Goods and GST Bill passed, Goods and Services Tax - GST

[Ganeshan Kalyani]

Dear All,

GST Bill is passed in Rajya Sabha on 03. 08.2016.

A panel under chief economic adviser Arvind Subramanian has recommended a revenue-neutral rate of 15-15.5%, with a standard rate of 17-18% be levied on most goods and all services.

But, there has been no agreement yet on rates of various goods and services, which remains a tricky issue. According to the Bill, passed in the Lok Sabha in May 2015, the rates were to be decided by a GST council headed by the central finance minister with state finance ministers as members.

Let us wait.

Thanks.

Posts / Replies

[Ganeshan Kalyani]

The cap of peak rate of tax under the GST Law has been increased from 28% (14% CGST +14% SGST) to 40% (20% CGST + 20% SGST ).

[Ganeshan Kalyani]

Once SGST and UTGST Laws are approved by the GST Council, GST officials will start classifying different goods and services into the four-tier rate structure of 5%, 12%, 18%, 28%.

[Ganeshan Kalyani]

"A proposed flat 12 per cent GST on biscuits will be a grave injustice to the poor as biscuits retailed below ₹ 100 per kg are treated as merit goods. If these products are included then about 240 biscuit factories will shut down," Mayank Shah, vice president, Biscuit Manufacturers Welfare Association, told .

[Ganeshan Kalyani]

Biscuit Manufacturers Welfare Association has petitioned the Goods and Services Tax Council to keep biscuits below `100 a kg in the zero-tax bracket, separate from the high-priced ones. At present, low-priced biscuits are exempted from central excise but attract value added tax in states. The association wants this distinction to continue under the GST, which is to be implemented from July 1.

[Ganeshan Kalyani]

Experts point out that GST being levied on branch transactions could be cumbersome because of the enormous number of financial transactions being carried out and because it will be impossible for banks and finance institutions to value services provided by one branch to another and then pay GST on that. Banks have written to the government to amend the GST law involving such 'self-supply' of services.

[YAGAY AND SUN]

GST might be disruptive like demonetisation: UR Bhat

In an interview with CNBC-TV18, UR Bhat said that going ahead the US Fed meet and roll-out of the goods and services tax (GST) will act as a catalyst for the market.

[YAGAY AND SUN]

Parliament Meets, PM Narendra Modi Underscores Star Status Of GST Reform

1. To meet the July 1 deadline for introducing the GST, parliament must pass three bills, which spell out the operational details of the new tax, before its current session concludes on April 11.

2. The long-awaited GST will replace a slew of central and state levies, transforming Asia's third-largest economy into a single market for the first time.

3. Proposed tax rates range from five to 28 per cent, with 12 per cent and 18 per cent being the standard rates.

4. It has not been decided yet which tax rates will apply to which categories of goods.

5. The three bills that need to be cleared will be introduced as Money Bills - which means that once they are cleared by the Lower House or Lok Sabha, the Rajya Sabha or Upper House can only recommend changes, not insist on them.

6. The government has a huge majority in the Lok Sabha, so the bills will not encounter any difficulty there.

7. But the challenge will lie in the Rajya Sabha, where the government is in a minority, and where, in the past, the opposition, especially the Congress, has created frequent disruptions to stall legislation. Technically, Money Bills can be cleared even without a discussion on the Upper House, but the opposition will allege that violates basic democratic principles for a reform as crucial as the GST.

8. The GST is expected to make business simpler and reduce business transaction costs. The Congress has said in the past that it will not accept the rate of tax being presented in a Money Bill, which would not need the Rajya Sabha's approval.

9. In August last year, parliament cleared GST, delivering a huge victory for Prime Minister Narendra Modi. Half of India's 29 state legislatures need to pass the same act - this has been done.

10. The three new laws to implement the tax will similarly have to be cleared by state legislatures after they are approved by parliament.

[YAGAY AND SUN]

Intuit looks to tap small businesses for GST compliance

Rolling-out experience in Malaysia, Australia will give it an edge, says CMO

[YAGAY AND SUN]

GST: Why Modi-Jaitley team will face challenges in Parliament and outside

The model GST draft bill allows maximum tax rate at 40 per cent even as the effective tax rates range between five and 28 per cent. The Congress has been demanding for a levy cap at 18 per cent.

[YAGAY AND SUN]

Teething troubles 1.0: GST induces conflicts among state governments.

[Ganeshan Kalyani]

Under GST, HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime. Services will be classified as per the Services Accounting Code (SAC).

[Ganeshan Kalyani]

GST council had finalised broad buckets wherein 4 tier rate structure would be followed – 5%, 12%, 18% and 28%. Apart from these, some goods/ services will be exempt from tax and some demerit goods could carry ‘cess’ over and above their tax slab rate. The GST Council had also proposed to raise the peak tax rate to 20 per cent, from the current 14 per cent, in the model goods and services tax Bill to preclude the requirement of approaching Parliament for any change in rates in future.

[Ganeshan Kalyani]

The government is keen to pass the much-awaited legislations related to the GST during the month-long session which will continue till April 12.

[Ganeshan Kalyani]

The Export Promotion Council for EOUs and SEZs (EPCES) today urged the government to exempt special economic zones from Goods and Services Tax (GST) levies. The issue was discussed at a workshop on GST impact on SEZs and export oriented united (EOUs).

[Ganeshan Kalyani]

“During the workshop, it was unanimously decided that Export Promotion Council for EOUs and SEZs (EPCES) must request the central and state governments to provide exemption to SEZs from payment of CGST/SGST/IGST as there is no mechanism in SEZ Act for refund and it is also not a subsidy,” the EPCES said in a statement.

[Ganeshan Kalyani]

The GST Laws (CGST and IGST) cleared by Council and UT-GST Law will now be taken up in Parliament in the second half of budget session beginning March 9. Government sources said the GST legislation will likely be taken up as money bills during the second half of the Budget session starting March 9. This means they can’t be rejected by the Rajya Sabha, where Prime Minister Narendra Modi’s government doesn’t have a majority.

[Ganeshan Kalyani]

The GST Council has proposed to raise the peak tax rate to 20 per cent, from the current 14 per cent, in the model goods and services tax Bill to preclude the requirement of approaching Parliament for any change in rates in future.

The change in the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28 per cent agreed upon last year, but is only a provision being built into the model law to take care of contingencies in future, two officials in the know told PTI.

[Ganeshan Kalyani]

“There shall be levied a tax called the central/state goods and services tax (CGST/SGST) on all intra-state supplies of goods and/or services… at such rates as may be notified by the central/state government but not exceeding 14 per cent on the recommendation of the Council and collected in such manner as may be prescribed,” the draft law states.

[Ganeshan Kalyani]

The central and state officials will soon start the exercise to determine which goods and services should fall in which tax bracket and the same will be taken to the Council for approval soon.

Together with this, they will also decide the goods and services that would attract a cess on top of the peak rate to create a corpus that can be used for compensating states for any loss of revenue from implementation of GST in the first five years.

The government is looking at GST rollout from July 1.

[Ganeshan Kalyani]

Revenue Secretary Hasmukh Adhia said there were demands that restaurants should be included in the composition scheme, particularly those with less turnover. “So the Council decided that there would be a composition scheme for restaurants up to a turnover of ₹ 50 lakh and the rate for them is 5 per cent. So the remaining restaurants, they will come in the regular service tax rate,” Adhia said.

[Ganeshan Kalyani]

The most talked about highlight of the Model GST Law (November draft) is a provision that enables government to constitute an authority to monitor the prices of goods and services under GST regime to ensure that any reduction in a business’ effective cost, or in the tax rate on goods and services as a result of the introduction of GST, is passed on to consumers in the form of appropriately reduced prices.

[Ganeshan Kalyani]

Another reason that can trigger anti-profiteering is reduction is prices due to reduction in tax rate. Therefore, if the tax cost of a product under GST regime gets reduced vis-a-vis tax cost of such product under non-GST regime, such benefit should be passed on by the supplier to the recipient of the supply.

The model GST Law in its current shape does not throw light on procedural aspects as to how this task will be undertaken, when does it start, how will excess profit be measured etc.

Such a concept was introduced in Malaysia too while implementing GST wherein price control was done through amendments to Price Control and Anti-Profiteering Act, 2011 in 2014 read with Pric (e Control and Anti-Profiteering (Mechanism to determine unreasonably high profit)(Net profit margin) Regulations, 2014.

These regulations specify a certain period during which increase in net profit margin will be under consideration through checks like tax imposed, supplier’s cost, demand and supply conditions, cost incurred in course or furtherance of business etc.

It remains to be seen how Indian government shapes up the enabling provision to ensure passing of reduction in cost under GST to consumers.

[Ganeshan Kalyani]

Government kick started the process of migrating existing VAT/ Service Tax/ Excise Duty registrations to GST called GST Enrolment in November 2016 wherein tax payers had to enroll themselves with GST Portal. Post completion of enrolment, a provisional ID is issued.

[Ganeshan Kalyani]

The final Registration Certificate will be issued within 6 months of verification of documents by authorized Center/ State officials of the concerned Jurisdiction (s) after the appointed date.

[Ganeshan Kalyani]

The Provisional Registration Certificate will be available for viewing and download at the Dashboard of the GST Common Portal on the appointed date. The certificate will be available only if the Registration Application was submitted successfully.