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]

In GST Era, The CBEC Will be Renamed As Central Board of Indirect Taxes and Customs (CBIC)

[Ganeshan Kalyani]

Input Service Distributor (ISD) means an office of the supplier of goods or services or both which receives tax invoices towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax (CGST), State tax (SGST)/ Union territory tax (UTGST) or integrated tax (IGST) paid on the said services to a supplier of taxable goods or services or both having same PAN as that of the ISD.

[Ganeshan Kalyani]

An ISD is required to obtain a separate registration. The threshold limit of registration is not applicable to ISD. The registration of ISD under the existing regime (i.e. under Service Tax) would not be migrated in GST regime. All the existing ISDs will be required to obtain fresh registration under new regime in case they want to operate as an ISD.

[Ganeshan Kalyani]

The distribution of credit would be done through a document especially designed for this purpose. The said document would contain the amount of input tax credit being distributed.

[Ganeshan Kalyani]

The input tax credit of input services shall be distributed only amongst those registered persons who have used the input services in the course or furtherance of business.

The common credit used by all the recipients can be distributed by ISD on pro rata basis i.e. based on the turnover of each recipient to the aggregate turnover of all the recipients to which credit is distributed.

[Ganeshan Kalyani]

Valuation rules set guidelines as to what will be the value on which GST is required to be paid on goods and services.

[Ganeshan Kalyani]

“It has been observed in the past that calculation of tax on a transaction becomes very difficult when a pure agent is involved. It should be noted that previously there was no mention made of taxation on such transactions and why it has been reintroduced is a mystery to us because it makes things more complex, especially for service providers,” M.S. Mani, senior director at Deloitte Haskins Sells LLP said.

[Ganeshan Kalyani]

Existing tax payers are required to migrate to Goods and Services Tax (GST) regime. This GST enrolment activation drive kicked off in November for VAT registrants and in January for Service Tax and Excise registrants. Deadline to migrate is set at 30th April 2017.

[Ganeshan Kalyani]

In terms of most number of tax payers who have migrated to GST, the state that tops the list is – Karnataka with 92.83% conversion. 2nd in list is Maharashtra with 88.01% followed by Gujarat 87.44%.

[Ganeshan Kalyani]

Taxpayers who are registered under Service Tax Act but not registered under State VAT stand at 30.1% and Taxpayers who are registered under Central Excise Act but not registered under State VAT at a very low 13.15%

[Ganeshan Kalyani]

With goods and services tax (GST) now close to reality and the government aiming for rollout by July 1, Former Finance minister, P Chidambaram thinks October 1 would be the best time to rollout GST.

[Ganeshan Kalyani]

In an exclusive interview to CNBC-TV18, Former Finance minister, P Chidambaram says people need more time to adjust to change in the tax regime. ?It's undesirable to set such a tight roll-out target for GST,? adding that it is also impractical.

[Ganeshan Kalyani]

The Good and Services Tax (GST) Bills are far from perfect and are not ready for implementation yet, according to former Finance Minister P Chidambaram. Any rush to roll out GST by July 1 could prove harmful, he cautioned while batting for an October implementation of the new tax regime.

[Ganeshan Kalyani]

Chidambaram said the Bills still have some ?imperfections?, including the multiplicity of rates, compliance provisions and a lack of clarity on compoundable offence.

"I think people should be given enough time to adjust. The second aspect is that the GSTN has to be proved in a trial. The Finance Minister spoke of 30 billion invoices a day. If that number if right, it is a humongous number. Is the GSTN capable of processing all that without glitches? I think the GSTN should be allowed to run it on a trial basis for a month or two before you actually launch GST," he told The Financial Express.

[Ganeshan Kalyani]

Chidambaram also raised questions over the 14 percent revenue figure for states that the government has assured. If this 14 percent has to be achieved, many goods could fall under the higher rate of 28 percent.

[Ganeshan Kalyani]

The GST Bill have an anti-profiteering provision which ensures reduction of tax incidence is passed on to the customers. ?There is no definition of anti-profiteering, they are going to set up an authority, that authority will devise its own procedure. It?s clearly open to abuse,? Chidambaram told the paper.

Also, there are separate bodies that deal with cases of profiteering already. In this case, why should an income tax official be given the right to take decision, which ideally should have be in hands, he asked.

[KASTURI SETHI]

There is every possibility that GST will be implemented from 1.9.2017 or 1.10.17.

[Ganeshan Kalyani]

As India Inc. awaits implementation of long awaited revamped indirect tax regime i.e Goods and Services Tax (GST), it fears that 3 months is too short a time to prepare for it.

[Ganeshan Kalyani]

Industry experts opine that 3 months is less time to get ready for GST. Post GST Council’s meeting on 31st March – GST Bills and Rules were released which had some key changes from the draft earlier released by government.

[Ganeshan Kalyani]

“The rates are now the big remaining issue,” said Sudhir Kapadia, national tax leader at EY in India. “If they get decided too late, then in all fairness the government should consider an extension of time.”

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.