a) The Finance Ministry has released the 'Model GST Law' on Tuesday, June 14, 2016. The draft of 'Integrated GST Bill, 2016' is
also released along with such Model GST laws. It also provides the framework
for levy and collection of CGST and SGST.
b) The Sale
of goods and services and all online purchases will attract Goods and Services
Tax (GST) at the first point of transaction.
c) The
government is hoping to get the Constitution Amendment Bill passed by
Parliament in the upcoming monsoon session. It plans to roll out GST from April
1, 2017 that will subsume excise, service tax and all local levies. Virtually
all states have supported the idea of GST except Tamil Nadu which has
"some reservations", Finance Minister Arun Jaitley said after the
meeting of Empowered Committee on the long awaited indirect tax reform.
d) The threshold
annual turnover for levy of the tax at INR 10 lakh. The limit will be INR 5
lakh in North East and Sikkim.
e) The
model GST law, which has 162 clauses and four schedules, has also suggested a
jail terms of up to five years and fine for violation of the provisions of the
statute. The law also provides for setting up of an Authority for Advance
Ruling, Consumer Welfare Fund, a 'Composition Levy' for entities with turnover
of INR 50 lakh and self assessment by a tax payer.
f) The
ecommerce companies will be required to file a statement to the tax department
providing details of all supplies made through the online platform.
KEY TAKEAWAYS FROM
MODEL GST LAW ARE GIVEN HEREUNDER:
1) THRESHOLD LIMIT
FOR REGISTRATION
The dealer is required
to take registration under this law if his aggregate turnover in a financial
year exceeds Rs.9 lakhs and in case of any North Eastern State the dealer required
to take registration if their turnover exceeds Rs.4 lakhs.
2) PLACE OF
REGISTRATION
The dealer has to take
registration in the State from where taxable goods or services are supplied.
3) MIGRATION OF
EXISTING TAXPAYERS TO GST
Every person already registered
under extant law will be issued a certificate of registration on a provisional
basis which shall be valid for period of 6 months and after furnishing of required
information, final registration certificate shall be granted by the
Central/State Government.
4) LEVY OF TAX
The person registered
under this law is liable to pay tax if his aggregate turnover in a financial
year exceeds Rs 10 lakhs. However, a dealer conducting business in any of the
North Eastern is required to pay tax if his aggregate turnover exceeds Rs. 5
lakhs.
5) TAXABLE EVENT
The taxable event under
GST regime will be supply of goods or services. Supply includes all forms of
supply of goods and/or services such as sale, transfer, barter, exchange,
license, rental, lease or disposal made or agreed to be made for a
consideration. It also includes importation of service, whether or not for a
consideration. A negative list has also been prescribed for transactions and
activities of Government and Local Authorities which shall be exempt from GST
levy, like activities of issuance of passport, visa, driving license, birth
certificate or death certificate, etc.
6) POINT OF TAXATION
CGST/SGST shall be
payable at the earliest of the following dates, namely:
(i) Date
on which the goods are removed for supply to the recipient (in case of movable
goods).
(ii) Date
on which the goods are made available to the recipient (in case of immovable
goods).
(iii) Date of issuing invoice by supplier;
or
(iv) Date of receipt of payment by supplier;
or
(v) Date
on which recipient shows the receipt of the goods in his books of account.
7) GST COMPLIANCE
RATING SCORE
Every taxable person
shall be assigned a GST compliance rating score based on his record of
compliance with the provisions of this Act. The GST compliance rating score
shall be updated at periodic intervals and intimated to the taxable person and
also placed in the public domain.
8) VALUATION RULES
Such Rules shall apply
to the supply of goods and/or services under the IGST/CGST/SGST Bill. Some of
the methods prescribed for valuation are given hereunder:
a) Transaction Value of goods and/or services
b) Transaction value of goods or services of
like kind
c) Computed Value Method in case where value
cannot be determined under method (b)
d) Residual Method in case where the value
cannot be determined under the computed value method
9) UTILIZATION OF
CREDIT:
Utilization of IGST: First be utilized towards payment of IGST then
remaining amount may be utilized towards the payment of CGST and SGST, in that
order.
Utilization of SGST: First be utilized towards payment of SGST and
the amount remaining may be utilized towards the payment of IGST.
Utilization of CGST: First be utilized towards payment of CGST and
the amount remaining may be utilized towards the payment of IGST.
Note:
a) The input tax credit
on account of CGST shall not be available for payment of SGST.
b) Under the Model GST
Law, a registered taxable person will be entitled to take credit of the amount
of cenvat credit/ Value Added Tax carried forward in a return furnished by him
in respect of the period ending with the day immediately preceeding the
appointed day.
c) As per Model GST
Law, a registered taxable person shall be entitled to take in his electronic
credit ledger/credit of the unavailed cenvat credit/ unavailed input tax credit
in respect of capital goods not carried forward in a return furnished by him
for the period ending with the day immediately preceding the appointed day.
d) If a person
registered under GST was not liable to be registered under the earlier law or
if he was manufacturing exempted goods under the earlier law which are not
taxable, then he will be allowed to take credit of eligible duties and taxes in
respect of inputs held in stocks or semi-finished/finished goods.
10) PAYMENT
Any tax, interest,
penalty, fee, etc., shall be paid via internet banking or by using credit/debit
cards or NEFT or RTGS. This amount shall be credited to the electronic cash
ledger of dealer.
11) TDS
The Central or a State
Government may mandate certain departments (viz, local authority, Govt.
agencies) to deduct tax at the rate of one percent on notified goods or
services, where the total value of such supply, under a contract, exceeds Rs 10
lakhs.
12) REFUND
A person can claim
refund of any tax and interest by making an application in that regard to the
prescribed officer of IGST/CGST/SGST. The application can be made before the
expiry of two years from the relevant date as may be prescribed. It has been
provided that the limitation of two years shall not apply where such tax or
interest or the amount has been paid under protest.
Every claim for refund
of any duty/tax and interest, if any, paid on such duty/tax or any other
amount, filed by any person before the appointed day, shall be disposed of in
accordance with the provisions of earlier law and any amount eventually
accruing to him shall be paid in cash. However, where any claim for refund is fully
or partially rejected, the amount so rejected shall lapse
13) RETURNS
Dealers shall be
required to furnish following returns
a) Monthly Return: Every registered taxable person shall have to
e-file a monthly return for inward and outward supplies of goods and/or
services, input tax credit availed, tax payable, tax paid and other particulars
within 20 days after the end of such month.
b) Return for Composition Scheme: Dealers paying tax under
composition scheme shall have to furnish a return for each quarter or part
thereof, electronically within 18 days after the end of such quarter.
c) TDS Return: Every dealer who is required to deduct tax at source
shall furnish a return electronically within 10 days after the end of month in
which deduction is made.
d) Return for Input Service Distributor: Every Input Service
Distributor shall file e-return for every calendar month or part thereof,
within 13 days after the end of such month.
e) First Return: Every registered taxable person paying CGST/SGST
on all intra-State supplies of goods and/or services shall have to furnish the
first return from the date on which he became liable to registration till the
end of the month in which the registration has been granted.
f) Annual return: Every registered taxable person shall have to
furnish an annual return for every financial year electronically on or before
the 31st day of December following the end of such financial year.
g) Final return: Every registered taxable person who applies for
cancellation of registration shall have to furnish a final return within three
months of the date of cancellation or date of cancellation order, whichever is
later, in a prescribed form.
