Goods and Services Tax

Government notifies September 12, 2016 as the appointed date for GST Council Provisions
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 13-9-2016

Dear Professional Colleague,
Government notifies September 12, 2016 as the appointed date for GST Council Provisions
The Central Government vide Notification S.O. 2915(E).- [F. No. 31011/09/2015-SO (ST)] dated September 10, 2016, has appointed 12th day of September, 2016 as the date on which the provisions of Section 12 of the Constitution (101st Amendment) Act, 2016 (“the Constitutional Amendment Act”) shall come into force.
In terms of Section 12 of the Constitutional Amendment Act (i.e. insertion of new Article 279A), the President shall within 60 days, from date of com

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

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total votes cast, and
* The votes of all the State Governments taken together shall have a weightage of 2/3rd of the total votes cast,
in that meeting.
Now, following legislations-Central GST (CGST) and Integrated GST (IGST) will have to be passed by Parliament and a State GST (SGST) legislation by each of the State Legislatures. The States and the Centre are working overtime and talking to stakeholders to draft the CGST, SGST and IGST laws, which are to be passed in the Winter Session of Parliament in November this year.
Video Presentations on GST
* Highlights of Draft GST Law, 2016: https://www.youtube.com/watch?v=7ByfCXugAk0
• Presentation on Draft GST Law – Levy, Taxable Event: Supply, Taxable Person, Composition Scheme: h

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AMENDMENT OF CONSTITUTION FOR GOODS AND SERVICES TAX
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 13-9-2016

The long awaited amendment of Constitution for the purpose of goods and services tax has got the assent of the President on 08.09.2016 and also published in the Official Gazette. It is called as the Constitution (One Hundred and First Amendment) Act,2016 ('Act' for short).
Effective date
The Act has not come into effect immediately on the date of publication in the Official Gazette. Section 1(2) of the Act provides that the Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.
Special provisions with respect to goods and services tax
Section 2 of the Act in

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

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mendment proposes some deletion of some words. After amendment Article 268 reads as follows-
Article 268 (1) Such stamp duties as are mentioned in the Union List shall be levied by the Government of India but shall be collected-
* In the case where such duties are leviable within any 226 (Union territory)
* in other cases, by the States within which such duties are respectively leviable.
268 (2) – The proceeds in any financial year of any such duty leviable within any State shall not form part of the Consolidated Fund of India, but shall be assigned to that State.
Omission of Article 268A
Article 268A deals with service tax levied by Union and collected and appropriated by the Union and States. Section 7 of the Act proposes to omit this Article 268A.
Amendment to Article 269
Article 269 deals with taxes levied and collected by the Union but assigned to the States. Section 8 of the Act proposes amendment to Article 269. The amended Article 269 (1) reads as follows-
Article 26

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

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

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

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merits of the case.
Adjudication of dispute
The Council shall establish a mechanism to adjudicate any dispute-
* between the Government of India and one or more States; or
* between the Government of India and any State or States on one side and one or more other States on the other side; or
* between two or more States
arising out the recommendations of the Council or implementation thereof.
Amendment of Article 286
Article 286 deals with the restrictions as to imposition of tax on the sale of purchase of the goods. Section 13 of the Act proposes amendments in Article 286. After amendment Article 286 reads as follows:
Article 286 (1) – No law of a State shall impose, or authorize the imposition of, a tax on the supply of goods or of services or both, where such supply takes place-
* outside the State; or
* in the course of the import of the into, or export of the goods out of, the territory of India.
Article 286 (2) – Parliament may by law formulate principles for det

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res and letters 'article 162, article 241 or article 279A' shall be substituted for the words and figures 'article 162 or article 241' in clause (a) of the proviso to Section 368 (2).
Amendment of sixth schedule
Sixth schedule deals with the provisions as to the administration of Tribal areas in the States of Assam, Meghalaya, Tripura and Mizoram. Para 8 of the schedule schedule deals with deals with the powers of the Regional Councils to assess and collect land revenue and impose taxes. Section 16 of the Act proposes to insert clause (e) after clause (3) (d) . After this para 8(3) reads as follows-
(3) The District Council for an autonomous district shall have the power to levy and collect all or any of the following taxes within such district, that is to say –
(a) taxes on professions, trades, callings and employments;
(b) taxes on animals, vehicles and boats;
c) taxes on the entry of goods into a market for sale therein, and tolls on passengers and goods carried in ferries;
(

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quor for human consumption, but not including sale in the course of inter-State trade or commerce or sale in the course of international trade or commerce of such goods.
The section further proposes to substitute the following for entry 62 in the State List-
62. Taxes on entertainments and amusements to the extent levied and collected by a Panchayat or a Municipality or a Regional Council or a District Council.
The section proposes to delete the following entries-
* Entry No. 52 – Taxes on the entry of goods into a local area for consumption, use or sale therein.
* Entry No. 55 – Taxes on advertisements other than advertisements published in the newspapers and advertisements broadcast by radio or television.
Compensation to States for loss
Section 18 of the Act provides that Parliament shall, by law, on the recommendations of the GST Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and service tax for a perio

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Definition Of Goods-Issues and comparision
By: – parth sharma
Goods and Services Tax – GST
Dated:- 13-9-2016

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

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

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viable to Vat as per Case of TCS. Moreover, SC was silent on chargeability of uncanned software and said that it may be goods. However, even uncanned software is intangible property (goods) and transfer of right to use will be chargeable to VAT.
In service tax law, temporary transfer of IPR will be liable to service tax. Non exclusive licensing will be liable to service tax. Development of software (uncanned software) will be chargeable to service tax vide sec 66E(d).
Conclusion is that in case of software which are developed and put on a media disk, both Vat and service tax is being charged which led to double taxation.
To end this double taxation, a explanation is added to make intangibles as service and would be taxed as service.
Dis

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GST Council and Secretariat Established; First Meeting Set for September 22-23, 2016 in New Delhi.
News
GST
Cabinet approves creation of GST Council and its Secretariat – The Finance Minister

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Cabinet approves creation of GST Council and its Secretariat – The Finance Minister decided to call the first meeting of the GST Council on 22nd and 23rd September 2016 in New Delhi.
GST
Dated:- 12-9-2016

Press Information Bureau
Government of India
Cabinet
12-September-2016 13:10 IST
The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has approved setting up of GST Council and setting up its Secretariat as per the following details:
(a) Creation of the GST Council as per Article 279A of the amended Constitution;
(b) Creation of the GST Council Secretariat, with its office at New Delhi;
(c) Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council;
(d) Inclusion of

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s.
The steps required in the direction of implementation of GST are being taken ahead of the schedule so far.
The Finance Minister has also decided to call the first meeting of the GST Council on 22nd and 23rd September 2016 in New Delhi.
Background:
The Constitution (One Hundred and Twenty-second Amendment) Bill, 2016, for introduction of Goods and Services tax in the country was accorded assent by the President on 8th September, 2016, and the same has been notified as the Constitution (One Hundred and First Amendment) Act, 2016. As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article

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GST IN INDIA: IS 1ST APRIL 2017 SACROSANCT?
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 12-9-2016

We often hear that Government is working hard to see that it is able to introduce dual GST in country w.e.f. 1st April 2017 and at the same time a caveat that the target is stiff and there may be some time overrun.
GST implementation is the top most priority at present for the Government. Recently, at a recent event of 'The Economist – India Summit 2016', Finance Minister made a statement on GST being implemented w.e.f. 1st April 2016 that "we look ahead, it is a very stiff target and we are running against time. I would certainly like to give it a try". At the moment, the Constitutional Ame

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

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OFFENCES AND PENALTIES UNDER MODEL GOODS AND SERVICE TAX ACT, 2016
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 12-9-2016

Introduction
Chapter XVI of Model Goods and Service Tax Act, 2016 ('Act' for short) provides for penalties for contravention of the provisions of the Act and the rules made there under. The following Sections deal with penal provisions-
* Section 66 – Offences and penalties;
* Section 67 – General Penalty;
* Section 68 – General disciplines related to penalty;
* Section 69 – Detention of goods and conveyances and levy of penalty;
* Section 70 – Confiscation of goods and levy of penalty;
* Section 71 – Confiscation of conveyances;
* Section 72 – Confiscation or penalty not to interfere with other punishments.
The minimum penalty to be imposed is ₹ 10,000/-. The welcome provisions contains in Section 68. Usually before imposing penalty the provisions of tax laws provide that reasonable opportunity should be

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re under;
* collects any amount as tax but fails to pay the same to the credit of the appropriate Government beyond a period of three months from the date on which such payment becomes due;
* collects any tax in contravention of the provisions of this Act but fails to pay the same to the credit of the appropriate Government beyond a period of three months from the date on which such payment becomes due;
* fails to deduct the tax in terms of Section 37 (1), or deducts an amount which is less than the amount required to be deducted under the said subsection, or where he fails to pay to the credit of the appropriate Government under subsection (2) thereof, the amount deducted as tax;
* fails to collect tax in terms of Section 43C (1), or collects an amount which is less than the amount required to be collected under the said sub-section, or where he fails to pay to the credit of the appropriate Government under sub-section (4) thereof, the amount collected as tax;
* takes and/or

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tax under this Act;
* fails to keep, maintain or retain books of account and other documents in accordance with the provisions of this Act or the rules made there under;
* fails to furnish information and/or documents called for by a CGST/SGST officer in accordance with the provisions of this or rules made there under or furnishes false information and/or documents during any proceedings under this ;
* supplies, transports or stores any goods which he has reason to believe are liable to confiscation under this Act;
* issues any invoice or document by using the identification number of another taxable person;
* tampers with, or destroys any material evidence;
* disposes off or tampers with any goods that have been detained, seized, or attached under this Act.
Section 66(2) provides penalty for making short payments repeatedly. A taxable person shall be deemed to have made short payments 'repeatedly', if there were short payments in three returns during any six consecutive t

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nt in an enquiry;
* fails to appear before the CGST/SGST officer, when issued with a summon for appearance to give evidence or produce a document in an enquiry;
shall be liable to a penalty which may extend to ₹ 25,000/-.
General Penalty
Section 67 provides that any person, who contravenes any of the provisions of this Act or any rules made there under for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to ₹ 25,000/-.
Detention of goods and levy of penalty
Section 69(1) provides that where any person-
* transports any goods or stores such goods while they are in transit in violation of the provisions of this Act; or
* stores or keeps in stock goods or supplies goods which have not been accounted for in the books or records maintained by him in the manner required by this Act;
all such goods and the conveyance used as a means of transport for carrying the said goods shall be liable to detention, in the manne

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de there under with intent to evade payment of tax,
then, all such goods shall be liable to confiscation. Such person shall be liable to penalty under section 66.
Section 70 (5) provides that where any goods are confiscated under this Act, the title of such goods shall thereupon vest in the appropriate Government. Section 70(6) provides that the proper officer adjudging confiscation shall take and hold possession of the things confiscated and every Officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession.
Confiscation of conveyances
Section 71 provides that any conveyance used as a means of transport for carriage of taxable goods without the cover of documents as may be prescribed in this behalf shall be liable to confiscation, unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance.
Redemption fi

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conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods being transported thereon.
Confiscation or penalty not to interfere with other punishments
Section 72 provides that no confiscation made or penalty imposed under the provisions of this Act or the rules made there under shall prevent the infliction of any other punishment to which the person affected thereby is liable under the provisions of this Act or under any other law.
General disciplines related to penalty
Section 68 lays down instructions to the Officers to follow certain disciplines while imposing penalty as detailed below-
* No tax authority shall impose substantial penalties for minor breaches of tax regulations or procedural requirements. In particular, no penalty in respect of any omission or mistake in documentation which is easily rectifiable and

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GST Council Formation Begins: Key Step in India's Tax Reform Under Constitution (101st Amendment) Act, 2016.
Notifications
GST
Provisions relating to Formation of GST Council comes into effec

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Scope of remission of tax in GST where the supplies are found to be deficient in quantity
Query (Issue) Started By: – CA Surender Gupta Dated:- 11-9-2016 Last Reply Date:- 14-9-2016 Goods and Services Tax – GST
Got 6 Replies
GST
Section 11 of the First Draft Model GST Act states that:
11. Remission of tax on supplies found deficient in quantity
(1) The Central or a State Government may, by rules made under this sub-section, provide for remission of tax on such supplies which are found to be deficient in quantity due to any natural causes.
(2) Any rules made under sub-section (1) may, having regard to the nature of the supply, fix the limit or limits of percentage beyond which no such remission shall be allowed.
Now vario

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the event of supply occurs and before reaching the destination, it may have differently worded.
Since the issue of manufacturing loss, process loss, storage loss, transportation loss or any other loss due to natural event or any other reason before occurring of supply event, remain unaddressed and would lead to undue harassment.
To understand further, pl see an issue of 'Invisible Loss' in TNVAT – M/s. Sri Gayathri Enterprises Versus The Assistant Commissioner (CT) [ 2016 (8) TMI 635 – MADRAS HIGH COURT] wherein the matter was remanded back for ascertaining the factual position.
Demand of VAT – reversal of Input tax credit (ITC) – assessment, pertaining to 'Invisible Loss' during manufacturing activity – Held that:- matt

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sion among experts by which visitors shall enrich their knowledge. Ofcourse visitors may also cast their views etc.
Sir, all these concerns are very valid. The law should have clear direction. Thanks.
Reply By MARIAPPAN GOVINDARAJAN:
The Reply:
Your concern is good. We may not expect the remission is in line with Central Excise. The Actual provisions of Act and Rules and will make it clear. Now the drafting in law is not good having so many mistakes, the provisions of rules are inconsistent with main Act. If GST is to be introduced with effect from 01.04.2017 there will be hurry in drafting and there may be many chaos.
Reply By Ganeshan Kalyani:
The Reply:
Sir, in my view the GST provision is nothing but advance version of VAT. I mean

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GOODS AND SERVICES TAX LAW – IN THE MAKING
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 11-9-2016

A major change in administering GST will be that the tax incidence is at the point of sale as against the present system of point of origin. According to the Task Force under the 13th Finance Commission, GST, as a well designed value added tax on all goods and services, is the most elegant method to eliminate distortions and to tax consumption.
The Constitution (122nd Amendment) Bill, 2014
The GST Bill – The Constitution (One Hundred and Twenty-second Amendment) Bill, 2014 has been discussed and passed by Rajya Sabha on 4th August, 2016 after a 7 hours long debate by members of Rajya Sabha. The discussion on the GST bill came after months of discussions between the ruling party and the opposition – with both sides meeting multiple times to negotiate amendments.
The momentous Bill, which marks the first parliamentary step towards implementation of a “o

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of concerns about state Government's being allowed to raise revenue in emergency situations.
* The subsequent GST Bill should not be categorized as Money Bill, by passing Rajya Sabha.
* Cap on GST rates of 18%
* Improved dispute resolution mechanism
Model GST Law
The draft of model law on proposed Goods and Services Tax (GST) has since been released by the Empowered Committee of State Finance Ministers (in short, EC) on 15th June, 2016.
Called as 'Model GST Law', it shall comprise of two pieces of legislation, viz,
* Goods and Service Tax Act, 2016 (year may change)
* Integrated Goods and Services Tax Act, 2016 (year may change)
GST Act
The model GST Act comprises of –
* 25 Chapters
* 178 Sections (including numeric – alpha section)
* 4 Schedules
* GST Valuation (Determination of Value of Supply of Goods and Services), Rules 2016
* 109 definitions in section 2
IGST Act
The Model IGST Act comprises of –
* 11 Chapters
* 33 Sections
* 8 Defini

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sthan.
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%
2009
Empowered Committee release First Discussion Paper on GST in November.
Report of Task Force on GST of 13th Finance Commission in December
Report of 13th Finance Commission (TFC) (Chapter 5 on GST) in December
2010
Proposed date to introduce GST in India postponed to April 01, 2011.
2011
Government introduces Constitution Amendment Bill on GST in Lok Sabha

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er : 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
03.08.2016
Revised draft presented in Parliament / approved by Rajya Sabha
08.08 2016
Revised Constitutional (122nd Amendment) Bill approved by Lok Sabha
12.08.2016 to 06.09.2016
Constitutional Amendment Bill ratified by 18 Legislative Assemblies
Be Prepared For GST
Preparedness for GST in next few months will involve Tax Planning Review, Tra

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sales returns in gst regime
Query (Issue) Started By: – joseph david Dated:- 10-9-2016 Last Reply Date:- 12-9-2016 Goods and Services Tax – GST
Got 8 Replies
GST
what is the status of sales returns in gst regime
thanks
Reply By MUKUND THAKKAR:
The Reply:
will revert back after GST regime. it is premature stage giving any input…
Reply By YAGAY AND SUN:
The Reply:
DUTY PAID GOODS RETURNED TO THE PLACE OF BUSINESS ON OR AFTER APPOINTED DAY
Duty Paid Goods are at time of removal not being earlier than 6months, returned to any place of business or to supplier
Reply By YAGAY AND SUN:
The Reply:
No Tax shall be payable thereon if such goods are returned within period of 6 Months from appointed day & such Goods are identifiab

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Provisions relating to Formation of GST Council comes into effect from 12-9-2016 – The Constitution (One Hundred and First Amendment) Act, 2016
S.O. 2915(E) Dated:- 10-9-2016 Central GST (CGST)
GST
CGST
CGST
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 10th September, 2016
S.O. 2915(E). – In exercise of the powers conferred by sub-section (2) of section 1 of the Constitution (One Hundred and First Amendment) Act, 2016, the Central Government hereby a

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GST Bill gets President’s assent – Now becomes a law
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 9-9-2016

Dear Professional Colleague,
GST Bill gets President's assent – Now becomes a law
The Government's plan to roll out Goods and Services Tax (“GST”) from April 1, 2017, has moved an inched closer to the reality with the Hon'ble President Shri. Pranab Mukherjee signing the Government's flagship Constitution (122ndAmendment) Bill, 2014 on GST (“GST Bill”), just a while ago. The much-awaited GST now becomes a law with President signing the GST Bill after more than 16 States (BJP-ruled Assam being the first one) ratified it.
After being assented by the President, the GST Bill will be enacted as the Constitutio

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ly included dropping of 1% additional tax on Inter-State sale of goods and a definite provision in the statute for 100% compensating the States for any revenue loss for 5 years, amongst others.
With the President giving his assent to the GST Bill, a GST Council will be set up within 60 days of the enactment of the GST Bill, comprising the Union Finance Minister as Chairman, MOS-Revenue/ Finance and State Finance Ministers as Members of the GST Council, which will make important recommendations on GST rates, Common list of Exempted goods and services, dual control & adjudication, subsumation of surcharge and cesses, etc.Thereafter, following legislations-Central GST (CGST) and Integrated GST (IGST) will have to be passed by Parliament and a

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AGGREGATE TURNOVER IN GST REGIME
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 9-9-2016

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

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

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limit for turnover, i.e. (exempt below 10 lakhs)
A
Taxable turnover
10,00,000
Non taxable / exempt turnover / export turnover
Nil
Aggregate turnover
10,00,000
Tax @ 20%
2,00,000
Effective tax rate
20%
B
Taxable turnover
Nil
Exempt / non-taxable / export turnover
10,00,000
Aggregate turnover
10,00,000
Tax @ 20%
2,00,000
Effective tax rate
Entire tax is cost
C
Taxable turnover
10,000
Non-taxable / exempt / export turnover
9,90, 000
Aggregate turnover
10,00,000
Tax @ 20%
2,00,000
Effective tax rate
2000 %
D
Taxable turnover
5,00,000
Non-taxable / exempt / export turnover
5,00,000
Aggregate turnover
10,00,000
Tax @ 20%
2,00,000
Effective tax rate
40%
(Note: Effective tax rate is based on taxable turnover)
The proposed scope of aggregate turnover may not yield the desired benefit to small tax payers and as such it may end up in tax inefficient and retrogatory measure. The present limit of exemption in Service Tax is only ₹ 10 lakhs wherea

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CENVAT CREDIT
Query (Issue) Started By: – PRANAB PANDA Dated:- 9-9-2016 Last Reply Date:- 10-9-2016 Goods and Services Tax – GST
Got 4 Replies
GST
Dear All
We are following the procedure as laid down in Rule 4 Cenvat Credit Rules, 2004 at the time of availing Cenvat credit on input, capital goods and service.
What will the conditions for availing ITC on inward supply under GST era?
* Whether on receipt of inward supply
* Receipt of invoice/Challan
* Making Payment to the sup

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THE CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT) ACT, 2016
GST
Dated:- 9-9-2016

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

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

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tioned to a State under clause (1) shall not form part of the Consolidated Fund of India.
(3) Where an amount collected as tax levied under clause (1) has been used for payment of the tax levied by a State under article 246A, such amount shall not form part of the Consolidated Fund of India.
(4) Where an amount collected as tax levied by a State under article 246A has been used for payment of the tax levied under clause (1), such amount shall not form part of the Consolidated Fund of the State.
(5) Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.''.
Amendment of article 270
10. In article 270 of the Constitution,-
(i) in clause (1), for the words, figures and letter "articles 268, 268A and 269", the words, figures and letter "articles 268, 269 and 269A" shall be substituted;
(ii) after clause (1), the following c

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rom the date of commencement of the Constitution (One Hundred and First Amendment) Act, 2016, 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…………………… Chairperson;
(b) the Union Minister of State in charge of Revenue or
Finance…………….. Member;
(c) the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government………………..Members.
(3) The Members of the Goods and Services Tax Council referred to in sub-clause (c) of clause (2) shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide.
(4) The Goods and Services Tax Council shall make recommendations to the Union and the States on-
(a) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be

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vices Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.
(6) 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.
(7) One-half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings.
(8) The Goods and Services Tax Council shall determine the procedure in the performance of its functions.
(9) Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:-
(a) the vote of the Central Government shall have a

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itution,-
(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-clause (b), for the word “goods”, at both the places where it occurs, the words “goods or services or both” shall be substituted;
(ii) in clause (2), for the words "sale or purchase of goods takes place", the words "supply of goods or of services or both" shall be substituted;
(iii) clause (3) shall be omitted.
Amendment of article 366
14. In article 366 of the Constitution,-
(i) after clause (12), the following clause shall be inserted, namely:-
'(12A) “goods and services tax” means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption;';
(ii) after clause (26), the following clauses shall be inserted, namely:-
'(26A) “Services” me

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uted, namely:-
"84. 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.";
(ii) entries 92 and 92C shall be omitted;
(b) in List II-State List,-
(i) entry 52 shall be omitted;
(ii) for entry 54, the following entry shall be substituted, namely:-
"54. Taxes on the sale of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption, but not including sale in the course of inter-State trade or commerce or sale in the course of international trade or commerce of such goods.";
(iii) entry 55 shall be omitted;
(iv) for entry 62, the following entry shall be substituted, namely:-
"62. Taxes on entertainments and amusements to the extent levied and collect

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President Approves GST Constitutional Amendment Bill; GST Council to be Notified Soon for Implementation.

GST
GST bill – One more step – President Pranab Mukherjee gives assent to the consti

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Supply of Goods Vs. Supply of Services in GST: Test of Constitutional Validity
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 8-9-2016

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

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goods
* Transfer of future goods (i.e. property therein will pass at future date)
* Transfer/disposal of business assets with or without consideration
* Sale of business assets by any other person to recover debt
* Goods forming part of business assets on ceasing to be a taxable person
* Supply of goods by an unincorporated association to its members
Matters to be treated as supply of services:
* Transfer of right to use goods
* Lease, tenancy, easement, licence to occupy land
* Lease or letting out of building
* Job work on others' goods
* Personal use/making available for non-commercial use of business assets
* Renting of immovable property
* Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or before its first occup

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in points 6 to 13 are declared services as per Section 66E of the Finance Act)
Manifestly, present disputes of goods vs. services have been very decently handled in the Model GST Law which has been for ages, marred the current tax regime. But, threadbare analyses of the same would reveal that the settlement of goods vs. services may not fade away so easily in GST when the Schedule II is tested on the scale of constitutional validity. Few of such important points are summarised as under:
Is it constitutionally valid to treat intangibles as services?
The Model GST Law has made it explicit that intangibles would be treated as supply of services (as per definition of 'services' under Section 2(88) of the Model CGST/SGST Act, 2016), while the same has been excluded from the definition of 'goods' given under Section 2(48) of the Model CGST/SGST Act, 2016.
However, the definition of 'goods' given under Article 366(12) of the Constitution of India is defined in inclusive manner to provide

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sceptible to sales tax…..”
Thus, it may raise eyebrows as to whether for the limited purpose of GST, 'intangibles' (i.e. copyright, goodwill, software, trademark, etc.) can be considered as 'service', when the Constitution does not allow so. In case, tax is levied on the basis of definition provided in Model GST Law, it would tantamount to defiance of sanctity of the Constitution, which is ultra-virus.
Packaged software – whether goods or services?
Even if the bifurcation of goods and services created in Model GST Law by virtue of Schedule II is accepted (leaving aside the contraction with the Constitutional provisions), still there are certain matters where litigation may continue such as likely issue of dispute in case of packaged software (i.e. software provided in physical forms like CD/DVD, etc.), where a contrary view might be possible contending that by supplying software on CDs (being tangible property), the intention is to supply the 'software' essentially (being int

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ods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;
(e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;
(f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made.”
While the 122nd Constitutional Amendment Bill, 2014 has chosen to continue with Article 366(29A) of the Constitution (as against 115th Constitutional Amendment Bill, 2

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MODEL GST LAW : REFINEMENT REQUIRED
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 8-9-2016

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

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

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

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

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to be diluted in view of GST being a new levy and new law. Prosecution threshold should be kept at ₹ 2 crores as minimum. There should be a provision that except in fraudulent cases, no arrest / prosecution be made in first year of implementation.
* No new taxes should be allowed to be levied by states in GST regime when compensation for revenue loss, if any is guaranteed.
* GST is the future tax. GST law should, therefore be forward looking and open for futuristic businesses such as e-commerce, technology based, IT etc and recognize internet, digital economy, start ups etc.
GST law should be a very simple tax law as the proposed law / provisions are too complex to understand by a common man.
Reply By Ganeshan Kalyani as =
Sir, nice article and very valid suggestions. The conplaince part is really going to take time and manpower and cost. Secondly the matching concept for being eligible for availing credit is very tedious and are going to invite problems. Registration in

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deemed exports status in gst
Query (Issue) Started By: – joseph david Dated:- 8-9-2016 Last Reply Date:- 10-9-2016 Goods and Services Tax – GST
Got 9 Replies
GST
in present scenario by issuing form f -we can purchase material from local party for exports-the party will not
collect any taxes.
what is the status in GST
Reply By CS SANJAY MALHOTRA:
The Reply:
Dear Mr. David,
Form F is for stock transfer and Form H is for Deemed Exports. No forms exists in GST regime and tax is levied on all supplies even meant for Export. Refund is available to exporter of GST in case of Deemed Exports.
You can refer to my article published at this platform. (GST-Improving Ease of Doing Business) or go through PPT on GST as the all the info

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on. Thanks
Reply By YAGAY AND SUN:
The Reply:
GST cannot sustain if Statutory Declaration Forms/Way Bills/ Challans/ Declaration Form under Local VAT laws are allowed to be used as this will break very chain of levy of tax and seamless availment of credit. Further, there is no provision in GSTN Software.
Reply By KASTURI SETHI:
The Reply:
I am thankful to all the experts for enrichment of my knowledge on the issue.
Reply By YAGAY AND SUN:
The Reply:
CONCERNS OF THE EXPORTS SECTOR IN THE GST REGIME – PUT FORWARD BY FIEO IN THE MEETING OF EMPOWERED COMMITTEE OF STATE FINANCE MINISTERS ON GST on 30th August 2016.
Changes in Deemed Exports: GST would also require suitable changes in many of the Schemes in the Foreign Trade Policy .The c

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cess levied by State Government
Query (Issue) Started By: – joseph david Dated:- 7-9-2016 Last Reply Date:- 12-9-2016 Goods and Services Tax – GST
Got 10 Replies
GST
What Will be the fate of cess levied by state government's agricultural market committee on cotton,cotton waste, after the commencement of GST Act
Joseph David
Reply By KASTURI SETHI:
The Reply:
Cesses will also be subsumed into GST.
Reply By YAGAY AND SUN:
The Reply:
Cesses of any kind including Surcharge on State VAT shall be subsumed in GST for the purpose of removing the cascading effect i.e. Tax on Tax and for ease of doing business.
Reply By Ganeshan Kalyani:
The Reply:
Sir, all State taxes shall subsumed into SGST. Thanks.
Reply By CS SANJAY MALH

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osed to be Rs.ten lakhs per year under GST but now there is a proposal of hike in threshold exemption limit to ₹ 25 lakhs. I mean to say so many issues are being reconsidered.
Reply By MARIAPPAN GOVINDARAJAN:
The Reply:
The finalized Act in GST will decide the fate.
Reply By YAGAY AND SUN:
The Reply:
In our view, it would be better if representation regarding CESS is made to the Government of India to raise these concerns as again leving/imposing CESS in GST Regime would bring the change in VAT/CST/Excise era.
Reply By Ganeshan Kalyani:
The Reply:
Sir, yes no other indirect tax should be charged other than GST. It would have been an ideal tax mechanism. But it is not going to be so. The discussions was going on the meeting in re

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Fate of “Unjust enrichment” principle under GST
By: – sandeep saini
Goods and Services Tax – GST
Dated:- 7-9-2016

Fate of “Unjust enrichment” principle under GST
As we all know getting refund from Government is always a tedious task, and the most difficult task is to pass the unjust enrichment test i.e. to satisfy the Departmental officer that incidence of tax/duty has not been passed on to another person. The same test of unjust enrichment has to be passed under GST also, while claiming the refund under section 38 of the Draft CGST/SGST Act. The application which is filed for claiming refund under section 38, will be accompanied by prescribed documents or evidences, to prove that the amount of tax and interest, in relation to which refund is claimed, the incidence of such tax and interest has not been passed on by the applicant to any other person.
In this regard, the CBEC has also put a draft circular on public domain for getting feedback and comments, although

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sheet of the applicant should indicate the following information:
* The amount which is claimed as refund, has been paid or credit note has been issued;
* The refund amount should be shown as “Duty Receivable” under the heading “Current assets”
* The consolidated journal entry, which is passed at the end of the financial year, must reflect the invoices in respect of which differential amount of duty/taxes, is being transferred to “Duty Receivable” Account.
* In the Balance sheet “Duty Receivable” under the heading current assets, should be reflected, till the financial year, preceding the financial year, in which refund is sanctioned. For example, if the refund is sanctioned in the financial year 2016-17, the refund amount as “Duty receivable” should be shown upto the Balance sheet of financial year 2015-16 only.
* Certification of documents, for showing compliance of the conditions of unjust enrichment principle
As per Draft Circular
As per Draft CGST/SGST Act
Self certi

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x, in relation to which refund is claimed, has not been included in the cost;
* The CENVAT Credit has not been claimed in relation to duty/tax amount claimed as refund;
* If has already availed CENVAT Credit, then he will reverse the input tax credit account, by an amount equal to the refund amount and the same would be credited to “Duty receivable” account;
* If the duty/tax amount is included in the purchases, in that case the purchase account may be credited at the year end and debit the same in the “Duty Receivable” account.
* If the recipient reverses the CENVAT Credit in the financial year in which he claims the duty/tax amount as refund, it is sufficient to satisfy the test of principle of unjust enrichment.
* Refund arising out of differential duty on final products
* Discounts: The actual discount is quantified at the year end and the accounts are settled accordingly, in the given case normally transaction is settled through credit/debit note, where supplier credi

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has been reversed and the duty paid is not included in the cost;
* The supplier's certification that he has not filed the refund application or refund application filed by him has been rejected on the ground of unjust enrichment, etc.
* The amount of duty/tax paid on capital goods, not to be capitalised
The amount of duty/tax on capital goods has not been availed as CENVAT Credit and also duty/tax paid on capital goods is not claimed as depreciation under the provisions of Income Tax Act, 1961, in other words the amount of duty/tax should not be capitalised.
* The principle of unjust enrichment does not apply in case of refund of pre-deposit
The pre-deposit requirement at the time filing appeal before First Appellate Authority or Appellate Tribunal, is also retained under GST also. As per the Draft Circular, the principle of unjust enrichment is not applicable in case of refund of pre-deposit.
We hope the government will take care of above points and would clarify about th

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Goods and Service Tax – Impact on Imports / Exports / Foreign Trade Policy
By: – CSSANJAY MALHOTRA
Goods and Services Tax – GST
Dated:- 7-9-2016

Goods and Service Tax – “Impact on Foreign Trade Policy”
Impact of Goods and Service Tax on Imports and Exports in India is the area which calls for review of various statutory compliances, IGST Rates, Export Benefits, Import Exemptions, Position of EOU in present Vs GST Regime, Supplies to SEZ/STPI/Mega Power Projects/Projects under ICB (International Competitive Bidding)……
Industry at large needs to review the Impact of GST on Imports from Working Capital perspective, Input / Capital Cost of Imports, Decision making, Imports Vs Indigenous sourcing……..
In the present Indirect Tax structure, Central Taxes are refunded by either the office of Ministry of Finance or Ministry of Commerce, but the provisions under Model GST law seems to involve State also if the existing benefits under FTP 2015-20 continued, which has be

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Imported Inputs/Capital Goods. The same is also used for payment of Duty payments against E.O. Defaults in Chapter 4 and 5 of FTP 2015-20
No Provision exists in the Model GST Law-2016 (Section 35) for the utilisation of Duty Scrip for the payment of GST in case of Indigenous sourcing or Imports or E.O. Defaults.
The same should be reviewed and suitably incorporated in GST Law as one of the Mode of Payment of GST as in the absence of same, financial outflow will increase and the Duty Credit Scrip remain unutilised or accumulated with the Exporter. However as the Basic Custom Duty is out of GST, the Duty Scrip can be utilised towards payment of Basic Custom Duty, but nevertheless issue remains for payment of IGST in case of Imports or Indigenous sourcing.
CENVAT Credit admissibility on Utilisation of Duty Credit Scrip
Duty Credit Scrip utilised for payment of Excise Duty / Service tax is eligible for CENVAT Credit in the present Excise Law / FTP 2015-20 (Para 3.15 of FTP), whereas NO

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m Duty Credit Scrip against E.O. Defaults or regular Imports or Indigenous sourcing against Import Licences with Invalidation letter???
All the above needs to be considered and incorporated in GST Model Law so as to have continuity in business operations.
Exempted Supplies to EOU/STPI/Mega Power Projects against Concessional Certificates
At present Supplies to EOU/STPI/Mega Power Projects/World Bank Funded Projects / Projects under ICB are exempted from Central Taxes against CT-3/CT-1/Certificates from State Govt. or by way of Refund of Terminal Excise Duty / Duty Drawback.
All supplies as stated above are subject to Tax in GST regime. In case of supplies to EOU, Refund of GST may be claimed either by the Supplier of goods or Recipient subject to some conditions.
Nothing has been specified for supplies to STPI/Mega Power Projects / World Bank funded Projects as to the payment of GST and refund of same. In absence of clarity, these supplies would attract GST which adds to cost of p

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n account of Cash Outflow and the Country stands to gain in terms of realisation of Free Foreign Currency.
IGST will be substituted for CVD (Countervailing Duty) and SAD (Special Additional Duty). At present the CVD and SAD put together accounts for tax rate of nearly 17%, whereas GST rates may be 18-22%.
Change in GST Rates may impact Export Obligation also. For e.g. in case of sourcing under Zero Duty EPCG Scheme, in majority of cases CVD (12.50%) and SAD (4%) thus put together amounts to 17% considering cascading impact. If IGST rates prevail around 20-22%, the same would also add to increase in Export Obligation and Importer may not have his business strategy to Import under Import schemes.
In GST Regime, Imports of Inputs / Capital Goods should be exempted ab-initio from IGST or else the exemption of Basic Custom Duty and payment of IGST in cash would result in increased outflow of Working Capital thus leading to Increase in Transaction Cost.
The above is to be taken on prior

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COMPOSITION SCHEME IN PROPOSED GST
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 6-9-2016

Goods and Services Tax (GST) is going to be a reality in near future – could be by April, 2017 or few months later. GST is a new tax in India which shall be levied and collected as an indirect tax on supply of goods and services. 'Goods' and 'Services' are defined in section 2(48) and 2(86) of the model law as well as in the Constitution.
What is GST is also defined in article 366 (12A) of the Constitution which is being amended. Accordingly, 'goods and service tax' means any tax on supply of goods or services or both except taxes on the supply of the alcoholic liquor for human consumption.
Section 2(94) of the model law defines 'tax'. Accordingly, 'tax' means goods and services tax levied on the supply of goods and/or services under this Act and includes any amount payable under Section 8.
As per the above definitions rea

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ay be prescribed, but not less than one percent of the turnover during the year:
Provided that no such permission shall be granted to a taxable person who effects any inter-State supplies of goods and/or services.
Provided further that no such permission shall be granted to a taxable person unless all the registered taxable persons, having the same PAN as held by the said taxable person, also opt to pay tax under the provisions of this sub-section.
2) A taxable person to whom the provisions of sub-section (1) apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.
3) If the proper officer has reasons to believe that a taxable person was not eligible to pay tax under sub-section (1), such person shall, in addition to any tax that may be payable by him under other provisions of this Act, be liable to a penalty equivalent to the amount of tax payable as aforesaid:
Provided that no penalty shall be imposed without

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the prescribed rate which will not be less than one percent of the turnover during the year, i.e., it could be one percent or more but certainly lower than the GST rate.
* Composition scheme shall not be available to taxable person who supply goods or services to other states, i.e., it will not be applicable to inter-state supplies where IGST is payable.
* Composition scheme can be availed by those taxable persons only where all the registered taxable persons, having the same PAN as held by the said taxable person, also opt to pay tax under the provisions.
* Where composition scheme is opted for, taxable person will not be allowed or shall not collect any tax from the recipient of supplies.
* Taxable persons under composition scheme shall also not be entitled to any input tax credit.
* Where composition scheme is wrongly availed, proper officer may require such person to pay for taxes payable under the Act and an equal amount of penalty shall also be payable.
* Such penalt

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PPT on Goods and Service Tax (GST)
By: – CSSANJAY MALHOTRA
Goods and Services Tax – GST
Dated:- 6-9-2016

Enclosing herewith is the PPT on Goods and Service Tax (GST). Hope all will find the same beneficial to understand the concepts in GST and align the Business Model in times to come, as GST would lead to Business Transformation.
Any suggestions please do get back so that the same may be putforth to CBEC.
regards
CS Sanjay Malhotra
Reply By Ganeshan Kalyani as =
Sir, nice ppt. Simple and easy to understand. Thanks for sharing sir.
Dated: 6-9-2016
Reply By SNEHAL SHAH as =
Dear sir ,
Thanks sir for providing such valuable inputs .
Regards,
SNEHAL SHAH
Dated: 7-9-2016
=============
Document 1GST
GOODS AND SERVICES TAX •
By: BS SANJAY MALHOTRA
Practicing Company Secretary (Indirect Tax Matters),
Member Taxation Committee- FICCI Chandigarh,
Member GST Core Group Committee (ICSI)
# 95011-76633 (sanjaymalhotra.cs@gmail.com)
BY: CS SANJAY MALHOTRA
GOO

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e Providers
Reduce Compliance Costs
Broadening Tax Base.
• Reduce Tax Distortions.
Increase in Employment.
Increase in GDP by 2%
BY: CS SANJAY MALHOTRA
CONCEPT – PRESENT v/s PROPOSED
Service tax/Excise/Sales tax/
Other taxes
Present
TAXES
TAXES
TAXES
TAXES TAXES
TAKES
TAXES
TAXE AXES TAXES
TAXES TAXES
TAXE TAXES
TAVES
TAXE
TAXES
TAXES
TAXES
TAXES
TAXES
TAXES
TAKETAXES
TAXES
TAXE
TAXES
MAES
TAXES
TAXES
Packaging Automation layout prouide d
by Barry-Wehmiller Design Group, Inc.
MANUFACTURE
Tax Regime
IN INNNÊN
E
BY: CS SANJAY MALLIGRA
GST
Proposed
SUPPLY BASED
dreamstime
ATE
Present Regime
MRP of “X” : Rs 300/-
CENVAT@12.5% : Rs 26.25
Effective Duty Rate: 8.75%
Abatement: 30%
Total Taxes
Effective Duty
S.P
150
S.P
Total
Add:CENVAT 26.25
176.25
Total
200
Add:CENVAT 26.25
226.25
S.P
Add:CENVAT
Total
273.75
26.25
300.00
Rs 26.25
8.75%
Manufacturer
GST Regime
Wholesaler
Retailer
Consumer
S.P
150
C.P
177
C.P
236
• GST @ 18%
Add: GST 18%
27
Less: ITC
27
Less: ITC
36
Total
177
15

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A
GERMANY
10%
16%
☐ 9
SOUTH KOREA
10%
10
SWITZERLAND
8%
BY: CS SANJAY MALHOTRA
17
FINANCE & ADMIN
SALES &
MARKETING
BUSINESS STRATEGY
& OPERATION
LEGAL
HOW DOES
GST IMPACT
YOUR BUSINESS?
INFORMATION
TECHNOLOGY
CUSTOMERS
SUPPLIERS /
PROCUREMENT
HUMAN RESOURCE
BY: CS SANJAY MALHOTRA
Commodity
GST – Impact on Businesses
Proposed GST Rate (Lets
Present Tax Rates
say 20%)
Difference
Excise
Duty VAT
Total
CGST
SGST
Total
CHEMICALS
12.50% 6.05% 18.55%
10%
10%
20%
1.45%
PHARMACEUTICALS 12.50% 6.05% 18.55%
10%
10%
20%
1.45%
SMALL PASSENGERS
CARS
12.50% 14.50% 27.00%
10%
10%
20%
7.00%
MID SIZE CARS
24% 12.50% 36.50%
20%
20%
40%
3.50%
ENGINEERING
GOODS
12.50% 14.50% 27.00%
10%
10%
20%
7.00%
BY: CS SANJAY MALHOTRA
TOI
DU
GOODS & SERVICE TAX
Eating out
Phone Bills
High Segment cars
Parcel/Courier
Q
J
….
Phones
What will become
CHEAPER
Furniture
Needs Tax Rates
Review or else Price
Increase
Small Cars
Satellite TV
Heater/Air cooler
Biscuits/cakes
BATTERY
BY: CS SANJAY MALHOTRA
Buying House
Ba

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sale
Garment
Manufacturer “B”
Garment
sale
Wholesaler
“C”
TOTAL COST-
Rs 354/-
Consumer
“E”
Tax Invoice-“A”
Sale Price:
150/-
Tax Invoice-“B”
CGST 10%
15
Retailer
Garment
sale
“D”
Garment
sale
Sale Price:
SGST 8%
12
200/-
CGST 10%
20
Tax Invoice-“C”
SGST 8%
16
Sale Price:
250/-
Total
177/-
Tax Invoice-“D”
CGST 10%
25
Sale Price:
300/-
Total
236/-
SGST 8%
20
CGST 10%
30
Tax Payments
SGST 8%
24
Payable
(in Rs)
Total
295/-
CGST
15
Tax Payments
Payable
SGST
12
(in Rs)
Total
354/-
CGST
20
27/-
SGST
Less: Receivable
CGST
SGST
10
8
18/-
Less: Receivable
CGST
SGST
Net Payable Rs 9
ཞེཋསླེ
16
36/-
Tax Payments
Payable
(in Rs)
CGST
25
Tax Payments
SGST
༐
20
Payable
(in Rs)
CGST
30
45/-
SGST
24
Less: Receivable
27/-
CGST
54/-
20
Less: Receivable
Net Payable Rs 9
SGST
16
CGST
25
36/-
SGST
20
Net Payable Rs 9
45/-
Net Payable Rs 9
BY: CS SANJAY MALHOTRA
GST FLOW – INTER – STATE MOVEMENT
STATE: PUNJAB
Cotton Price: Rs 100
CGST 10% : Rs 10
SGST 8% : Rs

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CREDIT
IGST
Rs 45
TOTAL COST-
Rs 354/-
Manufacturer “A”
Yarn
sale
Garment
Manufacturer “B”
Garment
sale
Wholesaler
“C”
Consumer
“E”
Tax Invoice-“A”
Sale Price:
150/-
Tax Invoice-“B”
IGST 18%
27
Sale Price:
200/-
Garment
sale
Retailer
“D”
Garment
sale
IGST 18%
36
Tax Invoice-“C”
Total
177
Sale Price:
250/-
Tax Invoice-“D”
Total
236
IGST 18%
45
Sale Price:
300/-
Tax Payments
IGST 18%
54
Payable
Total
(in Rs)
295
Tax Payments
IGST
27
Total
354
Less: Receivable
IGST
18
Payable
IGST
Less: Receivable
(in Rs)
36
IGST
27
Tax Payments
Payable
IGST
(in Rs)
45
Net Payable Rs 9
Net Payable Rs 9
Less: Receivable
Tax Payments
Payable
IGST
(in Rs)
54
IGST
36
Less: Receivable
Net Payable Rs 9
IGST
45
Net Payable Rs 9
BY: CS SANJAY MALHOTRA
PURCHASING STATE: PUNJAB
Cotton Price: Rs 100
CGST 10% : Rs 10
SGST 8% : Rs 8
GST FLOW
Within State Supply
Sale Price:
100/-
CGST 10% 10
SGST 8%
8
Total
118/-
Inter-State Supply
Sale Price:
100/-
IGST 18%
18
Tax Payments
PAYABLE
ITC Net Payable
Total
11

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or
Registration
In case of multiple business,
separate registration may be
obtained.
Specialized agency of UNO
,
Multilateral financial
Institution etc shall obtain
UNIQUE IDENTITY
NUMBER(UIN) for notified
purposes
Don't
FORGET!
If eligible person fails to
obtain registration, Proper
officer may proceed to
register such person himself.
BY: CS SANJAY MALHOTRA
MIGRATION OF EXISTING TAXPAYERS TO GSTN DATABASE
Backspace
Scre
Online
Registration
Page
Up
Page
Dow
Existing Registrants either with states or with
centre to be migrated to GSTIN.
(Provisional Registration – Validity – 6 Months)
Validation of existing registration information by GSTN
APPROVED
VERIFIED
APPROVED
Registration
Information
*********
Verification by authorities
Verification/updation of migrated data by existing
registrants within specified period
Are you
ready
for
☐ Issuance of GSTIN by GSTN
GST SANJAY MALHOTRA
Registration of New Applicant
➤ Online Application through common portal
APPLY
ONLINE
Application no

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.
(May be extended
for further 90 days)
• Shall make an
advance deposit of
tax equal to est. Tax
Liability.
BY: CS LAY MALHOTRA
Registration
Information
Documents to be filed for
Registration :-
13
Constitution of
business
Principal place
of business
Bank Accounts
BY: CS SANJAY MALHOTRA
Authorised
Signatory
Amendment of Registration
(SECTION 20)
Inform the proper officer of any changes in
information furnished initially or subsequently.
GOODS & SERVICE
TAX
Proper officer may approve or reject amendment
Principle of natural justice shall be followed while
rejecting the request for amendment.
BY: CS SANJAY MALHOTRA
Cancellation of Registration
(SECTION 21)
Proper Officer may
cancel the registration,
either on his own
motion or on an
application filed.
CANCEL
Registration can also be
cancelled in case of
contravention, fraud,
not furnishing returns etc
Cancellation shall not
affect the previous
liability of taxable
person.
On cancellation,
amount =credit of Input
tax or output
tax(w

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eriod is 6
months.
Business has not commenced within 6
months.
Within 30 days from the date of service
of cancellation order.
6.
Time for applying for revocation of
cancellation:-
BY: CS SANJAY MALHOTRA
REFUND
BY: CS SANJAY MALHOTRA
INTRODUCTION
Refund of tax
Payment of refund
➤ Withheld of refund
➤ Important points
➤ Relevant date
➤ Interest on delayed refunds
➤ Consumer Welfare Fund
➤ Utilization of the Fund
Refunds
Situations where refund would arise
Documents to be filed for refund
➤ Procedure
Summary
BY: CS SANJAY MALHOTRA
REFUND OF TAX (SECTION 38)
TAX
REFUND
Any person claiming refund & interest of any tax, may make an
application to proper officer before expiry of 2 yrs.
A taxable person may claim refund of any unutilized Input Tax credit at
the end of any tax period.
Application shall be accompanied by necessary documentary evidences &
amount so determined shall be credited to the Fund.
The proper officer shall issue order within 90 days from

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s, tax charged etc.
Registered taxable person,
supplying non taxable
Goods/services or paying tax u/s 8,
shall issue a bill of supply instead
of tax invoice.
SUMMARY
If taxable value/tax charged in tax
invoice > taxable value/payable,
taxable person may issue CREDIT
NOTE to recipient on or before
30th day of September following
the end of FY or date of filing of
annual return (whichever is
earlier)
If taxable value/tax charged in tax
invoice 10
lakh
BY: CS SANJAY MALHOTRA
TAXES
The amount deducted shall be paid the credit of appropriate govt. by
deductor within 10 days after the end of month.
Deductor shall furnish to deductee a certificate mentioning contract
value, amount deducted, date etc.
(if deductor fails, he shall be liable for a late fee, sum of 100 Rs/day)
oh,
don't forget…
Deductee shall claim credit, in his E-Cash Ledger, of tax deducted &
reflected in the return of deductor.
If any deductor fails to pay to credit of appropriate govt., he shall be
liable to pay interest i

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ce
Supply in the course of intra-
state trade or commerce
Goods
Services
Means
where
location
of
supplier
& place
of supply
are in
different
states
IGST
Central GST
State GST
BY: CS SANJAY MALHOTRA
Goods
Means
where
location
of
supplier
& place
of supply
are in
same
states
Services
Levy & Collection of Tax (Section 4)
INTEGRATED GOODS &
SERVICE TAX
Tax on all supplies of goods/Services made in
course of inter-state shall be levied at the rate
specified.
Cansto
Tax
Paid
Shall be paid by every taxable
person
BY: CS SANJAY MALHOTRA
TAX PAYABLE ON REVERSE
CHARGE BASIS
EXEMPTED GOODS/SERVICES
Tax shall be paid by person
receiving such
Goods/Services.
No tax shall be payable by
any taxable person
Enter
1E0
BY: CS SANJAY MALHOTRA
Place of supply of Goods (Section 5)
Yes
Location of goods at
time at which
movement of goods
terminates for delivery
to recipient
Movement of goods
No
Location of such Goods
at the time of delivery
to the recipient
BY: CS SANJAY MALHOTRA
10
shutterstock
shutterst
sh

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h immovable property or
boat or vessel is located
Services provided by
way of organization
of cultural, scientific,
sporting, educational
etc.
BY: CS SANJAY MALHOTRA
â–  To a registered person, shall be the
location of such person
â–  To other person, shall be the place
where the event is actually held
Seminar
Services related to
P3R
BRE
123RF
Restaurant &
catering,
fitness
training &
performance
appraisal
Cultural,
entertainment
event or
amusement
park etc.
services on
board a
conveyance such
as vessel, aircraft
Where
services are
actually
performed
• Location of such
person for registered
person.
• For any other
person, where
services are actually
performed.
where event is
actually held or
where park or
such place is
located
location of the
first scheduled
point of
departure of that
conveyance
BY: CS SANJAY MALHOTRA
23R
123RF
Transportation of
goods, Inc. mail
or courier
Supply of services
Passenger
transportation
services
11
11
Registered
Person
Any other
person

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ION
KNOWLEDGE
AWARENESS
Location of
the recipient
of services
.
Location of
such person for
registered
person.
• For any other
person, location
of recipient of
service
Shall be taken
as located in
each of such
states
Summary on utilization of amount of ITC
Input Tax credit of
Output Liability of
IGST
CGST
IGST
SGST
CGST
Central GST
Central GST
CGST
IGST
State GST
State GST
SGST
SGST
Central GST
State GST
BY
IGST SANJAY MALHOTRA
40
Transitional Provisions
a
価格
12
415
32
845651
125685
85221
84651
BY CS SANJAY MALHOTRA
76565A
165676
5640
64898
3416545
45649
1235
18541
45004
123
123
41523
3216
9885
210
450
Semi-finished goods removed for
carrying out certain processes & returned
on or after the appointed day.
Finished goods removed for carrying out
certain processes & returned on or after
the appointed day.
Transitional
Provisions
Amount of CENVAT credit carried forward
in a return to be allowed as ITC.
Unavailed cenvat credit on capital goods,
not carried forward in a retu

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day.
Treatment of long term
construction/works contracts
Credit distribution of service tax by ISD.
Inputs removed for job work & returned
on or after the appointed day.
BY: CS SANJAY MALHOTRA
Progressive or periodic supply of
goods or services.
AMOUNT OF CENVAT CREDIT CARRIED FORWARD IN A RETURN TO BE
ALLOWED AS INPUT TAX CREDIT
A Registered Taxable Person
Shall be Entitled to credit of
amount of CENVAT credit
(CGST Law) and VAT (SGST
Law) forward in return
under earlier law by him.
CENVAT
The amount shall be recovered as an arrear of Tax if said amount is found to be
recoverable as a result of any proceeding instituted against such person under earlier
Law.
BY: CS SANJAY MALHOTRA
UNAVAILED CENVAT CREDIT ON CAPITAL GOODS, NOT CARRIED FORWARD IN
A RETURN TO BE ALLOWED IN CERTAIN SITUATIONS
Credit of unavailed CENVAT Credit in
respect of Capital Goods in E-Credit
Ledger, not carried forward in return
shall be allowed.
Capital Goods
The amount shall be recovered as an arrear of Tax if sa

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axable supplies.
BY: CS SANJAY MALHOTRA
Tax Credit available on Switching over from Composition scheme
Registered taxable person
INPUT
Paying tax under composition scheme
To avail Credit of eligible duties & taxes
in respect of inputs held in stock &
inputs contained in semi-finished/
finished Goods held in stock on
appointed date.
OUTPU
BY: CS SANJAY MALHOTRA
AMOUNT PAYABLE IN THE EVENT OF TAXABLE PERSON
SWITCHING OVER TO COMPOSITION SCHEME
Taxable person has carried forward
the amount of eligible Credit in return
or on account of VAT in return
furnished under Earlier law.
Composition
scheme under
Section 8
VAT
INPUT TAX CREDIT
Debit of Amount equal to Credit of input
tax in respect of inputs held in stock &
inputs contained in Semi-Finished
Goods/Finished Goods held in stock on day
immediately preceding date of switch over
to be made in E- CENVAT / Cash Ledger.
BY: CS SANJAY MALHOTRA
EXEMPTED GOODS RETURNED TO THE PLACE OF BUSINESS ON OR AFTER
APPOINTED DAY
TAX
FREE
TAX
FREE
Goods o

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lace, No Tax shall
be payable if inputs
are returned within
6 months
BY: CS SANJAY MALHOTRA
Semi-Finished Goods removed for Job work & returned on or after Appointed day
Where any Semi-
Finished Goods
Semifinished
Goods
No Tax shall be payable if
Goods after process returned
to said place within 6 Months
from Appointed day,
Had been removed or dispatched to
any other premises for Manufacturing
process
BY CS SANJAY MALHOTRA
Z
Finished Goods removed for carrying out certain processes & returned
on or after appointed day
Excisable Goods
manufactured in factory,
for carrying out process
not amounting to
manufacture, removed
or despatched without
payment of duty, to any
premises
No Tax shall be payable if said
goods are returned within 6
Months from the Appointed
day
BY: CS SANJAY MALHOTRA
Finished
Goods
Finished
Finished
Goods
Goods
ISSUE OF SUPPLEMENTARY INVOICES, DEBIT/CREDIT NOTES WHERE
PRICE IS REVISED IN PURSUANCE OF CONTRACT
â–ªIn pursuance of contract, if price of any Goods/Serv

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of earlier
Law and if any amount
shall be refunded in cash
1:1
RECOVERY
BY: CS SANJAY MALHOTRA
ç›®
Every proceeding of Appeal, Revision, Review or reference relating to any
output duty liability initiated before appointed day shall be disposed of in
accordance with provisions of earlier Law
OUTPUT
FAX
☐ If any amount becomes recoverable shall be recovered as an Arrear of tax or if
admissible shall be refunded in cash
BY: CS SANJAY MALHOTRA
PENALTY!
FOTOFNEH
In pursuance of an assessment or adjudication proceedings instituted,
any amount of tax, interest, fine or penalty becomes recoverable, same
shall be recovered as an Arrear of Tax & amount shall be admissible as ITC
If Refundable, same shall be Refundable in Cash under earlier Law
INTEREST
BY CS SANJAY MALHOTRA
Treatment of Amount Recovered or Refunded pursuant to Revision of Returns
$
if amount is
found to be
Recoverable
Shall be
recovered as an
arrear of tax &
that amount shall
be admissible as
ITC
Any return
revised
if a

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