Goods and Services Tax

Goods and Services Tax – Started By: – Velayutham Panchatcharam – Dated:- 15-9-2016 Last Replied Date:- 18-9-2016 – I am working in SEZ. As per present draft GST, will SEZ Developer go for refund because developer does not have export. Please clarify. – Reply By MARIAPPAN GOVINDARAJAN – The Reply = No GST provisions are there at present. It will be subject to the process to be undertaken by GST Council. As such you have to wait til such time. – Reply By YAGAY AND SUN – The Reply = Press Releases CONCERNS OF THE EXPORTS SECTOR IN THE GST REGIME: FIEO FIEO/PUB/PR /29/16 August 30, 2016 CONCERNS OF THE EXPORTS SECTOR IN THE GST REGIME – PUT FORWARD BY FIEO IN THE MEETING OF EMPOWERED COMMITTEE OF STATE FINANCE MINISTERS ON GST Legislative Cha

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– Reply By CS SANJAY MALHOTRA – The Reply = We have taken up on various issues relating to SEZ, EOU's & Export / Import Licences with Ministry of Commerce and Ministry of Finance. Even Ministry of Commerce too have taken up with MOF for redressal of exporters concerns in GST. Have shared the impact of GST on above sectors in my article titled Impact of GST on Exports / Imports. There are lot of queries like rate of duty on clearances from SEZ / EOU in domestic and transitional arrangement for said units,etc……..Wait for sometime, things will be put across in GST COuncil meeting scheduled for Sep 22, 2016 – Reply By Ganeshan Kalyani – The Reply = Sir, thanks for the updated news. Thanks. – Reply By YAGAY AND SUN – The Reply = Tra

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Goods and Services Tax – F. No. 31011/09/2015-SO (ST) – S.O. 2957(E) – Dated:- 15-9-2016 – MINISTRY OF FINANCE (Department of Revenue) NOTIFICATION New Delhi, the 15th September, 2016 S.O. 2957(E).-The following Order made by the President is published for general information:- ORDER In exercise of the powers conferred by article 279A of the Constitution, the President hereby constitutes the Goods and Services Tax Council consisting of the following members, namely:- a) The Union Finance Minist

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Goods and Services Tax – GST – By: – Venkata prasad Pasupuleti – Dated:- 14-9-2016 Last Replied Date:- 15-9-2016 – Meaning & Scope of Supply under GST CA Venkata Prasad GST is said to be levied on supply in legal words taxable event is supply thereby dispensing with the existing different taxable events for different levies of duties/taxes like Manufacture for levy of excise duty, sale for levy of VAT/sales tax etc., Therefore understanding of the expression supply is highly important. The Section 3 of draft GST law exclusively deals with the meaning & scope of supply . In this article, an attempt has been made to decode the said section and understand its coverage. The said section is defined in various parts covering different scenarios and also comprising of two schedules. The most criticized & problematic part is definition is only inclusive and does not have means part i.e. what is actually means. This is one of deviation from the accepted international GST/VAT laws.

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ideration are deemed as supply. The concept of one person to another (two persons) is no more relevant now. The main effect is that transactions between two units of same company may liable to tax. The same should be in the course or furtherance of business. Business is widely defined u/s. 2(17) (here again only inclusive manner). In the course of business implies a period of time during which business is in progress and also the connected relation with it. Furtherance of business can be commonly understood as helping, forwarding, promoting, advancement, or progress etc., of business Quoted: (b) importation of service, whether or not for a consideration and whether or not in the course or furtherance of business, and Unquoted: Services imported are liable for IGST. Section 2(52) of draft law specifies the conditions to construe import of service . One of condition laid down in the aforesaid section [i.e. clause (d)] is that supplier and receiver shall not be merely establishment of dis

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nts/reimbursements made to foreign branch. Same was view further elaborated in case of Tech Mahindra Ltd. v CCE 2016 (9) TMI 191 – CESTAT MUMBAI ). Consideration is not mandatory to attract GST i.e. free services received from outside India liable. The main effect can be seen in case of free transactions between foreign parent and Indian subsidiary company or vice versa. In the course or furtherance of business also not mandatory thereby personal services were also liable however it was provided in the law that there would be threshold limit exempting the services imported for personal use. Quoted: (c) a supply specified in Schedule I, made or agreed to be made without a consideration. Unquoted: In terms of clause (a) of Section 3(1) when there is no consideration then there is no supply. However this is general provision. The above clause i.e. (c) deems that transactions specified in schedule I as supply even though there is no consideration. Therefore specified transactions are liabl

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should in the course or furtherance of business. If this condition fails then same is not supply since transaction does not fall under clause (c) for the reason that there is consideration and simultaneously does not fall under clause (a) for the reason that it is not in the course or furtherance of business. Application of business assets to private/non-business use is deemed as supply in schedule I similar services for private/non business use. The tracing out these transactions has many practical challenges and may lead to litigation. There was widespread belief that stock transfers are liable for GST in terms of clause (5) of schedule I, which says supply by a taxable person to another taxable/non-taxable person and the expression taxable person can be understood from section 9 r/w schedule III deals with registration (state wise or business vertical wise). Here the question arises whether registration aspect can itself suffice to deem two units of same person as different persons

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upply of goods or supply of services etc., Quoted: (2A) Where a person acting as an agent who, for an agreed commission or brokerage, either supplies or receives any goods and/or services on behalf of any principal, the transaction between such principal and agent shall be deemed to be a supply. Unquoted: This subsection deems transaction between principal and agent as supply. This deeming fiction only for the transactions between principal and his agent and not in case of transactions with the third person. And the taxability of transactions between agent (acting on behalf of his principal) and third person will continue to be supply by third person to the principal and not to the agent. All legal consequences/rights/liabilities under GST like availing input tax credit, adding mismatched credit to recipient liability, reverse charge liability etc., Further this deeming fiction is to tax the movement of goods/services between principal and agent and not for commission or brokerage that

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ress provision to exclude actual service provider from the GST compliance is recommended and similarly 'turnover' made under the model of 'aggregator' shall be excluded from 'turnover' limits specified for registration, other areas. Further what is deems is supply of branded service which was defined u/s. 43B to mean that electronic commerce operator (E-commerce operator). There seems to be lack of synchronization here since tax compliance for aggregator and E-commerce operator is quite different. Be that as it may, E-Commerce Operator is defined u/s. 43B in such a manner that it would even cover an aggregator. Issue that may be of concern for an aggregator would be if they are also governed by the provision of collecting tax at source even when full GST is to be discharged by them on the same supplies. If yes, then in this situation also there is going to be a double taxation on the single transaction and credit accumulation in the hands of service providers. M

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Goods and Services Tax – GST – By: – Anuj Bansal – Dated:- 14-9-2016 Last Replied Date:- 15-9-2016 – As we are all aware that constitutional amendment for implementing GST Law has got nod in Rajya Sabha. Now we are looking forward to welcome GST Law to have brighter India with one law subsuming number of indirect tax laws like Entry Tax, Octroi, etc. The whole India is cherished and welcoming the GST Law by making different – different interpretations. But at the back of the mind, industry is worried about the applicability of law, transition process and compliances under GST Law. In this note I am discussing the first step to enter into the GST Law i.e. the registration process. The scope of the note is limited to transition provision of registration for the dealers who are presently registered in various states under VAT, Excise or Service Tax laws. The Govt. has ensured that they will migrate the existing registrations, whether under the State Laws or Central Laws, to GST Law. But

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other words, for smooth sailing of business present VAT registration would be converted to GSTIN (Registration Number under GST) and the circumstances where the VAT registration is not there with the tax payer, the existing Service Tax Number would be converted to GSTIN. However, initially a provisional registration will be issued and remaining information would be required to be filed within 6 months. VAT Registrations will be converted to GSTIN Process for migrating the VAT TIN numbers to GSTIN will be as follows: The dealers who are presently registered under VAT law and having TIN numbers, GSTIN will be generated after validating PAN from Income-tax Department. Such GSTIN will be sent by GSTN (GSTN is a company providing IT infrastructure) to respective state authorities. The state authorities will communicate GSTIN and password to the tax payers. Instructions will also be issued to the dealers to fill the remaining details as may be required. The above process will not in any way

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C) to GSTIN will be as follows: The department would be having email of the dealer. Department will advise the tax payers on email to intimate about the states where the assessee wants to get GSTIN. Once the details are received from the dealer about the states where dealer want to have GSTIN. Thereafter, the Service Tax portal will check with GSTN whether GSTIN is already generated or not generated by the dealer, in the states mentioned by the tax payers. In case GSTIN is not generated, GSTN will generate GSTIN for each of the state for that tax payer and will communicate to the tax payer and Service Tax Department. The tax payer will also be required to fill other data within six months and if the date is not filled in the specified time period, the GSTIN will be cancelled. It is stated that the government is trying to make a smooth conversion from VAT regime to GST Regime. The take of the note for the industry is that all VAT registration numbers should have updated PAN, Email and M

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 14-9-2016 Last Replied Date:- 15-9-2016 – GST TERMINOLOGY – PART I Model GST Law, as placed in public domain on 15th June, 2016 by the Empowered Committee of State Finance Ministers (EC) contains the draft of model GST law which provides a basis for CGST / SGST / IGST legislations to the enacted in near future. Like in any other statute or tax law, model law on GST also contains exhaustive terminology or interpretations for understanding and interpretation of the law. Section 2 of Goods and Services Tax Act contains definitions of various terms, expressions and phrases which ought to be understood for the purpose of interpretation of tax law. It contains meanings of 109 such terms in 109 clauses in Section 2. An attempt is being made in a series of articles to dissect or interpret the GST terminology so as to enable desired understanding of tax provisions. To begin with, let's discuss the following terms in relation

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ould have issued such tax invoice for delivery of goods or services in question. Literally, address means the particulars of the place where someone lives or an organization is situated. What is an 'invoice' is defined in section 2(60) read with section 23 to mean a document showing the description, quantity and value of goods or services, tax charged thereon and other prescribed particulars. 'Taxable person' is defined in section 2(96) read with section 9 to mean a person who carries on any business in India or any State and who is registered or required to be registered under Schedule III. Further, an agriculturist has not been considered as a taxable person. 'Person' is defined in section 2(74) of the GST law. Address on Record [Section 2(3)] 'Address on record' means the address of the recipient as available in the records of the supplier. Address on Record was not defined earlier in the Finance Act, 1994. This definition is a newly inserted definiti

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#39;place of business' which has been separately defined in clause 75 of section 2. Fixed establishment is – Place other than place of business It is characterized by a sufficient degree of – Permanence, and Suitable structure It should be meant to supply services or to receive and use services for its own needs. Such permanence should be have sufficient degree of permanence. What is sufficient is subjective and would depend upon facts and circumstances of each case. Examples of permanence may be property as lease or rent or own property. Suitable structure has been referred to in the form of human and technical resources. Fixed establishment has been referred to only for the purpose of supply of or receiving of services, not for goods. Temporary presence of staff by way of a short visit at a place cannot be called a fixed establishment. Also, the number of staff at a location is not important. What is relevant is the adequacy of the arrangement (of human and technical resources),

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ch 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 establishment elsewhere, the location of such fixed establishment; where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and in absence of such places, the location of the usual place of residence of the recipient; According to Rule 2(i) of Place of Provision Rules, 2012, 'location of the service receiver' means: where the recipient of service has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained; where the recipient of service is not covered under sub-clause (a): the location of his business establishment; or where services are used at a place other

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usiness. Location of supplier of service [Section 2(65)] 'Location of supplier of service' means: where a supply is made from a place of business for which registration has been obtained, the location of such place of business ; where a supply is made from a place other than the place of business for which registration has been obtained, that is to say, a fixed establishment elsewhere, the location of such fixed establishment; where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and in absence of such places, the location of the usual place of residence of the supplier; According to present Rule 2(h) of Place of Provision of Rules, 2012 'location of the service provider' means- where the service provider has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been

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'Place of business' includes- a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, provides or receives goods and/or services; or a place where a taxable person maintains his books of account; or a place where a taxable person is engaged in business through an agent, by whatever name called; The place of business would accordingly include the following places – place from where business is ordinarily carried on, warehouse, godown, any other place used for storing goods or place to provide or receive goods or services by taxable person, place where books of accounts are maintained by taxable person (it may be place of business of agency or any professional), place from where a taxable person is engaged in business through agent by whatever name called.(like commission agent, C&F agent, consignment agent etc) The definition given is an inclusive definition and not a comprehens

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goods Input tax credit availed Output tax payable and paid Such other particulars as prescribed Section 42 also provides that where more than one place of business is specified in the certificate of registration, the accounts relating to each place of business shall be kept at such places of business concerned. Usual place of residence [Section 2(105)] 'Usual place of residence' means: in case of an individual, the place where he ordinarily resides. in other cases, the place where the person, as defined in sub-section (74), is incorporated or otherwise legally constituted. Usual place of residence has been specified for both, individuals as well as non-individuals as follows – Taxable person What is usual place of residence Individuals Place where an individual ordinarily resides Other cases (Any person other than individual) Place where much person is incorporated or otherwise legally constituted Section 2(74) defines who is a 'person' which includes company, firm, HU

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Goods and Services Tax – GST – By: – Bimal jain – Dated:- 13-9-2016 Last Replied Date:- 14-9-2016 – Dear Professional Colleague, Government notifies September 12, 2016 as the appointed date for GST Council Provisions The Central Government vide Notification S.O. 2915(E).- [F. No. 31011/09/2015-SO (ST)] dated September 10, 2016, has appointed 12th day of September, 2016 as the date on which the provisions of Section 12 of the Constitution (101st Amendment) Act, 2016 ( the Constitutional Amendment Act ) shall come into force. In terms of Section 12 of the Constitutional Amendment Act (i.e. insertion of new Article 279A), the President shall within 60 days, from date of commencement of the Constitutional Amendment Act, by order, constitute a

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on the following: The taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in GST; The goods and services that may be subjected to, or exempted from GST; Model GST Laws, principles of levy, apportionment of GST levied on supplies in the course of inter-State trade or commerce under Article 269A and the principles that govern the place of supply; The threshold limit of turnover below which goods and services may be exempted from GST; The rates including floor rates with bands of GST; Any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster; Special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmi

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he total votes cast, in that meeting. Now, following legislations-Central GST (CGST) and Integrated GST (IGST) will have to be passed by Parliament and a State GST (SGST) legislation by each of the State Legislatures. The States and the Centre are working overtime and talking to stakeholders to draft the CGST, SGST and IGST laws, which are to be passed in the Winter Session of Parliament in November this year. Video Presentations on GST Highlights of Draft GST Law, 2016: https://www.youtube.com/watch?v=7ByfCXugAk0 • Presentation on Draft GST Law – Levy, Taxable Event: Supply, Taxable Person, Composition Scheme: https://www.youtube.com/watch?v=XrWHZMZf8GQ GST impact & preparedness for Service sector: https://www.youtube.com/watch?v=

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 13-9-2016 Last Replied Date:- 14-9-2016 – The long awaited amendment of Constitution for the purpose of goods and services tax has got the assent of the President on 08.09.2016 and also published in the Official Gazette. It is called as the Constitution (One Hundred and First Amendment) Act,2016 ( Act for short). Effective date The Act has not come into effect immediately on the date of publication in the Official Gazette. Section 1(2) of the Act provides that the Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision. Special provisions with respect to goods and services tax Section 2 of the Act inserts a new Article 246A. The newly inserte

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cle 248 (1) – Subject to Article 246A, Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List. Article 248 (2) – Such power shall include the power of making any imposing a tax not mentioned in either of those Lists. Amendment to Article 249 Article 249 deals with the power of Parliament to legislate with respect to a matter in the State List in the national interest. Section 4 of the Act proposes amendment in Article 249. After amendment Article 249(1) reads as follows- Article 249 (1) – Notwithstanding anything in the foregoing provisions of this Chapter, if the Council of States has declared by resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in the national interest that Parliament should make laws with respect to goods and services tax provided under Article 246A or any matter enumerated in the State List specified in the resolution, it shall b

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endment Article 268 reads as follows- Article 268 (1) Such stamp duties as are mentioned in the Union List shall be levied by the Government of India but shall be collected- In the case where such duties are leviable within any 226 (Union territory) in other cases, by the States within which such duties are respectively leviable. 268 (2) – The proceeds in any financial year of any such duty leviable within any State shall not form part of the Consolidated Fund of India, but shall be assigned to that State. Omission of Article 268A Article 268A deals with service tax levied by Union and collected and appropriated by the Union and States. Section 7 of the Act proposes to omit this Article 268A. Amendment to Article 269 Article 269 deals with taxes levied and collected by the Union but assigned to the States. Section 8 of the Act proposes amendment to Article 269. The amended Article 269 (1) reads as follows- Article 269 (1) – Taxes on the sale or purchase of goods and taxes on the consig

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be supply of goods, or of services, or both in the course of inter-State trade or commerce. Article 269A(2) provides that the amount apportioned under clause (1) shall not form part of the Consolidated Fund of India. Article 269A(3) provides that where an amount collected as tax levied has been used for payment of the tax levied by a State under Article 246A, such amount shall not form part of the Consolidated Fund of India. Article 269A (4) provides that where an amount collected as tax levied by a State under article 246A has been used for payment of the tax levied under clause (1), such amount shall not form part of the Consolidated Fund of the State. Article 269A(5) provides that the Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes places in the course of inter-State trade or commerce. Amendment to Article 270 Article 270 deals with distribution of revenues between the Union and States.

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nion under clause (1) of article 269A, shall also be distributed between the Union and the States in the manner provided in clause (2). Amendment to Article 271 Article 271 deals with surcharge on certain duties and taxes for the purpose of the Union. Section 11 of the Act proposes amendment in Article 271. After amendment Article 271 reads as follows- Article 271 – Notwithstanding anything in articles 269 and 270, Parliament may at any time increase any of the duties or taxes referred to in those articles, except the goods and services tax under Article 246A, by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India. Goods and Services Tax Council Section 12 of the Act proposes to insert a new Article 279A after Article 279 which deals with Goods and Service Tax Council. Constitution of GST council Article 279A (1) provides that the President shall, within 60 days from the date of the commencement of the Act

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plies in the course of inter-State trade or commerce under Article 269A and the principles that govern the place of supply; the threshold limit of turnover below which goods and services may be exempted from the goods and services tax; the rates including floor rates with bands of goods and services tax; special provisions with respect to the States of Arunachal Pradesh, Assam, J&K, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and any other matter relating to the goods and services tax, as the Council may decide. Article 279A (5) provides that the Council shall recommend the date on which the GST be levied on petroleum crude, high speed diesel, motor spirit, natural gas and aviation turbine fuel. While discharging the functions, the Council shall be guided by the need for a harmonized structure of GST and for the development of a harmonized market for goods and services. The Council shall determine the procedure in the performance of its

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more States; or between the Government of India and any State or States on one side and one or more other States on the other side; or between two or more States arising out the recommendations of the Council or implementation thereof. Amendment of Article 286 Article 286 deals with the restrictions as to imposition of tax on the sale of purchase of the goods. Section 13 of the Act proposes amendments in Article 286. After amendment Article 286 reads as follows: Article 286 (1) – No law of a State shall impose, or authorize the imposition of, a tax on the supply of goods or of services or both, where such supply takes place- outside the State; or in the course of the import of the into, or export of the goods out of, the territory of India. Article 286 (2) – Parliament may by law formulate principles for determining when a supply of goods or services or both takes place in any of the ways mentioned in clause (1). Amendment of Article 366 Article 366 gives definition for some words. Se

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of sixth schedule Sixth schedule deals with the provisions as to the administration of Tribal areas in the States of Assam, Meghalaya, Tripura and Mizoram. Para 8 of the schedule schedule deals with deals with the powers of the Regional Councils to assess and collect land revenue and impose taxes. Section 16 of the Act proposes to insert clause (e) after clause (3) (d) . After this para 8(3) reads as follows- (3) The District Council for an autonomous district shall have the power to levy and collect all or any of the following taxes within such district, that is to say – (a) taxes on professions, trades, callings and employments; (b) taxes on animals, vehicles and boats; c) taxes on the entry of goods into a market for sale therein, and tolls on passengers and goods carried in ferries; (d) taxes for the maintenance of schools, dispensaries or roads.; and (e) taxes on entertainment and amusements. Amendment of seventh schedule Seventh Schedule deals with the three types of List viz., U

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ntry 62 in the State List- 62. Taxes on entertainments and amusements to the extent levied and collected by a Panchayat or a Municipality or a Regional Council or a District Council. The section proposes to delete the following entries- Entry No. 52 – Taxes on the entry of goods into a local area for consumption, use or sale therein. Entry No. 55 – Taxes on advertisements other than advertisements published in the newspapers and advertisements broadcast by radio or television. Compensation to States for loss Section 18 of the Act provides that Parliament shall, by law, on the recommendations of the GST Council, 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. Transitional provisions Section 19 of the Act provides that notwithstanding anything in this Act, any provision of any law relating to tax on goods or services or on both in force in any State immediately before the commencement

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Goods and Services Tax – GST – By: – parth sharma – Dated:- 13-9-2016 – Definition of Goods in Model GST law is seeing various complications which needs clarification. Comparison of definition of goods with previous laws is as under:- Model GST Law (48) goods means every kind of movable property other than actionable claim and money but includes securities, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under the contract of supply; Explanation- For the purpose of this clause, the term moveable property shall not include any intangible property. Section 2(48) Finance Act 1994. goods means every kind of movable property other than actionable claim and money; and includ

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forming part of the land which is agreed to be severed before sale or under the contract of sale; Discussion 1.-Scrap The definition was originally borrowed from Sales of Goods Act,1932. Though the definition speaks that all movable property is goods but it has been held by judiciary that Goods should have a commercial aspect of capable of being purchased and sold and served as a result of such sale. Goods in order to be called as goods should satisfy the test of marketability i.e. they should be something which can be ordinarily come to the market to be bought and sold. It must be something which is known to the customers and the commercial community. In CEA, there arose a dispute regarding taxability of scrap calling it non marketable an

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lity of uncanned software and said that it may be goods. However, even uncanned software is intangible property (goods) and transfer of right to use will be chargeable to VAT. In service tax law, temporary transfer of IPR will be liable to service tax. Non exclusive licensing will be liable to service tax. Development of software (uncanned software) will be chargeable to service tax vide sec 66E(d). Conclusion is that in case of software which are developed and put on a media disk, both Vat and service tax is being charged which led to double taxation. To end this double taxation, a explanation is added to make intangibles as service and would be taxed as service. Discussion 3.-Electricity Electricity is an intangible good. A separate entry

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Goods and Services Tax – Cabinet approves creation of GST Council and its Secretariat – The Finance Minister decided to call the first meeting of the GST Council on 22nd and 23rd September 2016 in New Delhi. – TMI Updates – Highlights

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Goods and Services Tax – GST – Dated:- 12-9-2016 – Press Information Bureau Government of India Cabinet 12-September-2016 13:10 IST The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has approved setting up of GST Council and setting up its Secretariat as per the following details: (a) Creation of the GST Council as per Article 279A of the amended Constitution; (b) Creation of the GST Council Secretariat, with its office at New Delhi; (c) Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council; (d) Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-voting) to all proceedings of the GST Council; (e) Create one post of Additional Secre

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he GST Council on 22nd and 23rd September 2016 in New Delhi. Background: The Constitution (One Hundred and Twenty-second Amendment) Bill, 2016, for introduction of Goods and Services tax in the country was accorded assent by the President on 8th September, 2016, and the same has been notified as the Constitution (One Hundred and First Amendment) Act, 2016. As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12th September, 2016 was issued on 10th September, 2016. As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Cen

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 12-9-2016 Last Replied Date:- 14-9-2016 – We often hear that Government is working hard to see that it is able to introduce dual GST in country w.e.f. 1st April 2017 and at the same time a caveat that the target is stiff and there may be some time overrun. GST implementation is the top most priority at present for the Government. Recently, at a recent event of 'The Economist – India Summit 2016', Finance Minister made a statement on GST being implemented w.e.f. 1st April 2016 that we look ahead, it is a very stiff target and we are running against time. I would certainly like to give it a try . At the moment, the Constitutional Amendment Bill has already been ratifie

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has to be launched at one go across India (unlike VAT) and from a common date failing which there will be distortions, injustice to stakeholders in State(s) who do not agree to do so and economically unviable to businessmen. If there are some over runs in terms of time, no body including Government should worry. In fact there is nothing to lose and if we can have a smooth and robust GST regime a bit later. There is no harm in it at the cost of slight more delay. Heavens are not going to fall. It is desirable to have transparency in drafting final provisions. Since the time the model law has been placed in public domain, there have been more than 40,000 suggestions / feedback on the same from different stakeholders including trade and profe

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OFFENCES AND PENALTIES UNDER MODEL GOODS AND SERVICE TAX ACT, 2016 – Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 12-9-2016 Last Replied Date:- 13-9-2016 – Introduction Chapter XVI of Model Goods and Service Tax Act, 2016 ( Act for short) provides for penalties for contravention of the provisions of the Act and the rules made there under. The following Sections deal with penal provisions- Section 66 – Offences and penalties; Section 67 – General Penalty; Section 68 – General disciplines related to penalty; Section 69 – Detention of goods and conveyances and levy of penalty; Section 70 – Confiscation of goods and levy of penalty; Section 71 – Confiscation of conveyances; Section 72 – Confiscation or penalty not to interfere with other punishments. The minimum penalty to be imposed is ₹ 10,000/-. The welcome provisions contains in Section 68. Usually before imposing penalty the provisions of tax laws provide that reasonable opportunity should be given to the a

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pay the same to the credit of the appropriate Government beyond a period of three months from the date on which such payment becomes due; collects any tax in contravention of the provisions of this Act but fails to pay the same to the credit of the appropriate Government beyond a period of three months from the date on which such payment becomes due; fails to deduct the tax in terms of Section 37 (1), or deducts an amount which is less than the amount required to be deducted under the said subsection, or where he fails to pay to the credit of the appropriate Government under subsection (2) thereof, the amount deducted as tax; fails to collect tax in terms of Section 43C (1), or collects an amount which is less than the amount required to be collected under the said sub-section, or where he fails to pay to the credit of the appropriate Government under sub-section (4) thereof, the amount collected as tax; takes and/or utilizes input tax credit without actual receipt of goods and/or serv

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ce with the provisions of this Act or the rules made there under; fails to furnish information and/or documents called for by a CGST/SGST officer in accordance with the provisions of this or rules made there under or furnishes false information and/or documents during any proceedings under this ; supplies, transports or stores any goods which he has reason to believe are liable to confiscation under this Act; issues any invoice or document by using the identification number of another taxable person; tampers with, or destroys any material evidence; disposes off or tampers with any goods that have been detained, seized, or attached under this Act. Section 66(2) provides penalty for making short payments repeatedly. A taxable person shall be deemed to have made short payments repeatedly , if there were short payments in three returns during any six consecutive tax periods. According to Section 66(2) any registered taxable person who repeatedly makes short payment of tax shall be liable t

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n an enquiry; shall be liable to a penalty which may extend to ₹ 25,000/-. General Penalty Section 67 provides that any person, who contravenes any of the provisions of this Act or any rules made there under for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to ₹ 25,000/-. Detention of goods and levy of penalty Section 69(1) provides that where any person- transports any goods or stores such goods while they are in transit in violation of the provisions of this Act; or stores or keeps in stock goods or supplies goods which have not been accounted for in the books or records maintained by him in the manner required by this Act; all such goods and the conveyance used as a means of transport for carrying the said goods shall be liable to detention, in the manner prescribed, by the proper officer. The same shall be released only after payment of applicable tax, interest and penalty leviable thereon or upon furnishing a sec

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es that where any goods are confiscated under this Act, the title of such goods shall thereupon vest in the appropriate Government. Section 70(6) provides that the proper officer adjudging confiscation shall take and hold possession of the things confiscated and every Officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession. Confiscation of conveyances Section 71 provides that any conveyance used as a means of transport for carriage of taxable goods without the cover of documents as may be prescribed in this behalf shall be liable to confiscation, unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance. Redemption fine Section 70 (2) provides that whenever confiscation of any goods is authorized by this Act, the CGST/SGST officer adjudging it shall give to the owner of the goods or, where such owner is

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to the tax payable on the goods being transported thereon. Confiscation or penalty not to interfere with other punishments Section 72 provides 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. General disciplines related to penalty Section 68 lays down instructions to the Officers to follow certain disciplines while imposing penalty as detailed below- No tax authority shall impose substantial penalties for minor breaches of tax regulations or procedural requirements. In particular, no penalty in respect of any omission or mistake in documentation which is easily rectifiable and obviously made without fraudulent intent or gross negligence shall be greater than necessary to serve merely as a warning.This section further explained that- a breach shall be considered a minor brea

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Goods and Services Tax – Provisions relating to Formation of GST Council comes into effect from 12-9-2016 – The Constitution (One Hundred and First Amendment) Act, 2016 – Notification – TMI Updates – Highlights

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Goods and Services Tax – Started By: – CA Surender Gupta – Dated:- 11-9-2016 Last Replied Date:- 14-9-2016 – Section 11 of the First Draft Model GST Act states that: 11. Remission of tax on supplies found deficient in quantity (1) The Central or a State Government may, by rules made under this sub-section, provide for remission of tax on such supplies which are found to be deficient in quantity due to any natural causes. (2) Any rules made under sub-section (1) may, having regard to the nature of the supply, fix the limit or limits of percentage beyond which no such remission shall be allowed. Now various question arouse about the the scope and coverage of the remission of tax as per the above stated provision as follows: Will it be in lin

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orage loss, transportation loss or any other loss due to natural event or any other reason before occurring of supply event, remain unaddressed and would lead to undue harassment. To understand further, pl see an issue of 'Invisible Loss' in TNVAT – M/s. Sri Gayathri Enterprises Versus The Assistant Commissioner (CT) [ 2016 (8) TMI 635 – MADRAS HIGH COURT] wherein the matter was remanded back for ascertaining the factual position. Demand of VAT – reversal of Input tax credit (ITC) – assessment, pertaining to 'Invisible Loss' during manufacturing activity – Held that:- matters are remanded to the respondent for fresh consideration, who shall cause inspection of the petitioner's Factory and ascertain the manufacturing proc

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The law should have clear direction. Thanks. – Reply By MARIAPPAN GOVINDARAJAN – The Reply = Your concern is good. We may not expect the remission is in line with Central Excise. The Actual provisions of Act and Rules and will make it clear. Now the drafting in law is not good having so many mistakes, the provisions of rules are inconsistent with main Act. If GST is to be introduced with effect from 01.04.2017 there will be hurry in drafting and there may be many chaos. – Reply By Ganeshan Kalyani – The Reply = Sir, in my view the GST provision is nothing but advance version of VAT. I mean to say the concept of taxing is same as that of VAT. The impressive point is that it evades cascading effect as most of the taxes now will be charged an

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 11-9-2016 Last Replied Date:- 12-9-2016 – 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 Constitution (122nd Amendment) Bill, 2014 The GST Bill – The Constitution (One Hundred and Twenty-second Amendment) Bill, 2014 has been discussed and passed by Rajya Sabha on 4th August, 2016 after a 7 hours long debate by members of Rajya Sabha. The discussion on the GST bill came after months of discussions between the ruling party and the opposition – with both sides meeting multiple times to negotiate amendments. The momentous Bill, which marks the first parliamentary step towards implementation of a one country, one market, one t

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ise revenue in emergency situations. The subsequent GST Bill should not be categorized as Money Bill, by passing Rajya Sabha. Cap on GST rates of 18% Improved dispute resolution mechanism Model GST Law The draft of model law on proposed Goods and Services Tax (GST) has since been released by the Empowered Committee of State Finance Ministers (in short, EC) on 15th June, 2016. Called as 'Model GST Law', it shall comprise of two pieces of legislation, viz, Goods and Service Tax Act, 2016 (year may change) Integrated Goods and Services Tax Act, 2016 (year may change) GST Act The model GST Act comprises of – 25 Chapters 178 Sections (including numeric – alpha section) 4 Schedules GST Valuation (Determination of Value of Supply of Goods and Services), Rules 2016 109 definitions in section 2 IGST Act The Model IGST Act comprises of – 11 Chapters 33 Sections 8 Definitions It may be noted that EC had already issued four reports on different business processes in October 2015 which pert

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tee of State Finance Ministers constitutes the Joint Working Group. VAT implemented in Tamil Nadu & Puducherry. Central Sales Tax (CST) phase out starts, CST cut to 3%. Joint Working Group set up for proposing GST roadmap and structure. 2008 VAT introduced in the last Indian State of UP from January 01, 2008. EC finalises its views on a broad GST structure with consensus on Dual GST (Central & State GST), separate legislation, levy and administration. CST reduced to 2% 2009 Empowered Committee release First Discussion Paper on GST in November. Report of Task Force on GST of 13th Finance Commission in December Report of 13th Finance Commission (TFC) (Chapter 5 on GST) in December 2010 Proposed date to introduce GST in India postponed to April 01, 2011. 2011 Government introduces Constitution Amendment Bill on GST in Lok Sabha 2013 Parliament Standing Committee submit reports on GST Constitutional Amendment Bill Standing Committee recommendations incorporated in Bill Standing Com

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Committee 17.06.2015 Committees Constituted to recommend tax rates and to monitor progress of IT preparedness / mechanism of GST / drafting of rules. 22.07.2015 Select Committee of Rajya Sabha tabled its report on GST Bill 29.07.2015 Union Cabinet approves Select Committee recommendations 11.10.2015 Discussion papers to on business processes on registration, payment, returns and refunds under GST made public 03.12.2015 Committee on Tax rates submits reports 03.08.2016 Revised draft presented in Parliament / approved by Rajya Sabha 08.08 2016 Revised Constitutional (122nd Amendment) Bill approved by Lok Sabha 12.08.2016 to 06.09.2016 Constitutional Amendment Bill ratified by 18 Legislative Assemblies Be Prepared For GST Preparedness for GST in next few months will involve Tax Planning Review, Transactions Review, Training Manpower, Cost Effectiveness in Inventory, logistics & final goods, business planning with anticipation of new tax structure with competition, fastest implementati

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Goods and Services Tax – Started By: – joseph david – Dated:- 10-9-2016 Last Replied Date:- 12-9-2016 – what is the status of sales returns in gst regimethanks – Reply By MUKUND THAKKAR – The Reply = will revert back after GST regime. it is premature stage giving any input… – Reply By YAGAY AND SUN – The Reply = DUTY PAID GOODS RETURNED TO THE PLACE OF BUSINESS ON OR AFTER APPOINTED DAYDuty Paid Goods are at time of removal not being earlier than 6months, returned to any place of business or to supplier – Reply By YAGAY AND SUN – The Reply = No Tax shall be payable thereon if such goods are returned within period of 6 Months from appointed day & such Goods are identifiable to satisfaction of proper officer. – Reply By MARIAPPAN GOVIN

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Goods and Services Tax – S.O. 2915(E) – Dated:- 10-9-2016 – MINISTRY OF FINANCE (Department of Revenue) NOTIFICATION New Delhi, the 10th September, 2016 S.O. 2915(E). – In exercise of the powers conferred by sub-section (2) of section 1 of the Constitution (One Hundred and First Amendment) Act, 2016, the Central Government hereby appoints the 12th day of September, 2016 as the date on which the provisions of section 12 of the said Act shall come into force. [F. No. 31011/09/2015-SO (ST)] UDAI S

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Goods and Services Tax – GST – By: – Bimal jain – Dated:- 9-9-2016 Last Replied Date:- 11-9-2016 – Dear Professional Colleague, GST Bill gets President s assent – Now becomes a law The Government s plan to roll out Goods and Services Tax ( GST ) from April 1, 2017, has moved an inched closer to the reality with the Hon ble President Shri. Pranab Mukherjee signing the Government s flagship Constitution (122ndAmendment) Bill, 2014 on GST ( GST Bill ), just a while ago. The much-awaited GST now becomes a law with President signing the GST Bill after more than 16 States (BJP-ruled Assam being the first one) ratified it. After being assented by the President, the GST Bill will be enacted as the Constitution (101st Amendment) Act, 2016, to pave

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x on Inter-State sale of goods and a definite provision in the statute for 100% compensating the States for any revenue loss for 5 years, amongst others. With the President giving his assent to the GST Bill, a GST Council will be set up within 60 days of the enactment of the GST Bill, comprising the Union Finance Minister as Chairman, MOS-Revenue/ Finance and State Finance Ministers as Members of the GST Council, which will make important recommendations on GST rates, Common list of Exempted goods and services, dual control & adjudication, subsumation of surcharge and cesses, etc.Thereafter, following legislations-Central GST (CGST) and Integrated GST (IGST) will have to be passed by Parliament and a State GST (SGST) legislation by each

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 9-9-2016 – Any tax is levied as a percentage of any amount which is either income or value or revenue or turnover. Presently, excise duty is levied on MRP, Service Tax on value of taxable service and VAT on turnover of goods. In the proposed GST regime, what will be relevant will be 'aggregate turnover'. The 'aggregate turnover' will be relevant for the purpose of – registration of taxable person Threshold exemption limits Composition levy The valuation of supply of goods and services shall be done in terms of section 15 of Model Law on GST read with GST Valuation (Determination of the Value of Supply of Goods and Services) Rules, 2016 [both are at draft stage as of now]. Accordingly, valuation may be done as per transaction value, by comparison, computed value method or residual method. Meaning of Aggregate Turnover 'Aggregate turnover' is defined in section 2(6) of the Model GST Law as follows

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r example, if a person is having, say 10 branch offices in different parts of a country under a same PAN filing single income tax return, his turnover for all such offices shall be aggregated. 'Aggregate turnover' shall, however, exclude the following sums – Taxes, if any charged under the CGST Act, SGST Act and IGST Act. Value of supplies of goods and services on which tax is levied on reverse charge basis. Value of inward supplies of goods and services. Under the present tax law, aggregate turnover is not defined in the tax statutes but turnover is defined in VAT laws and for the purpose of threshold exemption. In Service Tax, Notification No. 33/2012-ST dated 20.06.2012 defines aggregate turnover as under- Aggregate value means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon

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r Nil Aggregate turnover 10,00,000 Tax @ 20% 2,00,000 Effective tax rate 20% B Taxable turnover Nil Exempt / non-taxable / export turnover 10,00,000 Aggregate turnover 10,00,000 Tax @ 20% 2,00,000 Effective tax rate Entire tax is cost C Taxable turnover 10,000 Non-taxable / exempt / export turnover 9,90, 000 Aggregate turnover 10,00,000 Tax @ 20% 2,00,000 Effective tax rate 2000 % D Taxable turnover 5,00,000 Non-taxable / exempt / export turnover 5,00,000 Aggregate turnover 10,00,000 Tax @ 20% 2,00,000 Effective tax rate 40% (Note: Effective tax rate is based on taxable turnover) The proposed scope of aggregate turnover may not yield the desired benefit to small tax payers and as such it may end up in tax inefficient and retrogatory measure. The present limit of exemption in Service Tax is only ₹ 10 lakhs whereas on Central Excise, it is ₹ 1.50 crore. With the tax base being large, it is expected that cost of tax collection should also be kept in mind and threshold of aggre

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Goods and Services Tax – Started By: – PRANAB PANDA – Dated:- 9-9-2016 Last Replied Date:- 10-9-2016 – Dear All We are following the procedure as laid down in Rule 4 Cenvat Credit Rules, 2004 at the time of availing Cenvat credit on input, capital goods and service. What will the conditions for availing ITC on inward supply under GST era? Whether on receipt of inward supply Receipt of invoice/Challan Making Payment to the supplier – Reply By MARIAPPAN GOVINDARAJAN – The Reply = Even though ther

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Goods and Services Tax – GST – Dated:- 9-9-2016 – MINISTRY OF LAW AND JUSTICE (Legislative Department) New Delhi, the 8th September, 2016/Bhadra 17, 1938 (Saka) The following Act of Parliament received the assent of the President on the 8th September, 2016, and is hereby published for general information:- THE CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT) ACT, 2016 [8th September, 2016.] An Act further to amend the Constitution of India. BE it enacted by Parliament in the Sixty-seventh Year of the Republic of India as follows:- Short title and commencement. 1. (1) This Act may be called the Constitution (One Hundred and First Amendment) Act, 2016. (2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.

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ment shall be substituted. Amendment of article 249 4. In article 249 of the Constitution, in clause (1), after the words with respect to , the words, figures and letter goods and services tax provided under article 246A or shall be inserted. Amendment of article 250 5. In article 250 of the Constitution, in clause (1), after the words with respect to , the words, figures and letter goods and services tax provided under article 246A or shall be inserted. Amendment of article 268. 6. In article 268 of the Constitution, in clause (1), the words and such duties of excise on medicinal and toilet preparations shall be omitted. Omission of article 268A 7. Article 268A of the Constitution, as inserted by section 2 of the Constitution (Eighty-eighth Amendment) Act, 2003 shall be omitted. Amendment of article 269 8. In article 269 of the Constitution, in clause (1), after the words consignment of goods , the words, figures and letter except as provided in article 269A shall be inserted. Inserti

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ed by a State under article 246A, such amount shall not form part of the Consolidated Fund of India. (4) Where an amount collected as tax levied by a State under article 246A has been used for payment of the tax levied under clause (1), such amount shall not form part of the Consolidated Fund of the State. (5) Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. . Amendment of article 270 10. In article 270 of the Constitution,- (i) in clause (1), for the words, figures and letter articles 268, 268A and 269 , the words, figures and letter articles 268, 269 and 269A shall be substituted; (ii) after clause (1), the following clauses shall be inserted, namely:- (1A) The tax collected by the Union under clause (1) of article 246A shall also be distributed between the Union and the States in the manner provided in clause (2). (1B) The tax levied an

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members, namely:- (a) the Union Finance Minister…………………… Chairperson; (b) the Union Minister of State in charge of Revenue or Finance…………….. Member; (c) the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government………………..Members. (3) The Members of the Goods and Services Tax Council referred to in sub-clause (c) of clause (2) shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide. (4) The Goods and Services Tax Council shall make recommendations to the Union and the States on- (a) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax; (b) the goods and services that may be subjected to, or exempted from the goods and services tax; (c) model Goods and Services Tax Laws, principles of levy, apportionment of Goods and Services Tax levied on supplies

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the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services. (7) One-half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings. (8) The Goods and Services Tax Council shall determine the procedure in the performance of its functions. (9) Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:- (a) the vote of the Central Government shall have a weightage of one third of the total votes cast, and (b) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting. (10) No act or proceedings of the Goods and Services Tax Council shall be invalid merely

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ccurs, the words goods or services or both shall be substituted; (ii) in clause (2), for the words sale or purchase of goods takes place , the words supply of goods or of services or both shall be substituted; (iii) clause (3) shall be omitted. Amendment of article 366 14. In article 366 of the Constitution,- (i) after clause (12), the following clause shall be inserted, namely:- (12A) goods and services tax means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption; ; (ii) after clause (26), the following clauses shall be inserted, namely:- (26A) Services means anything other than goods; (26B) State with reference to articles 246A, 268, 269, 269A and article 279A includes a Union territory with Legislature; . Amendment of article 368 15. In article 368 of the Constitution, in clause (2), in the proviso, in clause (a), for the words and figures article 162 or article 241 , the words, figures and letter article 162, art

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substituted, namely:- 54. Taxes on the sale of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption, but not including sale in the course of inter-State trade or commerce or sale in the course of international trade or commerce of such goods. ; (iii) entry 55 shall be omitted; (iv) for entry 62, the following entry shall be substituted, namely:- 62. Taxes on entertainments and amusements to the extent levied and collected by a Panchayat or a Municipality or a Regional Council or a District Council. . Compensation to States for loss of revenue on account of introduction of goods and services tax. 18. Parliament shall, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for a period of five years. Transitional provisions. 19. Notwithstanding anyt

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Goods and Services Tax – GST bill – One more step – President Pranab Mukherjee gives assent to the constitutional amendment bill today – now, the government is expected to notify the GST Council soon – TMI Updates – Highlights

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Goods and Services Tax – GST – By: – Bimal jain – Dated:- 8-9-2016 Last Replied Date:- 9-9-2016 – Dear Professional Colleague, Supply of Goods Vs. Supply of Services in GST: Test of Constitutional Validity Owing to the federal structure of India, where there are two taxing authorities – the Central Government and the State Government(s), the Country has witnessed overlapping of powers of the State Government(s) and the Central Government. Even though the current indirect tax system treats goods and services differently, in certain cases where goods and services with other types of supplies are being packaged as composite bundles & offered for sale to consumers under a variety of supply-chain arrangements, there is double taxation. This is evident in the following exemplary cases: Excise Vs. Service Tax: Drawings and designs, Commissioning and installations, Software etc. Service Tax Vs. VAT: AC Restaurant services, Works contract, Construction Services Right to use of movable good

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iness assets with or without consideration Sale of business assets by any other person to recover debt Goods forming part of business assets on ceasing to be a taxable person Supply of goods by an unincorporated association to its members Matters to be treated as supply of services: Transfer of right to use goods Lease, tenancy, easement, licence to occupy land Lease or letting out of building Job work on others' goods Personal use/making available for non-commercial use of business assets Renting of immovable property Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or before its first occupation, whichever is earlier Temporary transfer or permitting the use or enjoyment of any intellectual property right Development, design, programming, cu

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T Law which has been for ages, marred the current tax regime. But, threadbare analyses of the same would reveal that the settlement of goods vs. services may not fade away so easily in GST when the Schedule II is tested on the scale of constitutional validity. Few of such important points are summarised as under: Is it constitutionally valid to treat intangibles as services? The Model GST Law has made it explicit that intangibles would be treated as supply of services (as per definition of services under Section 2(88) of the Model CGST/SGST Act, 2016), while the same has been excluded from the definition of goods given under Section 2(48) of the Model CGST/SGST Act, 2016. However, the definition of goods given under Article 366(12) of the Constitution of India is defined in inclusive manner to provide that goods includes all materials, commodities, and articles , and even there are settled judgments of the Hon ble Supreme Court to provide that this inclusive definition of goods incorpo

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s service , when the Constitution does not allow so. In case, tax is levied on the basis of definition provided in Model GST Law, it would tantamount to defiance of sanctity of the Constitution, which is ultra-virus. Packaged software – whether goods or services? Even if the bifurcation of goods and services created in Model GST Law by virtue of Schedule II is accepted (leaving aside the contraction with the Constitutional provisions), still there are certain matters where litigation may continue such as likely issue of dispute in case of packaged software (i.e. software provided in physical forms like CD/DVD, etc.), where a contrary view might be possible contending that by supplying software on CDs (being tangible property), the intention is to supply the software essentially (being intangible property) and not the CDs etc. Deemed sale of goods concept in the Constitution Vs. Schedule II As per Article 366(29A) of the Constitution, certain items such supply of food or any other artic

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ber thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made. While the 122nd Constitutional Amendment Bill, 2014 has chosen to continue with Article 366(29A) of the Constitution (as against 115th Constitutional Amendment Bill, 2011 wherein it was proposed to be deleted), on the contrary, as per the Model GST Law, the same i.e. AC Restaurant Services and Works Contract has been deemed to be as supply of services in terms of Schedule II to the Mo

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 8-9-2016 Last Replied Date:- 12-9-2016 – The model GST law as released by the Government / Empowered Committee on GST is in public domain since mid June 2016. The proposed provisions only conveys the Government s intention to levy GST in India and the manner in which it will be administered, levied , collected and implemented . However, the said proposed provisions require refinement, improvement and changes in order to be business friendly and lead to ease of doing business, boost economic growth, tax collection and balancing between inflation, revenue neutrality and participation of citizens by way of contribution to the exchequer in the form of goods and service tax. It is desirable and expected that the draftsmen should consider the following suggestions and inputs while finalizing the model law in its present form . Specific Suggestions Multiple state wise registrations will be a major hurdle for service providers

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d so as to exclude the value of exempt and non-taxable supplies from aggregate turnover to make it meaningful and objective. Otherwise the purpose of exemption / threshold will be defeated. Definition of supply should be 'comprehensive' and not inclusive. It is defined as 'supply includes' rather than supply means….'. This will add to litigation. The supply of capital goods (whether to own depot or to the customer) be kept outside the purview of GST , and only the leasing / renting / transfer of right to use the asset be subject to tax. Inter-state activities should exclude activities of same person. These activities are unnecessary under the GST law, unworkable and will be tantamount to creating inter-state fiscal frontiers, impeding free flow of goods and / services within the common market of India. The definition of manufacturer should be delinked from Central Excise Act and an elaborate definition of the term 'manufacture' be provided to avoid litigat

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e interest of small assessees as there might be a possibility that in aggregate turnover of ₹ 50 lakhs only a small amount constitute inter-state supply of goods or services which will deny him of the benefit of composition scheme. Valuation rules are too cumbersome so as to even prescribe valuation of services without consideration. Transaction value of goods and services should factor the 'discounts'. There should be no tax on free supplies. In GST system, it is expected that the figures submitted for GST returns will be validated with figures submitted to Income tax. Given the fact that the sale and provision of services is one of the factors for charging of tax, the taxable figures in GST will be far different than figures in accounts or in income tax. A system needs to be built so that the figures in other data base could be used for validation of figures in GST. The concept of granting input tax credits based on the matching concept of uploading data and filing of v

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ot hurry implementation of GST from April, 2017. There is lot of ground work to be done. The most important is awareness, education, training and trial runs. 1st April 2017 is not that sacrosanct but introduction of a perfect law at the right time is more important. Country can wait for a strong and robust GST law for some more time. General suggestions It should be ensured that all states have verbatim same provisions for rates, levy, administration and procedures. Only negative list or exemptions may vary based on regional issues. A large number of compliances / returns / reconciliations are proposed. This will only burden all stakeholders; will make GST inefficient and a regressive tax. Cost of compliance will be major issue which may take away the benefits of GST. Smooth, transparent and simple transition provisions are needed rather than revenue centric provisions. These ought to be practical too. Transitional provisions should bear this objective. Supplies effected under the curr

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uld be a provision that except in fraudulent cases, no arrest / prosecution be made in first year of implementation. No new taxes should be allowed to be levied by states in GST regime when compensation for revenue loss, if any is guaranteed. GST is the future tax. GST law should, therefore be forward looking and open for futuristic businesses such as e-commerce, technology based, IT etc and recognize internet, digital economy, start ups etc. GST law should be a very simple tax law as the proposed law / provisions are too complex to understand by a common man. – Reply By Ganeshan Kalyani – The Reply = Sir, nice article and very valid suggestions. The conplaince part is really going to take time and manpower and cost. Secondly the matching concept for being eligible for availing credit is very tedious and are going to invite problems. Registration in each state in case of reverse charge should should be revised and allow to get centralised registration as is there in present tax law. Fu

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Goods and Services Tax – Started By: – joseph david – Dated:- 8-9-2016 Last Replied Date:- 10-9-2016 – in present scenario by issuing form f -we can purchase material from local party for exports-the party will notcollect any taxes.what is the status in GST – Reply By CS SANJAY MALHOTRA – The Reply = Dear Mr. David,Form F is for stock transfer and Form H is for Deemed Exports. No forms exists in GST regime and tax is levied on all supplies even meant for Export. Refund is available to exporter of GST in case of Deemed Exports.You can refer to my article published at this platform. (GST-Improving Ease of Doing Business) or go through PPT on GST as the all the info is placed thereat. – Reply By MARIAPPAN GOVINDARAJAN – The Reply = As told by

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Statutory Declaration Forms/Way Bills/ Challans/ Declaration Form under Local VAT laws are allowed to be used as this will break very chain of levy of tax and seamless availment of credit. Further, there is no provision in GSTN Software. – Reply By KASTURI SETHI – The Reply = I am thankful to all the experts for enrichment of my knowledge on the issue. – Reply By YAGAY AND SUN – The Reply = CONCERNS OF THE EXPORTS SECTOR IN THE GST REGIME – PUT FORWARD BY FIEO IN THE MEETING OF EMPOWERED COMMITTEE OF STATE FINANCE MINISTERS ON GST on 30th August 2016.Changes in Deemed Exports: GST would also require suitable changes in many of the Schemes in the Foreign Trade Policy .The categories of the deemed exports would be notified by the Government

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