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]

Under the current regime, businesses have the option to file manual challans. However, the new law requires them to comply via the online mode only. Every supply to a registered person needs to be reported through the GSTR-1 form. In addition, GSTR-2 and GSTR-3, which are inward supply details and monthly GST return form, respectively, are required to be filed every month on the GST portal. Also, companies will be required to submit additional returns specific to their specific businesses under the GST regime.

[Ganeshan Kalyani]

Under the GST Law, a normal taxpayer will be required to furnish three monthly returns and one annual return. There are also provisions for separate returns for taxpayers registered under the composition scheme and those registered as Input Service Distributors.

[Ganeshan Kalyani]

Returns under GST are to be filed digitally through a common portal at https://www.gst.gov.in. The portal is maintained by GSTN, a non-government, private limited company promoted by the Central and state governments with the specific mandate to build the IT infrastructure and the services required for implementing GST.

[Ganeshan Kalyani]

Industry is waiting with bated breath for the draft GST rates to be announced. This is because of a variety of reasons. Most of the businesses in India firm up their budgets for the next financial year well before the beginning of the new financial year.

[Ganeshan Kalyani]

The Model GST Law would compel taxpayers to pass on the benefits arising out of lowering of GST rate or increase in input tax credits to customers.

[Ganeshan Kalyani]

Training of staff, changing IT systems, increased compliance costs, etc, are the key incremental expenses incurred/to be incurred by businesses in embracing GST.

[Ganeshan Kalyani]

India would be implementing an imperfect GST, wherein crucial sectors like oil & gas, electricity, have been left out of the GST net and they have to continue with the current indirect tax structure that we currently have.

[Ganeshan Kalyani]

The compliance prescribed under the GST regime requires every taxable person making a supply to upload transaction wise details to the GST network and input tax credits are available to purchaser only where the tax as reported by the supplier is actually deposited.

[Ganeshan Kalyani]

All businesses - manufacturers, distributors, retailers - will have to register on the GST network once the regulation comes to force. All the transactions of a company and thereby the revenues and profits would be captured by the GST system.

[Ganeshan Kalyani]

Experts point out that there are basically two types of fraud committed by businessmen - first is unilateral, where under invoicing or over invoicing is done only by one of the two people transacting. And then there is bilateral. Some experts said while unilateral frauds would drop drastically, bilateral ones may be difficult to detect even under GST framework.

[Ganeshan Kalyani]

Goods and Services Tax (GST) is finally expected to be rolled out from July 1, 2017.

[Ganeshan Kalyani]

With GST, India will become a seamless unified market without any difference between inter-state or intra-state sales.

[Ganeshan Kalyani]

Independent analyst estimates suggest that GST implementation can reduce overall logistics cost by around 30-40 per cent, thereby leading to an overall saving of about 0.3-0.4 per cent of GDP.

[Ganeshan Kalyani]

“GST is a once in a lifetime opportunity for the government to remove anomalies in tobacco taxation in India and bring a fair relief to the tobacco farmers without compromising on its tobacco control goals,” said Murali Babu, General Secretary, FAIFA in a statement.

[Ganeshan Kalyani]

“GST is an opportunity to remove tax arbitrage in tobacco taxation and disincentivise illegal and contraband products which have been flooding the Indian market. GST is also an opportunity to remove discrimination among various classes of tobacco farmers. There should not be any discrimination among cigarette, bidi, chewing tobacco farmers,” said Babu.

[Ganeshan Kalyani]

Even as Amazon India prepares for the much-awaited Goods and Services Tax (GST) roll-out on July 1, it is still worried about the proposed 1 per cent Tax Collection at Source (TCS) on e-commerce players.

Industry players feel the TCS would impact the working capital of small sellers and lead to massive job loss.

[Ganeshan Kalyani]

Many banks and financial institutions may be in for a lot of trouble as they could just see the complexity in paying taxes increase under the incoming goods and services tax (GST).

[Ganeshan Kalyani]

The Confederation of All-India Traders (CAIT) raised their concern over the GST clause which links availability of input tax credit to payment of tax by their suppliers.

[Ganeshan Kalyani]

Under the GST law, input credit against taxes paid by the purchaser can be availed of only if the seller deposits the tax. In the event of non-compliance at the end of seller, it is the purchaser who will be denied input credit.

[Ganeshan Kalyani]

“We are happy that the GST Council has cleared the way for the new law to get implemented. The trading community and other small businesses will benefit from the single tax regime undoubtedly,” Praveen Khandelwal, CAIT secretary general said.

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.