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]

Fiscal policy expert Parthasarathi Shome has said that the success of the goods and services tax (GST) hinges on the preparedness of businesses to comply with the new levy.

[Ganeshan Kalyani]

GST is meant to create a seamless common market and the Centre is hopeful of rolling out the new levy on July 1.

[Ganeshan Kalyani]

GST excludes real estate, electricity and alcohol besides petroleum products that will be brought under the net subsequently.

[Ganeshan Kalyani]

GST will be administered both by the Central and state tax authorities. So Shome underscores the need for proper training of the tax administration to ensure ease of doing business.

[Ganeshan Kalyani]

The Centre and states will be forced to make improvements in the GST design if taxpayers find it difficult to comply with the new regime.

[Ganeshan Kalyani]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) expects number of pending tax disputes would go down before implementation of Goods and Services Tax as it is disposing of cases quickly, an official said.

[Ganeshan Kalyani]

"Currently there are about 88,000 pending cases with the tribunal. We are trying to dispose the cases as quickly as possible given the constraints of members and funding," said President of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Justice Satish Chandra.

[Ganeshan Kalyani]

"We are disposing close to 100 cases per day and we are very serious about reducing the number of pending cases," said Chandra at an event organised by Merchants' Chamber of Commerce and Industry.

[Ganeshan Kalyani]

Passage of all the legislations would pave the way for introduction of Goods and Services Tax (GST) from July 1.

[Ganeshan Kalyani]

While a composite GST will be levied on sale of goods or rendering of services after the new indirect tax regime is rolled out, the revenue would be split between the Centre and the states in almost equal proportion.

[Ganeshan Kalyani]

While the C-GST will give powers to the Centre to levy GST on goods and services after Union levies like excise and service tax are subsumed, the I-GST is to be levied on inter-state supplies.

[Ganeshan Kalyani]

The S-GST will allow states to levy the tax after VAT and other state levies are subsumed in the GST.

[Ganeshan Kalyani]

The Council has already finalised a four-tier tax structure of 5, 12, 18 and 28 per cent, but the model GST law has kept the peak rate at 40 per cent (20 per cent to be levied by the Centre and an equal amount by the states) to obviate the need for approaching Parliament for any change in rates in future.

[Ganeshan Kalyani]

The cess will be levied on top of peak rate on selected demerit goods like luxury cars for creation of a corpus that will be used for compensating states for any loss of revenue from GST implementation in the first five years.

[Ganeshan Kalyani]

Prime Minister Narendra Modi emphasised the importance of clearing the landmark reform, the national Goods and Services Tax (GST), which the government wants to roll out on July 1.

[Ganeshan Kalyani]

The long awaited GST will replace a slew of central and state levies, transforming Asia's third-largest economy into a single market for the first time.

[Ganeshan Kalyani]

Proposed tax rates range from five to 28 per cent, with 12 per cent and 18 per cent being the standard rates.

[Ganeshan Kalyani]

It has not been decided yet which tax rates will apply to which categories of goods.

[Ganeshan Kalyani]

The three bills that need to be cleared will be introduced as Money Bills - which means that once they are cleared by the Lower House or Lok Sabha, the Rajya Sabha or Upper House can only recommend changes, not insist on them.

[Ganeshan Kalyani]

The GST is expected to make business simpler and reduce business transaction costs.

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.