Goods and Services Tax

Goods and Services Tax – Started By: – Jasbir Uppal – Dated:- 5-12-2015 Last Replied Date:- 11-9-2016 – Respected Sir/Madam,Kindly provide us a copy of Draft on GST that has been released on 04th Nov 2015.RegardsJ.S.UppalTax Consultant – Reply By YAGAY AND SUN – The Reply = The Model has not been authenticated by the CBEC and has not been uploaded. So be cautious in this regard till the time it is not authenticated by CBEC. – Reply By Ganeshan Kalyani – The Reply = Yes this is just a draft rule and not uploaded in CBEC. The report is submitted by Empowered Committee of State Finance minister with suggested set of act to be included in GST act. – Reply By MARIAPPAN GOVINDARAJAN – The Reply = The draft on GST may undergo many changes while b

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Committee headed by the Chief Economic Adviser Dr. Arvind Subramanian on Possible Tax rates under GST submits its Report to the Finance Minister; On the Revenue Neutral Rate (RNR), the Committee recommends the same in the range between 15 percent and 15.5 percent (Centre and states combined) with a preference for the lower end of that range based on the analysis made in the Report – Dated:- 5-12-2015 – Committee headed by the Chief Economic Adviser Dr. Arvind Subramanian on Possible Tax rates under GST submitted its Report to the Finance Minister here today. The Committee in its concluding observations has stated that this is a historic opportunity for India to implement a game-changing tax reform. Domestically, it will help improve governance, strengthen tax institutions, facilitate Make in India by Making One India, and impart buoyancy to the tax base. It will also set the global standard for a value-added tax (VAT) in large federal systems in the years to come. Following are the hig

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practice, there will be a structure of rates, but for the sake of analytical clarity and precision it is appropriate to think of the RNR as a single rate. It is a given single rate that gets converted into a whole rate structure, depending on policy choices about exemptions, what commodities to charge at a lower rate (if at all), and what to charge at a very high rate. The RNR should be distinguished from the standard rate defined as that rate in a GST regime which is applied to all goods and services whose taxation is not explicitly specified. Typically, the majority of the base (i.e., majority of goods and services) will be taxed at the standard rate, although this is not always true, and indeed it is not true for the states under the current regime. Against this background, the Committee drew a few important conclusions. Because identifying the exact RNR depends on a number of assumptions and imponderables; because, therefore, this task is as much soft judgement as hard science; and

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report. On structure, in line with growing international practice and with a view to facilitating compliance and administration, India should strive toward a one-rate structure as the medium-term goal. Meanwhile, the Committee recommends a two-rate structure. In order to ensure that the standard rate is kept close to the RNR, the maximum possible tax base should be taxed at the standard rate. The Committee would recommend that lower rates be kept around 12 per cent (Centre plus states) with standard rates varying between 17 and 18 per cent. It is now growing international practice to levy sin/demerit rates-in the form of excises outside the scope of the GST-on goods and services that create negative externalities for the economy. As currently envisaged, such demerit rates-other than for alcohol and petroleum (for the states) and tobacco and petroleum (for the Centre)-will have to be provided for within the structure of the GST. The foregone flexibility for the center and the states is

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rest of the economy will have to pay in the form of higher rates on other goods, including essential ones. As the table shows, very low rates on precious metals would lead to a high standard rate closer to 20 percent, distorting the economy and adding to inflationary pressures. On the other hand, moderately higher taxes on precious metals, which would be consistent with the government s efforts to wean consumers away from gold, could lead to a standard rate closer to 17 percent. This example illustrates that the design of the GST cannot afford to cherry pick-for example, keeping a low RNR while not limiting exemptions-because that will risk undermining the objectives of the GST. The GST also represents a historic opportunity to rationalize the tax system that is complicated in terms of rates and structures and has become an Exemptions Raj, rife with opportunities for selectivity and discretion. Tax policy cannot be overly burdened with achieving industrial, regional, and social policy

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ntre and states of say 8 percent and 9 percent, respectively. The Committee considers that there are sound reasons not to provide for an administration-complicating band of rates, especially given the considerable flexibility and autonomy that states will preserve under the GST (including the ability to tax petroleum, alcohol, and other goods and services). Implementing the GST will lead to some uncharted waters, especially in relation to services taxation by the states. Preliminary analysis in this report indicates that there should not be large shifts in the tax base in moving to the GST, implying that overall compensation may not be large. Nevertheless, fair, transparent, and credible compensation will create the conditions for effective implementation by the states and for engendering trust between the Centre and states; The GST also represents a historic opportunity to Make in India by Making One India. Eliminating all taxes on inter-state trade (including the 1 percent additional

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ther taxes or countenancing a slightly higher deficit-that would be worth considering. Finally, the report has presented detailed evidence on effective tax burdens on different commodities which highlights that in some cases they are inconsistent with policy objectives. It would be advisable at an early stage in the future, and taking account of the experience of the GST, to consider bringing fully into the scope of the GST commodities that are proposed to be kept outside, either constitutionally or otherwise. Bringing alcohol and real estate within the scope of the GST would further the government s objectives of improving governance and reducing black money generation without compromising on states fiscal autonomy. Bringing electricity and petroleum within the scope of the GST could make Indian manufacturing more competitive; and eliminating the exemptions on health and education would make tax policy more consistent with social policy objectives. There is a legitimate concern that p

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Clause 20 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 20 – Transitional provisions. 20. Notwithstanding anything in this Act, any provision of any law relating to tax on goods or services or on both in force in any State immediately before the commencement of this Act, which is inconsistent with the provisions of the Constitution as amended by this Act shall continue to be in

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Clause 21 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 21 – Power of President to Remove Difficulties 21. (1) If any difficulty arises in giving effect to the provisions of the Constitution as amended by this Act (including any difficulty in relation to the transition from the provisions of the Constitution as they stood immediately before the date of assent of the President t

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MEMO – Draft-Bills-Reports – STATEMENT OF OBJECTS AND REASONS – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – MEMO – MEMORANDUM REGARDING DELEGATED LEGISLATION Clause 12 of the Bill seeks to insert a new article 279A relating to the constitution of a Council to be called the Goods and Services Tax Council. Clause (1) of the proposed new article 279A provides that the President, shall within sixty days from the date of the commencement of the Const

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Clause STATEMENT – Draft-Bills-Reports – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause STATEMENT – STATEMENT OF OBJECTS AND REASONS The Constitution is proposed to be amended to introduce the goods and services tax for conferring concurrent taxing powers on the Union as well as the States including Union territory with Legislature to make laws for levying goods and services tax on every transaction of supply of goods or services or both. The goods and services tax shall replace a number of indirect taxes being levied by the Union and the State Governments and is intended to remove cascading effect of taxes and provide for a common national market for goods and services. The proposed Central and State goods and services tax will be levied on all transactions involving supply of goods and services, except those which are kept out of the purview of the goods and services tax. 2. The proposed Bill, which seeks further to amend the Co

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ces; (e) levy of an additional tax on supply of goods, not exceeding one per cent. In the course of inter-State trade or commerce to be collected by the Government of India for a period of two years, and assigned to the States from where the supply originates; (f) conferring concurrent power upon Parliament and the State Legislatures to make laws governing goods and services tax; (g) coverage of all goods and services, except alcoholic liquor for human consumption, for the levy of goods and services tax. In case of petroleum and petroleum products, it has been provided that these goods shall not be subject to the levy of Goods and Services Tax till a date notified on the recommendation of the Goods and Services Tax Council. (h) compensation to the States for loss of revenue arising on account of implementation of the Goods and Services Tax for a period which may extend to five years; (i) creation of Goods and Services Tax Council to examine issues relating to goods and services tax and

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proposal in the Goods and Services Tax Council shall be determined as under:- WT = WC+WS Where, WT = WC+WS × SF Wherein- WT = Total weighted votes of all members in favour of a proposal. WC = Weighted vote of the Union = i.e., 33.33% if the Union is in favour of the proposal and be taken as "0" if, Union is not in favour of a proposal. WS = Weighted votes of the States in favour of a proposal. SP = Number of States present and voting. WST = Weighted votes of all States present and voting i.e. i.e., 66.67% SF = Number of States voting in favour of a proposal. (j) Clause 20 of the proposed Bill makes transitional provisions to take care of any inconsistency which may arise with respect to any law relating to tax on goods or services or on both in force in any State on the commencement of the provisions of the Constitution as amended by this Act within a period of one year. 3. the Bill seeks to achieve the above objects. NEW DELHI; ARUN JAITLEY The 18th December, 2014 PRES

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Clause 19 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 19 – Compensation to States for loss of revenue on account of introduction of goods and services tax. 19. Parliament may, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for suc

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Clause 18 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 18 – Arrangement for assignment of additional tax on supply of goods to States for two years or such other period recommended by the Council. 18. (1) An additional tax on supply of goods, not exceeding one per cent. in the course of inter-State trade or commerce shall, notwithstanding anything contained in clause (1) of article 269A, be levied and collected by the Government of India for a period of two years or such other period as the Goods and Services Tax Council may recommend, and such tax shall be assigned to the States in the manner provided in sub-section (2).

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Clause 17 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 17 – Amendment of Seventh Schedule. 17. In the Seventh Schedule to the Constitution,- (a) in List I – Union List,- (i) for entry 84, the following entry shall be substituted, namely:- "84. Duties of excise on the following goods manufactured or produced in India, namely:- (a) petroleum crude; (b) high speed diesel; (c

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Clause 16 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 16 – Amendment of Sixth Schedule 16. In the Sixth Schedule to the Constitution, in paragraph 8, in sub-paragraph (3),- (i) in clause (c), the word "and" occurring at the end shall be omitted; (ii) in clause (d), the word "and" shall be inserted at the end; (iii) after clause (d), the following clause sh

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Clause 15 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 15 – Amendment of articl

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Clause 14 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 14 – Amendment of article 366. 14. In article 366 of the Constitution,- (i) after clause (12), the following clause shall be inserted, namely:- (12A) goods and services tax means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption; ; (ii) after clause (26

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Clause 13 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 13 – Amendment of article 286 13. In article 286 of the Constitution,- (i) in clause (1),- (A) for the words "the sale or purchase of goods where such sale or purchase takes place", the words "the supply of goods or of services or both, where such supply takes place" shall be substituted; (B) in sub-cla

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Insertion of new article 279A- Goods and Services Tax Council. – Clause 12 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 12 – Insertion of new article 279A. 12. After article 279 of the Constitution, the following article shall be inserted, namely:- Goods and Services Tax Council. 279A. (1)The President shall, within sixty days from the date of commencement of the Constitution (One Hundred and Twenty-second Amendment) Act, 2014, by order, constitute a Council to be called the Goods and Services Tax Council. (2) The Goods and Services Tax Council shall consist of the following members, namely:- (a) the Union Finance Minister

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and services that may be subjected to, or exempted from the goods and services tax; (c) model Goods and Services Tax Laws, principles of levy, apportionment of Integrated Goods and Services Tax and the principles that govern the place of supply; (d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax; (e) the rates including floor rates with bands of goods and services tax; (f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster; (g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and (h

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rmine the procedure in the performance of its functions. (9) Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:- (a) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and (b) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting. (10) No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of- (a) any vacancy in, or any defect in, the constitution of the Council; or (b)any defect in the appointment

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Amendment of article 271. – Clause 11 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clau

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Clause 10 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 10 – Amendment of article 270. 10. In article 270 of the Contitution,- (i) in clause (1), for the words, figures and letter "articles 268, 268A and 269", the words, figures and letter "articles 268, 269 and 269A" shall be substituted; (ii) after clause (1), the following clause shall be inserted, namely

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Insertion of new article 269A- Levy and collection of goods and services tax in course of inter-State trade or commerce. – Clause 9 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 9 – Insertion of new article 269A. 9. After article 269 of the Constitution, the following article shall be inserted, namely:- Levy and collection of goods and services tax in course of inter-State trade

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Amendment of article 269. – Clause 8 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Claus

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Omission of article 268A. – Clause 7 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Claus

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Amendment of article 268. – Clause 6 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Claus

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Clause 5 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 5 – Amendment of article

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Clause 4 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 4 – Amendment of article

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Amendment of article 248. – Clause 3 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Claus

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Clause 2 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 2 – Insertion of new article 246A. 2. After article 246 of the Constitution, the following article shall be inserted, namely:- Special provision with respect to goods and services tax. "246A. (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every

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Clause 1 – Draft-Bills-Reports – Enabling Goods and Services Tax (GST) – GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 [As intorduced] – Clause 1 – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014 A BILL further to amend the Constitution of India. BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:- Short title and commencement. 1. (1) This Act may be called the Constitution (One Hundredth Amendment) Act, 20

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