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GST CONCEPT & STATUS As on 01st May 2017

Goods and Services Tax - GST - Dated:- 3-5-2017 - Introduction The introduction of Goods and Services Tax (GST) would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax, it would mitigate cascading or double taxation in a major way and pave the way for a common national market. From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods .....

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osed that GST would be introduced from 1st April, 2010. The Empowered Committee of State Finance Ministers (EC) which had formulated the design of State VAT was requested to come up with a roadmap and structure for the GST. Joint Working Groups of officials having representatives of the States as well as the Centre were set up to examine various aspects of the GST and draw up reports specifically on exemptions and thresholds, taxation of services and taxation of inter-State supplies. Based on di .....

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tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) while the States have the powers to levy tax on sale of goods. In case of inter-State sales, the Centre has the power to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the originating States. As for services, it is the Centre alone that is empowered to levy service tax. Since the States are not empowered to levy any tax on the sale or purchase of goods in .....

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GST. 3.1 The assignment of concurrent jurisdiction to the Centre and the States for the levy of GST would require a unique institutional mechanism that would ensure that decisions about the structure, design and operation of GST are taken jointly by the two. For it to be effective, such a mechanism also needs to have Constitutional force. Constitution (One Hundred and First) Amendment Act, 2016 4. To address all these and other issues, the Constitution (122nd Amendment) Bill was introduced in t .....

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ommerce (including imports) in goods or services. The Central Government will have the power to levy excise duty in addition to the GST on tobacco and tobacco products. The tax on supply of five specified petroleum products namely crude, high speed diesel, petrol, ATF and natural gas would be levied from a later date on the recommendation of GST Council. 4.1 A Goods and Services Tax Council (GSTC) shall be constituted comprising the Union Finance Minister, the Minister of State (Revenue) and the .....

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red for majority because Centre would have one-third weightage of the total votes cast and all the States taken together would have two-third of weightage of the total votes cast. 4.2 The Constitution Amendment Bill was passed by the Lok Sabha in May, 2015. The Bill was referred to the Select Committee of Rajya Sabha on 12.05.2015. The Select Committee had submitted its Report on the Bill on 22.07.2015. The Bill with certain amendments was finally passed in the Rajya Sabha and thereafter by Lok .....

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GSTC: (i) The threshold exemption limit would be ₹ 20 lakh. For special category States enumerated in article 279A of the Constitution, , threshold exemption limit has been fixed at ₹ 10 lakh. (ii) Composition threshold shall be ₹ 50 lakh. Composition scheme shall not be available to inter-State suppliers, service providers (except restaurant service) and specified category of manufacturers. (iii) Existing tax incentive schemes of Central or State governments may be continued .....

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lementation of GST. The Council has asked the Committee of officers to fit various goods and services in these four slabs keeping in view the present incidence of tax. (v) The five laws namely CGST Law, UTGST Law, IGST Law, SGST Law and GST Compensation Law have been recommended. (vi) In order to ensure single interface, all administrative control over 90% of taxpayers having turnover below ₹ 1.5 crore would vest with State tax administration and over 10% with the Central tax administratio .....

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Four rules on input tax credit, composition levy, transitional provisions and valuation have been recommended. Further five Rules on registration, invoice, payments, returns and refund, finalized in September, 2016 and as amended in light of the GST bills introduced in the Parliament, have also been recommended. Salient Features of GST 6. The salient features of GST are asunder: (i) GST would be applicable on supply of goods or services as against the present concept of tax on the manufacture o .....

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itories without legislature would levy Union territory GST (UTGST). (iv) An Integrated GST (IGST) would be levied on inter-State supply (including stock transfers) of goods or services. This would be collected by the Centre so that the credit chain is not disrupted. (v) Import of goods would be treated as inter-State supplies and would be subject to IGST in addition to the applicable customs duties. (vi) Import of services would be treated as inter-State supplies and would be subject to IGST. (v .....

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Special Additional Duty of Customs (SAD); g) Service Tax; h) Cesses and surcharges insofar as they relate to supply of goods or services. (ix) State taxes that would be subsumed within the GST are: a) State VAT; b) Central Sales Tax; c) Purchase Tax; d) Luxury Tax; e) Entry Tax (All forms); f) Entertainment Tax (except those levied by the local bodies); g) Taxes on advertisements; h) Taxes on lotteries, betting and gambling; i) State cesses and surcharges insofar as they relate to supply of goo .....

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20 lakh (Rs. 10 lakh for special category States as specified in article 279A of the Constitution) would be exempt from GST. A compounding option (i.e. to pay tax at a flat rate without credits) would be available to small taxpayers (including to specified category of manufacturers and service providers) having an annual turnover of up to ₹ 50 lakh. The threshold exemption and compounding scheme would be optional. (xiv) The list of exempted goods and services would be kept to a minimum and .....

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tilized in the following manner: a) ITC of CGST allowed for payment of CGST & IGST in that order; b) ITC of SGST allowed for payment of SGST & IGST in that order; c) ITC of UTGST allowed for payment of UTGST & IGST in that order; d) ITC of IGST allowed for payment of IGST, CGST & SGST/UTGST in that order. ITC of CGST cannot be used for payment of SGST/UTGST and vice versa. (xvii) Accounts would be settled periodically between the Centre and the State to ensure that the credit of .....

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n respect of taxes paid on any supply of goods or services or both used or intended to be used in the course or furtherance of business. (xix) Electronic filing of returns by different class of persons at different cutoff dates. (xx) Various modes of payment of tax available to the taxpayer including internet banking, debit/ credit card and National Electronic Funds Transfer (NEFT) / Real Time Gross Settlement (RTGS). (xxi) Obligation on certain persons including government departments, local au .....

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ng two per cent. (2%) of net value of taxable supplies, out of payments to suppliers supplying goods or services through their portals. (xxiv) System of self-assessment of the taxes payable by the registered person. (xxv) Audit of registered persons to be conducted in order to verify compliance with the provisions of Act. (xxvi) Limitation period for raising demand is three (3) years from the due date of filing of annual return or from the date of erroneous refund for raising demand for short-pa .....

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ovable property of defaulting taxable person. (xxix) Officers would have restrictive powers of inspection, search, seizure and arrest. (xxx) Goods and Services Tax Appellate Tribunal would be constituted by the Central Government for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority. States would adopt the provisions relating to Tribunal in respective SGST Act. (xxxi) Provision for penalties for contravention of the provision of the proposed legisla .....

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existing taxpayers to GST regime. Benefits of GST 7. (A) Make in India (i) Will help to create a unified common national market for India, giving a boost to Foreign investment and Make in India campaign; (ii) Will prevent cascading of taxes as Input Tax Credit will be available across goods and services at every stage of supply; (iii) Harmonization of laws, procedures and rates of tax; (iv) It will boost export and manufacturing activity, generate more employment and thus increase GDP with gain .....

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reduce the incentive for evasion by eliminating rate arbitrage between neighboring States and that between intra and inter-State sales; (ix) Average tax burden on companies is likely to come down which is expected to reduce prices and lower prices mean more consumption, which in turn means more production thereby helping in the growth of the industries . This will create India as a Manufacturing hub . (B) Ease of Doing Business (i) Simpler tax regime with fewer exemptions; (ii) Reductions in the .....

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xpayer and the tax administration; (vi) Will improve environment of compliance as all returns to be filed online, input credits to be verified online, encouraging more paper trail of transactions; (vii) Common procedures for registration of taxpayers, refund of taxes, uniform formats of tax return, common tax base, common system of classification of goods and services will lend greater certainty to taxation system; (viii) Timelines to be provided for important activities like obtaining registrat .....

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entities will cost less for the consumers; (iii) Average tax burden on companies is likely to come down which is expected to reduce prices and lower prices mean more consumption. Goods and Services Tax Network 8. Goods and Services Tax Network (GSTN) has been set up by the Government as a private company under erstwhile Section 25 of the Companies Act, 1956. GSTN would provide three front end services to the taxpayers namely registration, payment and return. Besides providing these services to .....

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already appointed M/s Infosys as Managed Service Provider (MSP) at a total project cost of around ₹ 1380 crores for a period of five years. 8.1 GSTN has selected 34 IT, ITeS and financial technology companies, to be called GST Suvidha Providers (GSPs). GSPs would develop applications to be used by taxpayers for interacting with the GSTN. Other Legislative Requirements 9. Four Laws namely CGST Act, UTGST Act, IGST Act and GST (Compensation to States) Act have been passed by the Parliament a .....

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re and all the States participate simultaneously. Role of CBEC 10. CBEC is playing an active role in the drafting of GST law and procedures, particularly the CGST and IGST law, which will be exclusive domain of the Centre. This apart, the CBEC would need to prepare, in advance, for meeting the implementation challenges, which are quite formidable. The number of taxpayers is likely to go up significantly. The existing IT infrastructure of CBEC would also need to be suitably scaled up to handle su .....

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felt that the organizational structure and deployment of human resources needed a review for smooth and effective implementation of GST. A Working Group has after extensive deliberations and studies, submitted its Report which has been approved by the Government. 10.2 Augmentation of human resources would be necessary to handle large taxpayers base in GST scattered across the length and breadth of the country. Capacity building, particularly in the field of Accountancy and Information Technolog .....

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