Central Excise – Cross utilization of the credit on excuse duty and service tax denied – the cross utilization of credit on goods and services being not covered by any restrictive provision, leave alo
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
TRADE NOTICE NO.-02/2016 Dated:- 30-3-2016 Trade Notice – Circulars – GST – आयुक्त का कार्यालय केन्द्रीय उत्पाद शुल्क सीमा शुल्क एंव सेवाकर ११३ / ४ संजय प्लेस , आगरा C. No. V(30)47/Tech/Budget/2016-17 DATED: 30.03.2016
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
VAT and Sales Tax – Adequate rebut of Legal presumption – Deemed sale drawn by the authorities under Section 46(15)(d) of the AGST Act – the authorities have failed to discharge the obligation – HC – TMI Updates – Highlights
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 26-3-2016 – Amendment of Union List List I of Seventh Schedule would stand amended as follows: Entry 84 relating to excise duty would deal with duties of excise on the following goods manufactured or produced in India, namely:- (a) petroleum crude; (b) high speed diesel; (c) motor spirit (commonly known as petrol); (d) natural gas; (e) aviation turbine fuel; and (f) tobacco and tobacco products. Petroleum products and tobacco will continue to attract excise duty. However, the Bill specifically provides that petroleum products might not attract GST. However, at a later stage the GST Council might decide to levy GST on petroleum products. Entries 92 (Taxes on the sale or purch
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ntry 55 (Taxes on advertisements other than advertisements published in the newspapers and advertisements broadcast by radio or television) shall be omitted. Entry 62, which deals with entertainment/amusement tax would be substituted, such that taxes on entertainments and amusements can be levied by a Panchayat or a Municipality or a Regional Council or a District Council. The Bill provides that the import of goods or services will be deemed as supply of goods or services or both, in the course of inter-state trade or commerce and thus it will attract IGST (CGST plus SGST). Thus, import of goods will attract Basic Customs Duty and IGST, while import of services will attract IGST. Further, it appears that alcohol for human consumption will b
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Union territories, shall not form part of the Consolidated Fund of India and be deemed to have been assigned to the States from where the supply originates. The Government of India may, where it considers necessary in the public interest, exempt such goods from the levy of this additional tax. The Parliament may, by law, formulate the principles for determining the place of origin from where supply of goods take place in the course of inter State trade or commerce. Amendment of Sixth Schedule – Entertainment tax, etc. Sixth Schedule deals with provisions as to the Administration of Tribal Areas in the States of Assam, Meghalaya, Tripura and Mizoram. New Para 8(3)(e) empowers the District Council for an autonomous district to levy and collec
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 21-3-2016 – What is proposed Constitutional Amendment A newly inserted article 246A in the Constitution shall provide for special provision with respect to GST. According to the Bill, the following important clauses of the Bill are worth noting: Clause 246A The Legislature of every State shall have power to make laws with respect to goods and services tax imposed by the Union or by such State. Parliament will have exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Clause 269A Goods and services tax on supplies in the course of inter-State trade or c
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
dred and Twenty-second Amendment) Act, 2014, by order, constitute a Council to be called the Goods and Services Tax Council. Clause 279A The Goods and Services Tax Council shall make recommendations to the Union and the States on- the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax; the goods and services that may be subjected to, or exempted from the goods and services tax; model Goods and Services Tax Laws, principles of levy, apportionment of integrated Goods and Services Tax and the principles that govern the place of supply; the threshold limit of turnover below which goods and services may be exempted from goods and services tax; the rates including
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
nown as petrol), natural gas and aviation turbine fuel. While discharging the functions conferred by this article, 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. The Goods and Services Tax Council shall determine the procedure in the performance of its functions. The Goods and Services Tax Council may decide about the modalities to resolve disputes arising out of its recommendations. Meaning of Goods / Services / GST The amendment Bill defines these terms- goods includes all materials, commodities, and articles; [article 366 (12)] services means anything other than goods: [article 366 (26A)] go
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 15-3-2016 – The Constitution (115th Amendment) Bill, 2011 proposed to give powers to both, the centre and the states to make laws with respect to GST. The Bill was a necessity because, presently, the Union can not impose excise duty beyond the manufacturing stage and states cannot levy a tax on services. It sought to decide on tax rates, exemptions and threshold limits. It will also make recommendations on taxes, cesses and surcharges by the centre, states and local bodies, which may be subsumed in GST. Constitution (122nd Amendment) Bill, 2014 The Union Government in third week of December, 2014 (19 December, 2014) introduced Constitution (122nd Amendment) Bill, 2014 in Parliament which when passed shall pave the way for introduction of proposed Goods and Service Tax (GST) in India. This is an improvised version of lapsed 115th Amendment Bill of 2011. Contrary to the general perception amongst many quarters that this B
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ution (One Hundred and Twenty-Second Amendment) Bill, 2014 was introduced in the Lok Sabha on December 19, 2014. The following is the gist of amendments proposed by this Bill: The Bill seeks to amend the Constitution to introduce the goods and services tax (GST). Consequently, the GST subsumes various central indirect taxes including the Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. It also subsumes state Value Added Tax (VAT)/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. Concurrent powers for GST: The Bill inserts a new Article 246A in the Constitution to give the central and state governments the concurrent power to make laws on the taxation of goods and services Integrated GST (IGST): However, only the centre may levy and collect GST on supplies in the course of inter-state trade or commerce. The tax collected would be divided betw
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
nce, and the Minister in charge of Finance or Taxation or any other, nominated by each state government. Functions of the GST Council: These include making recommendations on: taxes, cess and surcharges levied by the centre, states and local bodies which may be subsumed in the GST; goods and services which may be subjected to or exempted from GST; model GST laws, principles of levy, apportionment of IGST and principles that govern the place of supply; the threshold limit of turnover below which goods and services may be exempted from GST; rates including floor rates with bands of GST; special rates to raise additional resources during any natural calamity; special provision with respect to Arunachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and Any other matters relating to the goods and services tax, as the Council may decide. The Goods and Service Tax Council shall recommend the date from which the goods and
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
f the Consolidated Fund of India and be deemed to have been assigned to the States from where the supply originates. Compensation to states: Parliament may by law provide for compensation to states for revenue losses arising out of the implementation of the GST, on the GST Council s recommendations. This would be up to a five-year period. The Government of India may where it considers necessary in the public interest, exempt such goods from the levy of tax. Both Centre and States will simultaneously levy GST across the value chain. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State. The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. There will be seamless flow of input tax credit from one State to another. Proceeds of IGST will be apportioned among the States. GST will be a destination
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 11-3-2016 – Steps Involved in GST Introduction Following steps are needed on political, administrative and technological fronts for smooth implementation of GST: Constitutional amendments (pending in Parliament (Rajya Sabha); Standing Committee Report submitted; draws opposition from Congress) Drafting of GST law (process started) Strong political commitment (looks a distant reality in present political set up). Arriving at common / general consensus on major issues including political agreement (efforts are on through Empowered Committee / negotiations ) Setting up a high level committee for monitoring the project of GST (Empowered committee is in place). Preparing a blueprint/road map for GST (to be made public) Creating a conducive environment for GST (slow efforts) Centre-States coordination (efforts on, onus on Empowered Committee) Consolidation of Central Excise, Service Tax and VAT on imports/exports Identificati
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
nces decision to introduce VAT in India. Formation of Empowered Committee on VAT 2002 Task Force on Indirect Taxes report headed by Kelkar CENVAT introduced on all commodities at central level 2003 VAT introduced in first Indian State of Haryana 2005 VAT in 24 States/UTs including Punjab, Chandigarh, HP, J&K and Delhi. 2006 VAT implemented in 5 more States including Rajasthan. 2007 FM announces GST introduction in India from April 01, 2010. Parthasarathi Shome submits a study paper on GST. Empowered Committee 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% 200
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
xes proposed to be subsumed under GST, whether collected by States or local bodies. Petroleum and petroleum products to be subsumed in GST, with nominal or zero-rated tax. GST compensation to States pegged at around ₹ 11,000 crore. Centre to provide three year compensation on the revenue loss incurred by States after GST roll-out. December : GST Constitutional Amendment Bill moved in Lok Sabha 2015 06.05.2015 Lok Sabha passes GST Bill 12.05.2015 Bill on GST not passed by Rajya Sabha ; referred to Select 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 ? Revised draft to be p
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 10-3-2016 – Union Budget for F.Y. 2016-17 is a complete miss so far as Goods and Services Tax is concerned, more so when everyone was expecting some announcement on GST in this Budget. The Budget speech in its opening paragraphs highlights the achievements of last three years including economic consolidation, growth and other strengths besides counting on the failures of previous Government but it lacks direction, vision, seriousness and commitment towards migrating to GST. It is regretful that with this broader focus in mind, Government has failed to touch upon the way forward for GST in India and thus missing the unique opportunity in the third Budget (out of five) of the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
se for GST regime. Textiles, readymade branded garments, edible oils, jewellery etc have been subjected to excise duty. Many exemptions in Service Tax have also been withdrawn and negative list pruned. On the fillip side, Budget has introduced new cesses which goes against the very scheme of proposed GST. Infrastructure cess has been levied as excise duty on vehicles w.e.f. 1st March 2016 (i.e., already levied) for the purpose of building traffic free roads and pollution free environment. This cess would be from 1% to 4% on various types of specified vehicles excluding taxies, three wheelers, ambulance, vehicles use by handicapped persons etc. Another cess called Krishi Kalyan Cess (KKC) @ 0.50 percent has been levied an all taxable service
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ST in still under preparation and is expected to be put up in public domain before finalization. It is an irony that even after twenty five years of starting economic reforms in India since 1991, we have not been able to have required tax reforms in place. On one hand we talk of good governance and talk of slogans like 'ek bharat, shreshta bharat' but on the other hand, fail to address the issue of deadlock on GST which is grossly detrimental to the economic interests of the nation. It also reflects weak political will and non-seriousness of all political parties. It would be in fitness of things that the Finance Minister comes out with a paper laying down clear cut road map on GST and its strategy to take it to logical conclusion i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Companies Law – Started By: – Shyam Naik – Dated:- 6-3-2016 Last Replied Date:- 18-9-2016 – Dear Experts, A newly incorporated Pvt Ltd Company had taken interest free advances for from its holding company during 2012-13. the advance was taken for meeting its expenses. The Pvt Ltd Company was engaged in sourcing long term coal supply for upcoming power plant of fellow subsidiary. The plant is yet to be operational. Whether the amount shall be treated as deposit under the Companies Act 2013. Kind
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 4-3-2016 Last Replied Date:- 22-3-2016 – Organizational Structure proposed under GST The organizational structure under the GST regime should be on functional basis rather than on territorial jurisdiction basis. The present organizational structure is based on territorial jurisdiction and one office i.e. Range handles all the different functions pertaining to units falling under their jurisdiction. Thus, one office handles the various functions of registration, audit, refund, adjudication, legal, recovery, taxpayer services etc. Under GST, it is proposed that different divisions of an office should handle different functions of registration, audit, refund, adjudication, legal, recovery, taxpayer services etc. This has been done to encourage specialization as well as better organizational structure. The new structure would be having: Organizational Structure for GST Audit Commissionerate Anti-Evasion Commissionerate GST
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
lized groups may provide policy inputs to the Board also. It was proposed that the entire staff of Audit Commissionerate is not required to be centralized at the headquarters. Anti-Evasion Commissionerate Anti-evasion work is done by three types of teams – (i) Anti-evasion wing of the Commissionerate Headquarters; (ii) Preventive units of the Divisions; and (iii) Directorate General of Central Excise Intelligence (DGCEI). Out of the three, the DGCEI is carrying out the work of intelligence and investigation at national level. It is top-ranked of three as regards quality of cases booked, value of goods and amount of duty involved in offence cases. Proposal for GST It is proposed that the anti-evasion work should be handled by a more specialized and exclusive Anti-evasion Commissionerate. In case of certain states where there are smaller numbers of taxpayers like in North-eastern states, Uttarakhand etc., one anti-evasion Commissionerate may have jurisdiction over more than one State. In
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ataraman – The Reply = SpontaneousGST is, as generally understood, a national code, intended and expected to be implemented and enforced uniformly across the country, the state barriers not coming in the way and leading to any influence / impairment in doing so. Perhaps, while one is not quite clear, the learned writer, it appears, is inclined to the said view as is gathered, though not made explicit, from the very opening sentence of the write-up. Should that be so, and if that were the view finding favour with the experts at large (open to correction, if wrong), then the matter might be worthwhile taking up with the highest authority , sooner than later, to the end of having the entire scheme of things as presently envisaged , revamped, appropriately, beforehand.The learned expert may wish to bring out sufficient clarity, for the common good. – Reply By Dr. Sanjiv Agarwal – The Reply = Yes, This call should be taken by the empowered committee and professional bodies and apex chambers
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
PLEASE CONFIRM ANY CHANGES MADE OF EXCISE DUTY AGST CH 3003 I,E 6% AS EARLIER SAME OR NOT – Central Excise – Started By: – nandankumar roy – Dated:- 4-3-2016 Last Replied Date:- 8-3-2016 – PLEASE CONF
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – Dated:- 26-2-2016 – Economic Survey 2015-16 proposes widening tax net from 5.5 percent of earning individuals to more than 20 percent, reasonable taxation of the better-off individuals with income from Real Estate and Agriculture, phasing out of the tax exemption Raj Higher Property Tax Rates to check speculation in real estate The Economic Survey terms the proposed Goods and Services Tax (GST) as a reforms measure perhaps unprecedented in the modern global tax history. The GST, to be implemented by the Centre, 28 States and 7 Union Territories, awaits a Constitutional amendment requiring broad political consensus. Estimated to affect between 2 to 2.5 million Excise and Service Tax payers, the survey says the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
such as the Indian state being able to avert famines while chronic malnutrition remains a challenge, organizing mega events but routine safety for women being more difficult to achieve, and effective state response to floods and tsunami while water and power metering remain more challenging. As a steps towards building fiscal capacity, the Survey suggests that the easiest way to widen the tax base would be not to raise exemption thresholds. Making a study of the data since Independence, the document points out that the exemption thresholds have been raised much more rapidly than underlying income growth resulting in a widening of the wedge between average income and threshold limit. Bringing more and more people into the tax net via some f
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – Started By: – Ramakrishnan T H – Dated:- 20-2-2016 Last Replied Date:- 11-9-2016 – Sir,Please provide the details about the merits and demerits of Goods and Services Tax provisions.Ramakrishnan.T.HPalakkad – Reply By KASTURI SETHI – The Reply = Sh.Ramakrishnan.T.H, Destination is far away. So many changes are likely to take place. In this forum, Experts, namely, Dr.Sanjiv Agarwal, Dr.Bimal Jain have written so many articles on GST covering all the aspects. These are very useful. – Reply By Ganeshan Kalyani – The Reply = Yes as said by Sri Kasturi Sir there are so many changes being incorporated in the GST draft based on the Committee Study. And more will be done till it is passed through the upper house. However, t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Reply By MARIAPPAN GOVINDARAJAN – The Reply = The merits and demerits could be determined only it comes in effect. Till such times assumptions may be there. – Reply By Ganeshan Kalyani – The Reply = You may please refer issue id 108821 where Sri Mahir Sir has elaborated the merits. Thanks. – Reply By AJAY JAIN – The Reply = Though it is not sure in what form ultimately the GST law would come into play, however, some inherent benefits may be envisaged at this stage like compliance under Single law instead of multiple Central & State laws, broadly all transaction would attract GST, so litigations in respect of determination whether process amounts to 'Manufacture' or not will set at rest, as of now there is both Service Tax &
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
minary information on the issue. I think still it is not high time even for raring to go inasmuch as the situation is fluid. – Reply By Ganeshan Kalyani – The Reply = Sir, whether GST is possible to be implemented this year ???The Congress has given its support with the condition set earlier. They were I) 1% additional tax ii) 18% fixing a cap iii) an independent judge for GST dispute. BJP has accepted on the terms except fixing of 18% tax rate as a higher rate. Will this year be a dawn for GST ? Let's toss… – Reply By YAGAY AND SUN – The Reply = Merits Shall bring growth in GDP. Tax Compliance would be better. FII shall increase. Tax Collection Cost shall go south ward Consultants/CA/CA/ICWAs/Lawyers/Advocate would get lots of busine
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 18-2-2016 – Challenges for GST Implementation Any change in taxation is difficult to implement, and in a federal republic like India where states are as powerful as they are, problems get compounded. The biggest of all challenges continue to be to understand the enormity of GST. It will impact every one and every part of business from manufacturing to financial reporting to tax accounting to supply chain to consumption. This will even require potential redesign of procurement vendor contracts, buying models, changes in information technology and ERP systems and logistics. The cost impact to achieve GST preparedness would differ from industry to industry and company to company. There will be issues on product mix, distribution, cash flows, working capital and ERP modules. Understanding and preparing for GST is a big management issue. Because of the huge change costs, there could be (and likely so) inflationary pressure i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
arity among the states in terms of their gross domestic production and tax base and revenue. As a result, it will affect different states and their revenues differently as also diverse impact on people. However, it should be borne in mind that all kinds of goods and services tax (GSTs) in federal countries all over the world are imperfect. Brazil's GST is so complicated that economists have called it a patchwork quilt. In European Union also the structure is defective such that in poorer countries like Italy and Spain, etc, there is a lot of cash sale. Even in Canada, each state collects it own sales tax apart from the central levy of seven per cent. In India, we have been able to subsume the sales tax, which is a better model than in Canada. Challenge also lies in making GST a clean and transparent tax law, unlike the present taxes. Also, we need to work out a clear and transitional phase. Economic fairness which comes from equity, fairness, certainty and clarity shall hold the ke
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
the tax net by taxing every economic supply in the distribution network. This will lead to rapid increase in assesses. It will require some of the businesses to restructure their distribution network to reduce additional tax burden on the consumer with a view to be price competitive. Though it will generate revenue in a neutral and transparent way, the Government will have to ensure that the ultimate consumer is not burdened with tax beyond his capacity. Logistics: GST has to be implemented simultaneously by the Central & State Government. And, here Central govt can only provide the proverbial carrot but doesn't have the stick since it doesn't have constitutional authority to levy the tax without States acceptance, and hence its pretty much at the individual State's mercy to implement. And, forming a consensus between all 28 states having different political parties & their own agendas isn't that easy. States reluctance to implement GST: The taxes would be levie
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
person collecting the tax on his supply in case of inter-State transactions should deposit the tax in the account of the State where the supply has been made. Then on the basis of revenue reports of the respective Governments, the banks can allocate the revenue to the respective States or the Central Government, as the case may be. The banking system needs to be improved fur this purpose. The challenge can be met by proper training and up gradation of tax administration with technological interface. IT infrastructure: If the Government wanted to introduce the proposed indirect tax, IT infrastructure for the Goods and Services would have to be put on fast track. IT infrastructure will play a huge role in interstate GST. IGST will be collected and passed on the states. It will have to be transferred electronically. Effective Credit Mechanism: If for any reason the proposed dual GST model does not allow credit to State GST in respect of Inter State Transaction, it will lead to increase i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ce of levy does not affect revenue receipts. In GST, however, the place of supply will have to be clearly defined to avoid disputes among states in case of inter state transactions. Time of supply will explain the point at which tax would be levied – invoice date, due date or payment date. Currently, different taxes are levied by the Centre and the states at various stages. The service tax is levied on the receipt of payment, excise duty is imposed by the fifth of following month and sales tax is levied when the sale happens. These variations will be eliminated in GST. The challenges posed by GST are no different from what other countries have faced while implementing major tax reforms. Despite the various impediments to the proposed transition, once implemented GST is likely to usher in a more taxpayer friendly regime that could help make various business decisions 'tax neutral' . Until the time GST is implemented, however, it would be worthwhile to monitor the developmen
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 17-2-2016 – The need of GST can be explained by way of the following reasons or weaknesses in the present system – In present tax structure there is no system of providing input credit mechanism in between taxes levied by state and the centre. Thus, cascading effect arises. There are various definitional issues related to manufacturing, sale, service, valuation etc arises. These needs to be rationalized. Several transactions take the character of sales as well as services, thus there is complexity in determining the nature of transaction. The mechanism of imposing taxes, exemptions, abatements, other benefits are different in state and centre. Existing laws have resulted in significant number of issues related to interpretation / tax disputes. Credit mechanism is also very narrow with several conditions alongwith procedural formalities which makes the compliances difficult. Administrative machinery at the centre and in
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
d chain in the distribution trade below the manufacturing level in the existing scheme of CENVAT. The introduction of GST at the Central level will not only include comprehensively more indirect Central taxes and integrate goods and service taxes for the purpose of set-off relief, but may also lead to revenue gain for the Centre through widening of the dealer base by capturing value addition in the distributive trade and increased compliance. In the existing State-level VAT structure there are also certain shortcomings as follows. There are, for instance, even now, several taxes which are in the nature of indirect tax on goods and services, such as luxury tax, entertainment tax, etc., and yet not subsumed in the VAT. Moreover, in the present State-level VAT scheme, CENVAT load on the goods remains included in the value of goods to be taxed under State VAT, and contributing to that extent a cascading effect on account of CENVAT element. This CENVAT load needs to be removed. Furthermore,
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
his power also to the States. Moreover, with the introduction of GST, burden of Central Sales Tax (CST) will also be removed. The GST at the State-level is, therefore, justified for (a) additional power of levy of taxation of services for the States, (b) system of comprehensive set-off relief, including set-off for cascading burden of CENVAT and service taxes, (c) subsuming of several taxes in the GST and (d) removal of burden of CST. Because of the removal of cascading effect, the burden of tax under GST on goods will, in general, fall. The GST at the Central and at the State level will thus give more relief to industry, trade, agriculture and consumers through a more comprehensive and wider coverage of input tax set-off and service tax set-off, subsuming of several taxes in the GST and phasing out of CST. With the GST being properly formulated by appropriate calibration of rates and adequate compensation where necessary, there may also be revenue/ resource gain for both the Centre an
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 15-2-2016 – Intangible goods / services Presently, intangible goods / services / rights are taxed as one of the declared services under section 66E(c) under temporary transfer of intangible property right services. Such services are also liable to VAT and often there is a dispute on levy of Service Tax or VAT or both. This is likely to be resolved in GST regime as such services will suffer one common tax, i.e., GST. In many countries, transfer of such assets / services are taxed as a service only. Examples of such services could be copyright (excluded presently), trademarks, designs, patents, good will, IT software etc. Electricity / Power Power to levy tax on the consumption or sale of electricity vets with the State Governments under Entry No. 53 in List-II of Seventh Schedule of the Constitution of India. Though electricity is 'goods', sales tax is not imposed on sale of electricity in India. Therefore, it is
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
transaction. Products outside the GST ambit GST shall be applicable across the products and services over the taxing jurisdictions with few exceptions. One such exception is petroleum products. The Centre has decided to keep petroleum production tax out of the taxing jurisdiction of the States while the States have retained the power to tax sale of petroleum products and potable alcoholic liquor with themselves. The reason cited for the same is that petroleum production tax fetches nearly 45% of the Centre's Indirect Tax revenue while sale of petroleum products and potable alcoholic liquor constitutes nearly 55% (35% plus 20%) of the State tax income. This is to provide fiscal security to stages and ensure that there is a minimum guaranteed income under the proposed GST regime. Another such product is tobacco which will come under the GST but from a future date. The exclusion of petroleum, liquor and tobacco, which accounts for nearly 40 per cent of total revenue, has been a point
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
bacco Products while the Centre can impose both GST and Excise Duty. Standing Committee on Constitutional Amendment Bill had recommended that keeping in view the requests received from several States and the fact that the States are already levying VAT at very high rate on Tobacco and Tobacco Products, therefore, the States may also be allowed to levy State Excise Duty or any other tax in addition to GST on Tobacco and Tobacco Products. This could be achieved by making amendment in Entry 51 in the State List of Seventh Schedule of the Constitution by incorporating ―(c) tobacco and tobacco products. The Constitution Amendment Bill, 2014 has amended List II of Schedule VII of the Constitution according to which states may continue to levy tax on tobacco products. The proposed entry No. 84 will include duties of excise on the following goods manufactured or produced in India – petroleum crude; high speed diesel; motor spirit (commonly known as petrol); natural gas; aviation turbine
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – ARPIT HALDIA – Dated:- 13-2-2016 Last Replied Date:- 30-12-1899 – Goods and Services Tax i.e. GST has been in the news for numerous reasons during the last decade be it the game changing concept in the history of Indian Economy or which GST Approach should be preferred i.e. common GST or Dual GST or whether Indian political system has the required will and common approach for implementation of GST and discussion has gone to the extent of deciding that whether it would anytime be implemented in India or not. What exactly is Goods and Services Tax, popularly known as GST . The Report of the Task Force on Goods and Services Tax Thirteenth Finance Commission referred to the report of the Task Force on Implementation of the Fiscal Responsibility and Budget Management Act, 2003 as follows: Accordingly, the Task Force recommended that a well designed destination-based value added tax on all goods and services is the most elegant method of eliminating dist
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
s a loser. It is unquestionably a very important moment because the whole process of indirect taxation in India will change once the GST itself is implemented. There will be uniformity to taxation as far as the whole country is concerned. There will be a seamless transfer of goods and services. The other important feature of this taxation is that there would be no tax on tax. It may bring inflation slightly down. Economists estimate that it has a potential to give a boost to India s GDP itself. Therefore, GST is a destination based Multipoint Tax system covering in its ambit both Goods and Services. All stages of production and distribution are held as mere pass through wherein tax paid is given as a credit to be adjusted against the liability to be paid at the next stage and tax finally sticks or gets added to the cost at the final consumption stage in the taxing jurisdiction. It has been further described as a destination based VAT Type dual Goods and Services Tax. There are so many
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Ministry of Finance, Government of India released in the month of March 2009 wherein it was stated that The state VAT design is based largely on the blueprint recommended in a 1994 report of the National Institute of Public Finance and Policy, prepared by a team led by late Dr. Amaresh Bagchi (hereinafter, the Bagchi Report ). This Report by Dr Amaresh Bagchi commonly referred to Bagchi Report on Reform of Domestic Trade Taxes in India: Issues and Options , National Institute of Public Finance and Policy, New Delhi stated the tax Structure as prevalent in India at that time was as follows: Archaic, irrational, and complex – according to knowledgeable experts, the most complex in the world . The Task Force on Implementation of the Fiscal Responsibility and Budget Management Act, 2003 July 2004 commented upon the Tax Structure prevalent in India at that time as follows: high import tariffs, excises and turnover tax on domestic goods and services have enormous cascading effects, leading
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ing cascading effect of multiple taxes and was more prone to tax evasion and avoidance. The Tax Rates were very high as the taxation base was very narrow, therefore there were political lobbying for exemptions and lowering of Tax Rates. The tax system at time was not providing a level playing field to all the market players. The neutrality principle of taxation provides that the taxes should be such that they provide a level playing field to all the market players and tax should not be a factor in the decision making of the consumer. There were classification issues as there were multiple Tax Rates and most surprisingly there were huge conflicts and competition between the States for lowering of Tax Rates going even to the extent as has been narrated in the Bagchi Report as follows: The States have been trying to export taxes via the CST and at the same time undercutting each other in sales tax rates to attract trade and Industry. This has created a situation in which all States are fi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
l there was a requirement of bringing in GST, then why it was not brought in place before VAT rather than first moving to VAT from single point taxation and then moving from VAT to GST. The answer had been given in Bagchi Report as follows: Given this background, the only feasible option seems to be a dual system in which the VAT is levied by the two levels of government independently within the existing constitutional framework. This would be possible if the MODVAT now operating through excise tax system is made into a full-fledged manufacturers VAT and the states also adopt a destination based harmonized system of VAT in place of the chaotic sales taxes operating now. The most important remark in the Bagchi report which also shows the farsightedness of the Study Team and its Team Leader Dr Amaresh Bagchi is as follows: Although it would not be the perfect or first best solution to the problems of the present system, reform on these lines would go a long way to remove many of its ill
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Report and was discussed in detail as a possible option in the report. It would be appropriate here to refer the observation in Working Paper on GST Reforms and Intergovernmental Considerations in India for the Department of Economic Affairs Ministry of Finance, Government of India released in the month of March 2009 wherein it was stated that Buoyed by the success of the State VAT, the Centre and the States are now embarked on the design and implementation of the perfect solution alluded to in the Bagchi Report. As announced by the Empowered Committee of State Finance Ministers in November 2007, the solution is to take the form of a Dual Goods and Services Tax (GST), to be levied concurrently by both levels of government. Therefore, preference was given to VAT over GST at that given point of time. The time has moved on and VAT has been successfully implemented now and the benefits of VAT can be seen by everyone. Therefore, country which took about 60 years from completely moving from
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
wever, at present there is no seamless transfer of goods and services in the country and tax is not a mere pass through during production and distribution and is added as cost in many cases during the intermediate stage. However the concept of GST suggests that the tax should stick as a cost only at final consumption stage. Therefore, the concept of VAT in Central and State Taxes prevalent in the present scenario is limited in scope as against the concept of GST. Historical Background for Implementation of GST highlighted in Extract of Union Budget Speech during the last 10 Years It has been approximately a decade since the announcement was made by the then Finance Minister Shri P Chidambaram in the budget speech for the Year 2006-07 dated 28th February 2006 for implementation of GST as follows: 155. It is my sense that there is a large consensus that the country should move towards a national level Goods and Services Tax (GST) that should be shared between the Centre and the States. I
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
d progressive scheme of Taxation known as GST. This declaration was more than a whisper and laid down the first real intent for the implementation of GST. In almost all the budget speech since the year 2006-07, there has been a reference to the implementation of GST. The relevant portion of the Speech of Hon ble Finance Minister in different years is being reproduced herewith to showcase the historical background of the process and preparation for the Implementation of GST. It showcases the fact that various amendments have been incorporated in statutes to bring the present scheme of taxation in line with the principles of Goods and Services Tax. These amendments would be cross referred in subsequent articles to show case that leaving aside the political issues, the necessary changes in the tax structure are being brought in slowly but surely and the present tax structure is being brought in line with the implementation of GST. Observation about GST in the Budget Speech for the Year 20
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
the Goods and Services Tax with effect from April 1, 2010. Observation about GST in the Budget Speech for the Year 2009-10 82. In the course of preparation of this budget, I have had the opportunity to interact with large number of stakeholders and receive valuable inputs. Most suggestions were for structural changes in the tax system. Tax reform, like all reforms, is a process and not an event. Therefore, I propose to pursue structural changes in direct taxes by releasing the new Direct Taxes Code within the next 45 days and in indirect taxes by accelerating the process for the smooth introduction of the Goods and Services Tax (GST) with effect from 1st April, 2010 . 85. I have been informed that the Empowered Committee of State Finance Ministers has made considerable progress in preparing the roadmap and the design of the GST. Officials from the Central Government have also been associated in this exercise. I am glad to inform the House that, through their collaborative efforts, they
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
er cent, the only rate below the mean rate. There is a case for enhancing the rate on many items appearing in this list to 8 per cent, which I propose to do, with the following major exceptions: • food items; and • drugs, pharmaceuticals and medical equipment. Observation about GST in the Budget Speech for the Year 2010-11 26. On Goods and Services Tax, we have been focusing on generating a wide consensus on its design. In November, 2009 the Empowered Committee of the State Finance Ministers placed the first discussion paper on GST in the public domain. The Thirteenth Finance Commission has also made a number of significant recommendations relating to GST, which will contribute to the ongoing discussions. We are actively engaged with the Empowered Committee to finalise the structure of GST as well as the modalities of its expeditious implementation. It will be my earnest endeavour to introduce GST along with the DTC in April, 2011. 121. To achieve the roll-out of GST by April
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ce tax to 12 per cent as it was before I introduced the third stimulus package. I am not resorting to this option to maintain the growth momentum and also to bring about a convergence in the rates of tax on goods and services. I, therefore, propose to retain the rate of tax on services at 10 per cent to pave the way forward for GST. Observation about GST in the Budget Speech for the Year 2011-12 Tax Reforms 21. The introduction of the Direct Taxes Code (DTC) and the proposed Goods and Services Tax (GST) will mark a watershed. These reforms will result in moderation of rates, simplification of laws and better compliance. 23. Unlike DTC, decisions on the GST have to be taken in concert with the States with whom our dialogue has made considerable progress in the last four years. Areas of divergence have been narrowed. As a step towards the roll-out of GST, I propose to introduce the Constitution Amendment Bill in this session of Parliament. Work is also underway on drafting of the model l
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ayments. A number of States have already started accepting Electronic Tax Returns and issuing forms required for inter-state trade. 152. In view of the healthy growth in indirect taxes in 2010-11, I had the option to roll back the Central excise duty to levels prevailing in November 2008. I have chosen not to do so for two reasons. I would like to see improved business margins translated into higher investment rates. I would also like to stay my course towards GST. I have therefore decided to maintain the standard rate of Central excise duty at 10 per cent. 153. I propose certain changes in the Central Excise rate structure to prepare the ground for the transition to GST, beginning with a reduction in the number of exemptions. At present, there are about 100 items that are exempt from Central Excise as well as State VAT. In addition, there are as many as 370 items that enjoy exemption from Central Excise duty but are chargeable to VAT. I propose to withdraw the exemption on 130 of thes
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
essage that honest taxpayers would be facilitated and deviants would be dealt with severely; and • Adoption of Point of Taxation rules for services which would shift the basis for tax collection from cash towards accrual basis as with Central Excise duty. 194. Many experts have argued that it will be desirable to tax services based on a small negative list, so that many untapped sectors are brought into the tax net. Such an approach will be very conducive for a nationwide GST. I propose to initiate an informed public debate on the subject to help us finalise the approach to GST. Observation about GST in the Budget Speech for the Year 2012-13 27. Similarly, the Constitution Amendment Bill, a preparatory step in the implementation of Goods and Services Tax (GST) was introduced in Parliament in March 2011 and is before the Parliamentary Standing Committee. As we await recommendations of the Committee, drafting of model legislation for Centre and State GST in concert with States is un
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
• Service Tax law is complex and sometimes avoidably different from Central Excise. We need to bring the two as close as possible in the light of our eventual goal of transition to GST. I have attempted to address both these issues this year. 159. Last year, I had initiated a public debate on the desirability of moving towards taxation of services based on a negative list. In the debate that continued for the better part of the year, we received overwhelming support for this new concept. It has been perceived both as sound economics and prudent fiscal management. 160. Thus, I propose to tax all services except those in the negative list. The list comprises 17 heads and has been carefully drawn up, keeping in view the federal nature of our polity, the best international practices and our socio-economic requirements. 171. Place of Supply Rules, that will determine the location where a service shall be deemed to be provided, are being placed in public domain for stakeholders comment
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
overwhelming majority – are agreed that there is need for a Constitutional amendment; there is need for State Governments and the Central Government to pass a GST law that will be drafted by the State Finance Ministers and the GST Council; and there is need for the Centre to compensate the States for loss due to the reduction in the CST rate. I hope we can take this consensus forward in the next few months and bring to this House a draft Bill on the Constitutional amendment and a draft Bill 30 on GST. Hope inspires courage. I propose to take the first decisive step by setting apart, in the Budget, a sum of ₹ 9,000 crore towards the first instalment of the balance of CST compensation. I appeal to the State Finance Ministers to realise the serious intent of the Government to introduce GST and come forward to work with the Government and bring about a transformational change in the tax structure of the country. Observation about GST in the Interim Budget Speech for the Year 2014-15
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
en apprehensive about surrendering their taxation jurisdiction; others want to be adequately compensated. I have discussed the matter with the States both individually and collectively. I do hope we are able to find a solution in the course of this year and approve the legislative scheme which enables the introduction of GST. This will streamline the tax administration, avoid harassment of the business and result in higher revenue collection both for the Centre and the States. I assure all States that government will be more than fair in dealing with them. Observation about GST in the Budget Speech for the Year 2015-16 11. We are now embarked on two more game changing reforms. GST and what the Economic Survey has called the JAM Trinity – Jan Dhan, Aadhar and Mobile – to implement direct transfer of benefits. GST will put in place a stateof-the-art indirect tax system by 1st April, 2016. The JAM Trinity will allow us to transfer benefits in a leakage-proof, well-targetted and cashless m
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
o levy of tax on services by both the Centre and the States, it is proposed to increase the present rate of service tax plus education cesses from 12.36% to a consolidated rate of 14%. Hassle Free Business Environment: Created a non-adversarial tax regime, ending tax terrorism; Secured the political agreement on the goods and services tax (GST), that will allow legislative passage of the constitutional amendment bill; Conclusion: From the above relevant extract of budget speech of the past decade, following conclusions can be carved out on a generalized basis: Reforms have taken place in the field of Taxation to adopt the best practices in line with the implementation of GST i.e. adoption of Negative List, Building up of IT Infrastructure, Development of GST Network, Convergence to a Common Rate under Service Tax and Central Excise, Place of Supply Rules under Service Tax etc. There have been commitments to implement GST. The commitments are yet to be fulfilled. However, the magnanimit
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 13-2-2016 – Systems of GST / VAT Internationally, there are three systems of Goods & Services Tax (GST) / Value Added Tax (VAT) in vogue in different countries, viz, Invoice System Payment System Hybrid System Invoice System: In the invoice system, the GST (Input) is claimed on the basis of invoice and it is claimed when the invoice is received, it is immaterial whether payment is made or not. Further the GST (Output) is accounted for when invoice is raised. Here also the time of receipt of payment is immaterial. One may treat it as mercantile system of accounting. In India the present system of sales tax on goods is an invoice system of VAT and here it is immaterial whether the taxpayer is following the cash basis of accounting or mercantile basis of accounting. The advantage of invoice system is that the input credit can be claimed without making the payment. The disadvantage of the invoice system is that the GST
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e basis of invoice and GST (Output) is accounted for on the basis of payment, if allowed by the law. In some countries the dealers have to put their option for this system or for a reversal of this system before adopting the same. GST and Present System of VAT In principle, there is no difference between present tax structure under VAT and GST as far as the tax on goods is concerned because GST is also a form of VAT on Goods and services. Here at present the sales tax, with an exception of CST, is a VAT system and in case of service tax the system also has the Cenvat credit system hence both sales tax and service tax are under VAT system in our country. At present, the goods and services are taxed separately but in GST, this difference will not exist and all goods and services shall be taxed alike as per the provisions of law. All the states have their own VAT Laws comprising VAT acts and VAT rules and these acts and rules are formulated on the basis of White Paper on VAT issued by the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
T calls for effecting widespread amendments in the Constitution and the various constitutional entries relating to taxation. In the current scenario, it is difficult to visualize constitutional amendments of such far reaching implications going through, more so in view of the fact that sharing of legislative powers is such an essential element of our federal polity. Another issue concerned is the appropriate designing and structuring of GST in India. The issue involved includes, how the issue of inter-state movement of goods and services may be addressed, taxes on services originating in one state and being consumed in other state etc. Another contentious issue that is bound to crop up in this regard is the manner of sharing of resources between the Centre and the states. Finally, apart from all these, there has to be a robust and integrated Management Information System dedicated to the task of tracking flow of goods and services across the country and rendering accurate accounting of
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Central Excise – Started By: – ASHOK AMIN – Dated:- 11-2-2016 Last Replied Date:- 11-2-2016 – Dear Experts,Is there any latest news in GST. Will the govt produce the GST scheme in the current budget ? Regards – Reply By Manjaly M – The Reply = There is a glimmer of hope for GST in budget 2016. Goods and Services Tax (GST) which is expected to provide the much-needed stimulant for economic growth by transforming the existing basis of indirect taxation in the process enabling the free flow of goo
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
FEMA – Foreign Exchange Management – By: – Mr. M. GOVINDARAJAN – Dated:- 11-2-2016 – The Reserve Bank of India made Foreign Exchange (Export of Goods & Services) Regulations, 2015 ( Regulations for short) by virtue of the powers conferred by Section 7(3)(1)(a) and Section 47 (2) of the Foreign Exchange Management Act, 1999 ( Act for short) and in supersession of its Notification No. FEMA.23/2000-RB, dated 03.05.2000 as amended from time to time, which came into effect from 12.01.2016. The Regulations dealt with the exports, the declaration to be filed, the realization of export value etc., The Regulation 2(iv) defines the term export as including the taking or sending out of goods by land, sea or air, on consignment or by way of sale, lease, hire purchase or under any other arrangement by whatever name called and in the case of software, also includes transmission through any electronic media. Export with prior approval Regulation 13 provides that certain exports require prior app
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
and Bhutan, shall furnish to the specified authority a declaration in one of the forms EDR or SOFTEX. The declaration shall be supported by such evidence as may be specified containing true and correct material particulars including the amount representing- The full export value (Regulation 2(v) defines the term export value in relation to export by way of lease or hire purchase or under any other similar arrangement, includes the charges, by whatever name called, payable in respect of such lease or hire purchase or any other similar arrangement) of the goods or software; or If the full value is not ascertainable at the time of export, the value which the exporter, having regard to the prevailing market conditions expects to receive on the sale of the goods or the software in overseas market; Realization of export proceeds in respect of export of goods/software from third party should be duly declared; The Importer-Exporter Code number allotted by the Director General of Foreign Trade
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ovides that Declaration in Form EDF shall be submitted in duplicate to the Commissioner of Customs. After duly verifying and authenticating the declaration form, the Commissioner of Customs shall forward the original declaration form/data to the nearest office of RBI and hand over the duplicate form to the exporter for being submitted to the authorized dealer. The declaration in form SOFTEX in respect of export of computer software and audio/video/television software shall be submitted in triplicate to the designated official of Ministry of Information Technology, Government of India at the software Technology Parks of India or the Free Trade Zones or Special Economic Zones in India. After certifying ll three copies of SOFTEX form, the designated official shall forward the original directly to the nearest office of RBI and return the duplicate to the exporter. The triplicate copy shall be retained by the designated official for record. Export with declaration Regulation 3(3) clarifies
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
claration by the exporter that they are not more than ₹ 5 lakh in value; Aircrafts or aircraft engines and spare parts for overhauling and/or repairs abroad subject to their reimport into India after overhauling/repairs, within a period of six months from the date of export; Goods imported free of cost on re-export basis; The following goods which are permitted by the Development Commissioner of SEX, EHTP, STP or FTZ to be re-exported, namely: Imported goods found defective, for the purpose of their replacement by the foreign suppliers/collaborators; Goods imported from foreign suppliers/collaborators on loan basis; Goods imported from foreign suppliers/collaborators free of cost, found surplus after production operations. Replacement of goods exported free of charge in accordance with the provisions of Foreign Trade Policy in force, for the time being; Goods sent outside India for testing subject to re-import into India; Defective goods sent outside India for repair and re-impor
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
alue declared in the declaration form does not differ from the value shown in the documents being negotiated or sent for collection ; or Where the value declared in the declaration is less than the value shown in the documents being negotiated or sent for collection, require the constituent concerned also to sin such declaration and thereupon such constituent shall be bound to comply with such requisition and such constituent signing the declaration shall be considered to be the exporter for the purposes of these Regulations to the extent of the full value shown in the documents being negotiated or sent for collection and shall be governed by these Regulations accordingly. Realization of export value Regulation 9 provides that the amount representing the full export value of goods/software/services exported shall be realized and repatriated to India within 9 months from the date of export, provided that where the goods are exported to a warehouse established outside India with the perm
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
yment therefor if the goods has been sold; and The sale of goods and payment thereof, if goods or software has not been sold or reimport thereof into India as the circumstances permit, within such period as the RBI may specify in this behalf; The omission of the RBI to give directions shall not have the effect of absolving the person committing the contravention from the consequences thereof. Advance payment against exports Regulation 15 provides that where an exporter receives advance payment from a buyer/third party named in the declaration made by the exporter, outside India, the exporter shall be under obligation to ensure that- The shipment of goods is made within 1 year from the date of receipt of advance payment; The rate of interest, if any, payable on the advance payment does not exceed the rate of interest LIBOR + 100 basis points; and The documents covering the shipment are routed through the authorized dealer through whom the advance payment is received. In the event of the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
l, which may, having regard to the circumstances, be given or withheld or may be given subject to such conditions as may be specified by the RBI by directions issued from time to time; That a copy of the declaration to be furnished to the specified authority shall be submitted to such authority or organization as may be indicated in the order for certifying that the value of goods specified in the declaration represents the proper value. No direction shall be given by RBI and no approval shall be withheld by the Authorized dealer unless the exporter has been given a reasonable opportunity to make a representation in that matter. Project imports Regulation 17 provides that where an export of goods or services is proposed to be made on deferred payments or in execution of a turnkey project or a civil construction contract, the exporter shall before entering into any such export arrangement, submit the proposal for prior approval of the approving authority, which shall consider the propos
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 11-2-2016 – GST, when comes, shall impact almost every one individually and to all sectors of trade and industry. Some of the sectors are discussed hereunder. Land, Real Estate, Renting Presently, Real estate transactions are taxed as levy of stamp duty. Renting/leasing transactions are covered under Service Tax. However, long-term leases suffer both, stamp duty and Service Tax and are under litigation presently. Construction activities and works contracts relating to construction/EPC contracts/installations etc are also liable to Service Tax as well as works contract tax (as VAT). As such, this sector is heavily under multiple tax burden. As of now, it is not clear as to whether real estate / land activities will be brought under the GST net or not as this sector provides major tax revenue to both, centre and states. In many other countries, construction and selling of houses is treated as a commodity and taxed to VAT
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Railways. While IR has a separate budgetary allocation by way of Rail Budget, its operations are subject to certain direct / indirect tax provisions in terms of direct tax, excise duty, service tax, Swachh Bharat Cess (SBC) etc. IR operates through zones, divisions and most of public sector undertakings, besides various business models / projects under PPP/JVs. Major revenue sources of IR include freight, passenger fare, advertisement & publicity, land lease, other leases etc. Looking to the expansion, modernization and maintenance of railways, IR is in urgent need of funds or schemes whereby IR can raise funds efficiently at low cost to meet its short term / long term financial requirements. Following issues need consideration from indirect taxes view point under the GST regime High Speed Diesel (HSD)/Light Diesel Oil (LDO) consumed by Indian Railway may be considered as input for the purpose of Cenvat Credit. Railway locos/coaches being used in-house (captive consumption) may be
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
in the form of margin and is hidden in the form of interest, dividend, annuity payments etc. In India, most of the banking and financial services are exposed to levy of Service Tax but interest is in the negative list. Through the Select Committee of Rajya Sabha also advocated for exclusion of financial services from levy of GST based on the representation of banking industry, it is felt that there does not appear to be any economic logic or reason as to why such services should not suffer levy of GST. However, Cenvat credit should be allowed on such transactions. Since interest is a return on money lent to borrowers, it may continue to the out of GST net. Presently, leasing companies are burdened with both taxes- VAT as well as Service Tax. In GST regime, it is expected that such anomaly will go and there should not be dispute on the nature of transaction and it would be easier to decide as to when will a transaction in relation to transfer of right to use goods takes place in course
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 10-2-2016 – How GST will work Generally, the dealers registered under GST (Manufacturers, Wholesalers and retailers and service providers) charge GST on the price of goods and services from their customers and claim credits for the GST included in the price of their own purchases of goods and services used by them. While GST is paid at each step in the supply chain of goods and services, the paying dealers don t actually bear the burden of the tax because GST is an indirect tax and ultimate burden of the GST has to be taken by the last customer. Features of GST GST can be divided into the following features to understand it better: Charging Tax The dealers registered under GST (Manufacturers, Wholesalers and Retailers and Service Providers) are required to charge GST at the specified rate of tax on goods and services that they supply to customers. The GST payable is included in the price paid by the recipient of the goo
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
rers, service providers, wholesalers and retailers. If a dealer is not registered, he normally cannot charge GST and cannot claim credit for the GST he pays and further cannot issue a tax invoice. Tax Period The tax period will have to be decided by the respective law and normally it is monthly and/or quarterly. On a particular tax period, which is applicable to the dealer concerned, the dealer has to deposit the tax if his output credit is more than the input credit after considering the opening balance, if any, of the input credit. Refunds If for a tax period the input credit of a dealer is more than the output credit then he is eligible for refund subject to the provisions of law applicable in this respect. The excess may be carried forward to next period or may be refunded immediately depending upon the provision of law. Exempted Goods and Services Certain goods and services may be declared as exempted goods and services and in that case the input credit cannot be claimed on the GS
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
sis of thresholds for goods and services prescribed for the States and the Centre Accounts and GST Credit The Central GST and State GST are to be paid to the accounts of the Centre and the States separately. It would have to be ensured that account-heads for all services and goods would have indication whether it relates to Central GST or State GST. Full input credit system would operate in parallel for the Central GST and the State GST. Taxes paid against the Central GST shall be allowed to be taken as input tax credit (ITC) for the Central GST and could be utilized only against the payment of Central GST. The same principle will be applicable for the State GST. Cross utilization of input tax credit for goods and services would be allowed. However, no credit between CGST and SGST would be permitted, except in the case of inter-State supply of goods and services under the IGST model. Credit Accumulation The White Paper on GST states that refund/adjustment of accumulated credit should b
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – CA Akash Phophalia – Dated:- 10-2-2016 – Background The Joint Committee on Business Process for GST on GST return has given its report stating various returns to be filed by the different taxpayers alongwith the periodicity of filing of returns. GSTR -2 prescribes the details to be furnished by the taxpayer in relation to inward supplies effected by it for the relevant period. This article summarizes the components, periodicity and instructions for filing of the return based on the committee report. Who needs to file this return This return needs to be filed by every taxpayer. However, compounding taxpayers and ISD are not required to furnish this return as separate returns have been specified for such categories of registered taxpayers. Periodicity As per the committee report GSTR-2 is the monthly return need to be filed by the 15th of the subsequent month. It is required to be filed by every taxpayer. However, the date of filing of return is like
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
or the services received from outside India. 6. The details of inward supplies would be auto-populated in the ITC ledger of the taxpayer on submission of his return. The taxpayer will select the invoice details regarding the in-eligibility and eligibility of ITC in relation to these inward supplies and the quantum available in a particular tax period. 7. There will be a separate table for submitting details in relation to ITC received on an invoice on which partial credit has been availed earlier. 8. In respect of capital goods, there will be a field to capture appropriate information regarding availment of ITC over a period (to be prescribed in GST Law in terms of duration and number of instalments) from the date of accountal of capital goods in the taxpayer s books of accounts. [GST Law may provide that Input credit pertaining to Capital Goods would be allowed to be availed of over a period of 2 years in two equal instalments] 9. In respect of inputs, there can be two situations. If
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
rs will be provided in the GST Law. 12. There will be a separate table for submitting details in relation to NIL rated, Exempted and Non GST inward Supplies (Both Inter-State and Intra-State) including those received from compounding taxpayers and unregistered dealers. 13. There will be a separate table for the ISD credit received by the taxpayer. 14. There would be a separate table for TDS Credit received by the taxpayer. Auto Population in this return from GSTR-1 will be done on or after 11th of the succeeding month. Addition or Deletion of the invoice by the taxpayer will be permitted between 12th and 15th of the succeeding month. Adjustments would be permitted on 16th and 17th of the succeeding month Conclusion GSTR-2 is the comprehensive return having schema where detailed information is required to be furnished. Proper invoicing and documentation would be key feature to furnish the correct information in such return. By the time the schema and the law is finalised we can see furt
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 5-2-2016 – While 'education' continues to be of utmost importance for the country's economic growth, it also has been a priority for the government in extending tax benefits and other concessions to boost education (both primary and professional / technical) in the country. The much thoughtful leaders of India have spared the education sector all alone from levy of taxes considering the importance of the same for the country. If a country wants to grow manifold than building infrastructure for education and educated infrastructure (people of the country) is a prerequisite. Education / coaching / training is a primary activity imparting skill in a particular discipline and is a process of development of personality of body, mind and intellect. The scope of education is broad but training or coaching is in a particular field. All three are very important today without which nobody could achieve anything. The c
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
laced in such a situation where its inflow and outflow both are under the negative list or exempt and it is only the coaching part of entire education which is subject to levy of Service Tax. It may be necessary at this point. To bring in the relevance of coaching in our education system. Why do we need coaching today ? What is the purpose it serves ? What if coaching is not available ? In fact coaching bridges the gap of quality between the input (student coming for coaching) and the output (quality /skills required for further technical or professional courses). No coaching would be required if the education system of the country takes care of the desired levels of quality of education at all stages of education/career of a student. Since it is not there, the gap is filled by the coaching institutes. The importance of education has been considered in Service Tax law. Under the negative list following education services were exempt pursuant to section 66 (l) (d) which stipulates as un
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
coaching only supplements the education and is an aid to complete the educations. Coaching and education both go together and in the present system, one cannot think of education without coaching. Infact many schools and colleges also provide coaching to the students appreciating the fact that it cannot be done away with. All parents want to provide the best educational opportunities for their children and coaching has become indispensable and irreplaceable to reinforce learning. More parents are becoming career-oriented and professional and they can t pay adequate attention to their children s education. Also, admittedly, many parents are not well-educated and knowledgeable enough in the academic field where their children need assistance. The benefits afforded by coaching institutions are enormous. Realistically it is already an integral part of a student education. With the ever increasing emphasis of getting excellent exam results at all levels, it is a difficult task for students
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ate …. Today coaching is a major feeding industry to the main stream education sector and given this fact, it is more than justified that it be considered at par with education and spared from all types of taxation by way of exemptions, concessions and inclusion in negative list for the purpose of Service Tax. This argument becomes important at this juncture when India is embarking into an era of largest ever indirect tax reforms in the country with the introduction of Goods and Service Tax (GST) in near future. The other arguments could be many same of which, inter alia are discussed here, besides the main aspect of considering coaching at par with education itself. The subject of coaching, i.e., students to whom coaching is imparted come from an exempt environ (pre-school / school education) and post imparting of coaching, again enter the education field which is excluded from the scope of Service Tax. Why to tax only this part of education system. Rather, steps should be take
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
tal goods, except for the provision of one or more of the specified services; or (B) services provided by way of renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods In absence of significant amount of tax credit not being allowed, it adds to the cost of providing coaching (educations) which again is not desirable. Coaching section also suffers from high completion leading to increased costs in terms of advertisements, fee concessions and discount etc which are not allowed as credits or are disputed (without any sustainable grounds) leading to tax disputes / litigation. This also ought to be sorted out and settled. Today (w.e.f. 1.6.2015), rate of Service Tax is 14% (prior to 1.6.2015, it was 12.36% including education cesses). This itself is considered to be a very high rate of taxation / an indirect tax) which adds to the total cost to be paid by / recovered from the students. In GST regime, talked about likely rates of taxation is in t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 4-2-2016 – Disadvantages / Possible Distortions of Implementation of GST Proposed GST is not a national unitary / centralized tax but a tax to be levied by both, states and the union simultaneously. In GST proposed GST- (a) There is a retrograde move to extend GST to stock transfer by first charging on it and then giving credit. The states have forced their way in this decision which will cause a lot of impairment in work against the wishes of the Centre. It will involve tremendous work with no revenue gain. Even if certain amounts are given credit after initial payment of duty, the money has to be brought out from other circulations and to that extent the economy will become slower. (b) On import, a countervailing (CV) duty of 27 per cent, which is said to be revenue neutral rate for IGST, is to be paid which is substantially higher than before. Earlier, service tax was not to be included in CV duty, but now that also
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
as basic food items, exports and some health services. Incorrectly claiming the full amount of GST credits on entertainment expenses where the business has elected for fringe benefits tax purposes to use the 50/50 split method, in which case only 50% of the input tax credits can be claimed. Claiming the entire GST credits on a car purchased for more than the luxury car limit. Sole traders and partnerships are not apportioning input tax credits and making adjustments to expenditure that's partly private and partly business use. Incorrectly claiming an upfront GST credit on assets financed through a commercial hire purchase (CHP).While an up-front GST credit is available for businesses accounting for GST using the accruals or invoice basis, Incorrectly claiming GST credits on payments for Yellow Pages advertising. If the business chooses to pay for the cost of advertising by installments. Claiming a GST credit when the business does not have a valid tax invoice at the time of lodgin
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
uding that on exports Expanding service tax to almost all services Common/unified tax rate for goods and services which may be ideally, revenue neutral (a suitable GST rate) Avoiding or minimizing differential tax rates Abolition of other small taxes Abolition of CST in a phased manner Power to levy service tax on select/agreed services to States Issue of inter-State services and goods movement vis-a-vis levy of duty or tax to be sorted out Revenue sharing mechanism to be rationalized Centre should be enabled to tax value added upto retail stage. While GST may be seen as national VAT system on goods and services, states sales tax shall eventually cover all states to have state level VAT system for sales etc. GST, if implemented, would end up prevailing distortions in goods and services taxation in term of money and scope. It will also result in lowering of cost of compliance, enhancing compliance levels and result in higher tax collections. It would offer a wider tax base and reduce re
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
