Wednesday 28 September 2016
Tuesday 27 September 2016
GST – Draft Rules and formats
Draft Rules and formats have been issued by Central Board of Excise and Custom for Registration, Payment and Invoice.
Monday 26 September 2016
Threshold limit of 10 lakhs to be applicable in respect to following states:
1. Arunchal Pradesh
2. Assam
3. Jammu & Kashmir
4. Manipur
5. Meghalya
6. Mizoram
7. Nagaland
8. Sikkim
9.Tripura
10. Himachal Pradesh
11. Uttarakhand
2. Assam
3. Jammu & Kashmir
4. Manipur
5. Meghalya
6. Mizoram
7. Nagaland
8. Sikkim
9.Tripura
10. Himachal Pradesh
11. Uttarakhand
If a taxpayer has a principal place of business in states other than mentioned above, the threshold limit will be 20 lakhs even if any branch/warehouse is situated in specified states.
For Ex: A taxpayer's principal place of business is in Delhi and it also has a branch/warehouse in Himachal Pradesh, then his threshold limit will be 20 lakhs
Saturday 24 September 2016
GST Council Meeting
1. GST threshold limit to be kept at 10 lakhs for hill area states and NE as against 20 lakh in other states.
2. All cesses to be subsumed under GST.
3. Separate Law for compensating states on any loss due to GST. Base year for compensation to be FY 2015-16.
4. Cross Empowerment model for assessees having annual turnover exceeding 1.5 crores.
5. Only 5% of the taxpayers to be covered under audit as against 70-80% under various state laws.
6. State to be compensated if its revenue under GST falls short of the average tax earnings in the best three years out of five years.
7. Next meeting of council on September 30.
8. States to monitor the taxpayers with annual turnover of less than 1.5 crores. Although the service tax assessees to remain with center only
Wednesday 21 September 2016
Tuesday 20 September 2016
GST Council to decide on cess treatment
Cess, including the Krishi Kalyan Cess and the Swachh Bharat Cess, might not be subsumed
under the goods and services tax (GST).
The proposed indirect tax regime would subsume several taxes such as central excise duty,
services tax, additional customs duty and state- level value added tax. But, finance ministry
officials said, the Constitution amendment Act on GST does not state how a cess is to be treated
under the new regime.
The Act leaves it to the GST Council to decide which cess may be subsumed in GST. “While certain taxes like entry tax, Octroi and others will be automatically subsumed under the GST, the Constitution amendment Bill does not mention treatment of cesses,” said a government official. “So, there is a possibility that Krishi Kalyan and Swachh Bharat cess are not subsumed, unless the GST Council decides to discontinue these. The call will have to be taken up by the GST Council now.” In the current financial year, the government has budgeted Rs.10,000 crore as revenue from Swachh Bharat Cess, Rs. 5,000 crore from Krishi Kalyan Cess and Rs. 3,000 crore from Infrastructure Cess. Satya Poddar of EY said the Centre can retain these cess, if it wants to.
Explaining this, he said surcharge is a tax on tax and hence would go once entries containing the principal taxes are deleted. However, a cess is not a tax and it does not go into the Consolidated Fund of India, he explained. Cess is imposed for specific purpose such as education, cleanliness etc. The Constitution amendment Act on GST omit entry 92 C of the Seventh Schedule under which the union government imposes services tax. Similarly, it amends entry 84 of the Seventh Schedule under which the union government levies excise duty to keep only some petroleum and tobacco and its products under it. So, any surcharges imposed on these would automatically go.
However, the Act does not amend relevant entries of cess, including entry 97 of the Seventh Schedule, which deals with residuary powers of the Union government. So, if the Centre decides they can retain these.” The statement and objects of the Act also talk about subsuming cess into GST. “ Hence there is inconsistency in the Act and its statement and objects,” Poddar added. A government official said if the taxes continue, these would be levied on GST, instead of only services or goods. “These cesses were put in place by the government for a very specific purpose, whether it is infra cess, Krishi Kalyan or Swachh Bharat,” he said.
Talks are on with the ministries concerned on a compensation mechanism if these cess are discontinued. “We are talking to agriculture ministry, drinking water and sanitisation ministry and others to get their views.” The Centre does not share cess with states, while all taxes under GST will have to be shared with the states. In 2014- 15, Rs. 75,232 crore came in as cess and surcharge, or 8.32 per cent of total tax revenue, after adjusting for states’ share. As petroleum is expected to be taxed at zero under the GST regime initially, the Centre will continue with the cess on crude oil and other related additional duties.
(Business Standard)
The Act leaves it to the GST Council to decide which cess may be subsumed in GST. “While certain taxes like entry tax, Octroi and others will be automatically subsumed under the GST, the Constitution amendment Bill does not mention treatment of cesses,” said a government official. “So, there is a possibility that Krishi Kalyan and Swachh Bharat cess are not subsumed, unless the GST Council decides to discontinue these. The call will have to be taken up by the GST Council now.” In the current financial year, the government has budgeted Rs.10,000 crore as revenue from Swachh Bharat Cess, Rs. 5,000 crore from Krishi Kalyan Cess and Rs. 3,000 crore from Infrastructure Cess. Satya Poddar of EY said the Centre can retain these cess, if it wants to.
Explaining this, he said surcharge is a tax on tax and hence would go once entries containing the principal taxes are deleted. However, a cess is not a tax and it does not go into the Consolidated Fund of India, he explained. Cess is imposed for specific purpose such as education, cleanliness etc. The Constitution amendment Act on GST omit entry 92 C of the Seventh Schedule under which the union government imposes services tax. Similarly, it amends entry 84 of the Seventh Schedule under which the union government levies excise duty to keep only some petroleum and tobacco and its products under it. So, any surcharges imposed on these would automatically go.
However, the Act does not amend relevant entries of cess, including entry 97 of the Seventh Schedule, which deals with residuary powers of the Union government. So, if the Centre decides they can retain these.” The statement and objects of the Act also talk about subsuming cess into GST. “ Hence there is inconsistency in the Act and its statement and objects,” Poddar added. A government official said if the taxes continue, these would be levied on GST, instead of only services or goods. “These cesses were put in place by the government for a very specific purpose, whether it is infra cess, Krishi Kalyan or Swachh Bharat,” he said.
Talks are on with the ministries concerned on a compensation mechanism if these cess are discontinued. “We are talking to agriculture ministry, drinking water and sanitisation ministry and others to get their views.” The Centre does not share cess with states, while all taxes under GST will have to be shared with the states. In 2014- 15, Rs. 75,232 crore came in as cess and surcharge, or 8.32 per cent of total tax revenue, after adjusting for states’ share. As petroleum is expected to be taxed at zero under the GST regime initially, the Centre will continue with the cess on crude oil and other related additional duties.
(Business Standard)
FinMin clears legal cloud on GST Act
The finance ministry on Monday clarified there was no legal problem in the notification of the
Constitution amendment Act on the goods and services.
On Sunday, speculations were rife that the government might have to re- notify the Act as
existing wording would not allow it to impose excise duty on goods.
“DoR (the department of revenue) examined the validity and implications of notifications dated
10 and 16 September, with respect to existing taxes imposed by the Union and states. There is no
legal infirmity in these notifications,” Revenue Secretary Hasmukh Adhia said in his tweets. He
added the law department had confirmed there appeared to be no legal requirement.
In a notification, the finance ministry had constituted the GST Council September 10.
Sources said the confusion arose from a second notification, where it notified provisions of 19
sections under the Act, to come into force from September 16. Among these notifications, most
of the complications were interpreted to have come from provisions of Section 17 of the Act.
The provisions said in entry 84 of the seventh schedule of the Constitution, under which the
government imposes central excise duty, petroleum and tobacco would replace other items. This
was meant to assume that the government would lose its power to impose the excise duty on
other goods since the provision has come into force from September 16.
Pratik Jain, leader, indirect tax, PWC, said the notification had, in fact, created some issues.
On Sunday, Adhia had tweeted that some questions were raised about the notifications issued
recently in respect of GST Constitution Amendment Act. The finance ministry, he had tweeted,
would clarify the correct legal position on Monday and issue amendments if need be.
(Business Standard)
(Business Standard)
Wednesday 14 September 2016
Provision Related to Job Work U/S 43A of Model GST Law
1) Registered Taxable Person Can send taxable goods to Job Worker without Payment of Tax, provided a permission is taken In advance from the Commissioner.
2) One Job Worker can further send the good to another job worker without payment of Tax.
3) The Good after Processing can be brought back at Principle place without payment of tax. And finally tax will be paid when such goods are further supplied by the Principle.
4) The goods can also be supplied to customer from Job Worker Place on payment of Tax and in case of export without payment of Tax.
It must be noted that goods can be supplied directly from the place of business of job worker by the principal *only when the principal declares the place of business of the job worker as his additional place of business*. However, the exceptions are -
(a) If job worker is registered under Section 19;
(b) The principal is engaged in the supply of notified goods.
It must be noted that goods can be supplied directly from the place of business of job worker by the principal *only when the principal declares the place of business of the job worker as his additional place of business*. However, the exceptions are -
(a) If job worker is registered under Section 19;
(b) The principal is engaged in the supply of notified goods.
Tuesday 13 September 2016
Cabinet approves creation of GST Council and its Secretariat
The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has approved setting up of GST Council and setting up its Secretariat as per the following details:
(a) Creation of the GST Council as per Article 279A of the amended Constitution;
(b) Creation of the GST Council Secretariat, with its office at New Delhi;
(c) Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council;
(d) Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-voting) to all proceedings of the GST Council;
(e) Create one post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the Government of India), and four posts of Commissioner in the GST Council Secretariat (at the level of Joint Secretary to the Government of India).
The Cabinet also decided to provide for adequate funds for meeting the recurring and non-recurring expenses of the GST Council Secretariat, the entire cost for which shall be borne by the Central Government. The GST Council Secretariat shall be manned by officers taken on deputation from both the Central and State Governments.
The steps required in the direction of implementation of GST are being taken ahead of the schedule so far.
The Finance Minister has also decided to call the first meeting of the GST Council on 22nd and 23rd September 2016 in New Delhi.
Background:
The Constitution (One Hundred and Twenty-second Amendment) Bill, 2016, for introduction of Goods and Services tax in the country was accorded assent by the President on 8th September, 2016, and the same has been notified as the Constitution (One Hundred and First Amendment) Act, 2016. As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12th September, 2016 was issued on 10th September, 2016.
As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members: -
a) Union Finance Minister - Chairperson
b) The Union Minister of State,
in-charge of Revenue of finance - Member
c) The Minister In-charge of finance or
taxation or any other Minister nominated
by each State Government - Members
b) The Union Minister of State,
in-charge of Revenue of finance - Member
c) The Minister In-charge of finance or
taxation or any other Minister nominated
by each State Government - Members
As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.
*****
AKT/VBA/AK
Friday 9 September 2016
Salient features of the proposed Indian GST system
--The power to make laws in respect of supplies in the course of inter-state trade or commerce will be vested only in the Union Government. States will have the right to levy GST on intra-state transactions, including on services.
--The Centre will levy IGST on inter-state supply of goods and services. Import of goods will be subject to basic customs duty and IGST.
--GST is defined as any tax on supply of goods and services other than on alcohol for human consumption.
--Central taxes such as Central Excise duty, Additional Excise duty, Service tax, Additional Custom duty and Special Additional duty as well as state-level taxes such as VAT or sales tax, Central Sales tax, Entertainment tax, Entry tax, Purchase tax, Luxury tax and Octroi will subsume in GST.
--Petroleum and petroleum products, i.e., crude, high speed diesel, motor spirit, aviation turbine fuel and natural gas, shall be subject to GST - date to be notified by the GST Council.
--Provision will be made for removing imposition of entry tax /Octroi across India.
--Entertainment tax,, imposed by states on movie, theatre, etc., will be subsumed in GST, but taxes on entertainment at panchayat, municipality or district level will continue.
--GST may be levied on the sale of newspapers and advertisements. This would mean substantial incremental revenues for the Government.
--Stamp duties, typically imposed on legal agreements by states, will continue to be levied.
--Administration of GST will be the responsibility of the GST Council, which will be the apex policy making body for GST. Members of GST Council comprise Central and State ministers in charge of the finance portfolio.
--The Centre will levy IGST on inter-state supply of goods and services. Import of goods will be subject to basic customs duty and IGST.
--GST is defined as any tax on supply of goods and services other than on alcohol for human consumption.
--Central taxes such as Central Excise duty, Additional Excise duty, Service tax, Additional Custom duty and Special Additional duty as well as state-level taxes such as VAT or sales tax, Central Sales tax, Entertainment tax, Entry tax, Purchase tax, Luxury tax and Octroi will subsume in GST.
--Petroleum and petroleum products, i.e., crude, high speed diesel, motor spirit, aviation turbine fuel and natural gas, shall be subject to GST - date to be notified by the GST Council.
--Provision will be made for removing imposition of entry tax /Octroi across India.
--Entertainment tax,, imposed by states on movie, theatre, etc., will be subsumed in GST, but taxes on entertainment at panchayat, municipality or district level will continue.
--GST may be levied on the sale of newspapers and advertisements. This would mean substantial incremental revenues for the Government.
--Stamp duties, typically imposed on legal agreements by states, will continue to be levied.
--Administration of GST will be the responsibility of the GST Council, which will be the apex policy making body for GST. Members of GST Council comprise Central and State ministers in charge of the finance portfolio.
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