reply By KASTURI SETHI – The Reply = Excellent article, Sir. All doubts cleared. The new definition of 'Agriculture' under GST specifically includes 'Horticulture'. Can we conclude

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Public Notice No. 01/2017 Dated:- 18-1-2017 Trade Notice – Circulars – GST – OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE SERVICE TAX 7th FLOOR, TRADE CENTRE, BUNTS HOSTEL ROAD, MANGALURU-575 003 C. No. IV/16/01/2017/Tech. Date: 18.01.2017 Public Notice No. 01/2017 Sub: – Process of Migration of Central Excise and Service Tax assessees to GST regime- Reg. As per Section 166 of the draft CGST Act read with Rule 14 of the draft GST Registration Rules, every Central Excise / Service Tax assessee having valid PAN shall be granted registration under GST regime on a provisional basis. 2. To simplify the process of migration, step wis

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TRADE NOTICE No. 16/2016 Dated:- 18-1-2017 Trade Notice – Circulars – GST – OFFICE OF THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX HYDERABAD-IV COMMISSIONERATE POSNETT BHAVAN : TILAK ROAD : RAMKOTE : HYDERABAD-500001 C. No. V/08/01/2016-Tech Date: 18.01.2017 TRADE NOTICE No. 16/2016 Sub: GST – Migration of existing Central Excise and Service Tax assessee to GST – regarding. Attention of the members of trade, industry and all concerned is invited to the subject matter mentioned above. 2. As per Section 166 of draft CGST Act read with relevant rule, every central excise / service tax assessee having a valid PAN shall be granted registration under GST regime on a provisional basis. For such assessees, GSTN shall generate provisional IDs and communicate same to the assessees through CBEC for migration to the GST regime. The director general of Systems

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In case you are also registered with State Commercial Tax dept (VAT/Luxury Tax/ Entry Tax/ Entertainment Tax), you may have already initiated this process of migration and no further action suggested below would be applicable to you. A schematic representation of the migration process is given below: In order to migrate to GST, you need to have a provisional ID and password. These details you can obtain by logging into ACES portal (www.aces.gov.in). These details are being obtained from GSTN and you may periodically log in to see your status. You are required to use the provisional ID and password to log into GSTN portal (www.gst.gov.in) to fill up the required details and upload the supporting documents. After you provide the requisite details, an ARN (Application Reference Number) would be communicated to you by GSTN. Once you have the ARN, you would migrate to GST on the scheduled GST roll out date with issue of Provis

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Additional Commissioner 040-24760800 Kukatpally Division K. Muralidhar Additional Commissioner 040-23060064 Jeedimetla Division Durishetty Anudeep Additional Commissioner 040-27750401 P. Rejendra Prasad Superintendent 040-27750401 Balanagar Division CH. Kusuma Kumari Superintendent 040-27955936 Medchal Division R. Srinivas Superintendent 040-27954288 Service Tax Division-I G. Samraj Kumar

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Goods and Services Tax – GST – Dated:- 17-1-2017 – New Delhi, Jan 16 (PTI) In a significant breakthrough in implementation of India's biggest tax reform, the deadlock over administration of GST ended on Monday after the Centre agreed to allow states control over most of small taxpayers, but the rollout date was pushed back by 3 months to July 1. The split of GST taxpayers between the two will be done horizontally with states getting to administer and control 90 per cent of the asseesses below INR 1.5 crore annual turnover, and the remaining 10 per cent coming under the Centre. The Centre and states will share control of assessees with annual turnover of over INR 1.5 crore in 50:50 ratio even as Finance Minister Arun Jaitley insisted th

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r-state movement of goods and services, as well as SGST and CGST will be finalised in the next meeting of the GST Council on February 18. Once approved, the Council will then decide on taxing various goods and services in different tax slabs, he said. The stalemate over administration of GST had been holding up consensus in the GST Council since early November with four successive meetings failing to break the deadlock as the Centre was not in favour of a horizontal split. It said states did not have the expertise to administer levies like service tax. The Centre also did not favour dual agencies auditing and scrutinising each taxpayer as multiple authorities could end up acting at cross-purposes. With the legislative calendar drawn up, Jai

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Goods and Services Tax – GST – By: – Ashish Mittal – Dated:- 17-1-2017 – Background: Submission of details of transaction that the business was indulged in for a given period, in prescribed manner can be termed as Return Every law when comes into force, defines some periodic statement called return to control and assess the transaction the organization has entered into. In context of GST, CBEC in collaboration with GST council has notified draft Model GST model Law (in short MGL ) as revised on 25th November 2016 wherein vide CHAPTER -VIII, twelve Sections has been issued in this regards for compliance along with separate set of rules under the MGL for various classes of assesse and types of returns. Applicability The different class of assesse who would be liable for various different returns along with applicable rule and relevant form has been summarized in the infra mentioned table (Reference to Section-32, 33, 34, 39 read with rules-1, 2, 3, 21 has been made) S.No. Applicability

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e 1 Return for Outward Supply: Original Form-FORM GSTR-1 Steps: First the form will be filled by supplier by 10th of the next month Later this form will be available to recipients in Part A of FORM GSTR-2A for verifying their details. Details updated by the recipient in his FORM GSTR-2 U/s 33 or FORM GSTR-4 U/s 34 shall be made available to supplier in FORM GSTR-1A and Supplier may accept or reject the amendment in full or part and accordingly FORM GSTR-1 of supplier shall stand amended. Rule 2 Return for Inward Supply: Original Form-FORM GSTR-2 a. It shall be prepared by using information of Part A,B,C,D of FORM GSTR-2A regarding details furnished by In part AOutward Supplier In part BISD regarding ITC In part CRegarding deduction U/s 37 In part DBy E-Commerce Operator U/s 43C b. Also details regarding 1. ITC available, allowed, disallowed 2. ITC related to Non-Taxable Supplies etc. Rule-21 for Annual Return: Original Form-FORM GSTR-9 (for others) Original Form-FORM GSTR-9A (for compo

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deduct tax at source under Section 46 of MGL Original Form-FORM GSTR-7 Certificate of Deduction provided to deductee in FORM GSTR-7A Rule-8 for Supplies effected through e-Commerce Original Form-FORM GSTR-8 Verification of Certain Documents shall be conducted in accordance with Rule-20 and 21 similar procedure as defined in ITC related points. Frequency Various Returns: Different returns need to be filled at different frequency which also varies assessee-wise which has been summarized below in tabular manner: S.NO. Who is Liable to file return? When i.e. at what frequency return need to be filled? Return for Outward Supplies (Section 32 read with Rule-1 ) Return for Inward Supplies (Section 33 read with Rule-2 ) Monthly Return (Section 34 read with Rule-3 ) Annual Return (Section 39 read with Rule-21) 1 Registered Taxable Person (Specified in Schedule V) Monthly by 10th of Succeeding month of relevant tax period Monthly by 15th of Succeeding month of relevant tax period Monthly by 20t

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d Monthly by 15th of Succeeding month of relevant tax period Monthly by 20th of Succeeding month of relevant tax period Annually by 31th of December of subsequent F.Y. Special Point: Person Liable for Audit under 53(4) shall submit audit report and return and reconciliation statements General/Common Provisions: Some Provisions which are common in nature has been herewith stated in Question and answer form for the sake of simplicity Certain General/Common Provision in Question and answer Form Certain General Questions Answers based on Relevant Provisions as mentioned in MGL What content need to be filled in Detail of Outward Supply? Details of outward supplies shall include U/s 32 zero-rated supplies, inter-state supplies, return of goods of an inward supply, exports, debit notes, credit notes and supplementary invoices Meaning of Inward Supply? Meaning of Inward Supplies U/s 33 1. Verify, validate, modify or delete the details of outward supplies and credit or debit notes as already au

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/s 34 of the tax period in which the default was detected 3. But before Earlier of [Sept. monthly return u/s 34 of next F.Y or Annual return of F.Y] i.e. Correction possible max. till subsequent F.Y. Sept return or Annual return of relevant F.Y. Certain Condition for Monthly Return Condition for Monthly Return U/s 34 1. All dues of Tax must be paid before or on due date of filling respective returns 2. If no supply then also NIL return Mandatory 3. If tax not paid then return Invalid for allowing ITC Concept of First Return U/s 35 1. Registered Person to file return U/s 32, 33 till end of the month in which registration is granted to them. 2. For Sec. 8 Assessee details up to end of relevant Quarter need to be filled. 3. Balance provision of 32, 33, and 34 apply mutatis mutandis. Input Tax Credit Related Provisions: Input tax being one of the most important limb of GST, and its impact on return would be crucial, Thus the governing provisions giving reference to Section 36, 37, 38 read

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details and credit note to both parties are a. Mismatch of tax shall be communicated in FORM GST ITC-1 b. Non-submission of Invoice by supplier would disallow the ITC of recipient in FORM GST ITC-1 c. Duplication of ITC would be disallowed and communicated in FORM GST ITC-1 d. The difference in tax becomes output liability of recipient with interest subject to reduction when correction is done along with refund (shall be granted in electronic cash ledger in FORM GST PMT-3 of interest earlier paid for setoff in future liability) (Sec. 37 & 38) Note: 1. Rectification by a supplier-adding or correcting outward supply details in his valid return 2. Rectification by the recipient -deleting or correcting inward supply details for matching with each other's return Note: Provisions of Sec. 37 & 38 are similar and incorporated above only and there relevant rules also. Belated or No Return: Question: Whether Belated Return shall be accepted if yes what is the penalty? What if No ret

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 17-1-2017 – DAILY DOSE OF GST UPDATE BY CA PRADEEP JAIN AGGREGATE TURNOVER UNDER REVISED GST LAW:- As we have discussed in earlier GST updates that registration under GST regime is required only if the turnover of the assessee crosses the threshold limit of Rs twenty lacs. Today in this update we shall analyse the definition of aggregate turnover and changes brought in by Revised GST Draft Law. The definition of aggregate turnover under revised GST Draft Law is under section 2(6) which states that the aggregate turnover shall include all taxable supplies, exempt supplies, exports of goods and/or services and inter-State supplies of a person having the same PAN. The turnover is to

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lies from the definition. Under old GST law, this was also included in the definition. It was thought to be a welcoming change on government s behalf as already the threshold limit given is too less and then including non taxable supplies along with exempted supplies further narrows the threshold limit. But the definition of exempt supply is given under Section 2(44) of revised GST Act which reads as follows:- exempt supply means supply of any goods and/or services which are not taxable under this Act and includes such supply of goods and/or services which attract nil rate of tax or which may be exempt from tax under section 11 ; Hence the delight was short lived as non taxable supplies has been included in definition of exempted supplies a

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ay the GST even for single transaction of interstate supply. After registration, he has to pay the tax on each supply. This interpretation came from the concept of voluntary registration. But inclusion of interstate supply in definition of aggregate turnover together with registration requirement with schedule V leads to two interpretations viz:- a. The single transaction interstate supply will be liable to tax and registration is to be taken for the same. But exemption of ₹ 20 lakh will be separately allowed for intra state supply. But the turnover of interstate supply will also be covered under aggregate turnover . b. The interstate supply will also be eligible for threshold exemption of ₹ 20 Lakh but the person has to get reg

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GST latest update – Goods and Services Tax – GST – Dated:- 16-1-2017 – GST council is now reaching towards consensus on most issues including Dual Control and power to levy GST on transaction made wit

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Goods and Services Tax – GST council is now reaching towards consensus on most issues including Dual Control and power to levy GST on transaction made within the Territorial Water – Most likely date i

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Goods and Services Tax – GST – Dated:- 16-1-2017 – New Delhi, (PTI) Finance Minister Arun Jaitley will today look to break the deadlock over distribution of powers between centre and states to administer GST, an issue that is holding up launch of the new national sales tax from April. The all-powerful GST Council, headed by Jaitley, will meet for the ninth time today with the issue of who gets to administer the Goods and Services Tax (GST) being the single biggest issue on agenda. The council has been deadlocked in the last four meetings, the last one being on January 4, with states seeking sole powers to control assessee with annual turnover of up to ₹ 1.5 crore. Centre, however, is not in favour of a horizontal split as it feels st

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ut may figure in today's meeting, sources said. The council had in previous meeting agreed on most of the clauses of the draft IGST law, which along with Central-GST (CGST) and State-GST (SGST) have to be passed by the Parliament and state legislatives respectively before the new tax regime can be rolled out. Interated-GST or IGST deals with levy on inter-state supply (including stock transfers) of goods or services. GST will subsume a host of indirect taxes levied by the centre and the states, including excise duty, value-added tax, service tax, entry tax, luxury tax and entertainment tax. The Parliament passed the landmark constitutional amendment in August last year and more than half of state legislatures ratified it by mid-Septembe

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 16-1-2017 Last Replied Date:- 18-1-2017 – DAILY DOSE OF GST UPDATE BY CA PRADEEP JAIN Continuing with the analysis of the revised GST law, we shall today discuss changes bought in the definitions as provided in the law: 1. 2(17) Business: the new definition reads as follows: Business includes – (a) Any trade, commerce, manufacture, profession, vocation or any other similar activity, whether or not it is for a pecuniary benefit; (b) Any activity or transaction in connection with or incidental or ancillary to (a) above; (c) Any activity or transaction in the nature of (a) above, whether or not there is volume, frequency, continuity or regularity of such transaction; (d) Supply or ac

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sed GST law is compared with old definition given in model GST law, it can be noted that a new explanation is added in the clause aiming to cover any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities in the definition of business. This has been added to make it amply clear that the functions and activities undertaken by the government as public authorities shall be treated as business activities. Treating them as business has a large impact to the extent GST is considered. Not only the definition of supply but the cenvat credit provisions, all mandate that the activities undertaken by the taxable person should be in the course or furtheranc

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, all other activities shall be termed as business transactions and will be covered under GST. Even in the present system of service tax also, there is reverse charge mechanism on all services provided by Government except the services mentioned in schedule IV. This implies that the same system will continue in the proposed GST also and it might be possible that the reverse charge will be applicable on the same. Moreover, we have seen that there is controversy of service tax liability on club and association. On the basis of principal of mutuality, it was held that club and its members are one and same person and hence the service tax is not applicable on the same. It was held by Bihar High Court in case of Ranchi club and Gujarat High Cour

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9th CST Council Meeting Dated:- 16-1-2017 GST Council – Minutes – Circulars – GST – Minutes of the 9th GST Council Meeting held on 16 January 2017 The ninth meeting of the GST Council (hereinafter referred to as 'the Council') was held on 16 January 2017 in Vigyan Bhavan, New Delhi under the Chairpersonship of the Hon'ble Union Finance Minister, Shri Arun Jaitley. The list of the Hon'ble Members of the Council who attended the meeting is at Annexure 1. The list of officers of the Centre, the States, the GST Council and the Goods and Services Tax Network (GSTN) who attended the meeting is at Annexure 2 . The officials from the Ministries of Power and Renewable Energy of the Government of India and the trade representatives who made presentations before the Council is at Annexure 3 . 2. The following agenda items were listed for discussion in the ninth meeting of the Council- 1. Brief presentation by representatives of Power Sector 2. Confirmat

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the Power Sector to make a brief presentation on the impact of GST on Power Sector. 4.1 Shri Pradeep Kumar Pujari, Secretary, Ministry of Power, in his introductory remarks, stated that implementation of GST would have an impact on the cost of generation, transmission and distribution of power. He observed that impact on thermal and hydel power plants would be different because coal was a major input for thermal power plants. He stated that any change in the tariff of power would have a big impact on the economy. He further stated that power tariff was approved by the regulator. He explained that there were broadly two regimes for determining power tariff, namely the cost-plus regime and the competitive bid regime. He explained that in the cost-plus regime, the cost of inputs was passed on to the consumers and in the competitive bid regime, the bidder took into account the cost of the inputs while making the bid for power tariff. He also explained that there was a very large elemen

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nistry of Power made a presentation giving different input tax rate scenarios under GST for the power sector and its impact on the price of power per unit for both coal-based and hydro power plants. For coal-based power plants, he stated that if electricity was kept out of the GST net, but inputs for generating electricity were taxed at the rate of 18%, the net impact could be an increase in price per unit from ₹ 6.99 to ₹ 7.10. He suggested alternative options for plants in operation and for new plants. He explained that if electricity was kept under GST in the zero rated category, the cost per unit would be reduced to ₹ 6.53 from the present ₹ 6.99. He stated that if this scenario was not possible due to revenue implication and if electricity was kept out of the GST net, the cost per unit of power for plants in operation would be ₹ 7.01 if coal was taxed at the rate of 12% and other inputs were taxed at the rate of 18%. He added that this cost could come

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st of power per unit would be higher if the same GST rate was kept for inputs for coal based and hydro power plants. He suggested that the hydro power plants should be treated as part of the renewable energy sector where presently duty regime was considerably lower as compared to coal and hydel power plants. He stated that around 11,000 megawatt hydro power capacity was expected to be added in the next five years and most of the projects were situated in the North-East or in the Special Category States. He suggested that supplies made to under-construction power projects should be granted the status of deemed export as was being contemplated for solar power projects. He observed that this would involve a relatively small tax short fall of₹ 880 crore spread over a period of five years. He pointed out that any tariff increase on power due to GST would have a multiplier effect on economic development and would adversely impact industrial production, GDP growth, make in India campaig

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coal at 5% and on other inputs at 18%. He pointed out that they had also given alternate proposals. The Hon'ble Chairperson enquired whether it would be desirable to maintain the present rate of taxation for the power sector and to this the Secretary, Ministry of Power responded that this could work for the thermal power sector but not for the hydro power sector. He also pointed out that electricity sector was different from the sectors like transport, civil aviation, etc. as this was consumed by the poorer sections of the society and the aim of the Government has been to electrify every home. The Secretary, Renewable Energy observed that permitting zero rating for this sector would not have any impact as presently they were not charged to any taxes. The Hon'ble Minister from Tamil Nadu observed that tax rate should be revenue neutral. He also wondered whether increase of tariff was due to tax rate on services going up to 18% for EPC (Engineering Procurement and Construction) c

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39;to encourage voluntary registration'. The Council agreed to replace the version of the Hon'ble Minister as per the suggestion made. 5.2. The Hon'ble Minister from Karnataka stated that the decision recorded in paragraph 24(ii) in relation to Section 10(2) of the Draft GST Compensation Law implied that the Council would sit and decide the mode of raising additional resources only when amount in the GST Compensation Fund fell short. He observed that this would not be a practical approach and suggested that, instead, the Council could give a standing authorisation to the Government of India to raise additional resources when the amount in the GST Compensation Fund fell short. The Secretary to the Council (hereinafter referred to as 'the Secretary') suggested to also add the expression 'is likely to fall short' in the fourth line. The Council agreed to the suggestion of the Secretary. 6. In view of the above discussions, for Agenda item 2, the Council d

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dual control and cross-empowerment. He proposed that these issues should be discussed first such as the 13 changes to the Model GST Law proposed by the Law Committee and circulated as an agenda note under agenda item 7 for the 8th GST Council meeting held on 3 and 4 January 2017, the provisions of Appellate Tribunal and the fitment of various commodities into the tax slabs. He suggested that the subject of cross-empowerment might be taken up after discussing and deciding the above issues. The Hon'ble Chairperson stated that the issues relating to the Model GST Law could be taken up later and that in this meeting, the Council should try to resolve the thorny issue of cross-empowerment. He invited the Chairman, Central Board of Excise and Customs (CBEC) to give his views on this subject. He further stated that along with the Members, officers could also contribute in the discussion to follow. 8. The Chairman, CBEC observed that cross-empowerment in the context of Central Goods an

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5 crore. He stated that most activities relating to taxpayers with turnover below ₹ 1.5 crore could be entrusted to the States and that the Centre could only have a small presence in this taxpayer segment. He stated that for taxpayers with turnover above ₹ 1.5 crore, Centre could carry out a greater percentage of scrutiny. He suggested that the taxpayers could be given a choice to go to either of the two administrations and that a taxpayer could choose to go to the State administration for activities relating to registration, post registration, etc. On IGST, he emphasised that there was a Constitutional challenge to entrust its administration to the State tax authorities, but in order to help build a consensus, he presented two options by which the Central government could cross-empower the State tax authorities under the IGST Act. He stated that the first option could be to empower State tax administrations for all processes like scrutiny, demand, audit, etc. but they shou

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377; 1.5 crore. As regards suggestion for carve out for exclusive jurisdiction of the Centre for adjudication on place of supply issues, he suggested that this should apply only where there was a dispute between two States. The Chairman CBEC suggested that carve out for the Central tax administration should be for all place of supply issues including where a third State was aggrieved or where there was a valuation challenge for an inter-State supply. 10. The Hon'ble Chief Minister of Puducherry stated that earlier, several permutations and combinations had been discussed on this issue including a proposal of vertical division. He added that an entirely new concept had been introduced by the Chairman, CBEC and requested that it should be tabled in writing. The Hon'ble Minister from Karnataka observed that the proposal appeared rational and worthy of consideration but requested more details in terms of numbers. He also added that the Chairman, CBEC had introduced a few caveats

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e, the officers of the State and the Central tax administration could sit together and decide the percentage of audit to be done by each. He stated, as an example, that more complicated service tax assessees could be taken up for audit by the Central tax administration. He stated that other than audit, servicing of taxpayers in other areas like change in registration particulars, etc. could be done by the State tax administration if the taxpayer was comfortable with them and this could also include taxpayers from the services sector. He stated that on cross-empowerment under the IGST Act, out of the two options proposed by the Chairman, CBEC, the better option would be that the States could do adjudication relating to issues arising out of inter-State supply except for place of supply issues as such disputes would affect the interest of two States. 12. The Hon'ble Deputy Chief Minister of Gujarat suggested to first arrive at the ratio for division and the rest could follow. He s

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rejected outright as the percentage of intervention above ₹ 1.5 crore would have exceeded 5%. Instead, he suggested that the auditable sample should be 5% each for taxpayers below and above ₹ 1.5 crore turnover. He also agreed that neither the Central Government nor the State Government should be ousted from any jurisdiction. He stated that 42 lakh taxpayers with turnover above ₹ 1.5 crore should be divided in the proportion of the staff strength of each administration. He also supported the proposal of the Chairman; CBEC that the other functions in relation to taxpayers below the turnover of ₹ 1.5 crore should be handled by the State tax administration. The Hon'ble Minister from Assam welcomed the proposal of the Chairman, CBEC to empower the State tax authorities under the IGST Act. The Hon'ble Minister from Telangana also observed that the suggestion of the Chairman, CBEC was a good one and it could be a basis to resolve this issue. Ms. Mona Khandhar

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not assigned to one administration, each would blame the other for lack of action. The Additional Chief Secretary (Taxes), Kerala stated that if freedom was left to the taxpayer to choose one of the two administrations, he might choose the one who would favour him. The CCT, Assam also expressed the apprehension that a taxpayer might not choose any tax administration or choose one who could collude with him. The ACS and CCT, Tamil Nadu stated that a large number of functions needed to be carried out in the field and the taxpayers needed handholding by the tax administration. The CCT, Uttar Pradesh supported dividing the taxpayer base. The CCT, Gujarat observed that for a successful implementation of GST, responsibilities to tax administrations should be assigned clearly and, if this was not done, there would be lack of accountability. He supported a vertical division. The CCT, Bihar supported the suggestion of Chairman, GSTN that a tax payer should report to the same authority to whom

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t and carry out enforcement functions. It added that the State's tax administration could issue demand, adjudicate or file appeals in respect of inter-State supplies of goods and services except in the following situation: (i) where issue related to changing the declared nature of supply from intra-State to inter-State or vice versa or led to change in the destination of supply from one State to another; (ii) consumption of supply was required to be apportioned between various States; (iii) valuation of inter-State supplies between related parties; (iv) the consuming State advise that the case be adjudicated by the Centre; (v) all import and export related functions. 15. The Secretary summed up the deliberations during the lunch break meeting with the officers and informed the Council that the overwhelming view of the States was to have a division of tax-payers for administrative purposes between the Central and the State tax administrations. He further informed that two options

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16: The Hon'ble Minister from West Bengal observed that the oral proposal of the Chairman, CBEC had only one caveat but the written paper circulated by the CBEC had five caveats. He expressed that the notion of taking geographically stratified sample was problematic. He further pointed out that CBEC's proposal appeared to be more in the nature of loud thinking as it was contingent upon the Ministry of Law being able to find a viable legal solution. The Hon'ble Chairperson stated that CBEC had taken a strict legal view that IGST could only be levied and collected by the Central tax administration and apportioned to the States. He pointed out that there was another view that under Article 258 of the Constitution, the Hon'ble President of India, with the consent of the Hon'ble Governor of the State, could entrust the function of the Central administration to the State administration. The Hon'ble Minister from Karnataka stated that another alternative was to delegat

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into five caveats and he had reservations in this regard. The Hon'ble Minister from Tamil Nadu observed that CBEC's written note was at variance with the statement of the Chairman, CBEC. He stated that in his view, IGST could not work without cross-empowerment to the State tax authorities and that it was not a correct way of discussion to state that the legal department would need to find a solution for cross-empowerment. He suggested that in order to avoid dual interface for tax payers, there should be a cut off of ₹ 1.5 crore turnover and audit of a certain percent of 'tax payer falling below this threshold could be done by the Central tax administration but otherwise, the control of the taxpayers in this segment should rest with the States. He added that taxpayers above the turnover of ₹ 1.5 crore should be divided equally between the Central and the State tax administrations. He stated that the overall percentage of sharing should be 75% for the States and

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e Minister from Kerala stated that tax payers with turn over below ₹ 1.5 crore should be exclusively with the State tax administration and those above the turnover of ₹ 1.5 crore should be divided equally between the two administrations. He further stated that there should be cross-empowerment under the IGST Act. Shri Alok Shukla, Joint Secretary TRU, CBEC stated that like States had concern regarding ensuring correctness of assessment of IGST and wanted powers under the IGST Act, the Central administration must also have a say on the collection of CGST for tax payers with turn over below ₹ 1.5 crore. He added that the Centre's jurisdiction for enforcement, audit and scrutiny of returns should not be completely ousted in respect of taxpayers below ₹ 1.5 crore turnover segment but the other functions could be carried out by the States. He also suggested that for tax payers below ₹ 1.5 crore turnover, Centre's intervention could be limited to 1% with

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strative division. The Hon'ble Minister from Assam supported this proposal. He observed that there could be a potential dispute as to when a taxpayer crossed the turnover threshold of ₹ 1.5 crore or conversely went below this threshold. The Hon'ble Minister from Maharashtra also supported a vertical division in the ratio of two-third for the States and one-third for the Centre and suggested that computer could do this division. The Hon'ble Minister from Kerala stated that all taxpayers below the turnover of ₹ 1.5 crore should be exclusively under the control of the State tax administrations. Shri Manish Kumar Sinha, Commissioner GST Council suggested that whatever model was adopted, the risk prone taxpayers for audit should be drawn from the entire taxpayer base. 19. The Hon'ble Chairperson, summing up the discussion laid out a few broad guidelines for a possible decision on the subject. He stated that out of the entire universe of the taxpayer base, draw

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ll taxpayers below ₹ 1.5 crore should be with the State tax administration and that the Central administration should not take up audit of 10% of the taxpayers in this segment. The Hon'ble Minister from Kerala stated that the State tax administration was closer to small dealers in the administrative reach and he agreed that the Centre could have a small space for auditing taxpayers falling below the turnover limit of ₹ 1.5 crore and that this sample could be drawn from the entire taxpayer base below ₹ 1.5 crore turnover. The Hon'ble Minister from Maharashtra reiterated his preference for a vertical division with two-third share going to the States from the entire value chain and suggested that a variation of this principle might be allowed for those States who wanted to have exclusive control of taxpayers below ₹ 1.5 crore turnover. He added that the two-third share of such States could be calculated after adjusting the total number of taxpayers below &#

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e should be no dual control in respect of audit by the Central tax administration for taxpayers with turnover below ₹ 1.5 crore. He also supported the suggestion to give flexibility to the States in determining the share of two-third taxpayers falling under their jurisdiction. He further stated that such an arrangement should not be made as a part of the law; rather it could be operated through a resolution which could be changed later. He stated that the Council could also permit a State to move from one model to another. Shri Tuhin Kanta Pandey, Principal Secretary (Finance), Odisha stated that there should be no diffused accountability except for enforcement and that a fixed proportion of dealers should be assigned to the Central and the State tax administrations. He added that option may also be made available to any State if it wishes to be allocated 100% taxpayers below the turnover of ₹ 1.5 crore subject to the overall share/proportion of dealers allocated to a State

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supported the proposal of the Hon'ble Minister from Tamil Nadu. 22. The Hon'ble Chairperson summed up the suggestions and the possible solutions: (i) there should be a vertical division of taxpayers where two-third share should go to the States and one-third share should go to the Centre (Gujarat's suggestion); (ii) for taxpayers below ₹ 1.5 crore, the administrative control should vest with the States and only 10% of units to be audited by the Central tax administration (Tamil Nadu's proposal); (iii) administration of taxpayers below ₹ 1.5 crore turnover to rest with the States and those above ₹ 1.5 crore to be divided between the Centre and States; (iv) States could have flexibility to negotiate the numbers with the Central tax administration; (v) Intelligence based action could be taken by both tax administrations without any division; (vi) Scrutiny and audit to be part of the division; (vii) IGST to be cross-empowered either under law or under

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rom West Bengal observed that the issue regarding allowing 10% audit to Central tax administration for taxpayers below ₹ 1.5 crore turnover was an important matter and it should be discussed when the Hon'ble Member from D.P. was also present. The CCT Gujarat suggested that within the overall formula of two-third and one-third division between State and the Centre, it could also be considered whether the base of the Service Tax payers could be left with the Central tax administration. The Hon'ble Minister from Assam observed that the States might need to create more posts at State level if administration of all Service Tax assessees below the turnover of ₹ 1.5 crore was entrusted to the States. The Hon'ble Minister from West Bengal suggested that both the Central and the State tax administrations could completely give up audit of taxpayers below Rs. l.5 crore turnover and that the other aspects of administration should be left with the States alone. 24. The Se

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variation should be permitted for administrative division of taxpayers. The Hon'ble Chairperson observed that States had historically taken a certain position in respect of taxpayers below the turnover of ₹ 1.5 crore and that needed to be taken note of. The Hon'ble Minister from Tamil Nadu suggested that there should be a particular percent of division of taxpayers below ₹ 1.5 crore turnover and another percent for taxpayers above ₹ 1.5 crore. He further stated that no carve out should be allowed in relation to cross-empowerment under lGST. The Hon'ble Chairperson stated that the only grey area left was in relation to division of taxpayers below ₹ 1.5 crore threshold where the Centre proposed a 20% share and the Hon'ble Minister from Tamil Nadu had suggested a 10% share. He further observed that there was not much substantial difference between the two proposed percentages of 20 and 10. 25. The Hon'ble Minister from Tamil Nadu sought clar

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5 crore and so on. He also observed that the proposed arrangement should not be binding on all the States. The Hon'ble Minister from West Bengal stated that for taxpayers below the turnover of ₹ 1.5 crore, there were three options on the table, namely to have a division in the ratio of 80% and 20% or 90% and 10% or 100% and 0% in favour of the States. He stated that Tamil Nadu's position was very close to the option of 100% and 0%. He added that the proposal made by the Hon'ble Minister of Tamil Nadu was not acceptable to his State and he sought a flexibility for West Bengal that 100% of its taxpayers below ₹ 1.5 crore turnover would remain with the State. The Hon'ble Chairperson stated that broadly, the concern of the States was that the Central tax administration should not scrutinise the books of account of small taxpayers in the goods sector and one solution to this concern could be that the 20% taxpayers allocated to the Centre should only be from the S

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jurisdiction of Centre could only be Service taxpayers and taxpayers above ₹ 1.5 crore turnover should be divided equally between the two administrations. He stated that other suggestions remained the same which he had earlier put on the table. The Hon'ble Minister from Bihar supported the proposal of the Hon'ble Chairperson. The CCT Andhra Pradesh raised an issue whether goods would include 'deemed' goods and whether these would remain with the States. The Secretary observed that the 'deemed' goods were mostly considered as services and that the Centre would have to get a share of such Service Tax assessees. The Hon'ble Minister from West Bengal stated that restaurant was in the category of deemed goods and it should remain in the jurisdiction of States. The Hon'ble Minister from Tamil Nadu suggested not to divide the taxpayer base on the basis of service category and suggested that the division should be based on the available resources with the

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The Hon'ble Minister from Haryana suggested that the Hon'ble Chairperson could seek the views of each State on this issue. The Hon'ble Minister from West Bengal objected to this suggestion and stated that this amounted to voting in disguise. He also reminded the House that earlier on many occasions the sense of the House was not adopted as the basis of consensus and on this issue, no sense of the House had emerged as yet. The Hon'ble Chairperson observed that the Council had avoided voting till now and it must continue to work on the principle of consensus and develop a healthy convention in this regard. The Hon'ble Minister from Tamil Nadu stated that he had changed his position and now supported a vertical division with two-third of taxpayers going to the States and one-third to the Centre. The Hon'ble Chairperson stated that in order to reach consensus, he offered that of the taxpayers below ₹ 1.5 crore turnover, 90% should be allocated to the States a

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taxpayers above ₹ 1.5crore turnover, all administrative control shall be divided equally in the ratio of 50% each for the Central and the State tax administration; iv. The division of taxpayers in each State shall be done by computer at the State level based on stratified random sampling and could also take into account the geographical location and type of the taxpayers, as may be mutually agreed; v. The new registrants shall be initially divided one each between the Central and the State tax administration and at the end of the year, once the turnover of such new registrants was ascertained, those units with turnover below ₹ 1.5 crore shall be divided in the ratio of 90% for the State tax administration and 10% for the Central tax administration and those units above the turnover of ₹ 1.5 crore shall be divided in the ratio of 50% each for the State and the Central tax administration; vi. The division of the taxpayers may be switched between the Centre and

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nion of India unless the Hon'ble Supreme Court decides otherwise in the ongoing litigation on the issue but the power to collect the State tax in the territorial waters shall be delegated by the Central Government to the States. Agenda Item 4: Discussion on issues of considering sale within twelve nautical miles as inter-state or intra-state sale 29. This agenda item was covered during the discussion on agenda item 3. Agenda Item 5: Date of the next meeting of the GST Council 30. Before discussing the next date of the meeting, the Council briefly discussed the date Of implementation of GST. The Hon'ble Minister from Maharashtra suggested that GST should be implemented from l April, 2017. The Hon'ble Minister from Assam stated that it was not desirable to change the tax regime in the middle of the financial year and suggested that it should be implemented from 1st April, 2017. The Hon'ble Minister from Kerala stated that the decision could not be rus

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w had been put in the public domain on 26 November, 2016, several comments had been received and on this account, about 15 to 20 minor changes might be needed. On enquiry from the Hon'ble Chairperson, he informed that the revised Model GST Law could be brought to the Council for its consideration by around 15 February, 2017. The Hon'ble Minister from Kamataka stated that the registration process was on going and that the status of fitment exercise for rates of tax was not known. The Hon'ble Minister from West Bengal stated that adequate time was needed for rate of taxes to be put into the ERP (Enterprise Resource Planning) of the taxpayers. The Hon'ble Minister from Tamil Nadu stated that 1 st July, 2017 appeared a more practical date for implementation of GST. The Hon'ble Minister from Kamataka also concurred with this observation. The Principal Secretary (Revenue), Telangana stated that an effort could be made to implement GST by 1st April, 2017 and if it was not

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Goods and Services Tax – GST – By: – Ashish Mittal – Dated:- 14-1-2017 – Background: Every time a law comes into force the Assessee falling under its ambit has to get them registered in said law and comply with the relevant provisions. CBEC in association with empowered GST council has notified draft Model GST model Law (in short MGL ) as revised on 25th November 2016, rules and schedules issued in this regards wherein vide CHAPTER – VI, a set of five Sections (in short Sec. ) read with separate rules issued in this regards for compliance and a schedule defining person liable to be registered wide Schedule-V of the MGL for classifying the fate of certain classes of Assessee. Applicability The applicability of registration under MGL on various classes of Assessee along with turnover limit (in short T/o) can be explained in a summarized form in the following table (Reference to Sec. 23 read with Schedule-V have been made herein) S.No. Class of Assessee Liable for Registration as Per Sec

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ys from appointed date 3 In case of Succession of Business-the successor of business need to get fresh registration. No Limit is Applicable as it is transfer of existing business Within 30 days of transfer or succession 4 In case of amalgamation or demerger-the resultant Assessee No Limit is Applicable as it is transfer of running business Within 30 days of issue of Certificate of Incorporation 5 Interstate supplier No T/o Limit Within 30 days of indulging in such activity under MGL. 6 Casual taxable person No T/o Limit At least five days prior to the commencement of business 7 Non-Resident Taxable person 8 Person liable under Reverse Charge Mechanism (in Short RCM ) No T/o Limit Within 30 days of indulging in such activity under MGL. 9 Deductor specified under Sec. 46 of MGL or Collector of Tax under Sec. 56 (irrespective of fact of separate registration) 10 Agent of a taxable person No T/o Limit Within 30 days of indulging in such activity under MGL. 11 Input Service Distributor Spec

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than Non-Resident, Deductor under sec. 46 or collector under Sec. 56, fill Part A of FORM GST REG-01 particulars such as email, PAN, Mobile No. which would be verified. 2. After verification an application reference number shall be generated and communicate 3. Then fill Part B of FORM GST REG-01, signed and submit along with documents. 4. An acknowledgement shall be issued in FORM GST REG-02 (electronic on temporary basis) 5. Proper officer after verifying above shall approve within 3 working days form application. 6. If found deficient with regards to information or documents, then it shall be intimated in FORM GST REG-03 within 3 working days form application and reply should be given within 7 working days form intimation receipt in FORM GST REG-04. 7. The reply forwarded to concerned proper officer and he may Grant approval within 7 working days Reject along with reasons in FORM GST REG-05. Note: If no action taken by proper officer in 3 or 7 working days then automatic registration

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: At the outset emphasis must be given to governments intention of keeping each and every communication with the department in electronic form thereby defining forms for each and every communication whether from Assessee or department s side thereby promoting the Hon ble PM view of digital India and paper less economy which would definitely be appreciated by the industry thereby reducing the manual work load and regular visiting to the department. Although huge efforts are being made by the government towards building a strong GSTN portal but it should effectively carters the need of various class of Assessee thereby enabling in Digitalization . Common Points and Penal Provisions related to Registration: Certain common & penal provisions for all the Assessee (Reference to Section 23 and 24 read with rule 4, 6,7,10, 15, 17 of Registration rule) 1. For Multiple Locations in a single state, different registration may be taken on fulfilling certain conditions i.e. as per Rule-4 of regi

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Display GSTIN and RC in prominent place in principal place of business. 8. All communication shall be done electronically on GST site by department and Assessee and communication shall be appropriately signed by authorized person. 9. Physical verification if required by proper officer may be conducted and documents shall be uploaded in Form GST REG-26. Amendment in registration Amendment in registration (Reference of Section 25 read with rule 9 of Registration rule has been made) 1. Any information change which was filled at time of registration shall be intimated within 15 days to the proper officer in FORM GST REG-11 along with documents as proof. 2. Changes relates to the Name, Principal Place of Business, and details of partners or directors, Karta, Managing Committee, Board of Trustees, Chief Executive Officer or equivalent then order to be passed within 15 days by proper officer on satisfaction in order under FORM GST REG-12. 3. for others as soon as application is filled on por

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n case of composition scheme person and 6 month for others person taken voluntary registration don t start business within 6 month 3. Registration obtained by fraud, willful misstatement or suppression of facts, can be cancelled with retrospective effect. 4. Cancellation after giving Opportunity of being heard (in short OBH ), by issuing SCN under FORM GST REG-15, Assessee still liable for old dues. 5. In case of cancellation ITC/CENVAT of inputs capital goods shall be reversed in prescribed manner. 6. Application may be made in FORM GST REG-14 for cancellation along with relevant documents on being satisfied proper officer shall issue cancellation order under FORM GST REG-16 within 30 days. (Apply mutatis mundis to legal heir) 7. On cancellation by proper officer an application in FORM GST REG-17 within 30 days of service shall be filled (except in case of non-filling of return in such case application can be filled after return is filled and dues paid thereof). 8. After being satisfi

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 14-1-2017 Last Replied Date:- 18-1-2017 – While the Government still claims that it is actively working to see GST roll out from April, 2017, much would depend upon next week's GST Council meeting. States have indicated that it could be doable from any time between June and September, 2017. Finance Minister has once again affirmed in ongoing Vibrant Gujarat Summit that GST could be introduced in April, 2017. Gujarat may be one of the few states that are prepared for GST. Government is working overtime to make it a reality with target of 1st April, 2017. However the present developments are not in sync with this dream. All the states will have to pass legislations of SGST

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ocess of being fully geared up for April, 2017 (though it may not happen). If Government may so feel, it may increase the rate of Service Tax to avoid any revenue loss due to delayed GST. This will serve dual purposes – will improve revenues and bring Service Tax rates closer to standard GST rates. Since the likely standard rte of GST would be 18 percent as decided by GST Council, there is all likelihood that Service Tax rate may be increased to 16 or 18 percent. This would result in higher revenues to centre as compared to GST regime where rate is likely to be lower for some select services. We can look for the following in Budget- 2017: Clear road map and Government's irrevocable intention on GST implementation A forward looking state

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and whether rate of taxes / cases be lowered) Laying GST Bills in Budget session itself For the first time, Union Budget will include (subsume) railway budget in it as there will be no separate railway budget. This would also mean a total fact lift for railways in two ways, moving on to accrual based accounting and second, an independent authority to recommend changes in fares and fright tariff. With general elections having been announced in five states from 5th February till 8th March, 2017, the combined opposition is now demanding that Union Government should not present the Budget on 1st February, 2017 as it could influence the voters in election states. However, Government does not want to delay the budget, and rightly so. It appears

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 14-1-2017 – GST DAILY DOSE OF UPDATION BY CA PRADEEP JAIN Continuing with the analysis of the revised GST law, we shall today discuss changes bought in the definitions as provided in the law: 2(4) Adjudicating Authority: The new definition reads as follows: Adjudicating Authority means any authority competent to pass any order or decision under this Act, but does not include the Board, the Revisional Authority, Authority for Advance Ruling, Appellate Authority for Advance Ruling, the First Appellate Authority and the Appellate Tribunal; Under the earlier definition in Model GST law, only Board, First appellate authority and Appellate tribunal was excluded. But when compared to thi

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eads as follows: Agent means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services on behalf of another, whether disclosed or not; Whereas the earlier model GST law gave the definition of agent as under:- (5) agent means a person who carries on the business of supply or receipt of goods and/or services on behalf of another, whether disclosed or not and includes a factor, broker, commission agent, arhatia, del credere agent, intermediary or an auctioneer or any other mercantile agent, by whatever name called, and whether of the same description as hereinbefore mentioned or n

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CBEC GST Migration Help (PPT for taxpayers on Migration) – Goods and Services Tax – GST – Dated:- 13-1-2017 – CBEC GST Migration Help (PPT for taxpayers on Migration) – News – Press release

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Goods and Services Tax – Started By: – Chandrashekhar Kandpal – Dated:- 13-1-2017 Last Replied Date:- 18-1-2017 – Dear ExpertsI will appreciate your views on the following :1. Whether SGST or CGST paid in one state can be utilised as set off in other state. e.g. a branch office in Delhi registered under GST and GST from where no supply is taking place. Can we take set off of SGCT/CGST charged for Delhi office against the liability in Maharashtra? 2. If an Exhibition in organised in a state wher

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 13-1-2017 Last Replied Date:- 2-7-2017 – Introduction Alcohol sector is the second largest contributor of taxes to state Government exchequers yielding more than ₹ 90, 000 crores in taxes every year. The total tax impact for liquor companies are in the range from 70-150% in most states as no inter-tax set-offs are available for them. While alcoholic beverages represent 25% of the food and beverage market in China and the US, in India, spirits alone is 34%, making it the largest category. For most states, alcohol contributes to 20 to 25% of state revenue (state excise). It may, however, be noted that manufacture of liquor meant for human consumption is subject to state excise duties and not Central Excise Duty under the Central Excise Act, 1944. State Excise Duties will not get subsumed in GST. With Constitution (101st) Act, 2016 which authorizes levy of GST in India, it is clear that alcohol beverages shall be kep

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try No. 30 of exemption Notification No. 25/2012-ST. To give effect to the exclusion of processes in relation to alcoholic liquor from negative list, exemption under Notification No. 25/2012-ST was also amended w.e.f. 01.06.2015 to exclude exemption to intermediate production processes/job works in relation to alcoholic liquor meant for human consumption. Liquor industry is also subject to levy of State VAT and other local taxes as entry tax / octroi etc. Goods and Services Tax (GST) as a tax reform Migrating to Goods and Services Tax (GST) is a time to revisit the taxation and remove the anomalies. Goods and Service Tax (GST) is a destination based consumption tax which is a levy of tax on all goods and services with the objective of expanding the tax base through wide coverage of economic activities , mitigating the cascading effect , reduction of exemptions , enable better compliances etc. thereby resulting into formation of common national market for goods and services . Taxation i

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ll lead to both, positive and negative impact. Likely positive GST impact on the alco-beverage industry Better and efficient logistics/distribution channels State taxes other than excise/VAT to be subsumed in GST. To that extent, input tax credit may be allowed. Relief from dual administrative control (only States to control) Likely adverse GST impact on the alco-beverage industry There is no concept of centralized registration in GST regime, unlike in the present setup. Where input goods and services used in the petroleum and liquor industries are covered under GST and the outputs are not, there could arise complex issues surrounding double taxation, ineligibility for input tax credits, supply chain regulations, and so on. GST will accentuate increased cascading effect of taxes on the final retail product price because no input tax credit will be available between GST and state excise/VAT. No input credit will be available between any two or more State taxes and on various goods and s

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certain inputs / outputs. There will be adverse impact on major consumers like hotels, restaurants, pharmaceuticals, perfumes manufacturing sector etc. in the form of increased cost. Major Challenges in GST GST poses multifarious challenges to alco-beverages industry. In the GST regime, due to higher GST rates tax on many input raw materials (for instance, agriculture inputs to ethanol production) as well as services, costs would go up significantly which would prove detrimental to the industry in both the short-term and the long-term. Even if all of these costs are passed down the value-chain, the additional burden may have a huge working capital impact on the industry. Manufacturers of alcoholic beverages for human consumption procure the raw materials (Extra Neutral Alcohol (ENA)/Grain Neutral Spirit (GNS) / Concentrate of Alcoholic Beverage) either through captive manufacture or by way of purchase from third parties in India or they import it from other countries. As the finished p

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being excluded from GST base, will be unable to avail credit for the enhanced tax paid on transportation services. The 70% abatement should be continued for taxation of these services. Some of the alco-beverages manufacturers use their own exclusive patented bottles, which may be used 5-7 times by the same manufacturer. Presently, many States impose a lower VAT rate with some states like imposing the standard VAT rate on glass bottles vattable against the VAT on the finished product sold within the state. The used glass bottles which are purchased by brewers / spirits manufacturers from used bottle dealers are again taxed at the lower/ standard VAT. In GST, each re-use / re-supply is likely to suffer GST @ 18% with no possibility of credit as alcohol is excluded from GST base. The effective GST cost on every bottle will be about 70% of the purchase price of a new bottle. This too will add to cost as levying VAT on used bottles at the full purchase price leads to double taxation, since

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 13-1-2017 – GST DAILY DOSE OF UPDATION BY CA PRADEEP JAIN As the GST law has been revised, it is pertinent to note down what all issues still remain un-tackled or untouched. Also certain provisions are there which are yet again drafted in such a way that they would attract litigation. Here we are discussing two such provisions: Seeing the valuation provisions as prescribed in section 15, the sub-section 3 of section 15 lays down the conditions to be adhered in relation to exclusion of discounts. The sections reads as follows: (3) The value of the supply shall not include any discount that is given: (a) before or at the time of the supply provided such discount has been duly record

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d the like sectors. For the pre-shipment discount, this section clearly provides that no discount shall be allowed unless the same is given either before or at the time of supply. Now, how a discount before the supply of goods or services? Secondly, if a price is negotiated between supplier and buyer then department will always compare with other buyer price and will intend to challenge such price that these are due discount given to buyer and it is clearly not mentioned on invoice. This is due to the second condition that it should be recorded in the invoice issued for such supply. Hence, every price negotiated should mention the standard price and then discount given to buyer. Otherwise, it will always be liable to be challenged by the de

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n a particular period. Now, such type of discounts cannot be deducted beforehand. Such type of discounts were allowed under Central Excise law on notional basis. Such type of discounts will fall under second category. Hence, you have pay GST firstly and then claim discounts afterwards. However the discounts related to post sale turnovers are also not allowed. It will be allowed only if there is agreement to that effect beforehand. Normally, big companies enters into agreement and announces their policies. But the small traders does not formally enters into such agreements. They simply gives the discounts. Such discounts will always be under challenge. The above conditions have to be coupled with the condition that the recipient of the disco

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