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]

Fitment of rates - The rate committee would finalise rates of different goods and services under GST and submit the same before the GST Council.

[Ganeshan Kalyani]

The Constitution Amendment Bill for Goods and Services Tax (GST) was approved by The President of India post its passage in the Parliament (Rajya Sabha on 3 August 2016 and Lok Sabha on 8 August 2016).

[Ganeshan Kalyani]

The Government of India is committed to replace all the indirect taxes levied on goods and services by the Centre and States and implement GST by April 2017.

[Ganeshan Kalyani]

With GST, it is anticipated that the tax base will be comprehensive, as virtually all goods and services will be taxable, with minimum exemptions.

[Ganeshan Kalyani]

GST will be a game changing reform for the Indian economy by creating a common Indian market and reducing the cascading effect of tax on the cost of goods and services.

[Ganeshan Kalyani]

GST will impact the tax structure, tax incidence, tax computation, tax payment, compliance, credit utilization and reporting, leading to a complete overhaul of the current indirect tax system.

[Ganeshan Kalyani]

GST will have a far-reaching impact on almost all the aspects of the business operations in the country, for instance, pricing of products and services, supply chain optimization, IT, accounting, and tax compliance systems.

[Ganeshan Kalyani]

GST would bring in significant change in doing business in India. Advocacy for best practices, gearing up for changes in processes, training teams and developing IT systems for being GST compliant are the key areas to be assessed.

[Ganeshan Kalyani]

The Government is committed to introduce GST by April 2017.

[Ganeshan Kalyani]

The Government is committed to introduce GST by July 2017.

[Ganeshan Kalyani]

Tax payers need to be GST compliant to be able to test system changes in time. Depending on the operating geographies, size and sector, the changes would be substantial and may require proactive planning with a time-bound action plan.

[Ganeshan Kalyani]

In order to prepare for the implementation of GST, companies need to understand GST policy development and its implications for scenario planning and transition roadmap preparation.

[Ganeshan Kalyani]

GST is a value-added tax levied at all points in the supply chain with credit allowed for any tax paid on input acquired for use in making the supply. It would apply to both goods and services in a comprehensive manner, with exemptions restricted to a minimum.

[Ganeshan Kalyani]

In keeping with the federal structure of India, it is proposed that GST will be levied concurrently by the Centre (CGST) and the states (SGST).

[Ganeshan Kalyani]

It is expected that the base and other essential design features would be common between CGST and SGST across SGSTs for individual states.

[Ganeshan Kalyani]

Both CGST and SGST would be levied on the basis of the destination principle.

[Ganeshan Kalyani]

Exports would be zero-rated, and imports would attract tax in the same manner as domestic goods and services.

[Ganeshan Kalyani]

As India gets ready for its biggest tax reform in decades, industries such as ecommerce, banking and insurance, logistics and others will get another chance to resolve any niggles they have with the goods and services tax (GST), which the government wants to put in place by July 1.

[Ganeshan Kalyani]

Ahead of the introduction of GST-related legislation in Parliament this week, the government has set up 10 groups to iron out sectoral issues faced by trade and industry to ensure a smooth transition to the new regime with just a little over three months to go.

[Ganeshan Kalyani]

In a chat with ET Now, Suresh Narayanan, Chairman & MD, Nestle India, says despite temporary blips, GST will usher in economies of scale and efficiencies, says Narayanan.

He also said, while you might have some initial teething issues which is bound to be there in a fiscal change of this magnitude, I believe it can unleash economies of scale and economies of efficiencies that can be quite significant in the context of the country. And in such a case, these kind of temporary aberrations would be seen as blips.

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.