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Home Articles Goods and Services Tax - GST Dr. Sanjiv Agarwal Experts This |
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MODEL GST LAW: A NEW BEGINNING |
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MODEL GST LAW: A NEW BEGINNING |
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The draft of model law on proposed Goods and Services Tax (GST) has since been released by the Empowered Committee of State Finance Ministers (in short, EC) on 15th June, 2016 in its last meeting held. Thus, called as 'Model GST Law', it shall comprise of two pieces of legislation, viz,
GST Act The model GST Act comprises of –
IGST Act The Model IGST Act comprises of –
It may be noted that EC had already issued four reports on different business processes in October 2015 which pertains to registration, payment, returns and refund under the GST regime. These business processes in fact lay down the procedural aspects in relation to such activities. (may take shape of Rules on finalization). The model of GST law envisages certain concepts or provisions which were not in vogue earlier, either in Service Tax or Central Excise or Value Added Tax. Some of these are as follows :
However, provisions relating to registration, threshold exemption, taxability, point of taxation, valuation principles etc still shall continue and are guided by extant provisions. It may be noted that the person registered is liable to pay tax if his aggregate turnover in a financial year exceeds ₹ 10 lakhs. However, a dealer conducting business in any of the North Eastern region will be required to pay tax if his aggregate turnover exceeds ₹ 5 lakhs. A negative list has also been prescribed for transactions and activities of Government and Local Authorities which shall be exempt from GST levy, like activities of issuance of passport, visa, driving license, birth certificate or death certificate, etc. The taxable event under GST regime will be supply of goods or services. Supply includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration. It also includes importation of service, whether or not for a consideration.
By: Dr. Sanjiv Agarwal - July 2, 2016
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