GST – Overview :
Concept of GST is not new to the world. In some countries it is termed as VAT. Around 160 countries all over the world has implemented GST or VAT in some form or other. GST or VAT is a destination based taxation on goods and services. France is the first country to implement GST. Canada has Dual GST and now India is going to implement the same w.e.f. April 1st 2017.
As GST is a destination based consumption tax it is for sure that the tax burden has to be borne by the ultimate consumer of the goods & services.
SOME INSIGHTS ON GOODS AND SERVICES TAX:
Goods and Services Tax is a topic of interest in recent times in India. Many people do not have any idea about Goods and Services Tax, though lot other have developed knowing more and more about it.
GST is now reality
With the passing of Constitutional Amendment Bill, 2014 (122nd Amendment), popularly known as “GST Bill” by Rajya Sabha on August 01, 2016, Central Government is moving at an amazing speed to implement GST w.e.f. April 01, 2017. GST is now a reality. Now it seems real and achievable. Rajya Sabha is the Upper House of Parliament in India.
What is Goods and Services Tax :
Goods and Services Tax is a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. After 1947, this is the biggest tax reforms in Independent India. There is a prediction that, with the implementation of GST law, reputation of our country will enhance globally; inflation and tax evasion will be reduced.
SOME OF THE NEW AMENDMENTS IN THE GST BILL :
- Scrapping of 1 percent (1%) additional tax on inter-state supply of goods.
- Compensation to States for up to 5 (five) years on revenue loss on account of implementation of GST.
- Re-designing of framework for distribution of CGST (Central GST) and IGST (Integrated GST) that will be collected by Centre, amongst the Centre and States.
- IGST collected by the Centre and apportioned to States will not form part of Consolidated Fund of India.
- The GST Council shall establish a standing mechanism to adjudicate any dispute arising out of its recommendations.
WHAT ARE THE OLD AMENDMENTS ALREADY MADE TO THE GST BILL?
- To replace the current indirect tax regime consisting of multiplicity of taxes with a single tax.
- Conferring concurrent taxing powers on the Centre and States for levying GST on every transaction of supply of goods or services or both.
- Subsuming of various Central indirect taxes and levies.
- Subsuming of State Value Added Tax (VAT) / Sales Tax.
- Dispensing with the concept of ‘declared goods of special importance’.
- Levy of integrated GST on Inter-State transactions of goods and services.
- Conferring concurrent power upon Parliament and the State Legislatures to make laws governing GST.
- Coverage of all goods and services, except alcoholic liquor for human consumption, under GST.
- In case of petroleum and petroleum products, it has been provided that these goods shall not be subject to the levy of GST till a date notified on the recommendation of the GST Council.
- The Union Cabinet has approved setting up of GST Council as per Article 279A of the amended Constitution and its secretariat with office at New Delhi. The GST Council will be responsible for deciding various issues including the GST tax rate and functioning of GST regime.
IMPORTANT TO CONSUMERS (after implementation of GST) :
a) Telephone bills to cost more.
b) Logistics, consumer goods, auto to benefit.
c) Buyers to get benefit.
d) Jewellery to be costlier.
RATIFICATION OF GST BILL BY STATES (in chronological order) :
- Himachal Pradesh
- Madhya Pradesh
GST Rates on Goods & Services will be based on Revenue Neutral Rate (RNR) :-
—There will be four rates-
- Merit rate for essential goods and services;
- Standard rate for goods and services in general;
- Special rate for precious metals; and
- NIL rates.
Current Rates of GST in some other countries are:
- Australia – 10%
- France – 19.60%
- Canada – 5%
- Germany – 19%
- Japan – 8%
- Singapore – 7%
- Sweden – 25%
- New Zealand – 15%
- Pakistan – 17%
LIABILITY TO BE REGISTERED UNDER GST (SCHEDULE III) :
- Every supplier shall be liable to be registered under GST Act in the State from where he makes a taxable supply of goods and / or services if his aggregate turnover in a financial year exceeds Rs. 9 (Nine) Lakh.
> The threshold limit of Rs. 4 (Four) lakh will apply only if the taxable person conducts his business in any of the North Eastern States including Sikkim.
> North Eastern States include Seven Sister States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland & Tripura and the Himalayan State of Sikkim.
> The supplier shall not be liable to registration if his aggregate turnover consists of only goods and / or services which are not liable to tax under this Act.
The GST Council agreed on to set the threshold exemption limit to Rs. 20.00 lakhs for all States except North-Eastern States where this limit will be Rs. 10.00 lakhs.
- Every person who is already registered or holds a license under an earlier law like Excise Law, VAT Law, CST Law, etc., shall be liable to be registered under this Act with effect from the appointed day.
- The following categories of persons shall be compulsorily required to be registered under Goods and Services Tax Act without any threshold limits: (Limit of Rs. 9 lakh / 4 lakh is not available)
1) the persons making any Inter-State taxable supply;
2) casual taxable persons;
3) the persons who pay tax under reverse charge;
4) non-resident taxable persons;
5) the persons who deduct tax under Section 37;
6) the persons who supply goods and / or services on behalf of other registered taxable persons whether as an agent or otherwise;
7) input service distributor;
8) the persons who supply goods and / or services, other than branded services, through electronic commerce operator;
9) every electronic commerce operator;
10) an aggregator who supplies services under his brand name or his trade name, irrespective of the threshold limit of 9 lakh / 4 lakh; and
11) such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the GST Council.
Time limit for registration is within 30 (Thirty) days from the date of liable to get register arises.
SOME IMPORTANT POINTS REGARDING GST REGISTRATION :
(1) Every person who is liable to be registered under Schedule III of this Act shall apply for registration in every such State in which he so liable within 30 (thirty) days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed.
(2) A person having multiple business verticals in a State may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed.
(3) There is a provision for a person to get himself registered voluntarily.
(4) Every person shall have a Permanent Account Number (PAN) in order to be eligible for grant of registration.
(5) A non-resident taxable person may be granted registration on the basis of any other document as may be prescribed.
(6) The registration or the Unique Identity Number (UIN) shall be granted, or as the case may be, rejected after due verification in the manner and within such period as may be prescribed.
(7) The proper officer shall not reject the application for registration or the Unique Identity Number without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.
(8) A certificate of registration shall be issued in the prescribed form with effective date as may be prescribed.
(9) A registration or a Unique Identity Number shall be deemed to have been granted after the period, if no deficiency has been communicated to the applicant by the proper officer within that period.
(10) Any rejection of application for registration or the Unique Identity Number under the CGST Act /SGST Act shall be deemed to be a rejection of application for registration under the SGST Act / CGST Act.
(11) The grant of registration or the Unique Identity Number under the CGST Act / SGST Act shall be deemed to be a grant of registration or Unique Identity Number under SGST Act / CGST Act.
MORE WILL FOLLOW———–
This is a compilation work done for the benefit of the readers. In the mean time, if you have found this article useful, please don’t forget to share it with others on Facebook, LinkedIn, Twitter, Pinterest, StumbleUpon, Reddit & Google+.