Goods and Services Tax

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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Goods and Service Tax – Improving Ease of Doing Business
By: – CSSANJAY MALHOTRA
Goods and Services Tax – GST
Dated:- 5-9-2016

Goods and Service Tax – “Improving Ease of Doing Business”
Long awaited Constitutional (122nd) Amendment Bill has been passed by Rajya Sabha on August 3, 2016 and by Lok Sabha on August 8, 2016. The same has been ratified by more than 50% of the states in India as on Sep 04, 2016 and will be forwarded to President for his assent for amendment in constitution. GST Council will be formed accordingly to finalise the GST rates. GST Council is to be headed by Union Finance Minister and consists of State Finance Minister or their representatives. GST Bill will be introduced in the winter session of Parliament in Nov-Dec'2016 and after the passage of same, will be sent to President for his approval and subsequently will become GST Act.
Govt. of India is working very closely with all the stakeholders i.e. States Govt's, Industry, Council, and Professi

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n Transaction Costs, Reduction in Compliance Costs, Uniform Tax Structure i.e. One Tax Rate across nation, Digital Environment moving to paperless regime, etc…..
Cascading impact of taxes adds to the business inefficiency and Goods and Service Tax will do away with the same as the CGST/SGST/IGST would be calculated on common base.
GST Glance : Worldwide
Country
Year
Dual Structure
Single Structure
GST Rate
France
1954
√
20%
South Korea
1977
√
10%
New Zealand
1986
√
15%
Japan
1989
√
5%
Canada
1991
√
5%
Singapore
1994
√
7%
China
1994
√
17%
Australia
2000
√
10%
European Union
2006
√
15%
Malaysia
2015
√
6%
Levy of Taxes under GST
Central Indirect Taxes i.e. Central Excise Duty, Countervailing Duty on Imports, Special Additional Duty, Service Tax, Surcharges & Cesses, will be subsumed into CGST (Central Goods and Service Tax).
State Taxes i.e. VAT, Entry Tax, Surcharges, Taxes on

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oods. Reduction in tax cost will be ultimately passed on to the consumers.
Goods and Service Tax will take away the present set of exemptions which would give all the businesses level playing field in the competitive environment.
GST is going to be a major shift in moving to Digital environment as all the Tax Payments, CENVAT Ledgers, returns, Refunds will be processed online over internet. The same will also result in Reduction in Compliance cost as all the required will be available online similarly to Income Tax i.e. Form 26AS, Returns, Refunds…..
Impact of GST on Industry
Goods and Service Tax is not only the change in the Indirect Tax Structure but would be ” Business Transformation” as it would have impact on Accounting Systems, Supply Chain Systems, Information Technology Systems, Restructuring of Business Models for Direct Sale / Distributors sale / Warehouse transfer.
Warehouses are set up in various states to leverage out the benefits in terms of CST Cost, which would

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t in sourcing from inter-state to intra-state and vice-versa as CST (Central Sales Tax) would be done away with and Input Tax credit is eligible irrespective of Inter/Intra State Purchases.
Cost of Collection of Taxes for the Central / State Govt. will come down as the all the payments, returns, Input Tax Credit ledgers are maintained online over internet.
End of Tax Exemptions Era
Goods and Service Tax will have barely minimum goods and services under Tax Exemption and may cover only those which may pertain to Life saving drugs, agricultural produce…….
Area Based Exemptions will also put to an end in GST Regime and everyone will have level playing field in the market. This would also put an end and control over the tax leakages in the system thereby adding to the Growth in GDP. Tax compliances would increase leading to reduction in litigations. If exemptions continue, Govt. may bring in policy for levy of GST on supplies and may refund back tax collected or define % of refund

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ducts in GST regime would eventually lower down the cost of inputs for various products.
Added advantage in the GST is that even the wholesalers / distributors who are not eligible to avail the Input Tax Credit for Central Excise Duty would now be eligible under GST regime for Central Taxes such as CGST / IGST, which can be further set off against their output tax liability.
Registration under GST – (Section 19)
Separate Registration is required at present under Central (Excise, Service Tax) and State Acts (VAT, CST). In GST, single registration is required, which is common for both CGST/SGST. Registration No will consists of 15 digits, wherein first 2 digits represent State Code, next 10 digits represents PAN No. , next two Entity code of the Applicant and remaining left blank intentionally for future use.
Persons falling under Schedule III to Model GST Law are required to be registered under the GST Law. This includes Persons having Aggregate Turnover > ₹ 9 Lacs during F.Y

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hall be given Registration for 90 days which may be further extended to 90 days. (These persons does not have fixed place of business in the state where they undertake assignment for short duration of time).
Casual Taxable Person and Non-Resident Person shall have to deposit the estimated Tax Liability at the time of seeking Registration under GST.
Input Tax Credit (Section 16)
In the current tax structure, CENVAT Credit is linked to inputs, input services, capital goods used in or in relation to the manufacture of Taxable final products, whereas in case of GST, Input Tax Credit is admissible on any supply of goods and / or services which are used or intended to be used in the course or furtherance of business and includes tax payable under sub-section (3) of Section 7 i.e. Reverse charge.
Input Tax credit is admissible until and unless the goods / services are specifically exempted under the GST Rules / Act.
Input Tax Credit is to be availed within a period of 1 year from the dat

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n 16(9) of Model GST Law which includes mainly goods acquired in relation to construction of Immoveable property, goods under Composition levy, goods or services relating to food and beverages, outdoor catering, beauty treatment, life insurance, health insurance, travel benefits, leave / home travel concession, motor vehicles until they are into such business, goods and services consumed for personal consumption…..
Composition Levy of Tax-(Section 8)
Composition Levy of Tax shall be applicable in respect of registered person whose aggregate turnover in a financial year within the state does not exceed ₹ 50 Lacs. These persons are liable to pay Composition Levy on their turnover at the rate to be decided by the GST Council and the tax levy should not be reflected on the invoice. Furthermore, these persons are not eligible to avail any Input Tax credit against the Input/Input services / Capital Goods. Furthermore no Tax charged is to be shown on Invoice; rather the document to

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ve been made very simple and easy for an assessee to comply with. Refund is admissible under GST in the following situations:
* Excess Payment due to mistake.
* Refund of Carry forward of Input Tax Credit. (Due to Inverted Tax Structure)
* Export (Including Deemed Export).
* Refund on Year End Volume Discounts.
* Refund of Pre-Deposit in case of Appeal / Investigation.
* Refund for Tax Payment in respect of supplies to CSD canteens, Un Bodies, Para Military forces…
Refund is to be submitted online and the same shall be submitted within 2 years from the Relevant Date which is defined separately under the Act for each of category, wherever refund arises.
Refund can be withheld by the department if the taxable person has defaulted in furnishing of returns, defaulted in making of tax payment / interest / penalty which has not been by the Court / Appellate authorities.
Payment of Tax- (Section 35)
Tax payment can be made by Internet Banking/ Debit Cards / Credit Cards / RT

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ds in the books of account.
In case of continuous supply of goods where successive account statements / payments are involved, the time of supply shall be the expiry of period to which successive statement of accounts / payment relate.
In case tax is liable to be paid under Reverse charge, then earliest of date of receipt of goods or date on which payment is made or date of receipt of Invoice or date of debit in the books of accounts.
Liability to pay CSGT/SGST arises at the time of Supply of Services which shall be earliest of the following:
* Date on Issue of Invoice or Date of Receipt of Payment whichever is earlier in case the Invoice is issued within prescribed period.
* Date of completion of provision of service or Date of Receipt of Payment if invoice is not issued within prescribed period.
In case of continuous supply of service “where payment is ascertainable” from contract, the date on which payment is liable to be made OR “where payment is not ascertainable” each tim

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oods terminates for delivery to recipient.
* If the goods are delivered by supplier or any other person on direction of third person, then Place of Supply shall be the Location of such person.
* Where Goods are assembled at site, Location shall be the Place of Installation of such assembly.
* If the goods are supplied on board or conveyance i.e. vessel or aircraft, then place of supply shall be the location at which such goods are taken on board.
Place of Supply of Services (Section 6)
Wherever Services are rendered to Registered Person, then the Location of such person is considered as Place of supply of goods.
In case services are rendered to a person other than registered person, POS shall be the location of supplier but if the address of service recipient exists in the records of service provider, then the POS shall be the location of recipient, where the address on record exists.
Section 4 to 14 of the IGST Draft Law defines POPS for various services for the purpose of d

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e returned on or after the appointed day (No Tax payable)
* Supplementary Invoices, Debit Notes / Credit Notes can be issued for change in price and Tax to be paid as per GST Rates.
* Pending Refund Claims as on the date of Implementation of GST to be processed under earlier law.
* Claim of CENVAT to be disposed off as per Law existing prior to GST Regime.
* Where any semi-finished goods are removed for Job Work & returned on or after appointed day, No Tax shall be payable if Goods after processing are returned within period of 6 months.
* Where any Finished goods are removed for processing not amounts to manufacture, No Tax shall be payable if Goods after processing are returned within period of 6 months.
All the above stated factors in GST would go a long way in making India a “Digital India”, Uniform Market across Nation for Goods & Services, Reduction in Logistics Cost, Transaction Cost, Cost of Production besides increasing efficiencies in operational processes”
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Goods Vs. Services in GST: Concept and Open Issues
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 5-9-2016

Dear Professional Colleague,
Goods Vs. Services in GST: Concept and Open Issues
As Goods and Services Tax (“GST”) is going to be levied on supply of goods and/or services, meaning of 'goods' and 'services' would also play vital role in levy and chargeability of GST after the key term 'supply'. It has to be clearly identified as to whether the supply constitutes supply of goods or services for leviability of GST. Importance of the terms 'goods' and 'services' would become all the more important if rates of GST on goods and services are going to be different.
This article attempts to decipher the main terms namely 'goods' and 'services' in the light of provisions contained in Model GST Law, to provide conceptual clarity as regards the meaning of goods and services in GST along with highlighting the key issues therein.
Meaning of 'goods' in GST:
The term '

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Explanation: Services include intangible property and actionable claim but does not include money.”
Apparently, the term 'service' has been defined in the widest sense possible as any transaction which is not goods, shall be services except money.
Whether Immovable property is service:
As the definition of the term 'service' is wide enough to cover anything other than goods, this would mean that even any rights or usage of immovable property would also constitute services under GST.
Actionable claim is a service:
It may be noted here that unlike the definition of 'service' as given under Section 65B(44) of the Finance Act, 1994 (“the Finance Act”), which excludes 'transaction in money' and 'actionable claim' from the taxable net of Service tax, the proposed definition of 'service' under GST only states exclusion of money and specifically includes actionable claim.
Thus, actionable claims would be service and exigible to GST unlike the Finance Act, where the same has been specifi

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over insurance money;
* Claim for arrears of rent etc.
Clarity required on exclusion of 'money':
As the definition of service only states that 'money' is excluded from its ambit, the same needs to be revisited to avoid any confusion as exclusion of money alone does not convey real nature of exclusion.
Examples of transaction in money:
* The principal amount of deposits in or withdrawals from a bank account.
* Advancing or repayment of principal sum on loan to someone, etc.
Whether intangibles are goods or services?
It may be noted here that the definition of 'goods' given under Article 366(12) of the Constitution of India is defined in inclusive manner to provide that “goods includes all materials, commodities, and articles”. Further, as per proposed Article 366(26A) “services” means anything other than goods”. Thus, the definition of 'goods' and 'services' in Model GST Law are different from the definitions given in the Constitution.
Further, from the settings of Article

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(the definition of goods under maximum State VAT Acts excludes securities). Thus, if no exemption is provided to securities transaction while finalising the Model GST Law, this could prove to be an additional burden, which in turn would blemish the domestic investments in India, as sale of securities outside India would qualify as export and can take over as preferred choice for attracting investments.
At the same time, one may also infer that securities are one of the forms of transaction in money, which are neither goods nor services as per the definitions provided under Model GST Law.
With the definition of goods and services provided under the Model GST Law, placed on public domain on June 14, 2016, it would be important for the Industry to appropriately understand and categorise the different types of the supplies made by them to assess the impact on taxability. However, considering the fact that both these crucial terms have been defined in extensive manner, the corresponding

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Input Tax Credit
Query (Issue) Started By: – santosh phulse Dated:- 4-9-2016 Last Reply Date:- 5-9-2016 Goods and Services Tax – GST
Got 15 Replies
GST
"According to the existing provisions under the draft law, the buyer can claim input tax credit only if the seller or provider of the goods or services has paid the tax charged for such goods or services.This has put the onus of ensuring compliance with the customer or buyer of the goods and services."
-This particular clause in the draft GST law seems unfair to the business community and should be removed.
Reply By KASTURI SETHI:
The Reply:
Dear Sir,
This has been proposed to be enacted in GST in order to make the facility of cenvat credit fool proof. In the present Cenvat Credit Rules, earlier also onus was cast on the person who avails Cenvat Credit.
Reply By CS SANJAY MALHOTRA:
The Reply:
Dear Sh. Santosh ji,
Tax credit provisions are defined considering the Tax leakages and Revenue protection. If suppl

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s with TIN in his return and shows the tax that it he has paid, based on which the authority with the help of system does cross checking as to whether the TIN of purchaser is appearing in the details and allow the credit if appears. If there is any difference in the tax amount shown by the supplier with the credit amount claimed by the purchaser then the purchaser in order to claim set off has to get written confirmation from the supplier and produce the same before the authority to become eligible to claim the set off.
In GST, as well, the same system as that of VAT is proposed. An assessee shall get tax credit of those tax which he has paid on his purchases only when the supplier has paid the tax. This would be monitered through VAT Credit Ledger in GSTN.
An assessee might think that his primary motive is to carry out business and not to check whether his counter party has paid the tax collected or not. But if we think from the eyes of authority then we can understand that for tax

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s, the Delhi VAT Department had come with a unique feature in its VAT Laws to reconcile the 2A and 2B statements and in recent time, the DVAT Department has come with coding systems of items which shall be mentioned in the purchasers' and sellers' return and invoices to reconcile the correctness of transactions.
Even in earlier times the Central Excise Department to check the availed Modvat Credit and Modvat credit availed above ₹ 10000/- the details/xerox copies used to send the seller's jurisdictional Range Office for its authenticity.
This is not a new feature which has been incorporated in the GST Model Law. As rightly indicated by Mr. Ganeshan, by doing so, the interest of our Country in tax matter has been taken care of.
Reply By santosh phulse:
The Reply:
Respected Sir,
If a supplier has failed to furnish the return on time or pay tax on time, the government should penalise the supplier instead of the buyer. “This clause is especially harsh on small and m

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ike mention here that similar fear was there when TDS was made online, it is rare or few exceptions may be there, but substantially, there is no complaint that the deductor of TDS has not uploaded the TDS details of the deductee.
I do believe that, the fear of deficit of trust between the supplier and buyer must be eliminated and the environment of mutual trust and responsibility must be allowed to grow. As you know, because of few persons / business entities engaged in wrongdoing, all genuine persons / business entities are finding it difficult to do the business honestly.
Reply By KASTURI SETHI:
The Reply:
Dear Experts,
I have come across a Trade Notice issued by Central Excise Commissionerate, Chandigarh-I on the issue. It explains why responsibility is cast upon service receiver.. Copy is appended below:
A copy of Trade Notice No.10/12 dated 13-7-2012 issued by Chandigarh Commissionerate-I on the issue.
I do not know what is the present position of this trade notice.
Reply B

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ee requests the deductor to file revised tds return by rectify the error. In GST whether such requirement of issue of Form would be there or like the system of 26AS would be there is a question mark as of now. Sir, also TDS is quarterly conplaince whereas GST would be monthly conplaince. This also will demands time of the dealer.
Sir, change is certain. It gives problem in the beginning but the fruits would be sweet. Likewise the provisions as included in the draft law would yield good result in long run. Thanks.
Reply By Ganeshan Kalyani:
The Reply:
Sir, I believe each dealers in the chain of GST should be made aware of such problems when tax is not paid by one of the party in the chain of tax credit. Thanks.
Reply By santosh phulse:
The Reply:
Sir, this is little bit complicated. How can a buyer, who has 100s of suppliers, ensure that the each of the suppliers has paid the tax collected by them into the Govt treasury??? And whether they have accounted for each transaction (incl

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is aspect. Though there may arise teething troubles, yet GST will be successful through GSTN. Time will come when people will work from home through the System/internet. So much will be the importance of technology.
Reply By CS SANJAY MALHOTRA:
The Reply:
Dear Mr. Santosh ji,
Am in agreement with Sh. Kasturi ji. We have taken up this issue with the Board also to work out alternative so that the purpose of Govt may not be defeated. In connection with same, we were told that Govt wants us to be one of the stakeholder in ensuring compliance by taking up with our suppliers to pay tax timely, when we are reimbursing the same to them.
In sales tax, majority of states have matching concept and if balances does not reconcile, they call for Account Ledger to validate that all payments have been made by recipient of goods and accordingly allow credit.
Understand your concern which is common in Industry as resistance to change is always there. Proposal has been put across Board to review whe

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Commission and freight role in GST
Query (Issue) Started By: – RAM SHARMA Dated:- 2-9-2016 Last Reply Date:- 4-9-2016 Goods and Services Tax – GST
Got 5 Replies
GST
Dear Experts,
We are manufacturer of exciasable goods and selling our goods through our various consignment agent in all over india against form F. We are providing 3% commission and freight to our consignment agent for selling our goods and availing service tax cenvat on such commission and freight up to the consignment agent warehouse. I would like to know your opinion in this regard after implementation of GST impact.
Thanks & Regard
Reply By CS SANJAY MALHOTRA:
The Reply:
All forms i.e. C/D/E-1/F will be done away with in GST regime and the tax has to be pai

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d in the Model GST Law.
There is possibility that the Model GST Bill shall undergo change/modifications. All have to wait till time a final law is enacted.. Thanks.
Reply By Ganeshan Kalyani:
The Reply:
Sir, IGST shall be payable by sending unit and the receiving unit shall be able to take credit by adjusting first against IGST payable followed by CGST and finally against SGST. The said sequence has been prescribed in the draft GST Law.Thanks
Reply By CA Surender Gupta:
The Reply:
The transactions between the principal and agent will be treated as separate would be chargeable to GST as per the proposed scheme.
GST paid by the principal will be available to consignment agent / dealer as ITC and so no on subsequent sale.
Therefore, i

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k transfer is immediate liquidity to Exchequer. Say, if A has stock transfer to his branch in another State and the receiving location may sell those goods in the same month or by two or three months time depend upon the market demand. Generally looking into the need of that location stock transfer is taken place. But practically may take that much time in selling the goods in receiving branch state. Thus only when the goods are locally sold the Exchequer are getting the revenue. So there is a time gap from the date when goods are stock transfer and the date when actual sale is taken place. To bridge a gap and to prepone the tax collection Govt has come up which such provision where even stock transfer is taxes. This would make the authorit

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GST Council- mini parliament for GST
By: – sandeep saini
Goods and Services Tax – GST
Dated:- 2-9-2016

After a much awaited time period, now its matter of time, when GST is going to be a reality in India. The seriousness of the Government to implement GST, clearly appears from the passage of 122nd Constitutional Amendment Bill (“Constitutional Amendment Bill”) by both the houses of parliament i.e. Rajya Sabha as well as Lok Sabha. On the other hand, the States are also equally eager to implement GST as early as possible, and after the passage of Constitutional Amendment Bill, States are ratifying the same by holding the special sessions of their State legislative assemblies, and till now Assam, Bihar, Jharkhand, Himachal Pradesh, Chattisgarh has already ratified the Constitutional Amendment Bill. Therefore, we should not hessitate to appreciate the efforts of both Central Government and State Governments to implement the GST from April 1, 2017.
However, once the Consti

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well as from the States i.e. the Finance Minister of the Centre and the Finance Ministers of the States, so it will not be easy for the Centre or the States to ignore its recommendations without any strong reason.
Composition of GST Council: The GST Council shall consists of following members:
* Union Finance minister, who will be Chairperson of GST Council;
* Union minister of State incharge of Revenue or Finance;
* The minister incharge of Finance or Taxation or any other minister nominated by each State Government and they will choose one among themselves to be the vice chairperson of the council for a particular period.
Subject matters on which recommendations will be made by GST Council:
The GST Council shall make the recommendations to the Union and the States on the following subjects:
* GST rates, cesses and surcharges levied by the Union, States and Local bodies which may be subsumed in the GST;
* Goods and Services exempted from GST;
* Model GST Law which is pu

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t shall have a weightage of 1/3rd of total votes cast.
* The State Governments taken together shall have a weightage of 2/3rd of total votes cast.
Approval of any decision by the GST Council: In GST Council, every decision shall be taken, when it is approved by at least 75% of the weighted votes of members present and voting.
From the above voting pattern, it appears that it will not be possible for the States to take any decision against the will of Centre, since the Centre has 33% votes and to get any decision passed, 75% votes are required, which is possible only when centre supports that particular decision. In the similar way Centre cannot take any decision which is opposed by States.
Challenges before GST Council: The GST Council has to face challenges while taking the given below decisions:
* Computation of compensation in lieu of revenue loss to the States, since losses are going to be notional in nature, so it becomes important to laid down a transparent and detailed me

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