Goods and Services Tax

Goods and Services Tax – Started By: – yogesh Panchal – Dated:- 3-12-2016 Last Replied Date:- 3-12-2016 – Dear All Expert, Please guide, Meaning and scope of supply Comparative view under revised model GST law vis-à-vis earlier model GST law. Which published on 26th November 2016. earlier model GST law term supply is contained in sub section (2)(a) of section 3 of the model CGST/SGST act,2016 as above, Where a person acting as an agent who, for an agreed commission or brokerage, either s

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Goods and Services Tax – GST – By: – Bimal jain – Dated:- 3-12-2016 – Meaning and Scope of Supply – Comparative view under Revised Model GST Law vis-à-vis Earlier Model GST Law Whilst the Government is keen to make Goods and Services Tax ( GST ) a reality by envisaged April 1, 2017 deadline, efforts put in by the Government to look into the voluminous suggestions submitted by various stakeholders, on First cut Model GST Law (put on public domain on June 14, 2016), is indeed commendable. Honest attempt of the Government to eradicate the daunting provisions in the earlier Model GST Law, can be very well seen in the Revised Model GST Law which was made public on November 26, 2016. Apart from addressing key concerns of the Industry in a very decent manner, the Revised Model GST Law has also proposed an anti-profiteering mechanism to ensure benefit of lower taxes is shared with consumers, and also ensures no tax on securities and subsidies provided by the Government as also free of

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bility of all transactions, whether commercial or otherwise under GST regime. Like the Earlier Model GST Law, definition of term supply is contained in Section 3 of the Model CGST/SGST Act, 2016. A comparative view of the provisions is given hereunder for easy digest: Section Sub Earlier Model GST Law Revised Model GST Law 3 (1) Supply includes Supply includes (a) all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business No changes Definition of supply still continues to be an inclusive and subjective one (b) importation of service, whether or not for a consideration and whether or not in the course or furthe

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changes Concept of supply without consideration still continues but Schedule I revamped to done away with nightmare situations like Business Assets/ services put to private or non-business use, Assets retained after deregistration, FOC Supplies, etc. (2) Schedule II, in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services Schedule II, in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services No changes Supply of goods Vs. Supply of services still continues with minimal changes (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 Omitted Corresponding provision in Schedule I Following inserted in Schedule I – Para 3: Supply of g

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xable net. Schedule IV dealing with activities or transactions undertaken by the Central Government, a State Government or any Local Authority in which they are engaged as public authorities, which shall neither be treated as supply of goods nor supply of services, was also present in earlier Model GST Law. Schedule III has been now newly added which covers activities or transactions which shall neither be treated as supply of goods nor supply of services like services by an employee to employer in course of or in relation to his employment, services of funeral, burial etc. (3) (4) Subject to sub-section (2), the Central or a State Government may, upon recommendation of the Council, specify, by notification, the transactions that are to be treated as- (i) a supply of goods and not as a supply of services; or (ii) a supply of services and not as a supply of goods; or (iii) neither a supply of goods nor a supply of services Subject to sub-section (2) and sub-section (3), the Central or a

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not be deemed supplies by them. (5) The tax liability on a composite or a mixed supply shall be determined in the following manner – (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; (b) a mixed supply comprising two or more supplies shall be treated as supply of that particular supply which attracts the highest rate of tax Gist of the changes Taxability of composite and mixed supplies: A new incorporation to determine taxability of bundled supplies in following manner: Composite supply i.e. supplies naturally bundled à It shall be treated as a supply of principal supply Mixed supply i.e. two or more individual supplies or combination thereof, not constituting composite supply à It shall be treated as a supply which attracts the highest rate of tax In our next Article, we would cover analyses and impact of the changes made in Schedule I to the Model CGST/SGST Act, 2016. – Ar

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5th GST Council Meeting Dated:- 3-12-2016 GST Council – Minutes – Circulars – GST – Minutes of the 5th GST Council Meeting held on 2-3 December 2016 The fifth meeting of the GST Council (hereinafter referred to as 'the Council') was held on 2-3 December 2016 in Pravasi Bharatiya Kendra, New Delhi under the Chairpersonship of the Hon'ble Union Finance Minister, Shri Arun Jaitley. The list of the Hon'ble Members of the GST Council who attended the meeting is at Annexure. 1 . The list of officers of the Centre, the States, the GST Council and the GSTN who attended the meeting is at Annexure 2. 2. In his opening remarks, the Hon'ble Chairperson of the Council welcomed all the members and then took up the agenda items for discussion. 3. The following five agenda items were taken up for consideration: i. Confirmation of the Minutes of the 4th GST Council Meeting held on 3-4 November, 2016. ii. Approval of the Draft GST Law, the Draft IGST Law and the

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ept open and it could be considered after the completion of the rate fitment exercise. The Council agreed that no amendment was required in the Minutes on this issue. ii. The officer from Odisha stated that in paragraph 33 of the Minutes, the version of the Hon'ble Minister from Odisha recorded therein should be replaced with the following – 'The Hon'ble Minister from Odisha supported Option II.' iii. The Commissioner of Commercial Tax (CCT), Rajasthan stated that in paragraph 15 of the Minutes, the fourth sentence relating to the version of the Hon'ble Minister from Rajasthan recorded in the aforesaid paragraph should be replaced with the following version – 'He further stated that a special rate may be kept for demerit goods and that levying cess for generating revenue for compensation for five years was not desirable. He suggested that instead of deciding the special rate after five years, a special rate of tax for demerit goods may be decided at presen

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n Law 6. The Hon'ble Chairperson invited the members to commence discussion on this agenda item. However, a discussion ensued regarding the order of discussion between agenda items 2 and 3. The Hon'ble Ministers from Uttar Pradesh and Kerala suggested that agenda item 3 (Provision for Cross-Empowerment to ensure Single Interface under GST) be taken up first. The Hon'ble Chairperson stated that the Members needed to converge on a consensus on all issues. He observed that if a provision of law was linked to agenda item 3, then it could be decided along with the agenda item 3. The Hon'ble Chief Minister of Puducherry stated that it was important to get a clear picture in respect of agenda item 3 and then, it would be easier to decide on the law. The Hon'ble Minister from West Bengal strongly suggested to discuss agenda item 3 first as this had already been discussed in three meetings of the Council and in one informal meeting of the Members of the Council. The Hon

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person emphasized that the officers had worked on the draft model laws and this needed to be discussed and provisions of law linked to agenda item 3 could be looked at separately. The Hon'ble Minister from Kerala observed that if States wanted agenda item 3 to be discussed before agenda item 2, it could be agreed upon, particularly when it was also discussed earlier in an informal meeting of the Council. The Hon'ble Deputy Chief Minister of Delhi observed that as 8 or 9 Members had requested to change the sequence of the agenda, this could be accepted. The Hon'ble Chairperson observed that the art of reaching consensus was to first take up issues that bind the Council rather than those that divide it. He also pointed out that there was no scope to defer implementation of GST beyond 16 September 2017 and that the Council needed to be mindful that the laws needed to be passed in the Parliament and the State Legislatures. He further observed that the laws needed to be cleared

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agreement if the intention was to resolve issues. He observed that it was important to look at the larger picture and not to indulge in a political debate. He also observed that Jammu Kashmir was the most empowered legislature in the country which also levied Service Tax but he was making an effort to implement GST in his State too. He further observed that approval of law was not contingent upon an agreement on the administrative arrangement. 9. The Hon'ble Minister from Kerala observed that after the Constitutional amendment, the States had lost the bargaining power and had been reduced to the level of a municipality but on the administrative issue, power at State level was very important and this could not be compromised. He observed that there was a history of discussion on cross-empowerment and the agenda should have followed that sequence. The Hon'ble Chairperson observed that rights of the Centre were contingent upon States' agreement and vice versa and in that

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genda item 3. The Hon'ble Minister from Jammu Kashmir wondered how the issue of cross-empowerment could help improve the status of State Governments, as the power of bureaucracy to administer a tax did not lead to improving the status of States. He added that it was collectively decided to share the power to tax. The Hon'ble Minister from Uttar Pradesh observed that agenda item 3 had implications on several provisions of law. He suggested to give a fixed time for discussion on cross-empowerment and if there was no agreement, then, the discussion could move to agenda item 2. The Hon'ble Chairperson proposed that the draft IGST Law and the agenda item 3 could be taken up together and before that, the draft Central GST/State GST Laws and the Compensation Law could be taken up for discussion. The Council agreed to this suggestion and thereafter, discussion on agenda item 2 was taken up. Discussion on the Draft Model GST Law 11. Introducing the Draft Model GST Law, the

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n of India and the Constitution of Jammu Kashmir. The Council agreed to this suggestion. ii. Section 2 (7), 2 (8) and 2 (106) (Definitions): The Hon'ble Minister from Telangana suggested that the definition of agriculturist should not be limited to those who cultivate the land personally as small landholders might give their land to other ryots for cultivation. The Hon'ble Deputy Chief Minister of Delhi observed that tenancy was quite common in India and to make them taxable under GST would be a very big decision which needed to be discussed. The Hon'ble Minister from Uttar Pradesh suggested that the definition of 'agriculturist' should be a broad one. The Hon'ble Minister from Kamataka observed that while tenant farming was widespread, most States had laws against tenancy. He therefore posed a question whether tenancy could be legalized under the Model GST Law. The Hon'ble Chief Minister of Puducherry observed that share-cropping was prevalent in var

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be very wide and informed that his State had sent a definition for 'agriculturist' which read as follows – 'means a person not being a company, a firm, a limited liability partnership, any body corporate incorporated by or under the laws of a country outside India, involved in the operations of agriculture, either 1. by one's own labour, or 2. by the labour of one's family, or 3. by servants on wages payable in cash or kind or by hired labour, or 4. through any usufructuary, mortgage or lease or otherwise. He also suggested to delete the definition of the term 'to cultivate personally' contained in Section 2 (106). The Hon'ble Minister from Uttar Pradesh suggested to add pisciculture and animal husbandry in the definition of 'agriculture'. The Hon'ble Minister from Telangana suggested to keep poultry and dairy as part of the definition of agriculture. The Commissioner of Commercial Tax (hereinafter referred to as 'CCT'

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ity was exempted, then the processed dairy products produced by an agriculturist would also be exempt. The Hon'ble Chief Minister of Puducherry observed that a very small percent of dairying, poultry farming, etc. was carried out by corporates and due to this, the entire sector should not be subject to tax. The CCT, Maharashtra stated that in his State there was no Value Added Tax 01 AT) on primary products, but processed goods like cheese, butter and ghee attracted VAT. The Hon'ble Deputy Chief Minister of Gujarat observed that milk cooperative was a big activity in Gujarat and the practice was to exempt the farmers bringing milk to the cooperative but to tax the subsequent value added products. The Hon'ble Minister from Kerala stated that raw agriculture products were not taxed and as there was an exemption threshold of ₹ 20 lakh, the existing provision was acceptable. The Hon'ble Minister from Haryana stated that 50% of agricultural activity was through share c

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from Odisha stated that the collection of minor forest produce should not be taxed. The Hon'ble Minister from Tamil Nadu suggested to exclude branded, processed and packaged items from the definition of agriculture. The Secretary explained that these categories would not come within the ambit of agriculture. The Hon'ble Minister from Tamil Nadu also suggested to add pisciculture in the definition of agriculture. The Hon'ble Minister from Telangana suggested that in section 2(7), nothing should be excluded from the definition of agriculture. The Hon'ble Deputy Chief Minister of Gujarat cautioned against changing the existing definition of agriculture as this would invite demand for agricultural subsidy from the hitherto excluded sectors. The Hon'ble Minister from Tripura suggested to include rubber plantations and tea in the definition of agriculture. The Hon'ble Minister from Meghalaya suggested to include apiculture (beekeeping) and piggery in the definition o

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l operation on his own account- a) by one's own labour, or b) by the labour of one's family, or c) by servants on wages payable in cash or kind [(but not in crop share)] or by hired labour under one's personal supervision or the personal supervision of any member of one's family and to retain the Explanation 1 and 2 under Section 2 (106). However, the Council did not agree to the suggestion from the Hon'ble Minister from Punjab to add a sub-clause (d), namely, 'through any usufructuary, mortgage or lease or otherwise' and to include cooperative societies within the meaning of agriculturist. iii. The Hon'ble Minister from Punjab suggested that the lease of agricultural land should be exempt from service tax. After discussion; the Council agreed that this would be considered at the time of discussing exemptions from GST. iv. Section 2 (11) (Definitions): The Hon'ble Minister from Tamil Nadu suggested defining 'State' in the dra

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tions): The Hon'ble Minister from West Bengal suggested that the definitions of 'intra-state supply of good;' and of 'intra-state supply of services' should be incorporated in the Model GST Law also instead of only cross-referencing it to the IGST Act. The Hon'ble Deputy Chief Minister of Delhi also supported this proposal. The Council agreed to this suggestion. vii. Section 2 (63) (Definitions): The Hon'ble Minister from Tamil Nadu suggested that instead of cross-referencing the definition of 'manufacturer' from the Central Excise Act, 1944, the definition should be incorporated in the Model GST Law itself so that the definition in the Model GST Law did not change merely due to change in the definition in the Central Excise Act, 1944. The Hon'ble Deputy Chief Minister of Delhi also supported this proposal. The Council agreed to this suggestion. viii . Section 3 (2) (Meaning and scope of supply): The Hon'ble Minister from West Benga

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ice' was in the Model GST Law itself but in the revised version, it had been shifted to the draft IGST Act. He suggested that the definition of 'location of recipient of service' should also be incorporated in the Model GST Law. The Council agreed to this suggestion. x. Section 7 (Powers of SGSTICGST officers under the Act): The Council agreed that this Section would be discussed later as it related to cross-empowerment. xi. Section 8 (1) (Levy and Collection of CentraliSt ate Goods and Services Tax): The Hon'ble Minister from Kerala observed that as tax rates were not decided, a 14% cap on rate should not be kept. He further observed that after 5 years, once cess had ceased to exist, the tax rate would exceed 28% if cess was merged with tax. The Hon'ble Minister from Tamil Nadu suggested to keep the tax rate at 20%. The Secretary clarified that under Article 265 of the Constitution, no tax could be levied without the authority of law and therefore, a rate

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n scheme in violation of the provisions of law, the same could be handled through audit or enforcement provisions. The CCT, Karnataka explained that as there were certain conditions that had to be fulfilled by a person opting for the Composition scheme, the provision for permission had been kept. After discussion, the Council agreed that this provision be amended and that the benefit of the Composition scheme shall be availed on the basis of declaration rather than permission, subject to the conditions precedent being fulfilled. xiii. Section 9 (1) (b) (Composition Levy): The Hon'ble Deputy Chief Minister from Delhi expressed concern in regard to this provision and stated that any grocery store which was selling goods not leviable to tax under OST would get excluded from the benefit of the Composition scheme. The CCT, Gujarat clarified that this provision would only apply to stores selling the 5 petroleum products and potable alcohol which were excluded from GST and they would

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an 2.5% each in CGST and SGST. He sought the Council's approval for a change in its earlier decision. The Hon'ble Minister from Rajasthan observed that the threshold for Composition levy was too low which could be increased or CGST on supplies from small manufacturers could be reimbursed by the Central Government. The Secretary stated that the Central Government could decide separately regarding the issue of reimbursement of CGST to small manufacturers. The Hon'ble Minister from Tamil Nadu strongly argued for a Composition Scheme on the basis of the capacity of a unit instead of its turnover such as that for brick kilns. He observed that this would avoid the need for verification of turnover. The Secretary stated that it would be administratively difficult to fix capacities for different industries. The CCT, Karnataka explained that presently, the capacity based Composition scheme was available to different industries in different States (such as ply board in Haryana, marbl

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o agreed to modify its original decision taken in the 1 st GST Council meeting dated 22-23 September 2016 as per which manufacturers were not to be extended the benefit of the Composition scheme and agreed to extend the benefit to manufacturers also, subject to clause (e) of Section 9 (1) of the Model GST Law. The Council also agreed that such a scheme should be limited to turnover-based composition rather than capacity based composition. xv. The Council also discussed the rate oftax under Section 9 (Composition Levy). The Hon'ble Minister from West Bengal observed that a combined tax rate of 5% on manufacturers under the Composition scheme would lead to loss of competitive advantage. The Secretary explained that the Composition scheme would normally be relevant to manufacturers making Business-to-Consumer (B2C) supplies where no input tax credit CITC) was involved. The Hon'ble Minister from Punjab suggested to levy a higher rate of GST for manufacturers as value addition fo

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The Hon'ble Minister from Rajasthan stated that instead of having two rates of composition levy, manufacturers should be kept out of composition and the Centre should give them reimbursement of the CGST component. The Hon'ble Deputy Chief Minister of Gujarat stated that the benefit of lump sum tax should be limited to traders who were involved in resale and should not be extended to manufacturers. He suggested to consider one of the following two options: (i) Manufacturers should not be entitled to the benefit of lump sum tax; (ii) If it has to be given at all, it should be at the rate of 5% (2.5% CGST and 2.5% SGST) and that if the Government of India decided to extend relief, it should be given from its budgetary provision. The Hon'ble Minister from Tamil Nadu suggested that manufacturers should be levied a combined tax rate of 2% whereas traders should be levied a combined tax rate of 1 %. The Hon'ble Minister from Odisha suggested a combined tax rate of 2% for trade

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ST) for traders and a total composition rate of 2% (i.e. 1 % for CGST and 1 % for SGST) for manufacturers. xvi. Section 9 (Composition Levy) and Section 8 (Levy and Collection of Central/State Goods and Services Tax): The Hon'ble Minister from West Bengal raised the issue whether tax on reverse charge basis should be levied on Composition dealers only. He added that as the provision was not envisaged for other classes of dealers, there would be no level playing field. The CCT, Gujarat suggested that levy of tax on reverse charge basis should be applied on all supplies from unregistered persons (which is otherwise chargeable to tax) as otherwise, it would create a non-level-playing field between unregistered persons and the registered taxpayers. He further added that without such a provision, it would be beneficial to buy goods from an unregistered person as no tax was paid at the time of receipt of goods even when incidence of tax had arisen. The Council accepted this suggesti

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uncil would recommend the rates and exemptions under all the three Acts, parity would be ensured. However, after discussion, the Council agreed to make suitable modification in the wording of Section 11 to reflect the understanding that applicability of exemptions under CGST, SGST and IGST shall be uniform. xviii. Section 12(2)(b) (Time of supply of goods): The Hon'ble Minster from West Bengal observed that there was presently no tax on advances received for sale of goods and that the terms of payment should not be made a point of taxation. The CCT, Gujarat explained that even today tax was collected on advances received for provision of services and to have parity, it was also applied to goods. The CCT, Karnataka added that for some goods, there was considerable gap of about 3-4 months between receipt of advance and delivery of goods and that the government should not be deprived of taxes for this period. The Hon'ble Minister from Telangana observed that tax on advances s

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ied that if vouchers were given for use in a grocery store, the point of supply of goods shall be fixed through this provision. The Secretary suggested to define the term 'voucher' in the Definitions section. The Council agreed to define the term 'voucher' in the Definitions section. xx. Section 15 (Value of taxable supply): The Hon'ble Minister from West Bengal raised a question as to why the value of reimbursable supply was omitted in the new draft. The Commissioner (GST Policy Wing), CBEC clarified that this provision was covered under Section 15(2)( c) and that this would be supplemented by the Valuation Rules which would have elaborate provisions for situations not covered under the Section. The Hon'ble Minister from West Bengal observed that the principle applied in respect of reimbursable expenditure in Service Tax should be used in GST to which the Commissioner (GST Policy Wing), CBEC clarified that this would be addressed in the Valuation Rules. Th

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provision for goods and services and further agreed that the time period for making payments shall be increased from three months to six months from the date of issuance of invoice. xxii . Section 16(1) (Eligibility and conditions for taking input tax credit): The Hon'ble Minister from Tamil Nadu questioned the rationale for allowing deferred input tax credit for pipelines and telecommunication towers but not for other capital goods. The Secretary clarified that credit was being staggered for these two categories of capital goods in view of the large amounts of ITC involved. The Hon'ble Minister from Kamataka observed that no ITC was given on power transmission lines though GST could be levied on wheeling charges. The Chief Economic Advisor, Government of India suggested to levy a low rate of GST on electricity to allow the blocked ITC in the power sector to pass through and that this would address the problem of high cost of power generation. The Secretary clarified that

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two sectors with this aim in mind. The Hon'ble Minister from Uttar Pradesh stated that if credit was spread over three years, it should not adversely impact the compensation to the States. The Chairman, CBEC informed that ITC on capital goods was high and it amounted to about ₹ 25,000 crore and out of this, pipelines and telecommunication towers accounted for about ₹ 10,000 crore. The Hon'ble Deputy Chief Minister of Gujarat observed that for the first five years of GST implementation, it would be beneficial for States if ITC on pipelines and telecommunication towers was given in the first year itself, but it would create problems for them after the expiry of the five-year compensation period. The Hon'ble Minister from Karnataka stated that telecommunication towers and pipelines were being extended the facility of ITC for the first time and if they were also allowed to take this credit in a single year, this would lead to a double bonanza for these two sectors,

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9;ble Minister from West Bengal suggested to clarify the wordings regarding excess distribution of credit to one or more recipients of credit. The Commissioner (GST Policy Wing), CBEC explained the mechanism of an Input Service Distributor (ISD). The Hon'ble Minister from West Bengal observed that the wordings of Section 22 regarding recovery of excess distribution of credit to one or more recipients of credit could be made clearer. The Council agreed to this suggestion. xxiv. Section 23 (Registration): The Hon'ble Minister from West Bengal observed that the progress of migration of taxpayers to GST was slow due to server errors and slow login process. He enquired as to what steps were being taken to rectify the situation. The Hon'ble Ministers from Chhattisgarh, Bihar and Jharkhand also expressed concern regarding considerable time being taken for logging in to the system for migration. Shri Navin Kumar, Chairman, Goods and Services Tax Network (GSTN) informed that mi

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o-Consumer (B2C) supplies, there was a discussion in the Empowered Committee (EC) in the past and it was concluded that the tax element should be shown in B2C invoices as well so that the consumer was aware of the amount of tax he paid for a transaction and that this would enhance transparency. The Hon'ble Chief Minister of Puducherry observed that every consumer should know as to how much tax he paid. The Hon'ble Deputy Chief Minister of Gujarat observed that even today, tax was being shown separately in the invoices. The Council agreed not to make any change in the provision. xxvi. Section 42 (Levy of late fee): The Hon'ble Minister from Haryana observed that the maximum late fee of ₹ 5,000 was too low. He also enquired as why the term 'late fee' was used instead of the term 'penalty'. The CCT, Karnataka explained that late fee would be charged under all three Acts and effectively, this would come to ₹ 15,000. If a higher late fee was c

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limit for transactions to attract TDS and that all government transactions should attract TDS at the rate of 1 %. The Hon'ble Minister from Haryana also supported this demand and also suggested that the TDS rate should be higher. The Secretary stated that a higher TDS rate was not desirable as TDS was only meant to create an audit trail. The Hon'ble Minister from Jammu Kashmir stated that law should not be made to address the errant taxpayers and that imposing TDS for all transactions would become very cumbersome. The Hon'ble Minister from Karnataka also warned that TDS on all Government transactions would create a lot of workload for the officers. The CCT, Karnataka stated that there was an alternative provision in the Draft Model GST Law of giving a Unique Identity Number (UIN) which could be obtained by panchayats, etc. and that they could report their purchases at a fixed periodicity (say one year) and upload it on GSTN for the purpose of matching. He added that this

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e the term 'Governmental agencies' in Section 46(1). After these discussions, the Council agreed that the limit for TDS under this Section shall be ₹ 2.5 lakh for all categories of supplies and to define the term 'Governmental agencies' III Section 46(1). 12. The Hon'ble Chairperson stated that discussion on the rest of the Sections of the Draft Model GST Law could be deferred for the next meeting of the Council and that some time should be devoted for discussion on agenda item 3 (Provision for Cross-Empowerment to ensure Single Interface under GST). The Council agreed to defer discussion on the remaining provisions of the Draft Model GST Law for the next Council meeting. 13. Accordingly, for agenda item 2, the Council approved the provisions of Chapters I to IX of the Model GST Law (Sections 1 to 46) subject to the decisions/observations recorded below and also subject to changes that might be suggested by the Union Law Ministry during the process of ve

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, grazing, dairy farming, poultry farming, stock breeding, piggery, apiculture, the mere cutting of wood or grass, gathering of fruit, collection of minor forest produce, raising of man-made forest or rearing of seedlings or plants. iii . Section 2(8) and Section 2(106) (Definitions): To merge the definitions under these two sections as follows – agriculturist means an individual or a Hindu Undivided Family, who carries on any agricultural operation on his own account- a) by one's own labour, or b) by the labour of one's family, or c) by servants on wages payable in cash or kind or by hired labour under one's personal supervision or the personal supervision of any member of one's family and to retain the Explanation 1 and 2 under Section 2(106). iv. To consider the issue of exemption from GST for lease of agricultural land at the time of discussing exemptions from GST. v. Section 2(11) (Definitions): To discuss the definition of 'State' at

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ion of recipient of service' in the Model GST Law as presently defined in the IGST Act. xi. Section 7 (Powers 0/ SGSTICGST officers under the Act): To discuss it later as it related to cross-empowerment. xii. Section 8(1) (Levy and Collection 0/ Centra/IState Goods and Services Tax): To change the rate cap from the existing rate of 14% to 20%. xiii. Section 9 (Composition Levy): To modify the original decision taken in the 1 st GST Council meeting dated 22-23 September 2016 as per which manufacturers were not to be extended the benefit of the Composition Scheme and agreed to extend the said benefit to manufacturers also, subject to clause (e) of Section 9(1) of the Model GST Law, and that such a scheme shall be limited to turnover-based composition rather than capacity based composition. xiv. Section 9(1) (Composition Levy): To amend the section so as to provide that the benefit of Composition scheme shall be availed on the basis of intimation rather than permi

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ne the term 'voucher' in the Definition section. xix. Section 16(1) (Eligibility and conditions for taking input tax credit): To defer decision regarding ITC in respect of capital goods till data on the total quantum of ITC availed on capital goods was received from CBEC. xx. Section 16(2) (Eligibility and conditions for taking input tax credit): To increase the time period for making payment from three months to six months from the date of issuance of invoice for both goods and services. xxi. Section 22 (Manner of recovery of credit distributed in excess): To make the wordings of Section 22 clearer regarding recovery of excess distribution of credit to one or more recipients of credit. xxii. Section 42 (Levy of late fee): To change the wording in the law suitably to reflect that the maximum late fee shall not be less than ₹ 5,000 or an amount as recommended by the Council. xxiii . Section 46 (Tax deduction at source): To prescribe the limit for

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of audits and for taxpayers with turnover above ₹ 1.5 crore, the Centre could conduct a higher number of audits. He expressed that in principle, it was a correct philosophy to move on, but cross-empowerment of IGST was a critical element. The Hon'ble Minister from Karnataka supported the view of the Hon'ble Minister from Tamil Nadu on the issue of cross-empowerment under IGST. He further observed that if one tried to divide the base, the lines of division became very sensitive. The alternative suggestion referred to by the Hon'ble Minister from Tamil Nadu would help to utilise both the administrations optimally without dividing the taxpayer base, but some variation could be made in the suggestion. 15. The Hon'ble Chairperson invited the Chairman, CBEC to express his views on the subject. The Chairman, CBEC stated that there was useful discussion during the officers' meeting. He stated that for smooth working of CGST and SGST, cross-empowerment was essentia

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try. He further observed that Central Sales Tax (CST) was an origin based levy, and that sales became inter-State by virtue of transactions entered into by the seller as well as the buyer as both needed to be registered under CST but the position would be different under IGST and that the number of taxpayers doing inter-State transaction would be lesser in GST than that in CST. He also observed that IGST being a destination based tax, the place of supply was a very important issue, and the revenue concern would essentially be that of the destination State and the Centre and that the origin State was not concerned with it. The Hon'ble Minister from Tamil Nadu raised a question regarding the relevance of buyer and seller being under CST. The Commissioner, GST Policy Wing, CBEC clarified that in CST, C-forms were given by destination States and thus, the buyers also became registered as inter-State dealers even if their subsequent transactions were only intra-State, whereas under GST,

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aler in State X could use ITC of SGST for payment of IGST, and the administration of State X should have the power to cross-check the correct availment of ITC. The Hon'ble Minister from Uttar Pradesh supported this view and observed that in his State, about 50% of dealers were carrying out inter-State transaction and it was necessary to allow State governments to administer IGST. The Commissioner (GST Policy Wing), CBEC clarified the fund settlement procedure under GST. He explained that if IGST was cross-utilised for payment of SGST in a State, the Central government would transfer the equivalent amount of money to that State government and if SGST was used to pay IGST in a State, the concerned State would transfer an equivalent amount to the Centre. He further clarified that as per data received by the GST Council for twenty States, the all-India average of inter-State dealers was only 27%. The Hon'ble Minister from Kamataka stated that the all-India average might be differen

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tration but without cross-empowerment under IGST, almost 60% of dealers would not have single interface. He emphasized that if the State administration conducted the audit of a unit, there was no reason for the case to go to the Central administration. The Hon'ble Minister from Tamil Nadu stated that it was essential that the key processes under GST, namely registration, return, scrutiny, audit, enforcement, appeals, refund and demand should be conducted by one authority only, and to achieve such a single interface, a horizontal division was necessary as suggested under Option II. 18. The Hon'ble Deputy Chief Minister of Gujarat observed that the issue of cross-empowerment had been discussed four times but the Constitutionality of eros -empowerment under IGST was being raised for the first time. He suggested dividing the taxpayer base in the ratio of 60% to States and 40% to the Centre. The Hon'ble Minister from Tamil Nadu observed that Article 269A itself gave power to

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t one interpretation was that under Article 269, the Central Government was empowered to assign the whole of the tax to States and CST was assigned to the States exercising this power, whereas Article 269A provided for apportionment of tax between the Centre and the States, which meant sharing a portion. The CCT Gujarat stated that without cross-empowerment under IGST, GST could not be implemented efficiently and the distinction between Origin State and Destination State was an artificial one. He emphasized that the Origin State also had a stake in IGST. The Hon'ble Minister from Rajasthan stated that cross-empowerment was required in all three Acts as otherwise, the aim of single interface would not be achieved. The Hon'ble Chairperson observed that in case there was no Constitutional problem for cross-empowerment under IGST, one needed to look at an optimal solution. The Hon'ble Minister from Karnataka stated that one solution could be to do cross-empowerment and provide

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axpayers for turnover above ₹ 1.5 crore and for units in multiple States, central registration could also be explored. He also stated that while the State would carry out the various processes, the .Central administration could have complete access to data regarding scrutiny etc. The Hon'ble Minister from West Bengal stated that to avoid complications for taxpayers below ₹ 1.5 crores, they should remain with the States. The Hon'ble Minister from Kerala supported the suggestion of the Hon'ble Ministers of Uttar Pradesh, West Bengal and Gujarat. The Hon'ble Deputy Chief Minister of Gujarat suggested that for units with turnover below ₹ 1.5 crore, the auditable units could be divided in the ratio of 70:30 for the States and the Centre and for units above ₹ 1.5 crore turnover, it could be 60:40 for the States and the Centre for all purposes, including audit and enforcement. The Hon'ble Minister from Punjab stated that if, for units with turnover

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he other authority. It was further clarified that cross-empowerment of refund required examination of the issue whether an officer of the Central administration could draw funds from the Consolidated Fund of the States and whether an officer from the State administration could draw funds from the Consolidate Fund of India. The Hon'ble Minister from Tamil Nadu observed that the model suggested by the Centre would require creation of more offices of the Central Government. The Chairman, CBEC clarified that the reorganization of CBEC did not envisage any expansion of the manpower and that the entire work would be performed by the existing manpower. He also pointed out that in Service Tax, the Central tax administration had a very significant presence in the taxpayer segment of turnover below ₹ 1.5 crore. 19. The Secretary suggested certain broad parameters as a possible solution for this Issue. He suggested that the enforcement-based action shall lie with both the tax adminis

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stration. The Hon'ble Minister from Punjab observed that such an arrangement would lead to a disproportionate number of taxpayer above the turnover of ₹ 1.5 crore going to the Centre. The CCT, Karnataka stated that in the scheme suggested by the Secretary, audit of taxpayers with turnover below ₹ 1.5 crore by the Central administration shall not exceed 1 % of the total taxpayer base below ₹ 1.5 crore, but there would be no restriction regarding the intervention by the Centre III respect of taxpayers having turnover above ₹ 1.5 crore and by the States for taxpayers with turnover below and above ₹ 1.5 crore. The Hon'ble Minister from West Bengal wondered why the Centre needed to have any toehold over taxpayers with a turnover below ₹ 1.5 crore. The Hon'ble Minister from Assam observed that the Centre had been administering taxpayers with turnover below ₹ 1.5 crore in Service Tax and suggested to vertically divide the taxpayer base so

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Hon'ble Minister from Punjab stated that there was nothing sacrosanct about the turnover threshold of ₹ 1.5 crore and there was a need to explore whether exclusive control for the States could be for a lower threshold, say ₹ 1 crore or even lower. 20. After these deliberations, the Council decided to defer a decision on this issue and to continue further discussion in the next meeting of the Council. Agenda item 4: Date of the next meeting of the GST Council 21. After discussion, it was agreed that the next meeting of the Council would be held on 11-12 December 2016 in New Delhi. Agenda item 5: Any other agenda item with the permission of the Chairperson 22. Some Members of the Council desired to discuss the impact of demonetization. The Hon'ble Chief Minister of Puducherry stated that it was important to discuss how to overcome loss of revenue due to demonetization. The Hon'ble Minister from West Bengal stated that it was important to dis

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nue could not be ruled out. The CCT, Amilia Pradesh stated that he had been directed by his Government to request the Council to clarify whether compensation under GST was to come only through cess or whether the Central Government would also be willing to compensate from the Consolidated Fund of India. The Hon'ble Minister from Punjab observed that as the Central Government had decided to compensate the States, the matter should be left to the Centre. The Hon'ble Minister from Uttar Pradesh stated that an assurance was needed that States would continue to be compensated even if there was a shortfall in the revenue collection. The Hon'ble Minister from Rajasthan observed that the Constitutional amendment itself had an assurance regarding the compensation. He suggested that demonetization should be discussed separately with the Hon'ble Union Finance Minister. The Hon'ble Minister from Kerala stated that States were also facing the crisis of currency and there was a n

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Goods and Services Tax – GST – Dated:- 2-12-2016 – New Delhi, Dec 2 (PTI) Finance Minister Arun Jaitley today said demonetisation may impact growth for a quarter or so but this disruption will not last too long and the move along with GST will help create a larger and cleaner economy. I have least doubt in my mind that (one year from now) you will have a bigger economy, higher GDP, cleaner GDP. You will have a higher tax base and more money in banks, and probably interest rates will be more reasonable. Therefore, all these collectively could contribute a lot as far as GDP is concerned, he said at the HT Leadership Summit. Both the economy and social system will see a major transformation after the implementation of the Goods and Services T

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Goods and Services Tax – Started By: – yogesh Panchal – Dated:- 1-12-2016 Last Replied Date:- 6-12-2016 – Dear All Experts, We have do two Business (1) manufacturing & (2) Trading, currently we are follow the rule 6(3)a of Cenvat Credit Rules-2004, maintain separate account of manufacturing inputs material & for the trading material also, revert service tax credit at turnover ratio prescribe in the central excise law. In above scenario please guide on following points. Trading warehouse material on which we have not take the credit, we have not charged excise duty at the time of sales, not collect duty from our customer, but if duty paid stock laying in trading warehouse on 31st March-2017. As a closing stock. also after implementa

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h-2017. – Reply By Ganeshan Kalyani – The Reply = Revised Draft Model GST Law has been published very recently . – Reply By sreemannarayana B – The Reply = The revised Section 18 (4) of revised GST Law states as follows: 4) Where an exempt supply of goods or services by a registered taxable person becomes a taxable supply, such person shall, subject to such conditions and restrictions as may be prescribed, be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finishedgoods held in stock relatable to such exempt supply and on capital goodsexclusively used for such exempt supply on the day immediately precedingthe date from which such supply becomes taxable:However,under Section 18

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 1-12-2016 Last Replied Date:- 1-12-2016 – In order to compensate the States for the introduction of Goods and Service Tax regime, the Central Government proposed to levy a new cess called as GST Compensation Cess through the Goods and Services Tax (Compensation to the States for loss of Revenue) Bill, 2016. The Government proposes to introduce the said bill in the winter session of Parliament and it may be introduced in the first week of December, 2016. The said bill extends to the whole of India. It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf. GST Compensation Cess Section 8 of the bill provides for the levy and collection of GST compensation cess ( cess for short). The said section provides that there shall be levied and collected in accordance with the provisions of this Act, a cess to be called the GST Compensation Cess . The rate

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turns in such formats, as may be prescribed, along with the returns to be filed under the Model GST law. The taxable person shall pay the amount payable under the Act in the manner as may be prescribed. Refund of Cess paid may be applied in prescribed form. For the purposes of cess, all the provisions, except for the format to be filed, of the Model GST law and the rules made there under shall apply in relation to the levy and collection of the cess. Section 11(1) provides that the provisions of CGST and the rules made there under including those relating to assessment, input tax credit, non levy, short levy, interest, appeals, offences and penalties shall apply mutatis mutandis in relation to the levy and collection of the cess leviable as they apply in relation to the levy and collection of Model law. Section 11(2) provides that the provisions of IGST Act, 2016 and the rules made there under including those relating to assessment, input tax credit, non levy, short levy, interest, app

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4.2017 (a probable date). 3. Section 3 provides the projected growth rate of the State. This section provides that the projected nominal growth rate of revenue subsumed for a State during the transition period shall be 14% per annum. 4. Section 5 provides the calculation of the base year Revenue of a State, i.e., 2015 – 16. The base year revenue of a State shall be the sum of the revenue collected by the State and local bodies during the base year on account of the taxes levied net of refunds with respect to the following taxes imposed by the respective State or Centre, which are subsumed into GST- VAT, sales tax, purchase tax, tax collected on works contract or any other tax levied by the concerned State under the erstwhile Entry 54 of List II of the VII Schedule to the Constitution, prior the Constitution (101st Amendment) Act, 2016 ( amendment for short); Entry tax, octroi, local body tax or any other tax levied by the concerned State under the erstwhile Entry 52 of List II of the V

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State Government to specific entities under the laws to promote industrial investment would be included in the total base year revenue of the State, subject to the conditions as may be prescribed; In respect of any State, if any part of revenue are not credited in the Consolidated Fund of the respective State, the same shall be included in the total base year revenue of the State, subject to the conditions as may be prescribed. 5. Section 5(3) provides that the following shall not be included in the calculation of the base revenue for the State- Any taxes levied under the erstwhile Entry 54 of List II of the VII Schedule prior to amendment on the sale or purchase of petroleum crude, high speed diesel, motor spirit, natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any taxes levied under CST on the sale or purchase of petroleum crude, high speed diesel, motor spirit, natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any cess impo

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ncial year after receipt of the final figure, as audited by C&AG. In case of excess amount has been released in any financial year during the transaction period, the excess amount shall be adjusted against the compensation payable in the subsequent financial year. 9. Section 7(2) provides that the total GST compensation payable shall be calculated as detailed below- The projected revenue for any financial year during the transition period, that have accrued to a State shall be calculated; The actual revenue collectedby a State in any financial year during the transition period net of refunds and the IGST apportioned to that State as certified by C&AG; Total GST compensation payable in any financial year shall be the difference between the projected revenue and the actual revenue collected by the State. 10. Section 7(3) provides that the loss of revenue at the end of any quarter shall be calculated at the end of every quarter as detailed below- The projected revenue till the end

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y the State to the Central Government and such amount shall be credited to the GST Compensation Fund. Disposal of GST Compensation Fund Section10(3) provides the procedure for the disposal of balance of amount in the GST Compensation Fund after the transition period is over and after compensating all the States for the transition period. According to this Section 50% of the amount remaining unutilized in the GST Compensation Fund at the end of the transition period shall be transferred to the Consolidated Fund of India and shall be distributed between the Centre and the State and amongst the States as per provisions of Article 270(2) of the Constitution. The balance 50% shall be distributed amongst the States in the ratio of their total revenues from SGST in the last year of the transition period. – Reply By Ganeshan Kalyani – The Reply = The Compensation cess is over and above IGST , CGST & SGST . It was said that there would be single rate in place of various tax rates that we ha

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 1-12-2016 Last Replied Date:- 6-12-2016 – Meaning of tax invoice ? As per section 2(60) read with section 23 of Model GST law, tax invoice is required to be issued by a registered taxable person showing description of goods and/or services, value, tax and other particulars at the time of supply. It is a document evidencing supply of goods and services which becomes the basis for charge of tax. According to explanation provided under section 23 of Model GST law, tax invoice shall be deemed to include a document issued by an input service distributor(ISD) under section 17, and shall also include any supplementary or revised invoice issued by the supplier in respect of a supply made earlier. Thus, tax invoice shall be deemed to include- a document issued by an input service distributor, and any supplementary or a revised invoice issued by the supplier in respect of a supply made earlier. Invoice is a document which provide

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s is important. As per section 23 of Model GST law, a registered taxable person supplying taxable services shall issue a tax invoice, within the prescribed time, showing the description, the tax charged thereon and such other particulars as may be prescribed. Therefore, a registered taxable person supplying taxable services shall issue a tax invoice- within the prescribed time, Tax invoice should show- description of services, tax charged , and other details. Particulars to be shown in a tax invoice According to section 23 of Model GST law, read with Rule 1 of draft GST Invoice Rules, a tax invoice issued by the supplier shall contain the following details: name, address and GSTIN of the supplier, a consecutive serial number containing only alphabets and/or numerals, unique for a financial year, date of its issue, name, address and GSTIN/ Unique ID Number, if registered, of the recipient, contain the following details: name and address of the recipient and the address of delivery, the

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d representative. Details required in a tax invoice of supply meant for export According to proviso to Rule 1 of draft GST Invoice Rules, in case of exports, an invoice shall carry an endorsement supply meant for export on payment of IGST or supply meant for export under bond without payment of IGST , as the case may be, and shall, in lieu of the details specified in clause (e) of Q. No. 5 above , contain the following details: name and address of the recipient, address of delivery, name of the country of destination, and number and date of application for removal of goods for export in form ARE-1. Other details required to be mentioned in the invoice According to proviso to Rule 1 of draft GST Invoice Rules, the Board/Commissioner may issue a notification to specify any of the following additional requirements – the number of digits of HSN code for goods or, as the case may be, the accounting code for services, that a class of taxable persons shall be required to mention, for such per

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supply of services- within a period of thirty days from the date of supply of service, Tax invoice for continuous supply of services- within a period of thirty days from the date when each event specified in the contract, which requires the recipient to make any payment to the supplier of services, is completed, Tax invoice for supplier of service in case of a banking company or a financial institution including a non-banking financial company(NBFC)- within forty five days from the date of supply of service. Time limits of issue of a tax invoice for services can be summarized as follows : Types of supply Time frame Supply in ordinary course Within 30 days from the date of supply of services Continuous supply Within 30 days from the date when each event specified in the contract for payment Banking company/Financial Institution including NBFC Within 45 days from the date of supply of services – Reply By Ganeshan Kalyani – The Reply = Nice article sir.The provision of digitally signed in

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Goods and Services Tax – Started By: – Vishal jaiswal – Dated:- 30-11-2016 Last Replied Date:- 30-11-2016 – I dont have any idea.I need help please any one know can help me. – Reply By Ganeshan Kalyani – The Reply = The Goods and Service Tax (GST ) is yet to be implemented . So as of now the actual payment process is not made public . However, to give a brief idea, i would say that there would be three type of payments to be made viz SGST , CGST and IGST . The payment accounting code would be r

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Goods and Services Tax – Started By: – nishant agrawal – Dated:- 29-11-2016 Last Replied Date:- 29-11-2016 – hello sirmera borwells ka business hai .. mere ko tin number lena hoga ki service tax number pls repply thanks – Reply By Ganeshan Kalyani – The Reply = Aap borewell se paani nikalkar tanker me bharke fhir bechte honge customer ko, aisa mai samajta hun. Agar aisa hai to aap pani bech rahe ho, to sales tax lagega. sales tax registration lena hoga agar apka basic exemption se upar turnover

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Constitution of the Appellate Tribunal – Section 100- Draft-Bills-Reports – APPEALS AND REVISION – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Sectio

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 28-11-2016 Last Replied Date:- 30-12-1899 – Audit under GST Audit function will be under the Member (L&J, Audit) of the Board to whom DG Audit, Directorate of Legal Affairs, Principal Chief Commissioners of Regions, Authorized representatives of Tribunal / Settlement Commission / Advance Ruling etc and Appellate Commissioners will report. The Appellate Commissioners would be reporting to Regional Principal Chief Commissioners for administration and would be reporting to Member for legal issues. The Authorized Representatives (AR) will report to Chief Commissioner and below. As legacy pendency will be very huge and due to new tax regime, in initial years, chances of litigation will be very high. To mitigate this, it is suggested that benches of tribunals may be created in each states and to wipe out legacy issue power of single bench may be increased up to ₹ 5 crore. The Directorate General of Audit will have u

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ST zone will have following type of Commissionerates- GST Commissionerate Central Excise Commissionerate & Legacy Commissionerate Customs Commissionerate Zone will be headed by the Chief Commissioner. For better coordination between Centre and States, it is suggested that there will be Apex level and Zonal level Coordination Committee. Principal Chief Commissioner of respective zone and Chief Secretary of States would attend the meeting of apex level committee. Commissioner CGST / IGST and Commissioner SGST will attend the Zonal coordination meeting which will be headed by Zonal Chief Commissioner. GST Commissionerates will further be divided into sub-commissionerates with GST Divisions and Anti-Evasion Wing. Each GST and Central Excise Commissionerate would be headed by Commissioner. It would have 30 divisions on average. The Anti-Evasion Wing should work from the Commissionerate Head Quarters. The Commissioner shall also liaise with the Commissioner SGST for intelligence sharing,

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report of taxes paid, refund given etc., levy and collection of CGST and IGST, stuffing of export containers, refund/rebate for exports, audit, help desk for assesses, aiding the SGST officers in case of joint audit, joint action, etc. The Division head shall report to Commissioner SGST and Additional Commissioner / Joint Commissioner as well whereas the reporting to Commissioner SGST would be for operational requirements, report and data submission. The appraisal would be for 360 degree appraisal. Ranges would be co-terminus with 1000 assessees per 20 sq km area as the case may be. It would be headed by Superintendent. Adjudication of Cases The duly appointed adjudicating authorities shall adjudicate the matters other than appeals in the GST regime. As per section 2(4), 'adjudicating authority' means any authority competent to pass any order or decision under this Act, but does not include the Board, the First Appellate Authority and the Appellate Tribunal. Thus, adjudicating

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CGST or Additional Directors General of CGST, First Appellate Authority, Additional Commissioners of CGST or Additional Directors of CGST, Joint Commissioners of CGST or Joint Directors of CGST, Deputy Commissioners of CGST or Deputy Directors of CGST, Assistant Commissioners of CGST or Assistant Directors of CGST, and such other class of officers as may be appointed for the purposes of this Act. Under SGST: Commissioner of SGST, Special Commissioners of SGST, Additional Commissioners of SGST, Joint Commissioners of SGST, Deputy Commissioners of SGST, Assistant Commissioners of SGST, and such other class of officers and persons as may be appointed for the purposes of this Act. [List is indicative] Under IGST: Principal Chief Commissioners of IGST or Principal Directors General of IGST, Chief Commissioners of IGST or Directors General of IGST, Principal Commissioners of IGST or Principal Additional Directors General of IGST, Commissioners of IGST or Additional Directors General of IGST

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SCHEDULE V – Draft-Bills-Reports – SCHEDULES – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – SCHEDULE V – SCHEDULE V PERSONS LIABLE TO BE REGISTERED 1. Every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds twenty lakh rupees: PROVIDED that where such person makes taxable supplies of goods and/or services from any of the States specified in sub-clause (g) of clause (4) of Article 279A of the Constitution, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees. (Other than Special Category States) 2. Every s

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n engaged exclusively in the business of supplying goods and/or services that are not liable to tax or are wholly exempt from tax under this Act; (b) an agriculturist, for the purpose of agriculture. 3. Subject to the provisions of paragraph 1, every person who, on the day immediately preceding the appointed day, is registered or holds a license under an earlier law, shall be liable to be registered under this Act with effect from the appointed day. 4. Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee, or the successor, as the case may be, shall be liable to be registered with effect from the date of su

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casual taxable persons, irrespective of the threshold specified under paragraph 1; (iii) persons who are required to pay tax under reverse charge, irrespective of the threshold specified under paragraph 1; (iv) persons who are required to pay tax under sub-section (4) of section 8, irrespective of the threshold specified under paragraph 1; (v) non-resident taxable persons, irrespective of the threshold specified under paragraph 1; (vi) persons who are required to deduct tax under section 46, whether or not separately registered under this Act; (vii) persons who are required to collect tax under 56, whether or not separately registered under the Act; (viii) persons who supply goods and/or services on behalf of other taxable persons whether

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SCHEDULE IV – Draft-Bills-Reports – SCHEDULES – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – SCHEDULE IV – SCHEDULE IV ACTIVITIES OR TRANSACTIONS UNDERTAKEN BY THE CENTRAL GOVERNMENT, A STATE GOVERNMENT OR ANY LOCAL AUTHORITY WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES 1. Services provided by a Government or local authority to another Government or local authority excluding the following services: (i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services; (ii) services in relation to an aircraft or a vessel , inside or outside the precincts of a port or an aircraft; or (iii) transport of goods or pa

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lomatic or consular activities; (ii) citizenship, naturalization and aliens; (iii) admission into, and emigration and expulsion from India; (iv) currency, coinage and legal tender, foreign exchange; (v) trade and commerce with foreign countries, import and export across customs frontiers, interstate trade and commerce; or (vi) maintenance of public order. 5. Any services provided by a Government or a local authority in the course of discharging any liability on account of any tax levied by such Government or authority. 6. Services provided by a Government or a local authority by way of – (i) tolerating non-performance of a contract for which consideration in the form of fines or liquidated damages is payable to the Government or the local a

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force; or (ii) testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, required under any law for the time being in force. Definitions: 1. Governmental Authority means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W or a Panchayat under article 243G of the Constitution. 2. Health care services means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and in

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Section SCHEDULE III – Draft-Bills-Reports – SCHEDULES – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section SCHEDULE III – SCHEDULE III ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES 1. Services by an employee to the employer in the course of or in relation to his employment. 2. Services by any Court or Tribunal established under any law for the time being in force. 3. (a) The functions

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SCHEDULE II – Draft-Bills-Reports – SCHEDULES – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – SCHEDULE II – SCHEDULE II MATTERS TO BE TREATED AS SUPPLY OF GOODS OR SERVICES 1. Transfer (a) Any transfer of the title in goods is a supply of goods. (b) Any transfer of goods or of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of services. (c) Any transfer of title in goods under an agreement which stipulates that property in goods will pass at a future date upon payment of full consideration as agreed, is a supply of goods. 2. Land and Building (a) Any lease, tenancy, easement, licence to occupy land is a supply of services. (b) Any lease or let

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any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods is a supply of services. (c) Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless- (i) the business is transferred as a going concern to another person; or (ii) the business is carried on by a personal representative who is deemed to be a taxable person. 5. The following shall be treated as supply of service (a) renting of immovable p

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constituted under the Architects Act, 1972; or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority; (2) the expression "construction" includes additions, alterations, replacements or remodeling of any existing civil structure; (c) temporary transfer or permitting the use or enjoyment of any intellectual property right; (d) development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software; (e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; (f) works con

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SCHEDULE I – Draft-Bills-Reports – SCHEDULES – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – SCHEDULE I – SCHEDULE I MATTERS TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION [IN TERMS OF CLAUSE (c) OF SUBSECTION (1) OF SECTION 3] 1. Permanent transfer/disposal of business assets where input tax credit has been availed on such assets. 2. Supply of goods or services between related persons, or between distinct persons as specified in sect

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Section 197 – Draft-Bills-Reports – TRANSITIONAL PROVISIONS – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section 197 – 197. Transitional provisions for availing Cenvat credit in certain cases Where any Cenvat credit availed for the input services provided under the earlier law has been reversed due to non-payment of the consideration within a period of three months, such credit can be reclaimed provided that the taxable person has made the pay

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Section 196 – Draft-Bills-Reports – TRANSITIONAL PROVISIONS – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section 196 – 196. Deduction of tax source Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under the earlier law and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 46 shall be made by the deductor under the said section w

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Section 195 – Draft-Bills-Reports – TRANSITIONAL PROVISIONS – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section 195 – 195. Goods sent on approval basis returned on or after the appointed day Where any goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shall be payable thereon if such goods are returned wi

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Section 194 – Draft-Bills-Reports – TRANSITIONAL PROVISIONS – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section 194 – 194. Treatment of branch tra

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Section 193 – Draft-Bills-Reports – TRANSITIONAL PROVISIONS – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section 193 – 193. Tax paid on capital goods lying with agents to be allowed as credit Where any capital goods belonging to the principal are lying at the premises of the agent on the appointed day, the agent shall be entitled to take credit of the tax paid on such capital goods subject to fulfillment of the following conditions: (i) the ag

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Section 192 – Draft-Bills-Reports – TRANSITIONAL PROVISIONS – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section 192 – 192. Tax paid on goods lying with agents to be allowed as credit Where any goods belonging to the principal are lying at the premises of the agent on the appointed day, the agent shall be entitled to take credit of the tax paid on such goods subject to fulfilment of the following conditions: (i) the agent is a registered taxab

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Section 191 – Draft-Bills-Reports – TRANSITIONAL PROVISIONS – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section 191 – 191. Provision for transfer of unutilized Cenvat Credit by taxable person having centralized registration under the earlier law Where a taxable person having centralized registration under the earlier law has obtained a registration under this Act, such person shall be allowed to take, in his electronic credit ledger, credit o

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Section 190 – Draft-Bills-Reports – TRANSITIONAL PROVISIONS – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section 190 – 190. Credit distribution of service tax by ISD Notwithstanding anything to the contrary contained in this Act, the input tax credit on account of any services received prior to the appointed day by an Input Service Distributor shall be eligible for distribution as credit under this Act even if the invoice(s) relating to such s

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Section 189 – Draft-Bills-Reports – TRANSITIONAL PROVISIONS – MODEL GST LAW – Draft The Central / State Goods and Services Tax Act, 2016 – [November 2016] – Section 189 – 189. Taxability of supply of goods in certain cases Notwithstanding anything contained in section 12 or 14, the tax in respect of the taxable goods shall be payable under the earlier law to the extent the point of taxation in respect of such goods arose before the appointed day. Explanation: Where the portion of the supply of

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