Goods and GST Bill passed

[Ganeshan Kalyani]

Dear All,

GST Bill is passed in Rajya Sabha on 03. 08.2016.

A panel under chief economic adviser Arvind Subramanian has recommended a revenue-neutral rate of 15-15.5%, with a standard rate of 17-18% be levied on most goods and all services.

But, there has been no agreement yet on rates of various goods and services, which remains a tricky issue. According to the Bill, passed in the Lok Sabha in May 2015, the rates were to be decided by a GST council headed by the central finance minister with state finance ministers as members.

Let us wait.

Thanks.

[Ganeshan Kalyani]

The transportation sector currently enjoys abatement of taxes of up to 70 percent (30 percent of 15 percent service tax payable i.e. an effective tax rate of 4.5 percent). Under the GST Act, there is no clarity on continuation of abatement.

[Ganeshan Kalyani]

Since every movement of goods from one warehouse to another situated in different states would be taxable under GST , the Corporate may think to have a mother warehouse in a most suitable States .

[Ganeshan Kalyani]

Compliance cost for logistics companies is likely to increase since transporters whose vehicles pass through multiple states would need registration in each of these states to take input credit for expenses incurred in that state.

[Ganeshan Kalyani]

“Supply of goods” without consideration are deemed as “supply” and would be subject to tax under GST regime. Thus free samples and promotional material in case of FMCG companies would attract tax and lead to higher tax outgo.

[Ganeshan Kalyani]

As the entire administration of finance ministry and also trade circles are now per-occupied with facing blows of demonetization, trade circles feels it would be difficult for the government to go ahead with its GST agenda.

[Ganeshan Kalyani]

Information Technology is going to play a key role in GST . Sales purchase details need to be uploaded in GSTN . The IT of an organisation should be very strong to provide such details.

[Ganeshan Kalyani]

Every dealer is going to cover under GST . The threshold proposed is so low. This means the compliance is utmost important from seamless flow of credit which Ultimately depends upon the IT of a company .

[Ganeshan Kalyani]

GST is most significant tax reforms .

[Ganeshan Kalyani]

All dealers need to be ready to implement GST when the date of implementation of GST is notified .

[Ganeshan Kalyani]

GST bills to be tabled as money bills. proposed.

[Ganeshan Kalyani]

Union Finance Minister has said that the tax incidence on goods will be worked out in a manner such that the GST levy will be somewhere close to the current tax rate i.e. Excise plus VAT.

[Ganeshan Kalyani]

Government plans to table GST Bills as money bills; won't need nod from Rajya Sabha.

[Ganeshan Kalyani]

GSTN is a not for profit organisation created for special purpose.

[Ganeshan Kalyani]

GST will result better tax conplaince under GST due to better network .

[Ganeshan Kalyani]

Complaince cost under GST is going to increase.

[Ganeshan Kalyani]

The list of goods covered under the proposed tax structure is expected by the dealers to analyse the impact of increase/ decrease in the business expense income etc due to GST to introduction of GST , is a matter of concern .

[Ganeshan Kalyani]

Tax payer having multiple business in one state may register one business entity first. For the remaining business within the State the tax payer need to get in touch with the respective Jurisdictional Authority.

[Ganeshan Kalyani]

There will be no paper based enrolment. All migration will take place online.

[Ganeshan Kalyani]

Existing ISD registrations are required to file fresh application in the GST Common Portal for the State in which the tax payer desire to seek registration. Also, tax payer needs to inform its Central Jurisdictional Authority.

[Ganeshan Kalyani]

Government has launched the existing registration migration project under GST. Existing tax payer registered under VAT/ ST/ Excise have to migrate their registration as per allotted dates.

AI Summary

Goods and Services Tax consolidation creates a dual GST framework with GST Council oversight and a shared IT platform for compliance.
Goods and Services Tax establishes a destination based, dual tax framework subsuming central and state indirect levies, administered through a GST Council and implemented via a shared IT platform (GSTN). The model law sets out registration and return regimes, HSN/SAC classification by turnover bands, input tax credit carry forward, composition and reverse charge rules, refund and valuation procedures, compensation to states during transition, and institutional arrangements for cross empowerment, adjudication and dispute resolution.