Electricity under GST – Goods and Services Tax – Started By: – Aitha RajyaLakshmi – Dated:- 16-3-2017 Last Replied Date:- 18-3-2017 – Whether power is exempted under GST or taxable? – Reply By Ramaswa
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Goods and Services Tax – GST – By: – Sanjeev Singhal – Dated:- 16-3-2017 – How the liabilities in respect of Tax , interest, penalty and other dues under the GST shall be paid, have been summarized hereunder. How the same shall be entered in various register etc. All this is prescribed in Section 44 and Section 45 of the revised GST Law and GST Payment Rules ,2016. Payment of Tax , Interest , Penalty Every deposit made for tax , interest, penalty and fees shall be credited to Electronic Cash Ledger in Form-GST PMT-3. The input tax credit in the return of taxable person shall be credited to his Electronic Credit Ledger to be maintained as per Form -GST PMT-2. Amount deposited in Electronic cash ledger may be used for paying payment of tax,
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tax credit available in Electronic Credit Ledger of SGST can not be utilized for payment of CGST or vice versa. The balance in the cash or credit register after payment of taxes , interest and penalty or fees under the act may be refunded as prescribed under Section- 48 and the amount refunded shall be reduce from the respective ledger a/c. All amount payable by taxable person shall be debited in Electronic Liability Register in Form-GST PMT-1. Payment of every liability by registered taxable person shall be by debiting the electronic credit ledger and crediting the electronic liability register. Taxes, Interest , Fees and penalty shall be paid by taxable person in any of the following mode. Internet banking Debit or credit card NEFT or RT
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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 16-3-2017 Last Replied Date:- 16-3-2017 – Introduction Chapter XX of the Model Goods and Services Tax Act, 2016 ( Act for short) provides for prosecution and compounding of offences. In this article the provisions relating to prosecution under this Act are going to be discussed. Section 92(1) provides the list of offences for which punishments is there and provides punishments according to the value involved in the offence. Section 93 provides about cognizance of offences. Section 94 provides the presumption of culpable mental state. Offences Section 92(1) of the Act provides the list of offences for which the person concerned is punishable under this Section. Whoever commits any of the following offence is punishable- supplies any goods and/or services without issue of any invoice or grossly misdeclares the description of the supply on invoice, in violation of this provisions of this Act, to intentionally evade tax; i
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th an intention to evade payment of tax due under this Act; obstructs or prevents any officer in discharge of his duties under this Act; acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with, any goods which he knows or has reason to believe are liable to confiscation under this Act or the rules made there under; receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reason to believe are in contravention of any provisions of this Act or the rules made there under; tampers with or destroys any material evidence or documents; fails to supply any information which he is required to supply under this Act or the rules made there under or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; or
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information which he is required to supply under this Act or the rules made there underor (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information. Subsequent commission of offence Section 92 (2) provides that if any person convicted of an offence under this section is again convicted of offence under this section, then he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to 5 years and with fine. In the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, the imprisonment referred in Section 92(1) and 92(2) shall not be for a term of less than six months. Cognizable offences Section 92(4) provides that the following offences indicated in Section 92(1)- supplies any goods and/or services without issue of any invoice or grossly misdeclares the description of the supply on invoice,
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wrongly taken exceeds ₹ 1 crore shall be cognizable and non bailable. The Commissioner concerned shall be the competent authority to take cognizance of the offence. Section 92(5) provides that a person shall not be prosecuted for any offence under this section except with the previous sanction of the designated authority. Section 93 provides that no court shall take cognizance of any offence punishable except with the previous sanction of the designated authority and no court inferior to that of a Magistrate of the First Class, shall try any such offence. Non cognizable offence Section 92(3) provides that notwithstanding anything contained in the Code of Criminal Procedure, 1973 all offences under this Act, except the offences referred to in Section 92(4) shall be non cognizable. Culpable mental state Section 94 provides that if any prosecution for an offence under this Act which requires a culpable mental state (it includes intention, motive, knowledge of a fact and belief in,
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-section (1) of section 76 of the Finance Act, as the case may be; Section 11AC(1)(a) provides penalty not exceeding ten per cent of the duty so determined or rupees five thousand, whichever is higher; Section 11AC(1)(b) provides the amount of penalty liable to be paid by such person shall be twenty-five per cent. of the penalty imposed, subject to the condition that such reduced penalty is also paid within the period so specified; In a case, where the CENVAT credit in respect of input or capital goods or input services has been taken or utilized wrongly by reason of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of the Excise Act, or of the rules made there under with intent to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of clause (c), clause (d) or clause (e) of sub-section (1) of section 11AC of the Excise Act. In a case, where the CENVAT credit in respe
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12th GST Council Meeting Dated:- 16-3-2017 GST Council – Minutes – Circulars – GST – Minutes of the 12th GST Council Meeting held on 16th March 2017 The twelfth meeting of the GST Council (hereinafter referred to as 'the Council') was held on 16 March 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 . 2. The following agenda items were listed for discussion in the 12th Meeting of the Council 1. Confirmation of the Minutes of the 11 th GST Council Meeting held on 4 March 2017 2. Approval of the Draft Model SGST Law as modified in accordance with the decisions of the GST Council and as vetted by the Ministry of Law Justice, Government of Indi
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contribution of the outgoing Ministers in the Council's deliberations which the Council fully endorsed. Discussion on Agenda Items Agenda Item 1: Confirmation of the Minutes of the 11th GST Council Meeting held on 4 March, 2017: 4. The Hon'ble Chairperson invited comments of the Members on the draft Minutes of the 11th Meeting of the Council (hereinafter referred to as 'Minutes') held on 4 March 2017 before its confirmation. The Members suggested the following amendments to the draft Minutes. 4.1. The Hon'ble Minister from Jammu Kashmir stated that in paragraph 8.3 of the Minutes, in the second sentence, the expression 'Article 5 of the Constitution of Jammu Kashmir' should be replaced by the expression 'Section 5 of the Constitution of Jammu Kashmir'. The Council agreed to this suggestion. 4.2. Shri R.K Tiwari, Additional Chief Secretary, Uttar Pradesh stated that in paragraph 6.2.8 of the Minutes, the version of the S
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below: 5.1. In paragraph 8.3 of the Minutes, in the second sentence, the expression' Article 5 of the Constitution of Jammu Kashmir' to be replaced by the expression 'Section 5 of the Constitution of Jammu Kashmir'. Agenda Item 2: Approval of the Draft Model State Goods and Services Tax (SGST) Law as modified in accordance with the decisions of the GST Council and as vetted by the Ministry of Law Justice, Government of India: 6. Introducing this agenda item, the Secretary informed that the draft SGST Law was almost a replica of the Central Goods and Services Tax (CGST) Law, with some minor changes. He invited Dr. P.D. Vaghela, Commissioner, Commercial Taxes (CCT), Gujarat to briefly explain the changes in the SGST Law vis-a-vis the CGST Law. CCT, Gujarat explained that there were three major changes in the SGST Law as compared to the CGST Law, namely (i) the transitional provisions would be different in each State; (ii) Advance Ruling Authority would
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to the Minutes. The Secretary invited comments of the Members on the draft SGST Law circulated as an Agenda Note and the amendments proposed thereto as contained in Annexure- 3. 6.1. The Hon'ble Deputy Chief Minister of Delhi stated that in Section 67(1) of the draft SGST Law, it was provided that a proper officer not below the rank of Joint Commissioner could authorise inspection or search of a premise. He observed that this power should only vest with the Commissioner as otherwise, all officers of the rank of Joint Commissioner could exercise the power of inspection, search and seizure. The Secretary stated that this provision restricted the power to authorise inspection and search to an officer not below the rank of Joint Commissioner and this did not preclude this power to remain vested only with the Commissioner. Dr. Reeta Vasishta, Additional Secretary, Legislative Department, Ministry of Law explained that an officer below the rank of Joint Commissioner could not be des
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Section 5 of the Constitution of the State of Jammu Kashmir. He stated that on this account, if certain drafting changes were required in the SGST Law of the State of Jammu Kashmir, it would be done in consultation with the Council. The Hon'ble Chairperson observed that the SGST Legislation of Jammu Kashmir could be enacted by the Jammu Kashmir Legislature itself without reference to the Council and that their SGST Law would need to have a provision to integrate it to the GST process of the country. The Hon'ble Minister from Jammu Kashmir raised an issue that since the SGST Law of his State was to be enacted under its own Constitution, whether it could enact a more ambitious SGST Legislation, like including sectors such as real estate and power under their SGST Law. The Secretary observed that this would not be feasible as a seprate dispensation on real estate or power sector in the SGST Act of Jammu Kashmir would create problem in relation to operation of the IGST
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SGST Law with the changes as indicated in Annexure-3 of the Minutes (the changes as suggested in the meeting of the officers of the Centre and the States held on 16 March 2017 in New Delhi). The Council also authorised the Law Committee of Officers to make minor corrections and rectify typographical errors, wherever required, and that the revised draft SGST Law shall be shared with the States. The Council also agreed that the relevant GST Rule shall provide that, if so required, the Central Tax Administration would carry out audit and scrutiny of the departments of the Central Government which deducted tax at source under Section 51(1) of the draft CGST/SGST Law and similarly, the respective State Tax Administration would, if so required, carry out audit and scrutiny of departments of the concerned State Government. Agenda Item 3: Approval of the draft Union Territory Goods and Services Tax (UTGST) Law as vetted by the Ministry of Law Justice, Government of India 8. Intro
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ed any comment on the draft UTGST Law. The Council thereafter approved the draft UTGST Law along with the proposed changes. 9. For agenda item 3 , the Council approved the draft UTGST Law with the changes as indicated in Annexure-4 of the Minutes (the changes as suggested in the meeting of the officers of the Centre and the States held on 16 March 2017 in New Delhi). The Council also authorised the Law Committee of Officers to make minor corrections and rectify typographical errors, wherever required, and that the revised UTGST Law shall be shared with the States. Agenda Item 4.1: Amendments to the draft Integrated Goods and Services Tax (lGST) Law 10. Introducing this agenda item, the Secretary stated that certain changes were proposed in the draft IGST Law due to the strong concerns expressed by the Ministry of Commerce in respect of certain provisions of the draft IGST Law which could adversely affect the export competitiveness of the units working in Special Economi
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l Excise duty, Service Tax, Central Sales Tax and also from Value Added Tax in some States. He observed that in the IGST Law, the provision in respect of supplies to SEZs was to pay the tax first and to claim refund later. He added that the provision of refund, within seven days, of 90% of the amount of refund claimed was only provided for physical exports and was not available for supplies to SEZs. He further observed that the procedure of export under bond was not available for supplies from DT A to SEZs. He stated that due to such provisions, supplies from DT A to SEZ would be at a disadvantage vis-a-vis physical exports and as a result, SEZ units would be discouraged to source their raw material from DTA. He said that this would adversely affect the 'Make in India' campaign and would also be against the principle of ease of doing business. He therefore strongly suggested that supplies from DT A to SEZs should be treated at par with physical exports and both should be extend
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6 of the draft IGST Law where it was proposed to delete sub-Section 4 and to replace in sub-Section 3 the expression 'exporting goods and services or both' with the expression 'making zero rated supply'. He stated that some other small consequential changes were also suggested in sub-Section 3 of Section 16. 10.3. The Secretary stated that another concern in relation to exports that needed to be addressed related to cascading of input taxes for six products which were not under GST, namely the five petroleum products (petroleum crude, high speed diesel, motor spirit or petrol, natural gas and aviation turbine fuel) and alcoholic liquor for human consumption. He stated that the existing wording in sub-section 1 and sub-section 2 of Section 16 of the IGST Law gave the benefit of zero rating to only taxable supplies and thus exported petroleum products and alcoholic liquor would not be eligible to get refund of GST paid on the. inputs used in relation to such exported p
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et more business as compared to import. The Hon'ble Minister from Karnataka stated that GST was based on a seamless refund mechanism and if time-bound refunds were assured, the changes proposed for supply to SEZ were not required. He stated that the Council should not question the fundamentals of the efficacy of the refund mechanism under GST and the efficient functioning of the Goods and Services Tax Network (GSTN). He stated that an underlying tenet of GST was to get rid of the existing system of declarations, bonds, etc. and this should not be reintroduced for DT A supplies to SEZ. The Secretary pointed out that under the existing tax regime, goods could be bought from DT A for use in SEZ without payment of duty and that the new dispensation under GST should not be disadvantageous for supplies to SEZ. He observed that in order to avoid misuse and diversion of goods when supplied to SEZ, the principle to pay IGST first and then take refund was being introduced under the IGST Law
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at if such a dispensation was allowed for supplies to SEZs, other segments of business might seek a similar dispensation. He further observed that this issue had been debated several times in the Law Committee of Officers before the provision was drafted in the present form and that it should not be changed at this late stage. He suggested that this provision should be retained presently in the IGST Law, and in case it caused severe disadvantage to domestic suppliers, it could be amended later on and that such an amendment would be relatively easy to carry out as it was to be done only by the Parliament and not simultaneously by the State Legislatures. 10.6. The Secretary stated that one difference between the existing procedure and the procedure under GST would be that the existing Forms like I, H, C etc., were issued manually and this lent them to greater misuse whereas in the GST regime, there would be an all-India record of movement of goods through GSTN and that the Customs ICE
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after GST implementation if it caused a serious bottleneck. The Hon'ble Chairperson stated that it would not be advisable to discriminate between domestic supplies and imports to SEZs. 10.7 The Hon 'ble Chief Minister of Puducherry stated that exports through SEZs should be encouraged. He further stated that if a refinery was outside SEZ and they were given certain special facility, others would also claim the same. The Secretary stated that the facility of refund of input taxes on exported goods which were outside GST related to only 6 products and that, in the absence of such a provision, these goods would suffer loss of international competitiveness in the GST regime due to tax cascading. After further discussion, the Council approved the proposed changes to Section 16 of the draft IGST Law as contained in Annexure 5 of the Minutes. 10.8. The Secretary stated that as supply to SEZs was to be treated at par with physical exports, it would be desirable to carry out anot
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n 54(6) of the CGST Law, approved earlier by the Council in its 11 th Meeting (held on 4 March 2017), by replacing the word 'export' with the words 'zero rated supply'. Agenda Item 4.2: Approval of the amendments to the draft Goods and Services Tax (Compensation to the States) Bill, 2017 12. Introducing this agenda item, the Secretary informed that in light of the approval of the CGST Law and the IGST Law with certain changes by the Council in its 11 th Meeting (held on 4 March 2017), certain consequential changes were required in the Goods and Services Tax (Compensation to the States) Bill, 2017. He further stated that ceiling rates for imposition of cess were also to be provided in the Compensation Law and on this account, certain consequential changes were proposed to Section 8 of the Goods and Services Tax (Compensation to the States) Bill, 2017 and a Schedule of ceiling rates of cess was presented for the approval of the Council. The Hon'ble Chairper
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ted that for coal, lignite etc. the existing rate of clean energy cess of ₹ 400 per tonne had been retained because this rate was already quite high and any further increase would have negative effect on other sectors of the economy. He stated that for aerated waters containing added sugar, there was a large dispersion of VAT rates and for calculating the ceiling rate of cess, the average of the highest and the second highest rate of VAT was taken and this was added to the existing rate of Central Excise and then, like in other cases, 28% of GST rate was subtracted and an additional 25% was added as a cushion and the resultant rate of 13% was rounded off to arrive at the ceiling rate of 15%. He stated that for motor cars, the proposed ceiling rate (15% ad valorem) was arrived at by summing up the existing rate of Central Excise and the highest existing rate of VAT, subtracting from it the GST rate of28% and then adding to it an additional 25% as a cushion. He stated that another
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39;Bidi'. The Hon'ble Minister from Rajasthan stated that in his State, 'Bidi' was taxed at a rate of 65%. He observed that for 'sin' goods, there should be no special categorisation for poor people and that it was, in fact, more harmful for the poor people. The Hon'ble Chief Minister of Puducherry stated that the issue of employment was equally important. The Hon'ble Minister from Madhya Pradesh stated that he did not support the view of the Hon'ble Minister from Rajasthan. He observed that as 'Bidi' was a handmade product, it was a source of employment for a large number of people and that it was also smoked by the poor people. The Hon'ble Minister from Bihar stated that no cess be levied on 'Bidi' as it was a source of employment and also that it was smoked by poor people. The Hon'ble Minister from West Bengal pointed out that the Hon'ble Minister from Kerala had written a letter to the Hon'ble Chairperson pointing
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9; as it posed a health hazard though such a ban went against the livelihood interests of the areca nut farmers. He observed that it was wrong to give a favourable treatment to 'Bidi' vis-a-vis cigarettes on the ground that it was a poor man's 'puff as it caused greater harm than cigarettes. He observed that if a poor man got cancer due to his' Bidi' smoking habit, his family would be ruined as there was no social health care system for the poorer sections of the society whereas a cigarette smoker, being relatively better off, could still afford medical treatment for cancer. He warned that a huge burden was being cast on the poor man by allowing him his 'puff and that this burden finally fell on the society. He therefore suggested that the existing schedule covering both cigarette and 'Bidi' should be retained. 12.4. Shri P. Mara Pandiyan, Additional Chief Secretary, Kerala stated that the Hon'ble Minister from Kerala had written a letter dat
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stated that' Bidi' was actually tobacco wrapped in tobacco leaf and therefore it was doubly harmful. The Hon'ble Chairperson informed that the Central Government had power to levy Central Excise duty on 'Bidi' but due to considerations like large number of tobacco growers and workers involved in the 'Bidi' trade, during the last 8 to 9 years, it had refrained from imposing Central Excise duty on 'Bidi', though the Union Ministry of Health and the cigarette lobby had always argued for parity in the treatment of cigarette and 'Bidi' as the latter was equally harmful. He further stated that the decision to levy cess on 'Bidi' could be kept with the Council. The Hon'ble Minister from Assam stated that the enabling provision to levy cess on 'Bidi' should be retained in the law. The Hon'ble Minister from West Bengal reiterated that in the 4th Meeting of the Council (held on 3 and 4 November, 2016), it was decided to levy ce
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and wondered whether States could be given flexibility to keep different rates of tax on 'Bidi' in the GST regime. The Secretary observed that presently, the rate of Central Excise duty on 'Bidi' was ₹ 28 per thousand which translated to an ad valorem rate of 5% to 6% and that different States charged varying rates of VAT, for example Rajasthan (65%), Himachal Pradesh and Gujarat (22.5%), Tamil Nadu and Uttar Pradesh (14.5%) and Haryana (12.5%). He stated that the rate of tax on 'Bidi' and the issue of imposing cess on it could be addressed at a later date. The Hon'ble Minister from West Bengal suggested that the Council could take a decision to keep' Bidi' in the Schedule of cess but not impose any cess on it. The Hon'ble Minister from Karnataka stated that the Council should not arrive at any conclusion regarding leviability of cess on 'Bidi' at this stage. He stated that both awareness and the stick of taxation was required to co
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n of relevant Harmonised System of Nomenclature (HSN) Code created some confusion and suggested that the Entry should be limited to aerated water with added sugar. The Secretary stated that cess could be limited to aerated water with added sugar and no cess-be put on packaged water as people should be encouraged to drink clean water. Shri Arvind Subramanian, Chief Economic Advisor, Government of India suggested that cess should also be charged on mineral water but the Hon'ble Minister from West Bengal disagreed with this suggestion. 12.8. The Secretary suggested that in order not to levy cess on lemonade which was covered under the description of the 6-digit HSN Code of 220 12, the description under the relevant 8-digit HSN Code, namely 22021010 could be adopted which covered only aerated water. The Hon'ble Minister from West Bengal stated that no cess should be levied on soda water. The Hon'ble Deputy Chief Minister of Gujarat supported this suggestion and observed that
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cil agreed not to delete the Entries at Serial No.4 and 5 of the Schedule of rate for Cess. 12.10. The Hon'ble Deputy Chief Minister of Delhi observed that Entry at Serial No.6 of the Schedule was a residuary Entry excluding the products covered under Serial No.1 to 5 and, therefore, a more appropriate description for Entry under Serial No.6 would be 'Any other supplies' instead of the existing description 'All other supplies'. The Council agreed to the suggestion to change the description for Entry under Serial No.6. 13. For agenda item 4.2 , the Council approved certain additional changes to Goods and Services Tax (Compensation to the States) Bill, 2017 which was earlier approved by the Council in its 10 th Meeting (held on 18 February 2017) and also the Schedule of the rates of Cess to be part of the Goods and Services Tax (Compensation to the States) Bill, 2017. These approved changes are shown in Annexure-6 of the Minutes, subject to further modificat
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maintained check posts. He stated that MoRTH had requested to take up this agenda in order to work towards a complete, seamless and barrier free freight transport system across the country. He recalled that in the 11 th Meeting of the Council (held on 4 March, 2017), Ms. Sujata Chaturvedi, CCT, Bihar had also suggested to consult with MoRTH while developing the e-Way Bill System in the GST regime. He stated that this agenda item was only to seek the approval of the Council to set up a Task Force of officers from the State Government Departments like Indirect Tax, Road Transport, State Excise and the Union Ministry of Road Transport and Highways and the Department of Revenue. This Task Force of officers, after their deliberations, could make a presentation to the Council suggesting measures to achieve seamless transport connectivity across the country. He added that subsequently, if required, there could be a joint meeting of the Hon'ble Ministers of Taxation and Transport to delib
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rovide a mechanism for granting tax exemption to certain kinds of cinemas like educational cinema. Agenda Item 6: Date of the next meeting of the GST Council 17. The Hon'ble Chairperson observed with satisfaction that the five primary legislations, namely the CGST Law, the Model SGST Law, the IGST Law, the UTGST Law and the Compensation Law had been approved by the Council and that the next item of work would be to approve the GST Rules. The Secretary stated that earlier, five GST Rules were approved relating to Registration, Return, Payment, Refund and Invoice but due to changes made in the CGST, SGST and IGST Laws, these would require some amendments. He further stated that in addition, Rules on Input Tax Credit, Valuation, Composition and Transitional Provisions were being framed by the Law Committee of officers. On an enquiry by the Hon'ble Chairperson regarding the likely date for completing this task, CCT, Gujarat stated that these Rules were likely to be comple
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Goods and Services Tax – GST – By: – Ravi Kumar Somani – Dated:- 15-3-2017 – GST is not just a tax reform but it is a business reform. It shall change the way in which business processes are performed and the way in which the business transactions are undertaken. Although, GST will bring with it, both positive and negative aspects. However, the organizations that will plan its business processes better in a manner to best suit the needs of the GST regime, then such organization will have competitive edge over others. Therefore, it is of due importance that business house proactively re-structure its business processes and optimize its tax position to reduce the negative impact of the changing tax environment. Procurements department plays a key role in any business set-up as they directly deal with the cost element. Apart from focusing on volumes and margin of sales, businesses also very keenly track the cost of procurements and efforts are always made to control the costs/ overheads.
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purchases being made from CST vendors as local VAT is not eligible as credit; Purchases being made locally only to avail local VAT credit. It is pertinent to note that above purchases were being made in the current regime to take the benefit of the present taxes. However, such benefits will not be available in the GST regime, therefore in all cases where currently procurement policy is driven by the tax implications, then all such procurements needs to be re-looked into for the other competitive sources. Purchase price/ cost It shall be very important for the businesses to strategies its procurement pricing and procurement cost based on the impact of GST. Below table determines the impact of procurement cost/ price on the purchases based on the various illustrative situations as under: Particulars Impact on purchase price/ cost There will be free flow of credits in the GST regime. Cascading of the taxes will reduce substantially in the GST regime. For instance, CST element is cost in t
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s. It helps to decide what to buy, when and from what sources. Most organizations spend around 20-60% of their money on the materials, supplies, capital equipment, technology, and services that are necessary to keep the enterprise running. Organizations need to transform their operations by aligning resources and technology and taxes thereon to enable organization to make the most cost effective purchases possible. Various elements of the purchase planning that needs to be looked into from GST point of view are as under: Change in EOQ levels, lead times, carrying costs etc. EOQ is the order quantity that minimizes the total holding costs and ordering costs. Under GST regime entire nation will become a one common market and in case the geographical location of the procurement undergoes a change then a corresponding change in the EOQ levels, lead times and the carrying costs must be planned and accordingly the promised delivery times to the customers must be changed. Revision in purchase
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revise the product costing to get better competitive price in the market to edge over others. Changing the purchase forecasts based on impact of GST on sale of a product or on the industry Organizations should consider the changing of the purchase forecasts based on impact of GST on sale of a product or on the industry in the following manner: If the prices of the products increases in the GST regime, the purchases should accordingly forecasted and procured in advance so that consistent survival in the market is possible. How the entire industry in which organization is carrying its operations is impacted due to GST and accordingly change the purchase forecasts. Timing of purchases to be re-visited especially during transitional phase The most important thing that the organizations can do during the transitional phase is timing of purchases. If the rate of GST is going to be high in GST regime when compared to present indirect tax regime then purchase can be pre-poned otherwise it can
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he same. Reduction in Purchases from CST vendors or other sources where credit not available Under GST regime transitional credit is available only when such credit is eligible in present regime and also GST regime as well. Since, CST credit is not eligible credit under present CST law, therefore the same is not eligible to be transferred into the GST regime. Hence, in such situations instead of procuring under CST, organizations may consider to reduce the purchases in the existing regime to the extent which will not affect the current sales. Procurement from un-registered vendor Procurement from unregistered vendors can have implications in the form of reverse charge liability which could have direct impact on the working capital. Therefore, businesses may have to avoid procurements from unregistered dealers especially in a scenario where the credit is not available. Advance payment to vendors Policy with respect advance payment to vendors have to be looked into. Currently, excise dut
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rchases. Managing procurement vendors As prices are expected to come down in GST regime, every customer would like to procure goods/services at a cheaper price. In this aspect, Purchase department of an organization has to be more proactive to manage their procurements/ suppliers better and to crack a better deal from their vendors. GST is nothing but an opportunity for the purchase department to enhance their vendors list and negotiate, this aspect is being discussed below in detail as under: Vendor masters updation, Tax master updation Once GST is implemented, the first and foremost important task is to update the vendor masters and tax masters with the additional information based on the structural changes and the tax changes performed by each businesses in the GST regime. Vendor Performance/ compliance It is very important that every supplier has to comply with GST, as the concept of compliance rating in the GST regime will be playing a crucial role. It not only defines the complia
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ness to follow up with the supplier for taking credits. Therefore, procurement department needs to assess their current vendors and the un-organised/ non-compliance oriented vendors must be trimmed down. Identifying multiple new vendors As GST is a united indirect tax and since it will change the entire dynamics of the businesses, therefore prices of almost all the businesses will undergo a change. Therefore, it gives an opportunity to the businesses consider entire nation as a common market and enhance the geographical purchase horizon and get the quotes multiple new vendors. Therefore, against the current practice of obtaining 3 or 4 quotations, business can identify multiple new vendors and get revised quotations from the existing vendors to obtain for a better and cheaper price at same quality in the GST regime. Conducting vendor education programmes for un-organized vendors Since GST involves compliance from both the supplier and the buyer, procurements from un-organized vendors i
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g information that needs to be updated in the vendor masters. An illustrative list of various information that needs to be immediately collected from the vendors is as under: Name of the Vendor; PAN of the Business; Provisional GSTIN No. in each supplying state; Details of Goods supplied & HSN Code; Software used by your organization for accounting purpose; Vendor IT readiness and support required if any; Understanding of the GST law – trainings Date of last reconciliation? Any open issue? Restriction on issuing of PO if above information not provided. Documentation As one of the criteria for allowing the credit under GST would be proper documentation on the basis of which credit is availed under earlier law. Ensuring that all the details of goods lying in the stock are collated in a master data with the documentary proofs capturing the details such as quantity, value at which such goods are procured, location at which such goods are stored and the amount of credit that is availed
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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 15-3-2017 – In its 12th meeting of GST Council (GSTC) on 4th March, 2017, GSTC approved the two Bills, i.e. for Central Goods & Services Tax (CGST) and Integrated Goods and Services Tax (IGST) which now have to be passed and legislated by the Parliament. Two other GST Bills, i.e., State Goods and Service Tax (SGST) and Union Territory Goods and Services Tax (UTGST) are slated to be approved by the GSTC in its next meeting to be held on 16th March, 2017. While SGST will be required to be passed by each of the State legislature Assemblies, UTGST which will administer levy of GST in the Union Territories (except Pondicherry and Delhi) will have to be legislated by the Parliament. All these enactments shall be enforced from a common appointed date which has to be before 16 September, 2017. While approving the draft statutory provisions, GSTC has, inter alia, agreed to the following : Payment of Tax in Installments – In
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as more and more transactions are likely to take place in states territorial waters, especially in the context of increased exploration, drilling for petroleum products and development of new sea-ports in territorial waters. Enhanced peak GST Rate – Against the earlier agreed upon CGST peak rate of 14 percent (14% CGST and 14% SGST aggregating to 28%), GSTC has agreed to a higher ceiling of 20% CGST leading to an aggregate GST rate of 40% (20% CGST and 20% SGST). It is understood that for the present, peak GST rate will be 28% only but this enhanced limit is an enabling provision so that in future, Government does not look at Constitutional amendment whenever GST rates are thought of being increased. This may not be desirable from tax payers view point but at the same time, Governments would have to exercise due restraint from increasing the rates just to get more tax revenue. However, it has to be seen how GSTC will ensure that the decision to enhance GST rates are taken by Centre an
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e, but states had wanted the levy. Registration – A State-wise single registration for a taxpayer for filing returns, paying taxes, and to fulfil other compliance requirements. Most of the compliance requirements would be fulfilled online, thus leaving very little room for physical interface between the taxpayer and the tax official. A business entity with an annual turnover of upto ₹ 20 lakhs would not be required to take registration in the GST regime, unless he voluntarily chooses to do so to be a part of the input tax credit (ITC) chain. The annual turnover threshold in the Special Category States (as enumerated in Article 279A of the Constitution such as Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh, Assam and the other States of the North-East) for not taking registration is ₹ 10 lakhs. Return Filing – A taxpayer has to file one single return state-wise to report all his supplies, whether made within or outside the State or exported out of the country and p
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C accruing to him due to payment of IGST to discharge his tax liability of CGST / SGST / UTGST. Conversely, a taxpayer can use the ITC accruing to him on account of payment of CGST / SGST / UTGST, for payment of IGST. Such payments are to be made in a pre-defined order. In the Services sector, the existing mechanism of Input Service Distributor (ISD) under the Service Tax law has been retained to allow the flow of ITC in respect of input serviceswithin a legal entity. In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the Law. Other measures – To prevent lock-in of capital of exporters, a provision has been made to refund, within seven days of filing the application for refund by an exporter, ninety percent of the claimed amount on a provisional basis. In order to ensure a single administrative interface for taxpayers, a provision has been made to authorise officers of
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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 14-3-2017 Last Replied Date:- 14-3-2017 – GST will be levied on supplies and not on sale or service. For the purpose of 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 have been specified in schedule I, which shall be considered as a supply even if made without consideration. The present taxable event under service tax is rendition of services which will no longer be relevant and only one event i.e., supply will be relevant for charge of tax. Supply has been defined in an inclusive manner. Tax is on supply of service, therefore, even the supply, as prescribed in Schedule-I, made without consideration will be taxable. In the present scenario, the services provided without consideration i.e., free services are not taxable. Transactions between
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es. Leased assets from outside India shall be subject to levy of IGST. In case of repossession of assets by banks / FIs / NBFC's, same will be treated as supply of goods in term of Schedule-II to the model GST law (version-II). Accordingly, any transfer of the title in goods is supply of goods. Where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person. Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless- (i) the business is transferred as a going concern to another person; or (ii) the business is carried on by a personal representative who is de
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r of the following events: Date of issue of invoice or on the last date on which invoice is required to be issued. Date on which bank receives payment with respect to such supply. As per place of supply provisions, if banks are required to pay tax on reverse charge basis, then time of supply shall be earlier of the following events: Date on which payment is made or Date immediately following sixty days from the date of issue of invoice by the bank / service provider Place of Supply As per section 9 of IGST law, the place of supply of banking and other financial services including stock broking services to any person shall be the location of the recipient of services on the records of the supplier, where the location of supplier of service and location of service recipient is in India. However, if the location of the recipient of services is not on the records of the supplier, the place of supply shall be the location of the supplier of services. Place of supply of services where the lo
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vy of taxes on real time basis based on address is not possible. In present regime, service tax is charged from account of the customer affecting such RTGS or NEFT on real time basis. Under GST, place of supply provisions provides solution to this issue. It provides for levy of tax in the State in which registered address of customer is mentioned in records (i.e., KYC documents) of the bank. The GST shall be levied on real time basis as in the present regime. Another issue for concern could be in case of multiple addresses for B2B transactions as to what shall be the place of supply. In such case, definition of 'location of recipient of services' shall provide for address of the recipient which shall be as under:- where a supply is received at a place of business for which registration has been obtained, the location of such place of business; where a supply is received at a place other than the place of business for which registration has been obtained, that is to say, a fixed
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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 14-3-2017 Last Replied Date:- 14-3-2017 – Introduction In GST all the indirect taxes except customs are going to be subsumed. The Central Excise Act and State VAT Acts deals with the levy of tax on goods. Central Excise levies excise duty on the manufacture of goods and VAT Act levies tax on sales of goods. Therefore there is the possibility of searching by the officers of concerned authorities to intervene in the transit of the goods. If it is found there is any violation of the provisions of the Act or rules made there under then the officers concerned is empowered to seize the goods and on inquiry if it is confirmed the said goods may be confiscated. Once the goods are confiscated they are vest in the respective Government. Penal provisions will also attract for the same. Provisions for seizure and confiscation in the Act Section 90 of the Model Goods and Services Tax Act, 2016 ( Act for short) provides for confisca
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s does not come forward for payment of such tax and penalty; the proper officer detaining or seizing goods and/or conveyances shall issue a notice specifying the tax payable and thereafter, pass an order for payment of tax and penalty. Discharge Section 89(2) provides that on payment of the amount referred to in Section 89(1), all liabilities under Section 89 shall stand discharged in respect of such goods and such conveyance. Confiscation Section 90(1) provides that if any person- supplies or receives any goods in contravention of any of the provisions of this Act or rules made there under with intent to evade payment of tax; or does not account for any goods on which he is liable to pay tax under this Act; or supplies any goods liable to tax under this Act without having applied for registration; or contravenes any of the provisions of this Act or rules made there under with intent to evade payment of tax; or uses any conveyance as a means of transport for carriage of taxable goods i
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goods seized shall be released on a provisional basis upon execution of a bond and furnishing a security, in such manner and of such quantum, respectively as may be prescribed or on payment of applicable tax, interest and penalty payable as the case may be. Redemption fine Section 90 (2) provides that whenever confiscation of any goods or conveyance is authorized by this Act, the CGST/SGST officer adjudging it shall give to the owner of the goods or, where such owner is not know, the person from whose possession or custody such goods have been seized or the owner or the person-in-charge of the conveyance, an option to pay in lieu of confiscation such fine as the said officer thinks fit. Such fine shall not exceed the market value of the goods confiscated less the tax chargeable thereon. The aggregate of such fine and penalty leviable shall not be less than the amount of penalty leviable under Section 89(1) of the Act. Where any such conveyance is used for the carriage of the goods or p
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f Police, on the requisition of such proper officer, shall assist him in taking and holding of such possession. Disposal of confiscated goods Section 90(7) provides that the proper officer may, after satisfying himself that the confiscated goods and conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose such goods and/or conveyances and deposit the sale proceeds thereof with the Government. Confiscation not to interfere with other punishments Section 91 provides that that no confiscation made or penalty imposed under the provisions of this Act or the rules made there under shall prevent the infliction of any other punishment to which the person affected thereby is liable under the provisions of this Act or under any other law. – Reply By Ganeshan Kalyani – The Reply = This is going to be a big concern for the assesse as both the government is going to interfere in a sin
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Goods and Services Tax – Started By: – Mukesh Agarwal – Dated:- 13-3-2017 Last Replied Date:- 13-3-2017 – Hi !I am a dealer /supplier dealing with army units. There is no fixed range or specific items . There are many items and depends on requirements and orders.What HSN Code should be selected in this case for GST MigrationThanks in advance. – Reply By YAGAY AND SUN – The Reply = Trader are facing this issue while enrolling on the GST website. You may fill 2-3 main Tariff Heading in the GST website by checking it on CBEC Website. Say articles of plastic comes under Chapter 39, Paper come under Chapter 48, Aluminium in chapter 76, Iron 73 etc. – Reply By YAGAY AND SUN – The Reply = FIRST SCHEDULEBasic Rate of duty / Classification / Tariff Items Chapter 01 Live animals Chapter 02 Meat and edible meat offal Chapter 03 Fish and crustaceans, molluscs and other aquatic invertebrates Chapter 04 Dairy produce; birds eggs; natural honey; edible products of animal origin, not else- where spec
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ates Chapter 17 Sugars and sugar confectionery Chapter 18 Cocoa and cocoa preparations Chapter 19 Preparations of cereals, flour, starch or milk; pastrycooks products Chapter 20 Preparations of vegetables, fruit, nuts or other parts of plants Chapter 21 Miscellaneous edible preparations Chapter 22 Beverages, spirits and vinegar Chapter 23 Residues and waste from the food industries; prepared animal fodder Chapter 24 Tobacco and manufactured tobacco substitutes Chapter 25 Salt; sulphur; earths and stone; plastering materials, lime and cement Chapter 26 Ores, slag and ash Chapter 27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes Chapter 28 Inorganic chemicals, organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes Chapter 29 Organic chemicals Chapter 30 Pharmaceutical products Chapter 31 Fertilisers Chapter 32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigm
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eof Chapter 44 Wood and articles of wood, wood charcoal Chapter 45 Cork and articles of cork Chapter 46 Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork Chapter 47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard Chapter 48 Paper and paperboard; articles of paper pulp of paper or of paperboard Chapter 49 Printed books, newspapers, pictures and other products of the printing industry; manu- scripts, typescripts and plans Chapter 50 Silk Chapter 51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric Chapter 52 Cotton Chapter 53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn Chapter 54 Man-made filaments Chapter 55 Man-made staple fibres Chapter 56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof Chapter 57 Carpets and other textile floor coverings Chapter 58 Special wo
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al or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin Chapter 72 Iron and steel Chapter 73 Articles of iron or steel Chapter 74 Copper and articles thereof Chapter 75 Nickel and articles thereof Chapter 76 Aluminium and articles thereof Chapter 77 BLANK Chapter 78 Lead and articles thereof Chapter 79 Zinc and articles thereof Chapter 80 Tin and articles thereof Chapter 81 Other base metals; cermets; articles thereof Chapter 82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal Chapter 83 Miscellaneous articles of base metal Chapter 84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof Chapter 85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles Chapter 86 Railway or tramway locomotives, roll
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Goods and Services Tax – Started By: – Aitha RajyaLakshmi – Dated:- 11-3-2017 Last Replied Date:- 13-3-2017 – Sir,It is stated that the Outward supplies of less that ₹ 2.5Lacs need not be uploaded line item wise and can be uploaded consolidated. if this is the case how can the invoice missed if any can be traced by the dealer who purchased the Goods for an amount of below ₹ 2.5 Lacs? – Reply By YAGAY AND SUN – The Reply = Line item wise means, Tariff Heading wise. Support if Invoice
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Goods and Services Tax – Started By: – Aitha RajyaLakshmi – Dated:- 11-3-2017 Last Replied Date:- 17-4-2017 – Sir,What is the position of the credit in case of Purchases in Transit (Including Import), stock with Depot and Stock Transfer which are in Transit on the appointed day? – Reply By KASTURI SETHI – The Reply = Dear Querist, Credit on purchases in transit on the appointed day would be allowed. Regarding the remaining points, no possibility of credit. However, any change in revised model GST Act can take place. Earlier, Sections were changed. So we will have to wait for the enactment of GST for authentic reply to every query on GST. – Reply By Ganeshan Kalyani – The Reply = Let us wait for final version of GST law. – Reply By YAGAY AN
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VAT and Sales Tax – Started By: – Aitha RajyaLakshmi – Dated:- 11-3-2017 Last Replied Date:- 13-3-2017 – Sir,What is the case if we find any Invoice missed in respect of our transactions in the uploaded details of the outward supplies of the Vendor from whom we have purchased?What is the consequence and what are the actions that we have to do? – Reply By YAGAY AND SUN – The Reply = You won't able to avail the Input Tax Credit and within 60 day you would have to reconcile it with your suppli
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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 11-3-2017 – Public Servant Section 146 of Model Goods and Services Tax, 2016 ( Act for short) provides that all persons discharging functions under the Act shall be deemed to be public servants within the meaning of Section 21 of the Indian Penal Code. Section 21 of the Indian Penal Code defines the term public servant as denoting a person falling under any of the descriptions as below- Every Commissioned Officer in the Military,Naval or Air Forces of India; Every Judge including any person empowered by law to discharge, whether by himself or as a member of any body of persons, any adjudicatory functions; Every officer of a Court of Justice (including a liquidator, receiver or commissioner) whose duty it is, as such officer, to investigate or report on any matter of law or fact, or to make, authenticate, or keep any document, or to take charge or dispose of any property, or to execute any judicial process, or to admini
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investigate, or to report, on any matter affecting the pecuniary interests ofthe Government, or to make, authenticate or keep any document relating to the pecuniary interests of the Government, or to prevent the infraction of any law for the protection of the pecuniary interests of the Government; Every officer whose duty it is, as such officer, to take, receive, keep or expend any property, to make any survey or assessment or to levy any rate or tax for any secular common purpose of any village, town or district, or to make, authenticate or keep any document for the ascertaining of the rights of the people of any village, town or district; Every person who holds any office in virtue of which he is empowered to prepare, publish, maintain or revise an electoral roll or to conduct an election or part of an election; Every person- in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government; in the ser
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ed to be done in good faith under the Act or the rules. No departmental proceedings shall lie against any GST officer for passing any adjudication order or appellate order in good faith under the Act or the rules. Confidentiality of information Section 148(1) provides that all particulars contained in any statement made, return furnished or accounts or documents produced in accordance with the Act or in any record of evidence given in the course of any proceedings under the Act, other than proceeding before a Criminal Court, or in any record of any proceedings under the Act shall, save as provided in Section 148(4), be treated as confidential. GST Officer not to produce information Section 148(2) provides that notwithstanding anything contained in the Indian Evidence Act, 1872, no court shall save as aforesaid, be entitled to require any GST officer to produce before it or to give evidence before it in respect of particulars as referred to in Section 148 (1). Particulars not applicable
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other law for the time being in force authorizing any such authority to exercise any powers there under; or to any officer appointed for the purpose of audit of tax receipts or refunds of the tax imposed by the Act; or where such particulars are relevant for the purpose of any inquiry into the conduct of any GST officer, to any person or persons appointed as inquiry officer under any relevant law; or to an officer of the Central Government or any State Government as may be necessary for the purpose of enabling that Government to levy or realize any tax or duty imposed by it; or when such disclosure is occasioned by the lawful exercise by a public servant or any statutory authority, of his or its powers under any law for the time being in force; or relevant to any inquiry into a charge of misconduct in connection with any proceedings under the Act against- a practicing Advocate; tax practitioner; a practicing cost accountant; a practicing chartered accountant; a practicing company secre
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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 11-3-2017 Last Replied Date:- 30-12-1899 – GST Council has approved a Bill for compensation to States for revenue loss arising out of introduction of GST in the country. A Bill called Goods and Services Tax (Compensation to the States for Loss of Revenue) Bill, 20… shall provide for compensation to the States for loss of revenue arising on account of implementation of the goods and Service Tax for a period of five years as per section 18 of the Constitution (101st Amendment) Act, 2016. This will extend to whole of India and shall come into force from a date to be notified. Highlights of Compensation Bill are as follows : Provides for revenue loss compensation to States for five years Nominal growth rate projected revenue has been decided @ 14% Base year to be financial year 2015-16 Revenue will be the sum of revenue collected by the State and local bodies during the base year, taxes levied by the States or Centre net
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te or Centre, net of refunds, with respect to the following taxes imposed by the respective State or Centre, which are subsumed into goods and services tax: Value Added Tax (VAT), sales tax, purchase tax, tax collected on works contract, or any other tax levied by the concerned State under the erstwhile Entry 54 of List-II (State List) of the Seventh Schedule to the Constitution, prior to bringing into effect the provisions of the Constitution (101st Amendment) Act, 2016.; Central Sales Tax (CST) levied by the Central Sales Tax Act, 1956; Entry tax, octroi, local body tax or any other tax levied by the concerned State under the erstwhile Entry 52 of List-II (State List) of the Seventh Schedule to the Constitution, prior to bringing into effect the provisions of the Constitution (101st Amendment) Act, 2016; Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling or any other tax levied by the concerned State under the erstwhile Entry 62 of List-II (State L
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not be included in the calculation of the base year revenue for that State: Any taxes levied under any Act made under the erstwhile Entry 54 of List-II (State List) of the Seventh Schedule to the Constitution, prior to bringing into effect the provisions of the Constitution (101st Amendment) Act, 2016, on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any taxes levied under the Central Sales Tax Act, 1956 on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any cess imposed by the State Government on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; and Entertainment tax levied by the State but colle
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inancial year during the transition period, as per the CAG audited figures of revenue collected, the excess amount so released shall be adjusted against the GST compensation amount payable to the State in the subsequent financial year. The total GST compensation payable for any financial year during the transition period to any State shall be calculated as follows: The projected revenue for any financial year during the transition period, that could have accrued to a State in the absence of GST, shall be calculated as per section 6. The actual revenue collected by a State in any financial year during the transition period would be the actual revenue from State Goods and Services Tax collected by the State, net of refunds given by the State under Chapter XI of the SGST Act, and the Integrated Goods and Services Tax apportioned to that State, as certified by the Comptroller and Auditor General of India. Total GST compensation payable in any financial year shall be the difference between
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ught into force. However, no such cess shall be leviable under this section on supplies made by a taxable person permitted to opt for composition levy under section 8 of the GST Law. Salient Features of Compensation Bill The nominal growth rate of revenue subsumed for a State during the transition period is projected at 14% per annum. FY 2016-17 is considered as the base year for calculating the compensation amount payable in any FY during the transition period. The base year revenue for a State will be the sum of revenue collected by the State and local bodies during the base year, taxes levied by the States or Centre, net of refunds, with taxes namely, VAT, CST, Entry tax, Octroi, local body tax, Luxury tax, Advertisement tax, Excise duty on medicinal and toilet preparation and any cess or surcharge levied by State Govt. The Acts of Central and State Govt. under which specific taxes will be subsumed into GST shall be notified. The revenue collected during the base year in a State, ne
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Goods and Services Tax – GST – Dated:- 10-3-2017 – The GST Council in its 9th Meeting held on 16 January 2017 took note of the work to be completed for the rollout of GST and after deliberations, agreed to extend the date for rollout of GST from 1st April 2017 to 1st July 2017. Steps taken to ensure rollout of GST by 1st July 2017 include approval of the Draft GST Compensation Law by the GST Council in its 10th Meeting on 18 February 2017 held in Udaipur, Rajasthan. Subsequently, the Draft CGST Law and Draft IGST Law were approved in the 11th Council Meeting held on 4 March 2017 at New Delhi. The issues of dual control and cross empowerment were resolved in the 9th Meeting of the GST Council held on 16 January 2017 in which a broad agreeme
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ocal bodies), Octroi and Entry tax, Purchase Tax, Luxury tax, and Taxes on lottery, betting and gambling. State cesses and surcharges in so far as they relate to supply of goods and services. GST will simplify and harmonise the indirect tax regime in the country. It is expected to reduce cost of production, thereby making the Indian trade industry more competitive, domestically as well as internationally. It is also expected that introduction of GST will foster a common or seamless Indian market and contribute significantly to the growth of the economy. Further, GST will broaden the tax base, and result in better tax compliance due to robust IT infrastructure. GST Council is presently deliberating on various issues entrusted to it. All the
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Goods and Services Tax – GST – Dated:- 10-3-2017 – The 122nd Constitution Amendment Bill, 2014 has been passed by the Parliament and after ratification by fifty percent of the States, the same has been enacted as 101st Constitution Amendment, Act, 2016. No Goods and Service Tax (GST) Bill has so far been passed. The Central Goods and Services Tax (CGST) Bill, Integrated Goods and Services Tax (IGST) Bill and Union Territory Goods and Services Tax (UTGST) Bill will be passed by Parliament. Each
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Goods and Services Tax – GST – By: – Sanjeev Singhal – Dated:- 10-3-2017 Last Replied Date:- 10-3-2017 – Procedure of Refund in GST is time bound and if not paid in time will be subject to interest. It seems to be simple . Circumstances are defined under which tax payer shall be eligible to file for refund and same shall be process a per the prescribed law. Refund of GST is prescribed in Section- 48 of the Revised GST Law. Applicability and Procedure Any person may make an application to the proper officer of IGST/CGST/SGST for refund of Tax and Interest, if any amount paid by him before the expiry of two years from the relevant date. But any taxable person , claiming any refund of any balance in electronic cash ledger u/s 44[6], may claim the same in return filed u/s 34. Any specialized agency of United Nation Organisation , consulate or embassy of foreign countries or any multilateral Financial Institution or Organization or any person or class of person notified under u/s 49, may c
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realization certificate or copy of FIRC. Documentary or such other evidence to substantiate that such tax and interest has not been passed on to any other person. A statement in Annexure -1 of Form -GST RFD-1 containing the no. and date on invoices received and issued during tax period in case where the claim is for refund of any unutilized ITC u/s 48[3]. It is further provided that if the refund claim is less than Rs.. 5 lacs, the above documentary evidences are not necessary. In that case, applicants by his own self declaration that incidence of tax and interest thereon has not been passed on to any other person. In case refund claim is ₹ 5 lacs or more, Annexure -2 of the Form -GST RFD-1 shall be signed by Chartered Accountant or Cost Accountant to the effect that such tax and interest has not been passed on to any other person. On receipt of application , the proper officer if satisfy, may pass the order for credit of whole or part of the refund and the amount may be credite
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here the claim pertains to refund from Electronic cash ledger ,the proper officer shall provide the Form- GST RFD-2 to the applicant as acknowledgement on the common portal. Claims other than electronic cash ledger, application shall be forward to proper officer who will examine the correctness of the application within 15 days of filing and acknowledge the same on Form-GST RFD -2 clearly stating the date of filing the application. Where any deficiency is noticed, the proper officer shall intimate the same on Form- GST RFD-3 to the applicant. to avoid the holding of capital of exporters, it has been provided to refund the 90% of the claim with in 7 days of the acknowledgment of claim. And will pass Order on Form -GST RFD-4 to the effect [ This has been approved by GST Council on March 4,2017 as well. The proper officer shall issue Form -GST RFD -8 mentioned the amount to be credited to applicant Bank. Relevant Date as mentioned above In case of export of goods out of India. In case of
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2017 (3) TMI 1889 – PUNJAB AND HARYANA HIGH COURT – TMI – Grant of stay against recovery – HELD THAT:- The interim order shall continue till the Tribunal considers the petitioner s application for interim reliefs and for a period of two weeks thereafter in the event of the order being adverse to the petitioner. This, however, is provided that the petitioner files the appeal and takes out an application for interim reliefs before the Tribunal by 31.03.2017. The Tribunal shall consider whether to permit the petitioner to rely upon the pleadings in this petition which includes the replies of the respondents as well. Petition disposed off. – CWP-2790-2016 (O&M) Dated:- 8-3-2017 – HON'BLE MR. JUSTICE S.J. VAZIFDAR, CHIEF JUSTICE
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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 7-3-2017 – Power to collect statistics Section 141 of the Model Goods and Services Act, 2016 ( Act for short) gives powers to the Commissioner to collect information for the purposes of the better administration of the Act. Section 141(1) provides that the Commissioner considers that it is necessary so to do, may by notification, direct that statistics be collected relating to any matter dealt with, by or in connection with the Act. Such notification may be issued even by any person authorized by the Commissioner. Section 141 (2) provides that upon such notification, the Commissioner or any person authorized by him in this behalf, may call upon all concerned persons to furnish such information or returns as may be specified therein relating to any matter in respect of which statistics is to be collected. Section 141(3) provides that the form in which the persons to whom or, the authorities to which such information or
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y individual return. This provision is exempted if it is for the purposes of prosecution under this Act. Penalty Section 142 (3) provides that if any person, who is required to furnish any information or return- without reasonable cause fails to furnish such information or return ; willfully furnishes or causes to furnish any information or return which he knows to be false, he shall, on conviction, be punished with fine which may extend to ₹ 100/-. In case of a continuing offence, a further fine which may extend to ₹ 100/- for each day after the first day during which the offence continues may be imposed subject to a maximum limit of ₹ 1,000/-. Punishment Section 142 (4) provides that if any person willfully discloses any information or the contents of any return given or made, otherwise than in execution of his duties under that section or for the purposes of the prosecution of an offence under the Act or under any other Act, he shall, on conviction, be punished wit
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losure Section 148(4) provides that nothing in Section 148 shall not apply to the disclosure of- any such particulars in respect of any such statement, return, accounts, documents, evidence, affidavit or deposition, for the purpose of any prosecution under the Indian Penal Code or the Prevention of Corruption Act, 1988 or any other law for the time being in force; or any such particulars to the Central Government or State Government or to any person acting in the execution of this Act, for verification of such particulars or for the purposes of carrying out the object of the Act; or any such particulars when such disclosure is occasioned by the lawful employment under the Act or any process for the service of any notice or the recovery of any demand; or any such particulars to a Civil Court or Tribunal constituted under any Central law in any suit or proceeding, to which the Government or any authority under the Act is a party, which relates to any matter arising out of any proceeding
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advocate, tax practitioners, a practicing cost accountant, a practicing chartered accountant, a practicing company secretary to the authority empowered to take disciplinary action against the members practicing the profession of a legal practitioner, cost accountant, chartered accountant or company secretary, as the case may be; or any such particulars to any agency appointed for the purposes of data entry on any authorized system or for the purpose of operating, upgrading or maintaining any automated system where such agency is contractually bound not to use or disclose such particulars; any such particulars to an officer of the Central Government or any State Government as may be necessary for the purposes of any other law in force in India; and any information relating to any class of taxpayers or class of transactions for publication, if, in the opinion of the Competent Authority, it is desirable in public interest, to publish such information. Punishment Section 148(3) provides th
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Goods and Services Tax – GST – By: – Pankaj Goel – Dated:- 7-3-2017 – Historically the passive infrastructure (mobile phone towers) sector has been plagued with intense litigation. The sector, though is a backbone for the telecommunication sector, has a huge capital expenditure requirements which inturn resulted into availability of huge CENVAT credit to be adjusted over a period of time. The authorities in the interest of revenue, denied the entire CENVAT credit by holding that the passive infrastructure so constructed is nothing but an immovable property and hence ineligible for credits. Though there were many counter arguments which the assessees are still pursuing the higher courts, this article examines the position in the Revised GST
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additions or alterations or repairs, to the extent of capitalization, to the said immovable property. Explanation 2.- Plant and Machinery means apparatus, equipment, machinery, pipelines, telecommunication tower fixed to earth by foundation or structural support that are used for making outward supply and includes such foundation and structural supports but excludes land, building or any other civil structures. From the plain reading it should be noted that as a general rule the credit of works contract service is not available, the exception is the works contract service for construction of plant and machinery. Furthermore, the way the term plant and machinery is defined is interesting for this discussion. This term is defined in an ambig
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eral has compared to CCR. While CCR required direct relationship with the provision of services, the RGL requires the supply to be used for the purpose of business. Accordingly, extending the argument to the definition it can be well argued that restricting the foundation and structural support only to towers will limit the purpose and hence the second interpretation should prevail. Moreover, the second interpretation is also in line with the stand adopted by the Tribunals under the CCR in relation to availability of credit on support materials. In a nut shell though the RGL, in its present form, will prove boon to the passive infrastructure industry. However, the varied interpretation may lead the revenue authorities to litigate the matter
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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 7-3-2017 Last Replied Date:- 7-3-2017 – What is information return? An information return is a tax document that certain persons are required to file with the Internal Revenue Service to report certain business transactions. An information return is not an income tax return; it is used for reporting purposes only. Furnishing of information return under GST Act Section 139 of the Model Goods and Services Tax, Act, 2016 makes it obligation on any person who is responsible for maintaining record of- registration; or statement of accounts; or any periodic return; or document containing details of payment of tax and other details of transaction of goods or services or transactions related to bank account; or consumption of electricity; or transaction purchase, sale or exchange of goods or property or right of interest in a property, shall furnish an information return of the same in respect of such periods, within such time
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rresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and any other financial institution notified by the Central Government in this behalf) or a State Electricity Board; or an electricity distribution or transmission licensee under the Electricity Act, 2003 or any other entity entrusted, as the case may be, with such functions by the Central Government or the State Government; or the Registrar or Sub Registrar appointed under the Registration Act, 1908; a Registrar within the meaning of the Companies Act, 2013; or the registering authority empowered to register motor vehicles under Chapter V of the Motor Vehicles Act, 1988; or the Collector referred to in Section 3© of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; or the recognized stock exchange referred to Section 2(f) of Securities Contracts (Regulations) Act, 1956; or a depository referred t
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ed in the information return is defective, he may intimate the defect to the person who has furnished in such information return with directions to rectify the defect within a period of 30 days from the date of such information or within such further period which, on an application made in this behalf; The prescribed authority may allow and if the defect is not rectified within the said period of 30 days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in the other provisions of this Act, such information return shall be treated as not submitted and the provisions of this Act shall apply; Where a person has not furnished the information return within the time specified, the prescribed authority may serve upon him a notice requiring furnishing of such information return within a period not exceeding 90 days from the date of service of the notice and such person shall furnish the information return. Penalty Section 140 provides that if a per
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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 6-3-2017 – Invoicing A registered taxable person supplying taxable services shall, before or after the provision of service but within a period prescribed in this behalf, issue a tax invoice, showing the description, value, the tax payable thereon and such other particulars as may be prescribed. In case of traders or retailers, a memo or bill shall constitute invoice. A registered taxable person shall, on receipt of advance payment with respect to any supply of goods or services by him, issue a receipt voucher or any other document, including therein such particulars as may be prescribed, evidencing receipt of such payment. Returns Under existing tax law, assessee is required to submit two half-yearly returns under service tax, monthly /quarterly return under excise and quarterly returns under VAT laws in a year. Model GST law (version-II) provides for the following returns which are required to be filed by the register
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e required Information Technology support to this sector and as such, there lies a good opportunity for software industry from small businesses and retail trade. GSTN has appointed over 30 GST Suvidha Providers (GSPs) who will be the conduit or interface between the taxpayer and the GST network (GSTN). Small business can avail the services of GSPs to comply with the GST requirements including invoking / return filing etc. Rate of Tax Under GST law, GST Council has proposed four-tier rate structures, i.e., 5%, 12%, 18% and 28%. However, no abatements have been prescribed yet. Therefore, prima facie, it appears that small traders/retailers would need to pay GST at the rate as may be prescribed for the supply of goods and/or services. However, there will be exemption rate (nil) and zero rate for exports. A special rate for gems & jewellery may also be prescribed. A compensation cess is also proposed on demerit / sin goods. Blockage of Working Capital In case traders supply goods or se
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. Most of the forms used in VAT and CST will be withdrawn. On the fillip side, GST may impact small businesses / traders negatively owing to following – Rate of GST may be higher for certain goods / services Most of the exemptions / concessions may be withdrawn or rationalised Stock transfers, unlike present, shall be made liable to GST Return compliances will substantiality increase Job works may be made taxable where as presently, they are exempt against prescribed form. Administrative Control over Small Assessees The States and the Centre have decided on sharing administrative powers wherein taxpayers with an annual revenue of less than ₹ 1.5 crore will be divided between both sides in the ratio 90:10. However, the division will be done in this ratio across four slabs to ensure that the division is uniform – below ₹ 20 lakh, ₹ 20 lakh to ₹ 50 lakh, ₹ 50 lakh to ₹ 1 crore and ₹ 1 crore to ₹ 1.5 crore. Those taxpayers above the ₹ 1
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ating that there will be around 8 million taxpayers under GST initially. Most of the Service Tax assessees are in the range of ₹ 20 lakh to ₹ 1.5 crore and the CBEC will now administer only 10% of them. Way Forward With the implementation of GST, which is likely to be done by July, 2017 now, small traders and retailers will be benefitted as the implementation means a seamless integration of goods and service transaction across the states. It will have benefit at different stages of the value chain. For the procurement of raw materials, movement of goods would become less cumbersome, which opens gates for more suppliers /vendors to merge. Following this, a wider base of distributors would be available as state boundary paperwork will not be a hurdle, resulting to better access and low transportation costs. A favorable environment for a supply chain will help reduce in-transit inventory and further lower the working capital requirement. Simplified taxes and availability of in
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tiate optimal pricing that would lead to incremental savings. Though with the proposed structure of GST, dealing with multiple authorities implementing the law will be challenge for companies. Companies will have to think of procurement in a granular way. Right from third-party contracts to understanding supplier's cost structures to where he will get credits, each aspects will have to be studied minutely. And that would require a deep dive into even vendor supply chains, something that wasn't required till now. Given the prescribed tax credit process, a transition to GST would also required ability to handle a huge amount of transactional level data. To manage that, vendors will have to be trained on how his systems capture the transactions and how tax credits are processed in his system to ensure proper transferability of credits. Leading companies will invest in vendor education and hand-holding programs, to ensure that their entire supply-chain transitions to a GST regime s
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e food wastage and bring down prices. It will not only bring relief to the consumers, but also help retail sector by building supply-chain efficiencies in India in a big way. This is thus going to be a win-win legislative reform for all. The threshold limit of ₹ 10 lakh or 20 lakh will protect the small businesses. The VAT limit currently varies from State to State, limit is currently at ₹ 10 lakh, for Uttar Pradesh it is at ₹ 5 lakh and it is only ₹ 1 lakh in North-Eastern States. There is wide variation among States on current VAT threshold. GST Council decided at ₹ 20 lakh threshold which means any dealer who has turnover of less than ₹ 20 lakh will not be part of tax net. This gives huge relief to small businesses in India. However, companies and business / retailers may face challenges in terms of inventory planning, logistics, budgeting, cash and working capital requirements while transiting to the GST regime. Whether the dealers will have to h
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Goods and Services Tax – Goods and Services Tax GST) Council approves the Central Goods and Services Tax (CGST) Bill and the Integrated Goods and Services Tax (IGST) Bill – TMI Updates – Highlights
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Goods and Services Tax – GST – Dated:- 4-3-2017 – The Goods and Services Tax GST) Council, in its meeting held today in Vigyan Bhawan in New Delhi under the Chairmanship of the Union Minister for Finance & Corporate Affairs, Shri Arun Jaitley has approved the draft CGST Bill and the draft IGST Bill as vetted by the Union Law Ministry. This clears the deck for the Central Government to take these two Bills to the Parliament for their passage in the ongoing Budget Session. Some of the main features of the two Bills, as finalized by the GST Council, are as follows: i. A State-wise single registration for a taxpayer forfiling returns, paying taxes,and to fulfil other compliance requirements. Most of the compliance requirements would be ful
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Special Category States (as enumerated in Article 279A of the Constitution such as Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh, Assam and the other States of the North-East) for not taking registration is ₹ 10 lakhs. iv. A business entity with turnover upto ₹ 50 lakhs can avail the benefit of a composition scheme under which it has to pay a much lower rate of tax and has to fulfil very minimal compliance requirements. The Composition Scheme is available for all traders, select manufacturing sectors and for restaurants in the services sector. v. In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the
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llow the flow of ITC in respect of input serviceswithin a legal entity. viii. To prevent lock-in of capital of exporters, a provision has been made to refund, within seven days of filing the application for refund by an exporter, ninety percent of the claimed amount on a provisional basis. ix. In order to ensure a single administrative interface for taxpayers, a provision has been made to authorise officers of the tax administrations of the Centre and the States to exercise the powers conferred under all Acts. x. An agriculturist, to the extent of supply of produce out of cultivation of land, would not be liable to take registration in the GST regime. xi. To provide certainty in tax matters, a provision has been made for an Advance Ruling A
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Goods and Services Tax – GST – By: – Ganeshan Kalyani – Dated:- 4-3-2017 Last Replied Date:- 10-3-2017 – The introduction of Goods and Service Tax (GST) would be very significant step in the field of indirect tax reforms in India. The Finance Minister announced that GST will be implemented from 1st July 2017. The earlier proposed timeline for the implementation of GST was 1st April, 2017. The benefit of introduction of GST are many – it amalgamates a large number of indirect taxes into a single tax called GST, seamless flow of input tax credit, cost of product would come down in long run, common national market etc. On the other side challenges are also expected to arise, may be – during the phase of transition from current tax regime to the new tax regime, compliance, etc. Out of many one of the challenges would be filing of returns. The same is discussed herein below. The compliance of filing of return under GST is going to be a challenging task. Every registered taxable person, int
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recipient by 17th day of the succeeding month in order to file a monthly return in GSTR-3 by 20th day of succeeding month. The compounding taxpayer is required to file return in GSTR-4, foreign non-resident taxpayer is required to file return in GSTR-5, input service distributor (ISD) taxpayer is required to file return in GSTR-6, tax deductor in GSTR-7 and Annual return is required to be filed in GSTR-8 by 31st December following the end of the financial year. E-commerce entities are required to file return in GSTR-9, Government entities in GSTR-10, Annual return for compounding dealer in GSTR-11 and Final return in GSTR-12. The above types of return is enumerated in the table below for easy reference: Type of return For the purpose of GSTR-1 uploading outward supplies of goods and/or services effected during a tax period GSTR-2 uploading the detail of inward supplies of taxable goods and/or services. The details would get auto populated based on the GSTR-1 filed by suppliers. GSTR-3
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ies are filing return under centralized service tax registration format in which two half yearly returns in Form ST-3 are filed by them. Now, under GST they will have to file 1,708 numbers of returns if they have branches in 28 states across India. The Association of Indian Revenue Services (IRS) officers of Customs and Central Excise has expressed that the multiple returns for service providers will increase compliance cost. Service providers in the banking, insurance, logistics, IT & ITES and aviation sectors are operating under a single centralized registration of service tax at present. That means, at present, they have to file 3 Service Tax returns in one year. In GST era, they will have to file 61 returns per state, per year, after taking registration in each state in which they have presence. So, a major Bank like SBI, which has branches in all 35 states and Union Territories, will end up filing over 2,000 returns annually. This does not seem to be in the spirit of ease of d
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n approved Tax Return Preparer to furnish their return and such other tasks as may be required in connection with filing of return. However, the responsibility of correctness of any particulars furnished in the return by the Tax Return Preparer shall continue to rest with the registered taxable person on whose behalf such return and details are filed. Additionally, taxpayer can also avail facility of third party service provider called GST Suvidha Provider or GSP which are envisaged to provide innovative and convenient methods to taxpayers and other stakeholders in interacting with the GST Systems from registration of entity to uploading of invoice details to filing of returns. The Good and Service Tax Network has recently finalized 34 companies as the GST Suvidha Providers (GSPs), which will offer support and services to help tax payers and businesses in compliance. Though the facility of the Tax Return Preparer and GST Suvidha Provider would be available in GST the responsibility of
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