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]

The Revenue Secretary Dr Adhia had reviewed the progress on enrollment of existing taxpayers. As on 30th April 2017, when Phase-1 of enrollment was closed, 60.5 lakh taxpayers out of 84 lakh had enrolled. The enrollment window was said to be re-opened for 15 days from 1st June,2017 to give another opportunity to taxpayers to enroll.

[Ganeshan Kalyani]

The Constitution (101 amendment) Act, 2016 provides that every decision of the GST Council shall be taken at a meeting by a majority of not less than 3/4th of the weighted votes of the Members present and voting. The vote of the Central Government shall have a weightage of 1/3rd of the votes cast and the votes of all the State Governments taken together shall have a weightage of 2/3rd of the total votes cast in that meeting. One half of the total number of members of the GST Council shall constitute the quorum at its meetings.

[Ganeshan Kalyani]

Revenue Secretary Hasmukh Adhia is hopeful of a smooth transition to the GST regime and says it will help domestic firms to become more competitive apart from streamlining the taxation for all business activities.

[Ganeshan Kalyani]

The all important and most powerful body-GST Council in recent past released its logo. Arun Goyal, additional secretary, GST Council tweeted to inform about the logo launch. GST Council was formed on 12th September 2016.

[Ganeshan Kalyani]

The Finance Ministry will be setting up a new dedicated team to dispose of the cases related to tax issues pending before the Central Board of Excise and Customs (CBEC) before the implementation of the Goods and Services Tax (GST) regime. As per the ministry sources, a separate Legacy Commissionarate will be established at the zonal level, which will be headed by Commissioner level officer whose responsibility will be to resolve the cases which are pending before the department.

[Ganeshan Kalyani]

Migration of existing assessees to GST is a challengeable issue. 30.03.2017 was fixed as the deadline for migration to GST by the existing assessees. It is reported that only 70% of them migrating as of April 30 deadline. Migration of service tax and Central excise assessees was also low at 43.73% and 24% respectively.

[Ganeshan Kalyani]

The onus lies on the Centre and states to ensure a smooth transition to the goods and services tax, which is the biggest indirect tax reform to create a unified market. Malaysia, which introduced GST two years ago, educated businesses and customers, but that did not suffice. India should be prepared better for the switch over to avoid any choas. So, rules must be clear, and the tax administration well-equipped to handle GST. Ideally, the new levy should be rolled out three months after the publication of GST rules to make transition smooth for businesses.

[Ganeshan Kalyani]

Testing of the GSTN is under progress.

[Ganeshan Kalyani]

The provision of input tax credit in the upcoming GST tax regime, scheduled to roll out from July 1 this year, will be beneficial for the construction and infrastructure sector, according to a study.

[Ganeshan Kalyani]

In case of real estate ,prima facie, the GST rate does appear higher than the current taxation regime, the availability of input tax credit under the GST will neutralise the impact of higher taxes, Icra said in its report on Impact of GST on Corporate Sector.

[Ganeshan Kalyani]

"Under GST, the composite supply of works contracts fall under the 18 per cent GST rate with full input tax credit (ITC). While prima facie, the GST rate does appear higher than the current taxation regime, in which majority of construction contracts fall under the nature of work contracts (which is overlapping between supply of services and supply of goods) and a combination of service tax and VAT is applicable," Icra said.

[Ganeshan Kalyani]

Declaration of valid GSTIN in Customs documents (BE/SB) would be mandatory w.e.f. 0000 hrs of 01-07-2017, the likely implementation date of GST, to avail IGST credit on Imports or GST refund on exports. The declared GSTIN would be validated for correct IEC/ PAN linkage.

Accordingly, during GSTIN registration, please ensure declaration of correct IEC and the same PAN [earlier registered with DGFT for getting IEC]. In case of any difference in PAN declared for GSTIN vis-à-vis the PAN declared for IEC registration, amendment of PAN in IEC may be undertaken immediately.

All concerned may make use of the special drive by GSTN from 01-06-2017 to 15-06-2017 for updation of IEC in GSTIN.

[Ganeshan Kalyani]

GST Council is meeting for the 15th time today to finalise pending draft rules namely transition, accounts and records, return filing, advance ruling etc.

GST Council will also finalise taxes to be levied on six commodities, including gold, textiles and biscuits, as the Centre and states gear up to roll out the new indirect tax regime from July 1.

[Ganeshan Kalyani]

Goods and Services Tax (GST) is expected to roll out from July 1, 2017. With not much time left for roll out, the Indian Banks’ Association (IBA) has informed a Parliamentary panel that lenders are not yet geared up for implementation of the new indirect tax regime.

[Ganeshan Kalyani]

“Since the GST will be operational from July 1, 2017, banks have to make lot of changes in their systems and other procedures. The preparedness of all banks for implementation of GST on July 1, 2017, is a question mark,” the IBA has conveyed to the Parliamentary Standing Committee on Finance.

[Ganeshan Kalyani]

Banks are one of the few sectors which have to make humongous changes in their system infrastructure and thus, getting ready for GST is not an average ask by any stretch of imagination.

[Ganeshan Kalyani]

The speculation of government postponing GST roll out to Sept 1, 2017 will find some fuel with this update. There have been concerns over readiness of GSTN (GST’s IT backbone). It remains to be seen if GST will get implemented from July 1 or not.

GST is expected to boost the GDP growth by about 2 percentage points and impose a critical watch on tax evasion.

[Ganeshan Kalyani]

GST is expected to boost the GDP growth by about 2 percentage points and impose a critical watch on tax evasion.

[Ganeshan Kalyani]

The all powerful GST Council after its meeting yesterday cleared revised rules for GST returns. It also released formats of returns to be filed under GST. (Download GST Return formats)

[Ganeshan Kalyani]

Under GST, primarily a tax payer is required to file following:
1. GSTR 1- Details of outwards supplies of goods or services
2. GSTR 2- Details of inward supplies of goods or services
3. GSTR 3- Monthly return

Tax payers under composition scheme is required to file quarterly return under GSTR 4.

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.