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.

[YAGAY and SUN]

In order to ensure that ITC can be used seamlessly for payment of taxes under the Central and the State Law, it has been provided that the ITC entitlement arising out of taxes paid under the Central Law can be cross-utilised for payment of taxes under the laws of the States or Union Territories. For example, a taxpayer can use the ITC accruing to him due to payment of IGST to discharge his tax liability of CGST / SGST / UTGST. Conversely, a taxpayer can use the ITC accruing to him on account of payment of CGST / SGST / UTGST, for payment of IGST. Such payments are to be made in a pre-defined order.

 

[YAGAY and SUN]

In the Services sector, the existing mechanism of Input Service Distributor (ISD) under the Service Tax law has been retained to allow the flow of ITC in respect of input services within a legal entity.

 

[YAGAY and SUN]

To prevent lock-in of capital of exporters, a provision has been made to refund, within seven days of filing the application for refund by an exporter, ninety percent of the claimed amount on a provisional basis.

[YAGAY and SUN]

In order to ensure a single administrative interface for taxpayers, a provision has been made to authorise officers of the tax administrations of the Centre and the States to exercise the powers conferred under all Acts.

[YAGAY and SUN]

An agriculturist, to the extent of supply of produce out of cultivation of land, would not be liable to take registration in the GST regime.

[YAGAY and SUN]

To provide certainty in tax matters, a provision has been made for an Advance Ruling Authority.

[YAGAY and SUN]

Exhaustive provisions for Appellate mechanism have been made.

[YAGAY and SUN]

Detailed transitional provisions have been provided to ensure migration of existing taxpayers and seamless transfer of unutilised ITC in the GST regime.

[YAGAY and SUN]

An anti-profiteering provision has been incorporated to ensure that the reduction of tax incidence is passed on to the consumers.

[YAGAY and SUN]

In order to mitigate any financial hardship being suffered by a taxpayer, Commissioner has been empowered to allow payment of taxes in instalments.

[YAGAY and SUN]

GST changes: Enabling provision for peak 40% rate

Council suggests change from present 28%, with Centre and states each empowered to have up to 14%.

[YAGAY and SUN]

The Goods and Services Tax (GST) Council is likely to get the power to raise the rate up to 40 per cent for any item in future, without the need for parliamentary approval. The proposed move has not gone down well with tax experts, who want the rates to be moderate even in the future.a

The Council, chaired by Finance Minister Arun Jaitley, has proposed an enabling provision in the GST Bills for a peak rate of 20 per cent each for Central GST (CGST) and state GST (SGST), from 14 per cent in the current draft, taking the limit to 40 per cent from 28 per cent.

[YAGAY and SUN]

Central Board of Excise & Customs (CBEC) has initiated the process of migration of its existing Central Excise/Service Tax assessees to GST and a 24x7 Helpdesk (Through Toll-Free number and Email) started for the purpose.

 

[YAGAY and SUN]

PAN is mandatory for migration to GST. Hence, if the existing Central Excise/Service Tax Registration Code does not have PAN, then PAN has to be obtained from Income Tax Department and the Registration details have to be updated in the ACES Portal www.aces.gov.in

 

[YAGAY and SUN]

GSTN also has a HELP DESK number: 0124-4688999 and GSTN email address is: [email protected] A Step-by-Step Taxpayers User guide for Migration is available at www.aces.gov.in and at www.cbec.gov.in

 

[YAGAY and SUN]

CBEC is also sending Emails/recorded telephonic messages to all registered CENTRAL EXCISE / SERVICE TAX assessees requesting them to migrate to GST. Outreach programmes such as Awareness Workshops/ Training for CENTRAL EXCISE/SERVICE TAX assessees are being organized all over India at the Commissionerate and Divisional offices of CBEC.

 

[YAGAY and SUN]

All existing CENTRAL EXCISE/SERVICE TAX assessees are requested to migrate as early as possible, latest by 31-03-2017.

[Ganeshan Kalyani]

Commerce and Industry minister Nirmala Sitharaman today said Amercian phone-maker Apple’s demand for tax incentives to set up a manufacturing unit in the country will have be looked at after the Goods and Services Tax (GST) is rolled out.

[Ganeshan Kalyani]

“GST will be coming soon. So, tax-related incentives demanded by Apple will have to be looked from a different angle,” Sitharaman told PTI on the sidelines of Chemexcil function here.

[Ganeshan Kalyani]

Goods and Services Tax (GST) is slated to unify good and services under one tax. This entails unification (re-organisation) of government tax office organisational structure.

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.