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 second day of the meeting of the GST Council saw both sides agree to the compensation formula wherein the centre agreed to absorb any spillover of revenue losses accruing on account of the adoption of the new tax regime

The stage is now set for a dialogue on the final agenda item: cross empowerment. The council will meet on 3-4 January to resolve this issue.

[Ganeshan Kalyani]

The Centre will impose a cess on luxury items like high-end cars and demerit goods including tobacco, pan masala and aerated drinks, over and above the highest 28%. Under the structure, the clean energy cess and cess on luxury items and demerit goods would be utilised to create a ₹ 50,000 crore fund every year which will be utilised to compensate the states for first five years of GST roll out.

Source: livemint

[Ganeshan Kalyani]

The base year for calculating the revenue of a state for Compensation has been decided as 2015-16.

[Ganeshan Kalyani]

The GST Compensation Bill will provide a legal backing to the Centre’s promise to compensate the states if their revenue growth rate falls below 14% in the first five years of the GST roll out.

[Ganeshan Kalyani]

The council will again meet during January 3-4, to hammer out an agreement on the issue of dual control or "cross-empowerment”.

The original deadline to roll-out GST from April 1, 2017 appears increasingly unlikely. “Our effort is to make it early as possible,” Jaitley said.

Source: money control

[Ganeshan Kalyani]

Under GST, the states and the Centre will collect identical rates of taxes on goods and services. For instance, if 18 percent is the GST rate on a good, the states and the Centre will get 9 percent each called the CGST and SGST rates.

[Ganeshan Kalyani]

States have demanded that assessees should be divided horizontally with ₹ 1.5 crore be the cut-off base. Under this model, states would assess businesses with an annual turnover ₹ 1.5 crore, while both the Centre and states would do so for businesses having higher turnover.

[Ganeshan Kalyani]

The Centre is pushing for a vertical division of the assessee-base without a turnover threshold. Under this model, both states and the union government will have oversight powers on a certain fixed proportion based on the number of assessees, rather than the turnover.

[Ganeshan Kalyani]

Jaitley said that a committee is concurrently working on the “classification”exercise--a comprehensive list specifying the tax rate that each good and service will attract.

[Ganeshan Kalyani]

States will be compensated 100 percent loss for 5 years, the Finance Minister added.

[Ganeshan Kalyani]

V Manickam, Secretary General, Life Insurance Council, the umbrella body for all life insurers, said that the industry had sought a zero rate for insurance, which the government rejected.

[Ganeshan Kalyani]

Roopam Asthana, CEO, Liberty Videocon General Insurance said that the 10 percent discount that is being offered for digital premium payments for PSU general insurers should also be extended to other insurers. Source : money control

[Ganeshan Kalyani]

MS Mani, Indirect tax expert at Deloitte said that clearing CGST is a positive step in the GST process. Demonetisation and GST both are directed towards pushing unorganized sectors into organised, Mani added.

[Ganeshan Kalyani]

"We have cleared the Model GST Law, and all the procedural parts…it was discussed line by line…some contentious issues were kept on the side, primarily the issue of cross empowerment, and some issues of IGST,” Jammu and Kashmir Finance Minister Haseeb Drabu said.

[Ganeshan Kalyani]

The collections from the proposed cess on luxury or demerit supplies over and above the higher tax slab are estimated to be around ₹ 50,000 crore, out of which around ₹ 26,000 crore will be collected through clean environment cess, Adhia said, adding that the cess collections will be exclusively used by the Centre to compensate states.

[Ganeshan Kalyani]

The centre, on the other hand, is keen on equal division of all assesses between the two authorities to ensure single interface with any one authority in line with constitutional amendment. It has mooted the idea of crossempowerment wherein both authorities can work in tandem on key functions of audit and registration of new assesses

[Ganeshan Kalyani]

“Associated Chambers of Commerce and Industry of India has suggested removal of a provision in the revised Model GST Law dealing with anti-profiteering since it is open to misuse and subjective interpretation,” Assocham said in a statement here on Friday.

In the revised Model GST Law, the central government has been given powers to constitute an authority to examine whether input tax credits availed of by any registered taxable person, or the benefit of a reduction in the tax rate, has resulted in a commensurate reduction in the price of the goods or services supplied.

Also, the authority would have powers to impose penalties where the prices of goods or services supplied are not reduced. “While the intent of such a proposal cannot be questioned, the industry believes that it will be very difficult to implement and the costs of compliance and administration will significantly outweigh the risks that some businesses will seek to ‘profiteer’ from the change in indirect tax systems,” the statement added.

[Ganeshan Kalyani]

National Academy of Customs, Excise and Narcotics (NACEN) was given the humongous task of training government officers on Goods and Service Tax (GST). As per the latest data of NACEN , 44,259 field officers have been trained.

[Ganeshan Kalyani]

Telecom operators have made fresh representations to the finance ministry seeking a uniform rate across states with a cap of 15 per cent in the proposed goods and services tax (GST) regime.

[Ganeshan Kalyani]

"Telecom is an infrastructure service designated as an essential service under the Essential Services Maintenance Act, 1968, and is availed by masses," said Rajan Mathews, director- general of the Cellular Operators Association of India (COAI).

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.