GST COMES TRUE

[Mr. M. GOVINDARAJAN]

Expected implementation of GST comes true when the Hon’ble President implemented by ringing a bell in the Central Hall of Parliament at 00.00 hrs on 01.07.2017. 

It comes true after a prolonged journey of 11 years when it was considered to be implemented in India.  GST as all aware consumes most of the indirect taxes levied by the Central Government and the State Governments.

The Constitutional amendment paved the way for enabling the Central Government and State Government to levy GST on the value of the supply of goods or services or both.

The GST Council formed by the Constitutional amendment led the way for the early implementation and smooth transition from the existing indirect tax regime to the new GST regime.

The GST Network established for the purpose of maintaining the system of the entire GST network from registration to every step involved in this aspect.  Every transaction will be paperless and online.  It is hoped that the GSTN will maintain and manage the entire network without any problems caused to the taxpayers and the administration.

The Central Government enacted four acts and got the nod of the President-

• Central Goods and Services Tax Act, 2017 – for the levy of central tax  and to be administered by the Central Government;
• Integrated Goods and Services Tax, Act, 2017 – for the levy of integrated tax and to be administered by the Central Government;
• Union Territory Goods and Services Tax Act, 2017 – for the levy of Union tax and to be administered by the Central Government in the Union territories where State Legislations are not there;
• Goods and Services Tax (Compensation to States) Act, 2017 – to provide compensation to the State for the loss to be incurred by the States for the implementation of GST for five years.

All the States passed the respective State Goods and Services Tax Act except Kerala and West Bengal which promulgated ordinances for this purposes.  All the provisions of the State Tax come into force with effect from 01.07.2017.

Nearly the provisions of 17 sections of CGST Act came into effect from 22.06.2017.  Except the following sections all other sections came into effect from 01.07.2017-

• Proviso to Section 42(9);
• Proviso section 43(9);
• Section 51 – Tax deduction at source;
• Section 52 – Collection of tax at source;

The Rules recommended and approved by the GST Council in respect of Central tax has been incorporated by the Central Government in the Central Goods and Services Tax Rules, 2017 which come into effect from 01.07.2017-

Chapter II	COMPOSITION RULES
Chapter III	REGISTRATION
Chapter IV	Determination of Value of Supply
Chapter V	Input Tax Credit
Chapter VI	TAX INVOICE, CREDIT AND DEBIT NOTES
Chapter VII	Accounts and Records
Chapter VIII	Returns
Chapter IX	Payment of Tax
Chapter X	Refund
Chapter XI	ASSESSMENT AND AUDIT
Chapter XII	Advance Ruling
Chapter XIII	Appeals and Revision
Chapter XIV	Transitional Provisions
Chapter XV	Anti - Profiteering
Chapter XVI	E-way Rules

The provisions of E-way Rules, even though, recommended and approved by GST Council, the Government has not formulated.  Rule 138 provides that till such time as an E-way bill system is developed and approved by the Council, the Government may, by notification, specify the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage.

Nearly 18 notifications were issued by the Government to carry out the provisions of sections and rules.  One circular was issued providing the list of ‘proper officer’ for dealing with the provisions of Composition Levy and Registration.

In respect of IGST Act, 2017 the provisions of six sections came into effect from 22.06.2017.  The remaining section, except section 15 which deals with refund of integrated tax paid on supply of goods to tourist leaving India, came into effect from 01.07.2017.

Vide Notification No. 4/2017-Integrated tax, dated 28.06.2017, the Central Government notified the ‘Integrated Goods and Services Tax Rules, 2017’ which came into effect from 22.06.2017.  Rule 2 provides that the CGST Rules, 2017 for carrying out the provisions of section 20 of IGST Act shall, so far as may be, apply in relation to integrated tax  as they apply in relation to central tax.

The Central Government also notifies the rate of interest payable by the taxable person for the delayed payment of tax and also the interest payable by the Department for the delayed refund both for Central tax and integrated tax.

In respect of UTGST Act, 2017, nearly 8 sections came into effect from 22.06.2017 and the remaining came into effect from 01.07.2017.  Section 21 of the Act provides that most of the provisions of central tax are applicable to Union territory tax.  Rule is yet to be made by the Government for Union territory tax.

Vide Notification No. 01/2017-Compensation cess, dated 28.06.2017 the Central Government notified all sections of the GST (Compensation to States) Act, 2016 shall come into force with effect from 01.07.2017.

In respect of rate of tax 10 notifications were issued for the purpose of central tax indicating the rate for various supplies of goods or services.   Similarly in respect of integrated tax 10 notifications were issued by the Government indicating the rate.   Likewise 10 notifications were issued by the Central Government fixing the tax rate for the purpose of Union Territory tax.  2 notifications were issued by the Central Government fixing the rate of cess for goods and also for specified goods.

Even though the process of implementation of GST is not in complete, it is hoped that the business entity will get it success with the utmost co-operation, guidance and support of the Central Government and State Governments and Departmental Officers with the backbone of network in a successful way which will pave the economic development of India.

Discussions to this article

[Rizwan Ullah]

Sir, What will be the procedure in case of export. ? Do we need to fill ARE-1 as it was required earlier for dispatching goods for export?