Posts Tagged ‘Goods and Services Tax’

‘One nation one tax’, ‘one nation one election’, why not ‘one nation one retirement age’?

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‘One nation one tax’, ‘one nation one election’, why not ‘one nation one retirement age’?

Retirement age?

Our country has replaced its numerous Union and state taxes with the Goods and Services Tax (GST), designed to unify the country into a single market. In other words, we may call, the GST brought ‘one nation one tax‘ regime in India.

Prime Minister Narendra Modi wants simultaneous elections to Lok Sabha and all state assemblies, under the banner of ‘one nation one election’ citing reasons of massive expenditure; diversion of security and civil staff from primary duties; impact on governance due to the model code of conduct and disruption to normal public life.

Prime Minister Narendra Modi’s pitch for ‘one nation one election’ has been backed by the opposition parties especially Samajwadi Party Chief Akhilesh Yadav.

However, The Election Commission (EC) has suggested “one year one election” as an alternative to Modi’s pitch for “one nation one election”.

So,’one nation one retirement age': Why not government employees? Why not now?

The retirement age is different for different states. The retirement age of government employees of Telangana, Tamil Nadu, Goa, Arunachal pradesh, Maharastra, Jammu and Kashmir, Mizoram, Manipur, Punjab, Himachal Pradesh, Haryana and Jharkhand is 58 years.

About the rest of states except Madhya Pradesh and Chhattisgarh- government employees retire at 60, but existing Kerala government employees who have to retire on completion of 56 years, as the increase in the superannuation age 60, is cover only new comers, who joined service from the fiscal 2014-15.

The Central government had already raised the retirement age to 60 years in 1998.

However, Madhya Pradesh government has recently been increased the retirement age to 62 years from 60 for its employees and Chhattisgarh government already increased the retirement age to 62 years from 60 for its employees in 2013.

The World Economic Forum said that retirement age must rise as lifespans increase.

The Forum also said that employees should continue working until 70 in nations such as Australia, Canada, China, India, Japan, Netherlands, United Kingdom and United States.

A parliamentary committee of India in 2014 also recommended that retirement age should be increased from 60 years to 65 years, citing the increase in ageing population and their productivity.

While aging populations and longer lifespans have forced to raise retirement ages but the retirement comes India quite early, when government employees are required to hang up their boots.

According to ‘one nation one tax’ and ‘one nation one election’, the central and state governments will require to implement ‘one nation one retirement age’ for central and state government employees.

“So, the central government is seriously thinking of enhancing the retirement age of the its employees to 62 to cover the cost of ageing population and existing employees productivity,” a government official told

“Keeping in mind the national balance if the central government increases retirement age to 62 years, then states should also do the same,” he added.

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Be the first to comment - What do you think?  Posted by admin - June 7, 2018 at 9:32 pm

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Finmin to initiate Budget exercise next week

Finmin to initiate Budget exercise next week

Work on India’s first post-GST Union Budget 2018-19 will start next week with the finance ministry issuing timelines for different processes that will culminate with its presentation in February.
Finance Minister Arun Jaitley arrived at the parliament on Wednesday for Budget.

It may also be the current government’s last full-fledged Budget as general elections are due in 2019.

Even though independent India’s biggest tax reform of GST was implemented from July 1, the Budget for 2017-18 (April- March), had followed the practice of tax revenue projections under the heads of customs duty, central excise and service tax alongside direct tax numbers.

With excise duty and service tax being subsumed in the Goods and Services Tax (GST), the classifications will undergo change, an official said.

While a new classification for revenues to be accrued from GST will be included in the Budget for next fiscal, for the current year two sets of accounting may be presented – one for actual accruals during April-June for excise, customs and service tax, and the other for July-March period for GST and customs duty.

The official said that since the GST rates are decided by a GST Council, headed by Union Finance Minister and comprising of representatives of all states, the Budget for 2018-19 will not have any tax proposals concerning excise and service tax levies.

Only proposals for changes in direct taxes – both personal income tax and corporate tax, besides customs duty – are likely to be presented in the Budget along with new schemes and programmes of the government.

This will be Finance Minister Arun Jaitley’s 5th Budget in a row.

It would also be the last full Budget of the BJP-led NDA government before the 2019 General Elections. As per practice a vote-on-account or approval for essential government spending for a limited period is taken in the election year and a full-fledged budget presented by the new government.

While P Chidambaram had presented the previous UPA government’s vote-on-account in February 2014, Jaitley had presented a full budget in July that year.

The official said the finance ministry will next week issue the Budget circular and start consultations with other ministries from October for Revised Estimates (RE) of expenditure for the current fiscal.

The Budget Circular contains the timelines for submission of information of budget requirements to the Ministry of Finance along with prescribed formats.

The ministries will have to provide the actual money spent in 2016-17 along with the budget estimates and Revised Estimates for current fiscal.

Along with this, they have to give the Budget they are expecting for 2018-19 as well, the official added.

Scrapping a colonial-era tradition of presenting the Budget at the end of February, Jaitley had for the first time presented the annual accounts on February 1, 2017.

With the preponement of Budget, ministries are now allocated their budgeted funds from the start of the financial year beginning April.

This gives government departments more leeway to spend as well as allow companies time to adapt to business and taxation plans.

Previously, when the Budget was presented at the end of February, the three-stage Parliament approval process used to get completed some time in mid-May, weeks ahead of onset of monsoon rains.

This meant government departments would start spending on projects only from August-end or September, after the monsoon season ended.

Besides advancing the presentation date, the Budget scrapped the Plan and non-Plan distinction and merged the Railway Budget with it, ending a nearly century-long practice.
PTI

Be the first to comment - What do you think?  Posted by admin - September 10, 2017 at 10:17 pm

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GST: Cabinet approves promulgation of the Goods and Services Tax (Compensation to States) Ordinance, 2017

GST: Cabinet approves promulgation of the Goods and Services Tax (Compensation to States) Ordinance, 2017

The Union Cabinet chaired by Prime Minister Shri Narendra Modi has given its approval to the proposal of the Finance Ministry to promulgate an ordinance to suitably amend the Goods and Services Tax (Compensation to States) Act, 2017.

The approval would allow to increase the maximum rate at which the Compensation Cess can be levied from 15% to 25% on:

a) motor vehicles for transport of not more than thirteen persons, including the driver [falling under sub-headings 870210, 8702 20, 8702 30 or 8702 90]; and

b) motor vehicles falling under headings 8703.

The GST Council, in its meeting held in August 2017, taking into consideration the fact that post introduction of GST, the total incidence on motor vehicles [GST+ Compensation Cess] has come down vis-a-vis pre-GST total tax, incidence, and had recommended increase in the maximum rate at which Compensation Cess can be levied on motor vehicles falling under headings 8702 and 8703 from 15% to 25%.

The issue regarding the increase in effective rate of Compensation Cess on motor vehicles will be examined by the GST Council in due course.

PIB

Be the first to comment - What do you think?  Posted by admin - August 30, 2017 at 4:41 pm

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FREQUENTLY ASKED QUESTIONS IMPLEMENTATION OF GST

CSD : FAQ on Implementation of GST

FREQUENTLY ASKED QUESTIONS IMPLEMENTATION OF GST

ISSUES CONCERNING DEPOTS

Q. What will be the format of Purchase Orders in GST Regime?

A. Purchase orders in the existing VAT regime will continue after removing the columns such as VAT columns VAT, CST etc and by adding the following fields :-

(a) GSTN of respective depot

(b) GST rate applicable for the index.

(c) HSN Code for each index etc.,

Q. To whom to approach for obtaining GSTIN of suppliers, HSN Code & GST rate for each index?

A. Stores Branches have been collecting the GSTIN details of each Company and their Distribution Centres, HSN Code and GST rate for each index of all the Companies. The data will be shared in

due course of time.

Q. What is going to be the Unique Identification Number (UIN) of CSD for refund mechanism?

A. The clarification in this regard is awaited from Ministry of Finance. Applicability of UIN for obtaining 50% GST refund will be clarified at the earliest.

Q. Will 50% exemption of GST rates apply on sale of non CSD items at URC?

A. Ministry of Finance vide Notification No 06/2017 & 07/2017 both dated 28 June 2017 has exempted sale / supply of goods by URCs to end customers. No URC is entitled to sell non CSD items in the same premises including INCS. Hence, non CSD items sold by any URCs to end customers are not eligible for exemption of GST rates extended by Govt of India.

Q. What will be the format of Form 2 and Return Form 2?

A. These formats under the VAT regime should continue in the GST regime after removing fields such as VAT, CST Octroi etc and by adding the following fields :-

(a) HSN code by each index

(b) GST rate of each index

(c) GSTN of supplier as well as CSD depot and etc.

Q. Are Debit Note and Credit Note raised on companies required to be uploaded on GST network?

A. The depots will raise the debit notes and credit notes against the Companies towards short supply of goods, damaged goods and life expired goods which will be further uploaded to GST network clearly quoting the corresponding purchase invoice details. However, the debit notes and credit notes for non-supply, late supply, part supply, non-extension on CPS etc are not to be uploaded to GST network since these are raised towards the penalties and not related to the quantum of goods supplied.

Q. Change of HSN Code and GST rate?

A. HSN Code and GST rate is being mentioned in all circulars sent to suppliers with copy to all depots. For any changes/revision from time to time depots should maintain proper record and update regularly on receipt of circulars from HO.

Q. What is to be done in case of difference between GSTIN of firm circulated by HO and as annotated on invoice?

A. Though HO is complying data for GSTIN of each firm and will be shared later on, the correct GSTIN data will be available on bills received from firms and same data be complied by each depot depending upon its source of supply and regular checked/updated for each bill so received so that there is no mismatch in returns.

Q. Is sale of stores to URC located outside State will attract CST in GST Regime?

A. CST charged in VAT regime is subsumed in GST. Hence, interstate sale made by CSD Depots to URCs or any inter Depot transfer will not attract CST. The sales to URCs by CSD Depots are outside the scopes of GST. Hence, CSD Depots have to sale URCs situated within the state or outside the State at whole sale rates issued by F&A Branch. However, liquor is outside the purview of GST, hence sale of liquor made to interstate URCs will be loaded with CST.

Q. Is separate Notifications by State Govt towards SGST is required?

A. A letter duly signed by GM (CSD) addressed to State Govt. will be forwarded for passing of Notification by State Govt. for extending exemption of 50% SGST. Depots are to liaise with concerned authorities for issue of notification in this regard.

Q. What is the mechanism for filing of GST returns?

A. GST returns to be filed by depots can be uploaded to GST network through excel files. Hence, all the depots to record their purchases and sales meticulously in the existing automated environment viz ICSDS Phase-I, Fox Pro etc., and to prepare excel files at the end of each month and file the following returns through their respective Chartered Accountants (CAs).

GSTR-I

(Clearly showing sales to URCs as business to customers)

GSTR-2

GSTR-3

Q. Is filing of GST returns through Chartered Accountants mandatory?

A. Filing of GST Returns through Chartered Accountants is not mandatory. Depots can file all the GST Returns after preparing the same in Excel File. However, due to limitation of expertise at Depots and new system related to GST, it is advisable to file GST Returns through Chartered Accountants. This procedure will be akin to the procedure followed in the VAT regime. The Competent Authority has stopped hiring of Tax Consultants/Advocates who are not a qualified Chartered Accountant, as defined in Companies Act & CA Act.

Q. Is 50% exemption of GST applicable to CSD Staff at Depots?

A. 50% of GST rates exemption is extended to all the supplies by CSD to its authorized customers and to the URCs as per the Notification No. 07/2017 dated 28 June 2017 issued by Ministry of Finance. CSD Staff are authorized customers to purchase goods at CSD Depots as per existing procedure. Hence, there should not be any doubt on eligibility of 50% exemption of GST rates to the sales made to CSD Staff at depots.

Q. Is 50% exemption of GST applicable for Defence Civilians for purchase of AFD-I items like TV, Refrigerator, Two Wheelers and Four Wheelers?

A. 50% GST rate exemption has been extended to all the authorized customers vide Notification No. 07/2017 dated 28 June 2017. Hence all the authorized customers who purchase AFD-I items like TV, Refrigerator, Two Wheelers and Four Wheelers etc. including Defence Civilians will be authorized for 50% exemption in GST rates. Hence, rates applicable to Armed Forces Personnel will be equally applicable to all eligible authorized customers.

Q. Is QD to be calculated without 50% of GST rates inclusive in selling prices?

A. 50% of GST will be the cost to CSD after filing/accounting the exemption operation of 50% GST rate. Hence, it becomes cost for CSD and not any tax element. Hence, it should be considered for computation of QD. However, the same is being sent for clarification to CDA (CSD). After receipt of clarification, a separate instruction will be issued to all the Depots.

Q. What is billing mechanism for AFD-I items in GST regime?

A. AFD-I suppliers are to bill to the respective Depots by adding corresponding GST rate (100%). CSD Depot will make payment towards AFD-I items supplied by the companies including 100% GST amount. Further, Depots have to claim refund of 50% of GST rate by filing necessary GST Returns.

Q. Which account is to be used for GST refund purpose?

A. “Main Account” of Depot will be used for the purpose of GST Refund.

Q. Can HSN Code be same for two or more than two items?

A. HSN Code can be same for similar category of items.

Q. How to resolve different HSN Code intimated by Store Branch Circulars and HSN Code mentioned in the suppliers bill?

A. Different HSN Code as intimated by circulars issued by Store Branches and as mentioned in suppliers Bill can be resolved by referring to concerned Store Branch directly. However, HSN Code with dot in between as happened in case of HUL (3401.11.90) should be accepted since it is different way of presentation of HSN Code.

Q. Should HSN Code with 4 digit to be accepted?

A. As per notification No. 12/2017 dated 28 June 2017 issued by Ministry of Finance, a company with annual turnover in the preceding Financial Year of more than one crore fifty lakhs and up to 5 crores shall mention first 2 digits of HSN Code and annual turnover of more than 05 crores shall mention first 4 digits of HSN Code. Thus, HSN code with first 4 digits can also be accepted though the Store Branch circulars convey 8 digits.

Q. Can firm raise Debit/Credit Notes on CSD?

A. Yes. The firms can raise Debit/Credit Notes on CSD. Debit/Credit Notes raised by the firm will be on account of correcting errors in invoice amount due to factors such as short/excess supply, wrong pricing etc. Such Debit/Credit Notes will be part of GST returns filing in GSTR-I uploaded by firms.

Q. Can one Invoice contain items having different GST rates?

A. An invoice can contain items having different GST rates say 5%, 12%, 18% and 28%. An invoice should not be rejected on the grounds that items falling under different GST rates have been included in one invoice. However, companies have been advised to segregate the supplies to feature each category of GST rate at one place for easy accounting at Depots vide letter No. 6/F&A/C&C/GST/6335 dated 27 July 2017.

Q. Rejection of supplies from companies due to mismatch of invoice formats from the format issued by F&A Branch vide letter No.6/F&A/C&C/419 dated 16 June 2017

A. Complaints have been received from many companies stating that Depots are refusing delivery of goods against the orders on the pretext that invoice format are not matching with format circulated by F&A Branch vide above quoted letter. In this regard it is once again clarified that invoice format circulated by this office was “PURELY ADVISORY IN NATURE” covering small scale sole proprietorship to HUL. Hence, if the invoice is meeting basic requirements of GST law such as GSTIN, GST rate, CGST, SGST, IGST, and etc., all the depots are to accept the goods.

ISSUES CONCERNING SUPPLIERS

Q. What is going to be the Unique Identification Number (UIN) of CSD for refund mechanism?

A. The clarification in this regard is awaited from Ministry of Finance. Applicability of UIN for obtaining 50% GST refund will be clarified at the earliest.

Q. Are Debit Note and Credit Note raised on companies required to be uploaded on GST network?

A. The depots will raise the debit notes and credit notes against the Companies towards short supply of goods, damaged goods and life expired goods which will be further uploaded to GST network clearly quoting the corresponding purchase invoice details. However, the debit notes and credit notes for non-supply, late supply, part supply, non-extension on CPS etc are not to be uploaded to GST network since these are raised towards the penalties and not related to the quantum of goods supplied.

Q. What is to be done in case of difference between GSTIN of firm circulated by HO and as annotated on invoice?

A. Though HO is complying data for GSTIN of each firm and will be shared later on, the correct GSTIN data will be available on bills received from firms and same data be complied by each depot depending upon its source of supply and regular checked/updated for each bill so received so that there is no mismatch in returns.

Q. What is billing mechanism for AFD-I items in GST regime?

A. AFD-I suppliers are to bill to the respective Depots by adding corresponding GST rate (100%). CSD Depot will make payment towards AFD-I items supplied by the companies including 100% GST amount. Further, Depots have to claim refund of 50% of GST rate by filing necessary GST Returns.

Q. Should HSN Code with 4 digit to be accepted?

A. As per notification No. 12/2017 dated 28 June 2017 issued by Ministry of Finance, a company with annual turnover in the preceding Financial Year of more than one crore fifty lakhs and up to 5 crores shall mention first 2 digits of HSN Code and annual turnover of more than 05 crores shall mention first 4 digits of HSN Code. Thus, HSN code with first 4 digits can also be accepted though the Store Branch circulars convey 8 digits.

Q. Can firm raise Debit/Credit Notes on CSD?

A. Yes. The firms can raise Debit/Credit Notes on CSD. Debit/Credit Notes raised by the firm will be on account of correcting errors in invoice amount due to factors such as short/excess supply,

wrong pricing etc. Such Debit/Credit Notes will be part of GST returns filing in GSTR-I uploaded by firms.

Q. Can one Invoice contain items having different GST rates?

A. An invoice can contain items having different GST rates say 5%, 12%, 18% and 28%. An invoice should not be rejected on the grounds that items falling under different GST rates have been included in one invoice. However, companies have been advised to segregate the supplies to feature each category of GST rate at one place for easy accounting at Depots vide letter No. 6/F&A/C&C/GST/dated 27 July 2017.

Q. Rejection of supplies from companies due to mismatch of invoice formats from the format issued by F&A Branch vide letter No.6/F&A/C&C/419 dated 16 June 2017

A. Complaints have been received from many companies stating that Depots are refusing delivery of goods against the orders on the pretext that invoice format are not matching with format circulated by F&A Branch vide above quoted letter. In this regard it is once again clarified that invoice format circulated by this office was “PURELY ADVISORY IN NATURE” covering small scale sole proprietorship to HUL. Hence, if the invoice is meeting basic requirements of GST law such as GSTIN, GST rate, CGST, SGST, IGST, and etc., all the depots are to accept the goods.

ISSUES CONCERNING URCs

Q. Will 50% exemption of GST rates apply on sale of non CSD items at URC?

A. Ministry of Finance vide Notification No 06/2017 & 07/2017 both dated 28 June 2017 has exempted sale / supply of goods by URCs to end customers. No URC is entitled to sell non CSD items in the same premises including INCS. Hence, non CSD items sold by any URCs to end customers are not eligible for exemption of GST rates extended by Govt of India.

Q. Is sale of stores to URC located outside State will attract CST in GST Regime?

A. CST charged in VAT regime is subsumed in GST. Hence, interstate sale made by CSD Depots to URCs or any inter Depot transfer will not attract CST. The sales to URCs by CSD Depots are outside the scopes of GST. Hence, CSD Depots have to sale URCs situated within the state or outside the State at whole sale rates issued by F&A Branch. However, liquor is outside the purview of GST, hence sale of liquor made to interstate URCs will be loaded with CST.

Q. Is QD to be calculated without 50% of GST rates inclusive in selling prices?

A. 50% of GST will be the cost to CSD after filing/accounting the exemption operation of 50% GST rate. Hence, it becomes cost for CSD and not any tax element. Hence, it should be considered for computation of QD. However, the same is being sent for clarification to CDA (CSD). After receipt of clarification, a separate instruction will be issued to all the Depots.

Authority: www.csdindia.gov.in

Be the first to comment - What do you think?  Posted by admin - July 31, 2017 at 11:35 am

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Cabinet Secretary reviews GST, asks departments to keep a lid on price rise

Cabinet Secretary reviews GST, asks departments to keep a lid on price rise

New Delhi: Three days into GST regime, Cabinet Secretary P K Sinha today asked all ministries and departments to ensure that their is no shortage of goods and prices of essential items are kept under check.
Sinha held a review meeting to take stock of situation post implementation of the new tax regime, and departments have been asked to ensure that retailers, dealers/shopkeepers should display a price list under GST of items sold by them.

“Government has asked all the departments to ensure that their is no shortage of products and consumer items in order to keep a check on prices. Special emphasis was laid on to keep prices of essential commodities under check,” a finance ministry statement said.

Sinha stressed that benefits of GST should be passed on to consumers, which would in turn also keep inflation under control.

“Various machines used by dealers, retailers for computerised billing should be calibrated at the earliest as per the new GST rates,” he added.

A four tier Goods and Services Tax (GST) – 5, 12, 18 and 28 per cent – has been rolled out from July 1. Essential items like salt, unpacked food grains, cereals have been kept a zero rated to ensure that there is no price rise.

Sinha also asked departments to be ready to deal with queries of their stakeholders.

“In order to do so, officers of every ministry should equip themselves and have full knowledge of the details relating to GST concerning their respective Ministry,” he said.

A similar review meeting will be held every week to keep a close watch on GST rollout.

Sinha has also asked all the departments/ministry to provide all the relevant information relating to GST concerning their ministry/department, including GST rates on their respective websites.

He asked the secretaries to get more detailed feedback and in-depth details of the field from their respective stakeholders, officers and consumers at large after GST implementation.

The officers should be fully ready to deal with it so that there is quick response to any situation, the statement said.

Sinha asked them to launch campaigns to make their stakeholders and consumers fully aware about GST related matters concerning their respective ministry/department.

Apart from Revenue Secretary Hasmukh Adhia, the 20 secretaries, including from textile, consumer affairs, food processing, railways, MSME, rural development, tourism, fertiliser, pharma, and financial services attended the meeting. CBEC officials were present in the meeting.

On June 20, Sinha had taken GST preparedness meeting with 30 ministries and departments and had asked the secretaries to organise outreach meetings and publicity campaigns through their departments and PSUs for explaining the provisions of new law and rules to their stakeholders.

The finance ministry had yesterday said that the two days of GST rollout has passed “without any major problems being reported” from the field offices.

“The Revenue Department has got encouraging reports from the roadside dhabas and big restaurants as well as from kirana shops to departmental stores which, in turn, have started getting acclimatised to the new tax system,” it had said.

The biggest indirect tax since Independence, GST removes at least 17 different taxes and transforms India into a single market for seamless movement of goods and services.

PTI

Be the first to comment - What do you think?  Posted by admin - July 4, 2017 at 11:49 am

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The Central Government abolished various Cesses in the last three years for smooth roll-out of GST

The Central Government abolished various Cesses in the last three years for smooth roll-out of GST 

The Central Government in the last three General Budgets viz 2015-16, 2016-17 and 2017-18 has gradually abolished various cesses on goods and services in order to prepare the ground for smooth roll- out of Goods and Service Tax (GST) from 1st July, 2017. The Central Government has taken this step in stages by abolishing various cesses so that it is easier to fit in various goods and services in different tax slabs for GST.

The Central Government in its General Budget 2015-16 had abolished Education Cess, including Secondary and Higher Education Cess on taxable services, and exempted Education Cess on excisable goods as well as Secondary and Higher Education Cess on excisable goods.

In its General Budget 2016-17, the Central Government abolished cess on cement, strawboard, three cesses including cess on Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines by amending Labour Welfare Cess Act, 1976, Tobacco cess by amending the Tobacco Cess Act 1975, and Cine Workers Welfare Cess by amending the Cine Workers’ Welfare Cess Act 1981 among others.

In its General Budget 2017-18, the Central Government abolished Research and Development cess by amending the Research and Development Cess Act.

 Through Taxation Laws Amendment Act 2017, the following cesses are abolished. However, the date of the implementation will coincide with the date of the GST roll-out:

  1. The Rubber Act 1947 – Cess on Rubber
  2. The Industries (Development and Regulation) Act 1951 – Cess on Automobile
  3. The Tea Act 1953 – Cess on Tea
  4. The Coal Mines (Conservation and Development) Act, 1974 – Cess on Coal
  5. The Beedi Workers’ Welfare Cess Act 1971 – Cess on Beedis
  6. The Water (Prevention and Control of Pollution) Cess Act 1977 – Cess levied on Water consumed by certain industries and by local authorities.
  7. The Sugar Cess Act 1982, the Sugar Development Fund Act 1982 – Cess on Sugar
  8. The Jute Manufacturers Cess Act 1983 – Cess on Jute Goods manufactured or produced or in part of Jute.
  9. The Finance (2) Act 2004 – Education Cess on Excisable Goods
  10. The Finance Act, 2007 – Secondary and Higher Education Cess on Excisable Goods
  11. The Finance Act 2010 – Clean Energy Cess
  12. The Finance Act 2015 – Swachh Bharat Cess
  13. The Finance Act 2016 – Infrastructure Cess and Krishi Kalyan Cess

 However, the following cesses will continue to be levied under the GST regime since they pertain to customs or goods which are not covered under the GST regime:

  1. The Finance (2) Act 2004 – Education Cess on Imported Goods
  2. The Finance Act, 2007 – Secondary and Higher Education Cess on Imported Goods
  3. Cess on Crude Petroleum Oil under the Oil Industry Development Act, 1974
  4. Additional Duty of Excise on Motor Spirit (Road Cess)
  5. Additional Duty of Excise on High Speed Diesel Oil (Road Cess)
  6. Special Additional Duty of Excise on Motor Spirit
  7. NCCD on Tobacco and Tobacco Products and Crude Petroleum Oil.

PIB

Be the first to comment - What do you think?  Posted by admin - June 7, 2017 at 3:32 pm

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The Union Finance Minister, Shri Arun Jaitley: Goods and Services Tax (GST) is an efficient tax system which not only checks tax evasion but also helps evolving India to become very strong society

The Union Finance Minister, Shri Arun Jaitley: Goods and Services Tax (GST) is an efficient tax system which not only checks tax evasion but also helps evolving India to become very strong society

FM inaugurates the National Academy of Customs, Indirect Taxes and Narcotics (NACIN) Campus in Bengaluru today

Inaugurating the National Academy of Customs, Indirect Taxes and Narcotics (NACIN) Campus in the Bengaluru today, the Union Finance Minister Shri Arun Jaitley said that Indirect Taxation regime in the country will play a key role and is undergoing a vital change.  He said that the present multiple taxation system is transformed into the Goods and Services Tax (GST) and all the taxes are amalgamated. Speaking further, the Finance Minister said that the new GST regime will come into effect from July 1, 2017. GST is an efficient tax system which not only checks tax evasion but it also help evolving India to become very strong society.

Speaking further on the occasion, the Finance Minister Shri Jaitley said that the new Indirect Tax is a product of federal India. He added that the Centre and the States will jointly administer and decide the taxes.  Coordination between taxation authority of Centre and States is also important. He said that the tax training academy NACIN, which has come-up in Bengaluru to impart training to officers of Central and State Governments and PSUs has to play a vital role.

Participating on the occasion, Smt.Vanaja N. Sarna, Chairperson, CBEC highlighted the contributions of NACIN.  Shri D.P.Nagendra Kumar, Principal Director General, NACIN, gave an overview of the new NACIN Complex.  Shri S.Ramesh, Member (Admn.), CBIC welcomed the dignitaries on this occasion while Shri P. K. Dash, Pr. Additonal Director General, NACIN, proposed vote of thanks.

PIB

Be the first to comment - What do you think?  Posted by admin - May 29, 2017 at 5:41 pm

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Lower Tax Incidence on Entertainment Services under Goods and Services (GST) Tax

Lower Tax Incidence on Entertainment Services under Goods and Services (GST) Tax

Service providers shall be eligible for full Input Tax Credits (ITC) of GST paid in respect of inputs and input services

Taxes on entertainments and amusements (covered by the erstwhile entry 62 of State List of the Constitution) have been subsumed under Goods and Services Tax (GST) except to the extent of taxes on entertainments and amusements levied by a Panchayat or a Municipality.

The rate of GST approved by GST Council on services by way of admission to entertainment events or cinematography films in cinema theatres is 28%. However, the entertainment tax rates in respect of exhibition of cinematography films in theaters/cinema halls, currently levied by States are as high as 100% in some of the States.

The rate of entertainment tax on cable TV and Direct-To-Home (DTH) levied by States is in the range of 10%-30% in many States. Apart from this, Service tax is also leviable at the rate of 15%. As against this, the rate of GST approved by GST Council on these services is 18%.

The rate of GST approved by GST Council on access to circus, theatre, Indian classical dance including folk dance and drama is 18% ad valorem. Further, the GST Council has approved an exemption upto a consideration for admission of Rs 250 per person. These services currently attract entertainment tax levied by the States.

Thus, entertainment services shall suffer a lower tax incidence under GST. In addition to the benefit of lower headline rates of GST, the service providers shall be eligible for full input tax credits (ITC) of GST paid in respect of inputs and input services. Presently, such service providers are not eligible to avail of input credits in respect of VAT paid on domestically procured capital goods & inputs or of Special Additional Duty (SAD) paid on imported capital goods and inputs. Thus, while GST is a value added tax, entertainment tax, presently levied by the States is like a turnover tax.

PIB

Be the first to comment - What do you think?  Posted by admin - May 23, 2017 at 7:00 pm

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Government may table 4 GST bills in Parliament today: Minister

Government may table 4 GST bills in Parliament today: Minister

New Delhi: The government may table four GST supplementary legislations in Parliament today, a union minister said.

We can do it today as well. A meeting on GST will be chaired by Finance Minister Arun Jaitley today, Minister of State for Finance Arjun Ram Meghwal said when asked about tabling of the four GST bills in the Lok Sabha.

He was speaking to reporters on the sidelines of an infrastructure event here.

The Cabinet on Monday cleared the four GST related bills to enable roll out of the Goods and Services Tax from July 1.

The four bills are: the Central Goods and Services Tax Bill 2017, the Integrated Goods and Services Tax Bill 2017, the Union Territory Goods and Services Tax Bill 2017 and the Goods and Services Tax (Compensation to the States) Bill 2017.

A source had told that the bills would be introduced as money bills in Parliament this week.

Yesterday, Finance Minister Arun Jaitley said that he was hopeful of rolling out GST from July 1 which will create one of the world’s biggest single markets and make commodities cheaper and tax evasion difficult.

Jaitley said India has “hugely” a non-tax compliant society and the government banned higher denomination notes to curb the tendency of people to deal in cash that lead to tax evasion as well as terror financing.

PTI

Be the first to comment - What do you think?  Posted by admin - March 23, 2017 at 1:43 pm

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GST rollout from July 1 to make goods cheaper: Jaitley

GST rollout from July 1 to make goods cheaper: Jaitley

New Delhi: Hopeful of the GST rollout from July 1, Finance Minister Arun Jaitley today said it will create one of the world’s biggest single markets and make commodities cheaper and tax evasion difficult.

Speaking at the 23rd Conference of the Commonwealth Auditor General, Jaitley said India has hugely a non-tax compliant society and the government banned higher denomination notes to curb the tendency of people to deal in cash that lead to tax evasion as well as terror financing.

He said the reform measures undertaken by the government will help India clock 7-8 % growth and retain the tag of fastest growing major economy in the world, but challenges remain in volatile global oil prices, reviving private sector investment and health of state-owned banks.

With regard to GST, he said the new indirect tax regime will ensure seamless transfer of goods and services, while stronger information technology backbone will make evasion difficult.

Despite being one political entity, India currently is not a single economic entity as there are multiple layers of taxation that make goods costlier. GST – first proposed in 2006 – will replace at last 17 state and central levies.

The biggest taxation reform what we are trying to implement from July 1 is Goods and Services Tax … It will increase the volume of taxation, there is no tax on tax and therefore makes goods, commodities and services little cheaper and far more convenient, Jaitley said.

The Union Cabinet this week cleared four supplementary GST legislations which will be introduced in Parliament in the ongoing budget session.

The laws which enable this (GST) are now before Parliament which hopefully should get cleared and once they do get cleared then by the middle of this year we hope to see the implementation as far as this law is concerned, Jaitley said.

In terms of tax compliances, he said India ranks fairly high as a non-compliant state.

Therefore, one of the efforts of the state has been how to bring non-compliance to an end. Once the GST is introduced it will be a great check as far as evasion is concerned, he said, adding that the government has amended direct taxation law by bringing in curbs on cash currency.

Jaitley, yesterday, in Parliament introduced an amendment to Finance Bill 2017 proposing to ban cash dealings above Rs 2 lakh.

Cash component of Indian economy was exorbitantly high about 12.2 per cent of GDP and of this, 86 per cent was high denominational currency and therefore the tendency to deal excessively in cash did exist and this created its own challenges for economy, he said.

Cash facilitated crime, corruption, incentivised tax non-compliance and was facilitator for funding terrorism and insurgency, he said, as he defended November 8 decision of the government to demonetise 500 and 1,000 rupee notes.

(With demonetisation) Anonymity which was attached to this high level of cash operating in market that anonymity disappeared as it had to be deposited in bank.

This has also increased the trend towards digitisation of economy, (will) act as disincentive to continuing to deal in a shadow or parallel economy and lead to a further integration of informal with formal economy, Jaitley said.

He said the size of India’s GDP in the near future will be bigger, size of formal economy will increase and will be cleaner.

As regards growth, Jaitley said India would continue to remain amongst the fastest growing economies of the world.

For the last three years we have been the fastest growing major economy, we will continue to be in that phase. I think for India to achieve the growth rate of 7-8 per cent is reasonably logically plausible. If big growth returns to the world we probably can push upwards, he said.

Outlining the challenges for Indian economy, Jaitley said the government is now trying to address the problems plaguing the public sector banks and also increasing private investment.

We are hopeful that in the next few quarters, will probably see a better result as far as those areas are concerned, he said, adding oil prices remain an uncertainty for India.

The gross NPAs of public sector banks have risen from Rs 5.02 lakh crore at the end of March 2016 to Rs 6.06 lakh crore in December 2016.

PTI

Be the first to comment - What do you think?  Posted by admin - March 22, 2017 at 6:57 pm

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Cabinet clears GST supplementary legislations

Cabinet clears GST supplementary legislations

The Cabinet today cleared four supporting GST legislations, paving the way for their introduction in Parliament as early as today.

The four supporting legislations the Compensation Law, the Central-GST (C-GST), Integrated-GST (I-GST) and Union Territory-GST (UT-GST) would be introduced as Money Bill, sources said.

The GST legislations have been cleared by the Cabinet.

These would be introduced in Parliament this week, could be even today, a source said.

The GST legislations were the only agenda in today’s meeting of the Union Cabinet, chaired by Prime Minister Narendra Modi.

Sources said the four legislations would be taken up for discussion together in Parliament. Once approved by Parliament, the states would start taking their SGST bill for discussion and passage in the respective state assemblies.

The GST Council, in its previous two meetings, had given approval to the four legislations as also the State-GST (S-GST) bill. While the S-GST has to be passed by each of the state legislative assemblies, the four other laws have to be approved by Parliament.

Passage of all the legislations would pave the way for introduction of Goods and Services Tax (GST) from July 1.

The government is hoping the C-GST, I-GST, UT-GST and the GST Compensation laws will be approved in the current session of Parliament and the S-GST by each of the state legislatures soon.

While a composite GST will be levied on sale of goods or rendering of services after the new indirect tax regime is rolled out, the revenue would be split between the Centre and the states in almost equal proportion.

This is because central taxes like excise and service tax and state levies like VAT will be subsumed in the GST.

While the C-GST will give powers to the Centre to levy GST on goods and services after Union levies like excise and service tax are subsumed, the I-GST is to be levied on inter-state supplies.

The S-GST will allow states to levy the tax after VAT and other state levies are subsumed in the GST. The UT-GST will also go to Parliament for approval.

The Council has already finalised a four-tier tax structure of 5, 12, 18 and 28 per cent, but the model GST law has kept the peak rate at 40 per cent (20 per cent to be levied by the Centre and an equal amount by the states) to obviate the need for approaching Parliament for any change in rates in future.

Similarly, the cess to be levied on top of peak rate on selected demerit goods like luxury cars for creation of a corpus that will be used for compensating states for any loss of revenue from GST implementation in the first five years, has been capped at 15 per cent.

PTI

Be the first to comment - What do you think?  Posted by admin - March 20, 2017 at 12:31 pm

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GST council clears state GST laws, likely to roll out by July 1

GST council clears state GST laws, likely to roll out by July 1

Finance-Minister-Arun-Jaitley-Revenue-Secretary-Hasmukh-Adhia-and-CBEC-Chairman-Najib-Shah-in-a-meeting-of-GST-council

 New Delhi: GST council moved yet another step closer to implement the country’s biggest tax reform possibly from July after the Centre and states agreed on a draft law that will enable states and union territories to impose the Goods and Services Tax (GST), all the five enabling draft bills stand approved to enable a likely rollout of the new indirect tax regime.

The panel, headed by Finance Minister Arun Jaitley and comprising representatives of all States, at its last meeting approved the final draft of Central GST (C-GST) and Integrated GST (I-GST) laws.

The GST council also agreeing on capping the cess on sin (tobacco products) and luxury goods has been capped at 15 per cent, Jaitley said after the meeting.

“Capping of cess has been done. These are not actual, but, ceiling is kept higher to give a marginal headspace,” he said.

“The supporting GST laws will now be taken to the Cabinet and then to Parliament for approval,” he said.

Jaitley also said the government was hopeful that GST could be “tentatively” implemented from July.

The GST Council would meet on March 31 for framing of rules for Goods and Service Tax regime, Jaitley said, adding that tax rates for various goods and services would be taken up after framing of rules.

After March 31, the Council will take up the exercise of fitment of various commodities in the GST tax slabs – 5 %, 12%, 15%  and 28%, he added.

The officials have already started the fitment process, which will be put up for discussion and approval before the Council.

Be the first to comment - What do you think?  Posted by admin - March 16, 2017 at 9:51 pm

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GST Bill likely to be tabled before Cabinet on March 22

GST Bill likely to be tabled before Cabinet on March 22

New Delhi: Maintaining the tempo for the much-awaited Goods and Services Tax (GST) against the backdrop of the crucial Uttar Pradesh Assembly elections, sources in the Finance Ministry on Wednesday said the bill will be presented before the Cabinet on March 22.

The government, which is leaving no stone unturned to lose its sight on the biggest tax reform, has said that the Central GST Law, Integrated GST Law, State GST Law and Union Territory GST and Compensation Law will be put together for the Cabinet’s approval on March 22.

However, the Finance Ministry has said that it will table the CGST, IGST and Compensation Law before the Parliament on March 27.

The Finance Minister sources have also cleared the air on SGST and UTGST, which will be cleared in the GST Council meet scheduled on March 16.

Also, it is likely that few more cesses will be added in the kitty to boost resources to compensate states. It will include Infra cess, Oil industry Development cess, and Swachh Bharat cess amongst others.

Earlier, the GST Council chaired by Finance Minister Arun Jaitley approved the draft CGST Bill and the draft I GST Bill as vetted by the Union Law Ministry. It cleared the deck for the Central Government to take these two Bills to the Parliament for their passage in the ongoing Budget Session.

ANI

Be the first to comment - What do you think?  Posted by admin - March 8, 2017 at 7:24 pm

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Tax officials to send 50,000 letters to PM for successful GST

Tax officials to send 50,000 letters to PM for successful GST

New Delhi: At least 50,000 letters will be sent by indirect tax officials to Prime Minister Narendra Modi seeking his intervention to ensure successful roll-out of Goods and Services Tax (GST).

A decision in this regard was taken during a meeting of representatives of All India Association of Central Excise Gazetted Executive Officers and those from Indian Revenue Service (Customs and Central Excise).

“We have decided that each employee working under Central Board of Excise and Customs (CBEC) will write a letter to the Prime Minister seeking his intervention for the successful GST.

“Though there are about 85,000 indirect tax employees working at various levels across the country, at least 50,000 letters will be sent to the Prime Minister within next two days,” said Anup Kumar Srivastava, President of IRS officers association.

He said through letters, the Prime Minister will be requested to revisit some of the decisions taken by the GST Council, headed by Finance Minister Arun Jaitley, in its meeting on January 16.

“There are certain issues concerning economic interests of the nation and concerning such a large work force like ours, who have been working for GST tirelessly for last 10 years and we want that these are resolved immediately to make roll-out of GST successful,” he told PTI.

The GST Council had in its meeting agreed to give states the powers to levy tax on economic activity within 12 nautical miles of territorial waters and to administer 90 per cent of the tax payers under Rs 1.5 crore annual turnover.

The indirect tax employees unions are demanding that the GST Council decisions are reviewed. They have also expressed concerns over Goods and Services Tax Network (GSTN) – a private company set up to provide information technology infrastructure for the implementation of the new tax regime, saying that it may be put under the CBEC.

PTI

Be the first to comment - What do you think?  Posted by admin - March 1, 2017 at 2:46 pm

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Government Hopeful of Passing GST Bills in next phase of Budget Session

Government Hopeful of Passing GST Bills in next phase of Budget Session

New Delhi: Government is hopeful of getting the supporting legislations of Goods and Services Tax (GST) passed by Parliament in the second phase of the Budget session for rolling out the new indirect tax regime by July.

Replying to a question on GST bill, Parliamentary Affairs Minister Ananth Kumar on Thursday said, “That is on the plate. GST council is meeting on 18th and it will be decided after that, but we are hopeful that supporting GST bills will be passed in the next phase of the session.”

The government is hopeful of getting Central GST (CGST) and Integrated GST (IGST) draft legislations approved at the next GST Council meeting on February 18 and bring them in the second half of the ongoing Budget Session along with GST Compensation Act.

While the CGST will subsume central taxes of excise, central sales tax and service tax, IGST is to be charged on movement of goods and services from one state to another.

States will also have to enact SGST or State Goods and Service Tax laws with minor variation incorporating state based exemptions.

Also, a GST Compensation Act needs to be approved by Parliament to provide for compensation to states that lose revenue because of implementation of GST in the first five years.

The GST bill was passed by the Rajya Sabha during the monsoon session last year.

PTI

Be the first to comment - What do you think?  Posted by admin - February 10, 2017 at 11:41 am

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GST: Finance Minister may hike service tax to 16-18% in Budget

GST: Finance Minister may hike service tax to 16-18% in Budget

New Delhi: Finance Minister Arun Jaitley may hike service tax rate to 16-18 per cent from the current 15 per cent in the Budget, due on Wednesday, as a precursor to the Goods and Services Tax (GST) rollout.

The move, that will make flying, eating out, phone bills and a host of other services expensive, would be an attempt to take the rates closer to the proposed tax slabs for GST.

GST, which will subsume central and state levies like excise duty, service tax and VAT, is scheduled to be rolled out from July 1.

The tax slabs decided for the GST are 5, 12, 18 and 28 per cent and taking service tax closer to one of the slabs is a logical move in the Budget, tax experts said.

Tax experts say, Jaitley, who had in his previous budget hiked service tax rate by 0.5 per cent to 15 per cent, may raise the levy by at least one percentage point to 16 per cent.

Some others feel there could be different service tax rates with a lower 12 per cent for basic services and a higher 18 per cent for the rest.

Also, a higher service tax for April-June will help the government garner more revenue to meet expenses on schemes and programmes it may be planning to contain the impact of demonetisation.

A service tax rate closer to the GST rate will also help consumers avoid a greater price shock when the new national sales tax is rolled out.

While service tax until now is a central levy, it will be equally split between the Centre and states under the new GST regime. Most services, except essential ones like primary healthcare and basic education, will be covered by GST.

Service tax was budgeted to provide Rs 2.31 lakh crore in 2016-17, more than 14 per cent of the Centre’s total tax revenues of Rs 16.30 lakh crore.

This will be the third time that Jaitley will raise service tax rate. Service tax from June 1, 2015 was hiked from 12.36 per cent to 14 per cent. A 0.5 per cent Swachh Bharat Cess was levied on all services, taking the total incidence of service tax to 14.5 per cent from November 15, 2015.

In the last Budget, he imposed a Krishi Kalyan Cess at the rate of 0.5 per cent on all taxable services to take the levy to 15 per cent.

PTI

Be the first to comment - What do you think?  Posted by admin - January 29, 2017 at 9:51 pm

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GST – 70,000 Tax Officials warn of non-cooperation movement

GST – 70,000 Tax Officials warn of non-cooperation movement

Opposing some recent decisions taken by GST Council, various indirect tax officials’ associations today decided to start non-cooperation movement.

To start with, the employees associations will not celebrate international customs day on Friday. Besides, they will observe ‘black day’ by wearing black badges on Martyrs’ Day, i.E. January 30, as per minutes of meeting held among their representatives here.

The associations said that their members are “highly disappointed” and feel “cheated” over the decisions taken by Finance Minister Arun Jaitley-led GST Council in its meeting on January 16.

The Council had agreed to give states the powers to levy tax on economic activity within 12 nautical miles of territorial waters and to administer 90 per cent of the tax payers under Rs 1.5 crore annual turnover.

“We feel that the biggest tax reform of the century should have been in conformity with the principles of responsibility and authority going together and also in conformity with the Constitutional design. We feel that the decision shall weaken the Centre’s ability to ensure its revenues.

“The decision will not only adversely affect the career of revenue officers but it is not in national interest. We oppose the decisions taken by GST Council and requests for deferment and review of above inappropriate and incorrect decisions,” as per the minutes of meeting of steering committee of associations representing Group A, B and C employees of Central Board of Excise and Customs (CBEC).

The decision came after a meeting of representatives of Indian Revenue Service (Customs and Central Excise), All India Association of Central Excise Gazetted Executive Officers, All India Central Excise Inspectors’ Association and All India Central Excise and Service Tax Ministerial Officers Association, comprising 70,000 personnel, here, office bearers said.

According to them, the decision taken by GST Council in its January 16, meeting will not only weaken the Centre but also adversely affect the Indian economy and revenue collection but also national security.

They have decided to request authorities concerned to take immediate necessary action to resolve the issues and to defer the unjustified decision of GST Council taken under pressure of state VAT officers.

“We feel that if the above genuine demands in national and revenue interest are not considered then this disciplined service will be forced to initiate non-cooperation movement following Gandhian methods of Satyagraha,” the associations said.

The Goods and Services Tax (GST) is likely to be rolled out from July 1, as against April 1 decided earlier by the government.

PTI

Be the first to comment - What do you think?  Posted by admin - January 27, 2017 at 3:11 pm

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GST: Service tax likely to be hiked to 18 percent this budget

GST: Service tax likely to be hiked to 18 percent this budget

New Delhi: Most services are likely to attract a tax of 18 percent under the Goods and Services Tax (GST) as Union Finance Minister Arun Jaitley presents the Union Budget on February 1.
It will be interesting to witness whether the Centre raises the service tax rate from the existing 15 percent by at least one percentage point to 16 percent as a precursor to the rollout of GST.

However, the Centre and states have agreed to rollout GST from July 1, 2017, after which most services will turn costlier.

Also, a higher service tax, even for three months, will help the Centre partially offset the revenue loss after the GST kicks in, sources indicated.

Under GST, the service tax collections will be divided equally between the Centre and the states. A service tax closer to the GST rate will also help consumers avoid a greater price shock after the new system is rolled out.

Jaitley-headed GST Council has agreed on a four-slab structure -5, 12, 18 and 28 percent-along with a cess on luxury and ‘sin’ goods such as tobacco.

Within these, two standard rates of 12 percent and 18 percent could extend to a majority of the taxable goods.

ANI

Be the first to comment - What do you think?  Posted by admin - January 18, 2017 at 4:46 pm

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Centre, states reach consensus on GST rollout from July 1

Centre, states reach consensus on GST rollout from July 1

New Delhi: In a significant breakthrough in implementation of India’s biggest tax reform, the deadlock over administration of GST ended on Monday after the Centre agreed to allow states control over most of small taxpayers, but the rollout date was pushed back by 3 months to July 1.

The split of GST taxpayers between the two will be done horizontally with states getting to administer and control 90 per cent of the asseesses below INR 1.5 crore annual turnover, and the remaining 10 per cent coming under the Centre.

The Centre and states will share control of assessees with annual turnover of over INR 1.5 crore in 50:50 ratio even as Finance Minister Arun Jaitley insisted that each tax payer will be assessed only once and by only one authority.

Besides ceding control, the Centre also agreed to the demand of coastal states, allowing them to tax economic activity in 12 nautical miles even though constitutionally the Centre has jurisdiction over territorial waters.

“This is a significant headway,” Jaitley said after the meeting.

While a four-rate tax slab of 5, 12, 18 and 28 per cent had already been reached, a consensus on the administration of the Goods and Services Tax – which will subsume central and state levies like excise duty, service tax and VAT – paved the way for finalisation of the draft supporting laws.

Jaitley said the draft of Integrated GST or IGST, the tax which will be levied by the Centre on inter-state movement of goods and services, as well as SGST and CGST will be finalised in the next meeting of the GST Council on February 18.

Once approved, the Council will then decide on taxing various goods and services in different tax slabs, he said.

The stalemate over administration of GST had been holding up consensus in the GST Council since early November with four successive meetings failing to break the deadlock as the Centre was not in favour of a horizontal split. It said states did not have the expertise to administer levies like service tax.

The Centre also did not favour dual agencies auditing and scrutinising each taxpayer as multiple authorities could end up acting at cross-purposes.

With the legislative calendar drawn up, Jaitley said “realistic” date for implementation of GST will be July 1 instead of previously planned April 1.

Since GST is a transactional tax, which is to be levied when a sale takes place, it does not necessarily have to be implemented from the beginning of the fiscal, he said.

PTI

Be the first to comment - What do you think?  Posted by admin - January 17, 2017 at 1:45 pm

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Frequently Asked Questions (FAQs) on Goods and Services Tax (GST)

Frequently Asked Questions (FAQs) on Goods and Services Tax (GST)

Following are the answers to the various frequently asked questions relating to GST:
Question 1.What is GST? How does it work?

Answer: GST is one indirect tax for the whole nation, which will make India one unified common market.

GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

Question 2. What are the benefits of GST?

Answer: The benefits of GST can be summarized as under:

For business and industry

Easy compliance: A robust and comprehensive IT system would be the foundation of the GST regime in India. Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which would make compliance easy and transparent.

  • Uniformity of tax rates and structures: GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business.
  • Removal of cascading: A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce hidden costs of doing business.
  • Improved competitiveness: Reduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry.
  • Gain to manufacturers and exporters: The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.

For Central and State Governments

  • Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being replaced by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre and State levied so far.
  • Better controls on leakage: GST will result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders.
  • Higher revenue efficiency: GST is expected to decrease the cost of collection of tax revenues of the Government, and will therefore, lead to higher revenue efficiency.

For the consumer

  • Single and transparent tax proportionate to the value of goods and services: Due to multiple indirect taxes being levied by the Centre and State, with incomplete or no input tax credits available at progressive stages of value addition, the cost of most goods and services in the country today are laden with many hidden taxes. Under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final consumer.
  • Relief in overall tax burden: Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers.

Question 3. Which taxes at the Centre and State level are being subsumed into GST?

Answer:
At the Central level, the following taxes are being subsumed:
a. Central Excise Duty,
b. Additional Excise Duty,
c. Service Tax,
d. Additional Customs Duty commonly known as Countervailing Duty, and
e. Special Additional Duty of Customs.

At the State level, the following taxes are being subsumed:
a. Subsuming of State Value Added Tax/Sales Tax,
b. Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States),
c. Octroi and Entry tax,
d. Purchase Tax,
e. Luxury tax, and
f. Taxes on lottery, betting and gambling.

Question 4. What are the major chronological events that have led to the introduction of GST?

Answer: GST is being introduced in the country after a 13 year long journey since it was first discussed in the report of the Kelkar Task Force on indirect taxes. A brief chronology outlining the major milestones on the proposal for introduction of GST in India is as follows:

a. In 2003, the Kelkar Task Force on indirect tax had suggested a comprehensive Goods and Services Tax (GST) based on VAT principle.

b. A proposal to introduce a National level Goods and Services Tax (GST) by April 1, 2010 was first mooted in the Budget Speech for the financial year 2006-07.

c. Since the proposal involved reform/ restructuring of not only indirect taxes levied by the Centre but also the States, the responsibility of preparing a Design and Road Map for the implementation of GST was assigned to the Empowered Committee of State Finance Ministers (EC).

d. Based on inputs from Govt of India and States, the EC released its First Discussion Paper on Goods and Services Tax in India in November, 2009.

e. In order to take the GST related work further, a Joint Working Group consisting of officers from Central as well as State Government was constituted in September, 2009.

f. In order to amend the Constitution to enable introduction of GST, the Constitution (115th Amendment) Bill was introduced in the Lok Sabha in March 2011. As per the prescribed procedure, the Bill was referred to the Standing Committee on Finance of the Parliament for examination and report.

g. Meanwhile, in pursuance of the decision taken in a meeting between the Union Finance Minister and the Empowered Committee of State Finance Ministers on 8th November, 2012, a ‘Committee on GST Design’, consisting of the officials of the Government of India, State Governments and the Empowered Committee was constituted.

h. This Committee did a detailed discussion on GST design including the Constitution (115th) Amendment Bill and submitted its report in January, 2013. Based on this Report, the EC recommended certain changes in the Constitution Amendment Bill in their meeting at Bhubaneswar in January 2013.

i. The Empowered Committee in the Bhubaneswar meeting also decided to constitute three committees of officers to discuss and report on various aspects of GST as follows:-
(a) Committee on Place of Supply Rules and Revenue Neutral Rates;
(b) Committee on dual control, threshold and exemptions;
(c) Committee on IGST and GST on imports.

j. The Parliamentary Standing Committee submitted its Report in August, 2013 to the Lok Sabha. The recommendations of the Empowered Committee and the recommendations of the Parliamentary Standing Committee were examined in the Ministry in consultation with the Legislative Department. Most of the recommendations made by the Empowered Committee and the Parliamentary Standing Committee were accepted and the draft Amendment Bill was suitably revised.

k. The final draft Constitutional Amendment Bill incorporating the above stated changes were sent to the Empowered Committee for consideration in September 2013.

l. The EC once again made certain recommendations on the Bill after its meeting in Shillong in November 2013. Certain recommendations of the Empowered Committee were incorporated in the draft Constitution (115th Amendment) Bill. The revised draft was sent for consideration of the Empowered Committee in March, 2014.

m. The 115th Constitutional (Amendment) Bill, 2011, for the introduction of GST introduced in the Lok Sabha in March 2011 lapsed with the dissolution of the 15th Lok Sabha.

n. In June 2014, the draft Constitution Amendment Bill was sent to the Empowered Committee after approval of the new Government.

o. Based on a broad consensus reached with the Empowered Committee on the contours of the Bill, the Cabinet on 17.12.2014 approved the proposal for introduction of a Bill in the Parliament for amending the Constitution of India to facilitate the introduction of Goods and Services Tax (GST) in the country. The Bill was introduced in the Lok Sabha on 19.12.2014, and was passed by the Lok Sabha on 06.05.2015. It was then referred to the Select Committee of Rajya Sabha, which submitted its report on 22.07.2015.

Question 5.How would GST be administered in India?

Answer: Keeping in mind the federal structure of India, there will be two components of GST – Central GST (CGST) and State GST (SGST). Both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and services. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State. The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage. Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output. No cross utilization of credit would be permitted.
Question 6.How would a particular transaction of goods and services be taxed simultaneously under Central GST (CGST) and State GST (SGST)?

Answer :The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services except on exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of Central Excise.

A diagrammatic representation of the working of the Dual GST model within a State is shown in Figure 1 below.

Figure 1: GST within State

dual-GST

Question 7.Will cross utilization of credits between goods and services be allowed under GST regime?

Answer : Cross utilization of credit of CGST between goods and services would be allowed. Similarly, the facility of cross utilization of credit will be available in case of SGST. However, the cross utilization of CGST and SGST would not be allowed except in the case of inter-State supply of goods and services under the IGST model which is explained in answer to the next question.

Question 8. How will be Inter-State Transactions of Goods and Services be taxed under GST in terms of IGST method?

Answer: In case of inter-State transactions, the Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supplies of goods and services under Article 269A (1) of the Constitution. The IGST would roughly be equal to CGST plus SGST. The IGST mechanism has been designed to ensure seamless flow of input tax credit from one State to another. The inter-State seller would pay IGST on the sale of his goods to the Central Government after adjusting credit of IGST, CGST and SGST on his purchases (in that order). The exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The importing dealer will claim credit of IGST while discharging his output tax liability (both CGST and SGST) in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST.Since GST is a destination-based tax, all SGST on the final product will ordinarily accrue to the consuming State.

A diagrammatic representation of the working of the IGST model for inter-State transactions is shown in Figure 2 below.

IGST

Question 9. How will IT be used for the implementation of GST?

Answer: For the implementation of GST in the country, the Central and State Governments have jointly registered Goods and Services Tax Network (GSTN) as a not-for-profit, non-Government Company to provide shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders. The key objectives of GSTN are to provide a standard and uniform interface to the taxpayers, and shared infrastructure and services to Central and State/UT governments.

GSTN is working on developing a state-of-the-art comprehensive IT infrastructure including the common GST portal providing frontend services of registration, returns and payments to all taxpayers, as well as the backend IT modules for certain States that include processing of returns, registrations, audits, assessments, appeals, etc. All States, accounting authorities, RBI and banks, are also preparing their IT infrastructure for the administration of GST.

There would no manual filing of returns. All taxes can also be paid online. All mis-matched returns would be auto-generated, and there would be no need for manual interventions. Most returns would be self-assessed.

Question 10. How will imports be taxed under GST?

Answer : The Additional Duty of Excise or CVD and the Special Additional Duty or SAD presently being levied on imports will be subsumed under GST. As per explanation to clause (1) of article 269A of the Constitution, IGST will be levied on all imports into the territory of India. Unlike in the present regime, the States where imported goods are consumed will now gain their share from this IGST paid on imported goods.

Question 11. What are the major features of the Constitution (122nd Amendment) Bill, 2014?

Answer : The salient features of the Bill are as follows:

g. Conferring simultaneous power upon Parliament and the State Legislatures to make laws governing goods and services tax;

h. Subsuming of various Central indirect taxes and levies such as Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty commonly known as Countervailing Duty, and Special Additional Duty of Customs;

i. Subsuming of State Value Added Tax/Sales Tax, Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States), Octroi and Entry tax, Purchase Tax, Luxury tax, and Taxes on lottery, betting and gambling;
j. Dispensing with the concept of ‘declared goods of special importance’ under the Constitution;
k. Levy of Integrated Goods and Services Tax on inter-State transactions of goods and services;
l. GST to be levied on all goods and services, except alcoholic liquor for human consumption. Petroleum and petroleum products shall be subject to the levy of GST on a later date notified on the recommendation of the Goods and Services Tax Council;

m. Compensation to the States for loss of revenue arising on account of implementation of the Goods and Services Tax for a period of five years;
n. Creation of Goods and Services Tax Council to examine issues relating to goods and services tax and make recommendations to the Union and the States on parameters like rates, taxes, cesses and surcharges to be subsumed, exemption list and threshold limits, Model GST laws, etc. The Council shall function under the Chairmanship of the Union Finance Minister and will have all the State Governments as Members.

Question 12. What are the major features of the proposed registration procedures under GST?

Answer: The major features of the proposed registration procedures under GST are as follows:

i. Existing dealers: Existing VAT/Central excise/Service Tax payers will not have to apply afresh for registration under GST.
ii. New dealers: Single application to be filed online for registration under GST.
iii. The registration number will be PAN based and will serve the purpose for Centre and State.
iv. Unified application to both tax authorities.
v. Each dealer to be given unique ID GSTIN.
vi. Deemed approval within three days.
vii. Post registration verification in risk based cases only.

Question 13. What are the major features of the proposed returns filing procedures under GST?

Answer: The major features of the proposed returns filing procedures under GST are as follows:

a. Common return would serve the purpose of both Centre and State Government.
b. There are eight forms provided for in the GST business processes for filing for returns. Most of the average tax payers would be using only four forms for filing their returns. These are return for supplies, return for purchases, monthly returns and annual return.
c. Small taxpayers: Small taxpayers who have opted composition scheme shall have to file return on quarterly basis.
d. Filing of returns shall be completely online. All taxes can also be paid online.

Question 14. What are the major features of the proposed payment procedures under GST?

Answer: The major features of the proposed payments procedures under GST are as follows:

i. Electronic payment process- no generation of paper at any stage
ii. Single point interface for challan generation- GSTN
iii. Ease of payment – payment can be made through online banking, Credit Card/Debit Card, NEFT/RTGS and through cheque/cash at the bank
iv. Common challan form with auto-population features
v. Use of single challan and single payment instrument
vi. Common set of authorized banks
vii. Common Accounting Codes

PIB

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