Goods and Services Tax

Goods and Service Tax – GST – By: – CA Akash Phophalia – Dated:- 1-9-2015 – This article is prepared to know about the proposed scheme of availing unutilized credit available with the assessee in pre-GST regime. The article also deals with the fate of credit for pre-GST unregistered assessees who will register in post-GST regime. Current provisions relating to input credit are different in case of central excise, service tax and other tax laws. Further, many of the state laws are different in relation to input credit provision. Possible methods which the Govt may adopt w.r.t to credit transition stocks could be as under: Fully allow deduction/refunds/carry forwards Fully deny deduction/refunds/carry forwards (of certain restricted goods) F

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ication of such inputs and transfer of credits. Burden of proof would be on claimant. Purchase invoice along with appropriate stock records duly certified by CA may be asked. Credit of Semi Finished and Finished goods lying in stock Credit on input goods used in semi finished/finished goods would have already been taken in tax records. Thus, no separate exercise. Require an appropriate mechanism to identify and allow taxes paid, based on records maintained. Credit of Capital Goods Must be allowed to carry forward the taxes paid in respect of eligible capital goods lying in stock. Subject to certain conditions as may be prescribed. These should also be allowed to take credit of capital goods that has suffered appropriate tax in pre GST regim

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Goods and Service Tax – GST – By: – CA Akash Phophalia – Dated:- 28-8-2015 – REGISTRATION IN GST (Proposed) Registration No can be PAN based followed by alphabets, numerals etc. (Eg. 10 digit PAN, 2 digit State code, 1 alphabet indicating nature of activities of an assessee and numerals indicating number of state registrations) GST is a destination based tax and as a result of State code, revenue can be allocated between states easily. There will be online Application form and it may provide link with the existing registrations. Original/digital signature of authorised person. Uniformity in documents throughout India. Government is proposing to charge a fee for registration under GST. Registration Number will be provided immediately to ass

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Goods and Service Tax – GST – By: – CA Akash Phophalia – Dated:- 25-8-2015 Last Replied Date:- 31-8-2015 – As per recommendations by Joint Working Group appointed by Empowered Committee in 2007, the GST in India may have four components in its tax structure as – (a) Central tax on goods upto retail level, (b) Central Service Tax, (c) State Vat tax on goods, and (d) State VAT on services. As far as tax rate structure is concerned each of the above four components may have four-rate categories. The Central GST will be administered by the Central Government and the State GST will be administered by the State Governments. The different taxes will be subsumed as under :- Subsumed in Central Tax Subsumed in State Tax Central Excise Duties (CENVA

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ion between State GST and Central GST is not expected to be allowed. This is just for your reference. It does not constitute our professional advice or recommendation. – Reply By Srikanthan S – The Reply = Dear Mr Akash Phophalia, thanks for the summary.However, you have mentioned that 'taxable event will shit to sale rather than manufacture'. Is it not 'supply' of goods/services which will be taxable event? That's why industries are looking at the fate of 'stock transfers or branch transfers' on which there could be a levy. Do kindly clarify.Regards,S.Srikanthan – Reply By KASTURI SETHI – The Reply = Taxable event will be on supply and Supply will be defined. It will include Stock transfer, branch transfer. – Re

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Goods and Services Tax – Started By: – ASHOK AMIN – Dated:- 24-8-2015 Last Replied Date:- 21-12-2015 – Dear Sir, Please let me know if GST is implemented will there be any change in record keeping for excise units. Can they combine trading & manufacturing activity under same place. Regards – Reply By YAGAY AND SUN – The Reply = Dear Ashok,Do not worry on things which are not in existence at present scenario. Government is working on this aspect to get it pass in Rajya Sabha and if passed in this financial year, then, there would a paradigm shift in Indirect Taxation and would also give boost to our country's economy/GDP between 1% to 2%. However, the double entry system and accounting principles would not be disturbed.So cheer up M

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nalized.It is subject to so many changes. You will have to wait for. – Reply By ASHOK AMIN – The Reply = Dear Sir,Ok. Noted. Thanks. – Reply By Ganeshan Kalyani – The Reply = The Empowered Committee has released Draft on registration, return, payment and refund. However these are draft and it will keep changing until it is finalized. – Reply By KASTURI SETHI – The Reply = Sh.Ganeshan Kalyani Ji, You are right, Sir. Draft GST will keep changing as now BJP has opened Pandora's box which has stalled the proceedings in Rajya Sabha. Now chances for passage of GST bill in Rajya Sabha are slim. GST Bill will be in doldrums. The winter session in Parliament ends on 23.12.15. Only 10 days have left. They should have opened Pandora's box afte

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Finance Minister to Inaugurate Two Day Annual Conference of Chief Commissioners / Director Generals of Customs, Central Excise and Service Tax on Monday, 24th August, 2014; Conference to Focus on Emerging Areas such as Taxpayers Services, Ease of Doing Business, Make in India and Goods and Services Tax Among Others; Dr. Arvind Panagariya, Vice Chairman, Niti Aayog to Deliver the 4th B.N. Banerji Lecture. – Dated:- 21-8-2015 – The Union Minister of Finance Shri Arun Jaitley will inaugurate the two day Annual Conference of the Chief Commissioners and Directors General of Customs, Central Excise and Service Tax on Monday, 24th August 2015 in the national capital. Shri Jaitley will deliver the keynote address on the occasion. This session will

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esults will be shared and discussed in the conference. Other new initiatives taken by CBEC in the area of simplifying procedures, promoting ease of doing business, facilitating trade, import & export and use of information technology to re-engineer business processes will also form part of the discussions with the Chief Commissioners. The Conference will commence with revenue analysis and strategies to achieve the Budget Estimates for the current Financial Year. Theme based interactive sessions with the Chief Commissioners will focus on areas such as on Infrastructure and HRD issues , Capacity Building , Taxpayers Services , Ease of Doing Business , and MIS System . Dr. Arvind Panagariya, Vice Chairman, NITI Aayog will deliver the 4th B

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Atal Pension Yojana (APY) Modified to Increase the Acceptability of the Scheme Amongst Informal Sector Workers and Make the Scheme More Viable; Subscribers Would Now Have an Option to Make the Contribution on a Monthly, Quarterly, Half Yearly Basis Instead of on a Monthly Basis Earlier; Discontinuation of Payment of Contribution Provision Substantially Modified in Favour of the Subscriber; Penalty on Delayed Payment has Been Simplified – Dated:- 20-8-2015 – The Atal Pension Yojana (APY) was launched by the Prime Minister Shri Narendra Modi at Kolkata on 9th May, 2015. APY provides a minimum guaranteed pension of ₹ 1000 per month or ₹ 2000 per month or ₹ 3000 per month or ₹ 4000 per month or ₹ 5000 per month, at

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is earlier Discontinuation of payment of contribution provision has been substantially modified in favour of the subscriber. The account will not be deactivated and closed till the account balance with self-contributions minus the Government co-contributions becomes zero due to deduction of account maintenance charges and fees Also the penalty on delayed payment has been simplified to Rs. One (1) per month for contribution of ₹ 100, or part thereof, for each delayed monthly payment instead of different slabs given earlier Similarly, premature exit from the scheme before sixty years of age was not permitted earlier except in exceptional circumstances, i.e., in the event of the death of the beneficiary or terminal disease. Now the modif

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Goods and Services Tax – Started By: – SANDESH SHINDE – Dated:- 18-8-2015 Last Replied Date:- 14-12-2015 – Dear Sir, Please explain us when there is stock transfer within state which GST would be levied, IGST or CGST & SGST and additional 1% will leaviable.Please explain, thanks & regards. – Reply By KASTURI SETHI – The Reply = If stock transfer is within State it would attract tax under CGST or SGST depending upon the product whether scheduled under CGST or SGST. No additional 1 % will

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VAT and Sales Tax – Exemption granted on Invalid F-Form – Invocation of revision jurisdiction – KGST – If there was error resulting in revenue losing tax, it would be prejudicial to interests of Reven

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Goods and Service Tax – GST – By: – Bimal jain – Dated:- 17-8-2015 – Dear Professional Colleagues, Rajya Sabha adjourns sine die without passing the GST Bill With the Prime Minister Shri. Narendra Modi Government going hammer and tongs using its majority in Lok Sabha to clear legislative agenda, Shri. Modi's reform agenda suffered a major blow on Thursday, August 13, 2015, when the lawmakers ended the Monsoon Parliament session without approving the much awaited Constitution (122ndAmendment) Bill, 2014 on Goods and Services Tax ( GST Bill or 122nd CAB ) aimed at boosting economic growth by harmonising a mosaic of State and Central levies replacing a chaotic structure that inflates costs. The Monsoon session of the Parliament, which saw protests between the Government and the Opposition, has been a complete washout. However, on the second day of the session, i.e. on July 22, 2015, Select Panel of the Rajya Sabha managed to submit its Report on the GST Bill amid Opposition furore ov

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advice of the Government for the purpose of deliberating and voting on the Bill . There are, however, three caveats: If a Bill passed by one House but rejected by the other; or If disagreement between the two Houses on amendments to the Bill; or When more than six months have lapsed after the date of receipt of the Bill by the other House without passing it. Thus, calling a Joint session to make up the difference is not an option for two reasons viz. GST Bill was struck in the Rajya Sabha with Oppositions neither saying yes or no and for a Constitutional Amendment Bill, it needs to be passed separately in each house by a 2/3rd majority of the members, present and voting. Extending the session after break Still keen to ensure passage of the GST Bill, the Centre has kept its option open of reconvening the session with the Cabinet Committee on Parliamentary Affairs on Thursday deciding not to recommend immediate prorogation of the Houses after they are adjourned sine die. Special session

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by External Affairs Minister Sushma Swaraj and Finance Minister Arun Jaitley. GST Bill hangs midway: April, 2016 deadline under mist The virtual closing of the Monsoon session without any major business being transacted is a blow to the Government which was looking to get major pending legislations, including the GST bill, passed in both houses of the Parliament so as to get the economy back on track. The delay in the passage of the GST bill has put a question mark on the planned roll out of the GST era by the appointed date of April 1, 2016 which now seems to be cumbersome task for the Government to meet a self-imposed deadline. The GST Bill which will subsume all Indirect taxes into one uniform levy across the Country, has to be first passed in the Rajya Sabha with 2/3rd majority followed by its ratification by at least 50% of the States before it becomes law of the land. Following this, the Government will set up the GST Council within 60 days from the date of commencement of 122nd

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Dated:- 12-8-2015 – Under the proposed GST regime, both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on supply of goods and services. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the States Goods and Service Tax (SGST) on all transactions within a State. The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. The proceeds

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Income Tax – Withholding of tax – The software has been purchased from Microsoft, the cost of which has been distributed amongst all the group entities. It is pure case of reimbursement of cost and ad

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Companies Law – Manipulative, fraudulent and unfair trade practices – Circular trading – not in dispute that six clients of Appellant acted in collusion amongst each other in synchronized / circular /

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GST KNOWLEDGE SERIES # 4: COMPARISON OF GST BILL 2014 AND RECOMMENDATIONS OF SELECT COMMITTEE OF RAJYA SABHA,2015 – Goods and Service Tax – GST – By: – CA. Chitresh Gupta – Dated:- 5-8-2015 Last Replied Date:- 30-12-1899 – The Constitution (122nd Amendment) Bill, 2014 was introduced in Lok Sabha on December 19, 2014 and was passed by it on May 6, 2015. The Bill was referred to a Select Committee of Rajya Sabha for examination which submitted its Report on July 22, 2015. The Report contained various recommendations along with three Notes of Dissent submitted by Congress, AIADMK and CPI. The Table below compares the provisions of the 2014 Bill with the recommendations of the Select Committee and the Notes of Dissent. Constitution (122nd Amend

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al 1% tax, states should be permitted to retain 4% of centre s share of IGST on all inter-state supplies of goods. Compensation to states (Clause 19) Parliament may provide for compensation to states for a maximum period of five years 100% Compensation to be for a five year period. 100% compensation to be provided for five years. Compensation must be deposited in a GST Compensation Fund, under the GST Council. Coverage of GST (Clauses 12, 14 and 17) Alcoholic liquor for human consumption to be exempt from GST. GST is to be levied on petroleum crude, high speed diesel, motor spirit, natural gas, aviation turbine fuel at a later date. GST to be imposed on tobacco. Centre to impose additional levy on tobacco. No Changes Proposed Tobacco and to

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of GST rates (over the floor rate) within which CGST and SGST may be levied on specific goods or services or class of good or services. Voting: No changes proposed A statutory GST Council is not required. A body like Empowered Committee of state Finance Ministers is adequate. A ceiling of 18% must be imposed on GST rates. Special consideration to be given to states or Union Territories whose population does not exceed 20 lakh, (ex. Goa or Puducherry). Voting: States must have 3/4 of the weighted votes, and the centre must have 1/4. GST is by far one of the most important and voluminous Indirect Taxation reform in India which has far reaching effects. GST Knowledge Series is an attempt to spread awareness of the Proposed GST Regime in clear

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Goods and Service Tax – GST – By: – Pradeep Jain – Dated:- 4-8-2015 Last Replied Date:- 6-8-2015 – Introduction:- The Goods and Services Tax (GST) is the most awaited reformation in the indirect tax structure of India which is planned to be implemented w.e.f. April 1, 2016. It has been the most happening topic in the parliament since December 19, 2014 when The Constitution (122nd Amendment) (GST) Bill, 2014 was first presented by the Finance Minister, Mr. Arun Jaitley in the Lok Sabha. In this piece of writing, the authors have made an attempt to give an insight of merits and probable threats in GST proposals. About GST:- GST is a Value Added Tax proposed to be levied in lieu of manufacture, sale and consumption of goods and services. It will replace all indirect taxes whether levied on goods and services by the Central and State governments including Central Excise Duty, Countervailing Duty, Service Tax, Value added tax, Octroi and entry tax, luxury tax, etc. It will be implemented c

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indirect tax is kept keeping in view the cascading effect and due provisions are framed to lower down the same. However, more the no. of taxes, more the cascading effect. When we talk of excise duty, service tax or VAT, there are Cenvat credit rules which allow the credit of input tax/duty suffered by the material or service so used. Still there are cases where the cascading effect is clearly visible but there is no mechanism in the law to deal with it. For eg. entry tax, octroi, etc. Almost every goods are subject to these taxes but no credit is allowable as these are collected normally by local bodies. Thus, ultimately these taxes form part of the cost of product which is further subject to excise duty or service tax or VAT. Thus, cascading effect do exists. This particularly happens when the same goods or service suffers a no. of taxes and no set off facility is available. Implementation of GST will bring drastic reduction in the cascading effect as most of the indirect taxes prevai

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ards. In the year 2006, Supreme Court gave a landmark judgment in the case of M/s BSNL and others wherein it was held that if the sale of the SIM card is merely incidental to the service being provided and facilitates the identification of the subscribers, their credit and other details, it would not be assessable to sales tax. While giving this decision, Supreme Court held that both the taxes cannot be levied on single transaction. But interestingly, even after this judgment there are several transactions which are subject to both service tax and excise duty. Further, there is a concept of works contract, both in the VAT law as well as in service tax. Though in both the laws, there is a provision of abatement or composite scheme, still there is part of total value which is subject to both VAT and service tax. All these problems will come to an end after implementation of GST. Rationalization of tax structure & simplification of compliance procedure:- At present, there are multiple

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be maintained by employing man, money and energy. This ultimately leads to inefficient utilization of nation s resources. Increase in product competitiveness in international market:- With the implementation of GST, in long run, there will be reduction in overall cost of products manufactured in India. This will make Indian products more competitive in International market. It is worth mentioning here that many of our top competitors in the international market have already switched to GST. Implementing GST in India will be a step forward in making our product more cost effective in international market. PROBABLE THREATS IN GST PROPOSAL:- Lots of publicity has been made about the benefits of implementing GST. However, on going through the GST proposal, it is found that there are some grey areas which sighs that it is nothing but a carry forward of VAT, excise duty and service tax in new name and fame. Let s have a look on these areas of negativity of GST:- Rate of GST: It s on higher

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It has been proposed that Decision in GSTC shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:- (a) The vote of the Central Government shall have a weightage of onefourth of the total votes cast, and (b) The votes of all the State Governments taken together shall have a weightage of three-fourth of the total votes cast, in that meeting. And the vote of each state shall have a weightage proportionate to the population of that State. [emphasis supplied] Thus, while assigning the weightage to vote, the population has been made the prime criteria. It is worthwhile to mention here that there are certain states which have very less population but their share in taxes is on much higher side. Such states, though contributing more, will lag behind in the decision making process taking place at GST Council. 1% additional tax on supply of goods:- It has been propose

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may not take effective steps for smooth run of GST as they are being compensated for the losses. It is also possible that the actual loss is much lower than that shown on records in order to get higher compensation. The Central Government will have to take steps to ensure that this proposal in the GST bill is not misused by the States. GST Proposal: Not friendly to important service sector like banks:- It is much hyped that GST will bring Indian goods a step forward in the International market. The reasons so given are that the GST will make Indian products cheaper in long run and thus will promote exports. In this regard, it is to be noted that the banking sector pays an important role in the exports. Whether it is export of service or export of goods, the role of banks is vital. It is worthwhile to mention here that at present service tax @ 14% is being levied on the banking transactions. On introduction of GST, this rate will be on much higher side as predicted. This will ultimatel

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s proposal which was explained by the Government that if any separate body is constituted for dispute resolution, it will hamper the working of GSTC in general and of legislature in particular. However, even after this explanation, there are possibilities that the decision taken on the disputes are not true and fair, particularly when they relate to small states which possess lower voting power (since voting weightage is based upon population). If any separate body is not constituted, the task of laying down the dispute resolution mechanism will be the toughest one. While parting:- The introduction of GST along with other government initiatives like the make in India programme have the potential to drastically bring down costs, re-define and re-shape the economy of India. The benefits of implementing GST have been much talked but the probable threats have only been popularized as opposition party s publicity stunts to hamper the implementation of GST. Whatever be the case, the fact is

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Goods and Services Tax – GST Dated:- 3-8-2015 – News – F. No. A-11013/18/2015-Ad.IV Government of India Ministry of Finance Department of Revenue (Central Board of Excise Customs) 6 th Floor, HUDCO Vishala Building, Bhikaji Cama Place, R.K. Puram, New Delhi, dated 31.07.2015 ORDER No. 01/Ad.IV/2015 Consequent upon, the decision of the Board to create a GST Directorate in Delhi by shifting the headquarters of DGST, Mumbai to Delhi, it has been decided that Directorate General of Service Tax (DGST) will henceforth be re-named as Directorate General pf Goods Service tax (DGGST) w.e.f. 01.08.2015. 2. It has also been decided that the headquarter of DGGST will be shifted to Delhi from Mu

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d in DGST Mumbai, Kolkata and Chennai (other then the AD who is loan basis to DGCEI) are to be placed at the disposal of Chief Commissioner, Service Tax, Mumbai, Chief Commissioner Service Tax, Kolkata and Chief Commissioner service Tax, Chennai respectively w.e.f. 1.08.2015on loan basis for one year. (b) The Services of Group B C and D officers posted in DGST Mumbai, Kolkata and Chennai are placed at the disposal of respective cadre controlling Chief Commissioners for a period of one year. (c) The officers posted at DGST New Delhi will be treated as the officers posted to DGGST New Delhi w.e.f. 01.08.2015. 4. The issues with approval of IFU vide their U.No. 466/2015/IFU-II dated 31.07.2015. – News – Press release – PIB Ta

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Dated:- 31-7-2015 – The State Governments have not objected to the proposed formula of the Union Government for sharing of revenue with States that would be earned as Goods and Service Tax (GST). Under the proposed GST regime, both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and services for consideration. Centre would levy and collect Central Goods and Services Tax (CGST) and States would levy and collect the State Goods an

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VAT – Delhi – Public Notice – Dated:- 30-7-2015 – DEPARTMENT OF TRADES & TAXES VYAPAR BHAWAN IP ESTATE DELHI PUBLIC NOTICE Dated 30/07/2015 It is envisaged that GST is likely to be rolled out with effect from 01st April 2016. Accordingly all the TINs of dealers shall be replaced with the GSTIN on the basis of their declared PAN details in the department. Department has observed that in respect of various registered dealers the PAN details are either not available in the database of the Depa

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Goods and Service Tax – GST – By: – CA. Chitresh Gupta – Dated:- 29-7-2015 Last Replied Date:- 30-12-1899 – One of the crucial issue for successful implementation of GST relates to the determination of the GST rate. Since the GST is primarily intended as an exercise in reforming the consumption tax in India and not an exercise for additional resource mobilisation through discretionary changes, the CGST and SGST rates should be such rates which would yield the same revenue as collected from the various taxes which will be subsumed in the CGST and SGST (hereafter such rates shall be referred to as 'revenue neutral rates' or 'RNR'). The RNR for the CGST and the SGST is determined in accordance with the formula- RNR = R X 100 B Where; RNR : Revenue Neutral Rate for the Centre or the States as the case may be; R : Collection from the Central or State taxes, as the case may be, which are proposed to be subsumed in the CGST and SGST; B: Estimated Tax base of the GST [A] WHAT

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the government is not able to arrive at consensus for the threshold. Currently, under Excise it is ₹ 1.50 Crores, under Service Tax it is ₹ 10 lacs and under various Vat Act, it ranges from ₹ 5 lacs to ₹ 20 lacs. Thus unless the government has clarified the above, the exact tax base which will be liable to GST can t be estimated. Consequently, determination of GST rate will be herculean task. [B] WHAT WILL BE RATE STRUCTURE UNDER GST? As per the First Discussion Paper released by The Empowered Committee, it has been decided to adopt a two-rate structure -a lower rate for necessary items and goods of basic importance and a standard rate for goods in general. There will also be a special rate for precious metals and a list of exempted items. For upholding of special needs of each State as well as a balanced approach to federal flexibility, and also for facilitating the introduction of GST, it is being discussed whether the exempted list under VAT regime including

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nt. However, in order to provide for an alternate buoyant source of revenue to the third-tier of Government. The rate of CGST and SGST on all non-SIN goods is recommended by Task Force at the single rate of 5 percent and 7 percent, respectively. For SIN goods comprising of emission fuels, tobacco products and alcohol, both the Central government and the State government may continue to levy taxes as at present, in addition to CGST and SGST. The empowered committee of state finance ministers has virtually trashed the Thirteenth Finance Commission task force s Goods and Services Tax (GST) report. They question the methodology applied by the committee to arrive at the 12 per cent revenue neutral rate. The states have expressed reservations on the methodology and the approach of the taskforce. It (the rate suggested by the taskforce) does not tally with the estimates made by the government, the National Institute of Public Finance and Policy, and the states. We will like them to review the

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sal in rates across various States compromises the objectives of a single common market significantly. The matter becomes even more complex if such variation in rates is permitted in the case of services. Services, being intangible, are difficult to be related to geographical locations and pose significant challenges in deciding the precise place where they are liable to be taxed. If the autonomy is permitted only in respect of goods, (and not services), it leads to different problems of distinguishing between goods and services, which is not easy in a modern economy where such distinctions are withering away fast. Moreover, variations in rates across States lead to arbitrage opportunities, resulting in evasion and distortion in production and supply chain. Thus the benefits of keeping harmonized structure far outweigh the desire to provide unrestricted autonomy. On floor rates, Dr. Parthasarathi Shome, Director & Chief Executive, Indian Council & Research on International Econ

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goods, not exceeding one percent in the course of inter-State trade or commerce. This additional tax will be collected by the Government of India for a period of two years, and assigned to the States from where the supply originates. Recently, the Select Committee of Rajya Sabha known to be suggesting that this additional @ 1% tax on inter-state supply of goods should be confined to inter-state movement of goods for consideration only. Sub Penal of Empowered Committee Recommended the revenue neutral rate 27% (SGST 13.91% and CGST 12.77%). This has been referred to the National Institute for Public Finance and Policy (NIPFP), as these were on the revenue estimates of 2011-12. COMMENTS A Select Committee of Rajya Sabha (which is examining the GST Constitutional 122nd Amendment Bill 2014) has observed that Standard GST rate should be within 20%, while the lower one should not cross 14%. It also suggested that the proposed GST council may opt for a broad based and moderate rate as the high

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Goods and Service Tax – GST – By: – CA. Chitresh Gupta – Dated:- 24-7-2015 – In continuance of our earlier series titled GST Knowledge Series# 1, Understanding the Mechanics of Goods & Service Tax, we have discussed the basic DNA of Goods & Service Tax popularly known as GST. These features as applicable to India were: DUAL GOODS AND SERVICE TAX APPLICABILITY OF GST TO ALL TRANSACTIONS DESTINATION BASED MULTI POINT LEVY COMPUTATION OF GST ON THE BASIS OF INVOICE CREDIT METHOD PAYMENT OF GST UNIFORM PROCEDURE FOR COLLECTION OF GST In this Article, we will take the discussion forward and discuss in detail about other Salient Features of GST. THRESHOLD LIMIT The present threshold limits prescribed in different State VAT Acts below which VAT is not applicable varies from State to State. A uniform State GST threshold across States is desirable and, therefore, it is considered that a threshold of gross annual turnover of ₹ 10 lakh both for goods and services for all the States

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tain GST registration number. The taxable entities with lower turnover will also have the option to register. As per First Discussion paper, each taxpayer would be allotted a PAN-linked taxpayer identification number with a total of 13/15 digits. This would bring the GST PAN-linked system in line with the prevailing PAN-based system for Income tax, facilitating data exchange and taxpayer compliance. There will be single GST registration number for all branches in a State. Therefore, a dealer having branches across States will have as many GST registration numbers as the number of States in which he operates. 4. INPUT TAX CREDIT (ITC) SET OFF Since the Central GST and State GST are to be treated separately, taxes paid against the Central GST shall be allowed to be taken as input tax credit (ITC) for the Central GST and could be utilized only against the payment of Central GST. The same principle will be applicable for the State GST. Further, the rules for taking and utilization of credi

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PORTS Imports will be brought under the scope of GST with necessary Constitutional Amendments. They will treated at par with inter-state transactions and Integrated goods and service tax (IGST) will be levied on imports. The incidence of tax will follow the destination principle and the tax revenue will accrue to the State where the imported goods and services are consumed. Full and complete set-off will be available on the IGST paid on import on goods and services. 9. SPECIAL INDUSTRIAL AREA SCHEME After the introduction of GST, the tax exemptions, remissions etc. related to industrial incentives should be converted, if at all needed, into cash refund schemes after collection of tax, so that the GST scheme on the basis of a continuous chain of set-offs is not disturbed. 10. MAINTENANCE OF RECORDS A taxpayer or exporter would have to maintain separate details in books of account for availment, utilization or refund of Input Tax credit of CGST, SGST and IGST. 11. PERIODICAL RETURNS The

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ll procedures under CGST and SGST should be uniform. The Central Government will be responsible for establishing a taxpayers information network (TINXYS) keeping in view the information requirement of CBEC and the State tax administration. The TIN will be shared between the Centre and the States. The information furnished through periodical returns shall be stored in a common database with access to both the CBEC and the State tax administrations.Since the tax base will be common, there should be a common appellate authority. Similarly, the Authority for Advance Ruling will also be common. No authority should have any power to make preventive detention for the purposes of CGST and SGST. 14. GOODS AND SERVICE TAX COUNCIL As per the Constitution Amendment Bill, 2014 ( Bill ), there will be a Goods and Service Tax Council who shall make recommendation to the Union and the States. The Bill provides that the administration of GST would be the responsibility of the GST Council which would th

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FEMA – 347/2015-RB – Dated:- 24-7-2015 – RESERVE BANK OF INDIA (Foreign Exchange Department) (CENTRAL OFFICE) NOTIFICATION NO. 347 /2015-RB Mumbai, 24th July, 2015 Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2015 G.S.R. 579(E).-In exercise of the powers conferred by clause (a) of sub-section (1), sub-section (3) of Section 7 and sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No.FEMA.23/2000-RB dated May 3, 2000 as amended from time to time, Reserve Bank of India makes the following amendment in the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, as amended from time to time, n

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2015 (7) TMI 1414 – TELEGANA HIGH COURT – TMI – Validity of assessment order – assessment was made alleging that the petitioners had purchased the goods falling under 5th schedule the purchase details from whom the petitioners had purchased had not been set out – HELD THAT:- In the facts of the present case and in the circumstances the assessment order is set aside. However, considering the fact that the assessment orders are set aside, it is deemed appropriate to direct the respondent authorities to furnish the details to the petitioners within a period of four (4) weeks from today and complete the assessment proceedings within a period of three (3) months thereafter. It is needless to mention that the petitioners shall be entitled to

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s from whom the petitioners had purchased had not been set out. As a matter of fact, the petitioners had specifically pleaded that they had not dealt with the said goods and in that connection the petitioners requested for furnishing of the names of the sellers from whom the petitioners alleged to have purchased. Assessing Officer had referred to this contention that does not deal with the same. When the writ petition came up for admission on 14-07-2014, the learned Government Pleader sought time to get instructions to produce the record. Today, the record has been produced and after perusing the record, learned Government Pleader fairly submits that the record does not disclose the material particulars sought by the petitioner hav

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GST Knowledge Series # 1 : Understanding the Mechanics of Goods & Service Tax – Goods and Service Tax – GST – By: – CA. Chitresh Gupta – Dated:- 17-7-2015 – The Goods and Services Tax (GST) is a comprehensive value added tax (VAT) on the supply of goods or services. It is levied and collected on value addition at each stage on sale or purchase of goods or supply of services based on input tax credit method but without state boundaries. There is no distinction between goods or services and they are taxed at a single rate in a supply chain of goods and services till the goods or services reach the ultimate consumer. Its main objective is to combine all indirect tax levies into a single tax thereby replacing multiple tax levies, overcoming the

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SGST statute for every State). 2. APPLICABILITY OF GST TO ALL TRANSACTIONS The Central GST and the State GST would be applicable to all transactions of goods and services made for a consideration except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. 3. DESTINATION BASED MULTI POINT LEVY It is recommended that the Centre and States should adopt a consumption based GST with no distinction being made between raw materials and capital goods , in avaliment of Input tax credit. GST is based on destination principle, thus tax base will shift from production to consumption of goods. The taxable event is Consumption of goods or services. As a result, r

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ds would have indication whether it relates to Central GST or State GST (with identification of the State to whom the tax is to be credited). 6. UNIFORM PROCEDURE FOR COLLECTION OF GST To the extent feasible, uniform procedure for collection of both Central GST and State GST would be prescribed in the respective legislation for Central GST and State GST. GST is not simply VAT plus service tax, but a major improvement over the previous system of VAT and disjointed services tax – a justified step forward. GST is by far one of the most important and voluminous Indirect Taxation reform in India which has far reaching effects. GST Knowledge Series is an attempt to spread awareness of the Proposed GST Regime in clear and concise manner. It will a

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Goods and Service Tax – GST – By: – pranav deshpande – Dated:- 14-7-2015 – E-Commerce, in itself, is a taxation quagmire. The roots lie in the classic sale vs service controversy, in which the respective e-tailers could treat the transaction as a service, whereas States want to treat it as a transaction subject to State VAT. Amazon is a classic example, in which Karnataka took the lead. Even within the sales tax controversy, the next question is that of a level playing field. If the State, in which these e-tailers have set up shop, should get the State VAT, should the States, where the end subscribers are actually based, be deprived? If an e-tailer adopts the VAT model, he can always open a warehouse in the respective State and levy VAT on

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ock transfers, without something going in their kitty. From a social perspective, Governments, doubtless have to lend voice to pleas of local retailers and traditional selling outlets, whose business faces stiff competition from such e-tailers. It is likely that lobbying by a plethora of such traders will move the State Governments to enact strict laws on e-commerce. Will GST address this? To an extent, Yes. If the State of consumption gets the tax, all issues being raised by such States, will go away. Of course, the State which was demanding or getting full tax, will lose its revenue, under GST, as other States will share it. Well, as they say, you win some, you lose some CA. Pranav Deshpande E-Commerce, in itself, is a taxation quagmire.

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odel scenario. In this scenario, even if the transactions are cross border, across States, the respective litigating authority will demand full VAT, in absence of a C Form. Therein lies the additional difficulty. And let us not forget the interest and penalty part. The situation can get further complicated if States amend their respective VAT laws, to provide for taxing such transactions. Even if the taxing entry gets challenged in Courts, another front that will be opened with this, is that of jurisdiction. States, in which offices are not located or from which billing is not happening, are not going to simply allow stock transfers, without something going in their kitty. From a social perspective, Governments, doubtless have to lend voice

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Goods and Service Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 6-7-2015 – Goods and services tax is a tax levied on goods and services imposed at each point of sale or rendering of service. Such GST could be on entire goods and services or there could be some exempted class of goods or services or a negative list of goods and services on which GST is not levied. GST is an indirect tax in lieu of tax on goods (excise) and tax on service (service tax). The GST is just like State level VAT which is levied as tax on sale of goods. GST will be a national level value added tax applicable on goods and services. A major change in administering GST will be that the tax incidence is at the point of sale as against the present system of point of origin. According to the Task Force under the 13th Finance Commission, GST, as a well designed value added tax on all goods and services, is the most elegant method to eliminate distortions and to tax consumption. The basic objective of GST is to remov

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rned. The Government has already introduced the Bill to amend Constitution of India for Goods and Services Tax (GST) in December, 2014 in Parliament. GST is expected to play a transformative role in the way our economy functions GST will add buoyancy to economy by developing a common Indian market and reducing the cascading effect on the cost of goods and services. The Budget speech reaffirms the commitment to have GST in place from next year. The Budget speech states – I have already introduced the Bill to amend the Constitution of India for Goods and Services Tax (GST) in the last Session of this august House. GST is expected to play a transformative role in the way our economy functions. It will add buoyancy to our economy by developing a common Indian market and reducing the cascading effect on the cost of goods and services. We are moving in various fronts to implement GST from the next year. Introduction of GST is eagerly awaited by Trade and Industry. To facilitate a smooth tran

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cation cess have been subsumed in excise duty and Service Tax in the present Budget. Further, the general rate of excise duty will be rounded off from 12.36% (including cesses) to 12.5%. In case of Service Tax, it will go up from 12.36% (including cesses) to 14%. The Union Budget focuses on Goods & Services Tax (GST) covering following aspects: State of the art GST regime to be introduced GST likely to be introduced from 1st April, 2016 GST will enable leakage proof tax regime GST to play a transformative role However, no clear cut road map on GST as to how GST will be introduced from 1st April 2016 and preparedness there for. Going by the present mood, the Government of the day feels that it may be able to introduce GST in India w.e.f. 01.04.2016, replacing a host of indirect taxes presently levied by the Centre , State and Local Bodies. It hopes for the parliamentary nod (two-third majority) in the forthcoming monsoon session in July-August, 2015. This is necessary as the Indian

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expected to change the complexion of indirect taxation in India, it will also bring down the prices of goods and services across the board. The consensus among the states (29) and between the Centre and states hold the key. Once consensus is reached, GST may see the light of the day in a year s time, even during any time of the year, it being a transaction based tax. While there is no doubt that GST will come, the sooner the better, it should also address the problems in present day taxation i.e., it should seek to achieve rationalization, boost transparency, offer flexibility to Union and states and broaden the much needed tax base. If GST comes into operation, it would achieve the status of integrated and most comprehensive set off tax structure in India leading to enhanced economic activities and tax buoyancy. GST would offer a complete set off and there will be no tax cascading effect as there will be no tax on tax, an ideal proposition for all. Even the Government won t mind as t

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Goods and Service Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 4-7-2015 – Some of the popular GST models being practiced in various countries are as follows – United Kingdom model Value Added Tax (VAT) is a tax on consumption levied in the United Kingdom by the national government. It was introduced in 1st January, 1973 and is the third largest source of government revenue after income tax and National Insurance. Before 1973 the UK had a consumption tax called Purchase Tax, which was levied at different rates depending on the goods' luxuriousness. The general rate is 20% and reduced rate is 5%. United States of America model The United States does not impose a national-level sales or value-added tax. Sales taxes and complementary use

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l Australia follows a single GST which is a federal tax collected by Centre and distributed to States. GST was introduced in July 2010 and rate of tax is 10%. Indian situation is similar but States may not like to lose their autonomy. Malaysian model Goods and services tax (GST) in Malaysia, a value added tax, was scheduled to be implemented by the Government during the third quarter of 2011, but has not yet been implemented. The Government is still studying the possible impact of the tax. During the Government reading of the 2014 budget, Malaysian Prime Minister announced that GST @ 6% shall be imposed starting on April 1, 2015. Singapore model On the recommendation of the 1986 Economic Committee, Singapore's government decided to shif

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