TaxTMI 
TaxTMI 
TaxTMI 
The purpose of writing this article is to point out that there are no 'mutatis mutandis' CGST rate replication provisions in the SGST laws, and as such, without appropriate notifications under the SGST laws of the respective states, the levy of SGST in these states cannot be considered as legal.
In the above background, it is a bit surprising that certain CGST notifications have not been replicated under SGST by the respective states even within a reasonable period of time. This gives rise to legal as well as system related (gstn.com) issues, which are analyzed below:
1. Implications from the legal perspective
1.1 States which have not yet notified even the basic SGST schedules
The following states are yet to even notify the basic SGST schedules and there is no legal basis for levy of SGST in these states. Even if they are taking the ordinance route, the same is not available in any of the public domains.
- Arunachal Pradesh;
- Uttarakhand;
- Sikkim;
- Mizoram; and
- Kerala (functioning based on an Ordinance but not sure if it has been ratified).
1.2 States which have not yet replicated specific CGST notifications
I have adopted the recent services related tax rate changes (works contract, GTA, Cab hire etc.,) to explain this issue.
Only the following 18 (out of 31) states have notified the above changes under their respective SGST laws. The balance 13 states are yet to notify the same.
- Andhra Pradesh
- Bihar
- Chattisgarh
- Delhi
- Goa
- Gujarat
- Haryana
- J&K
- Jharkhand
- Karnataka
- Madhya Pradesh
- Maharashtra
- Nagaland
- Odisha
- Rajasthan
- Tamil Nadu
- Tripura
- West Bengal
As mentioned earlier, there are no 'mutatis mutandis' CGST rate replication provisions in the SGST laws, and as such, without appropriate notifications under the SGST laws of the respective states, the levy of SGST in these states cannot be considered as legal.
As such, if we take the state of Telangana (which hasn't yet notified the above rate changes) as the example, the only option to calculate GST on GTA/ Cab is as given below:
CGST (new rate which has been notified) - 6%
SGST (old rate only, since new rate hasn't been notified) - 9%
Total GST 15%
1.2 State which has replicated the above CGST notification, but with a different date
The Goa Notification No. 38/1/2017-Fin(R&C) (22/2017-Rate) which gives effect to the rate changes mentioned under para 1.1 above is dated 28th August, 2017, as compared to the CGST/ IGST notifications which are dated 22 August 2017. The aforesaid notification specifically states that it shall come into force with effect from the date of its publication in the Official Gazette.
As such, for the period 22-27 August 2017, the old SGST rates would apply for Goa and only from 28 August 2017 would the new rates for services would be applicable. This would lead to the very same situation outlined in para 1.1 above - the CGST and Goa SGST rates for the above 6 days will not align.
2. Implications from the GSTN perspective
Now, it is pertinent to note that the GSTN portal doesn’t seem to be accepting any line item in which the CGST and SGST tax rates/ amounts differ, since the information pertaining to each transaction is captured as a single line item (it might have been possible, if, the CGST and SGST were captured as different line items). As such, if we create rules which have 6% CGST and 9% SGST, we may not be able to file the returns in the GSTN portal.
The apt approach would be to adopt the SGST rates only as and when the respective state governments notify the same. However, owing to delay in issue of notifications by various state governments, there could be situations when the CGST and SGST are different, as explained in para 1 above.
But, if the CGST and SGST rates are not aligned, then, filing returns in the GSTN portal may not be possible, as explained in para 2 above.
Thoughts are most welcome on how this situation can be resolved.