Goods and Services Tax

GOODS AND SERVICE TAX CONCEPT & STATUS – AS ON 1st FEBRUARY, 2019

Goods and Services Tax – GST – Dated:- 7-2-2019 – GOODS AND SERVICE TAX (GST) CONCEPT & STATUS CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC) DEPARTMENT OF REVENUE MINISTRY OF FINANCE GOVERNMENT OF INDIA AS ON 1st FEBRUARY, 2019 The uniform system of taxation, which, with a few exceptions of no great consequence, takes place in all the different parts of the United Kingdom of Great Britain, leaves the interior commerce of the country, the inland and coasting trade, almost entirely free. The inland trade is almost perfectly free, and the greater part of goods may be carried from one end of the kingdom to the other, without requiring any permit or let-pass, without being subject to question, visit, or examination from the revenue officers. ……This freedom of interior commerce, the effect of uniformity of the system of taxation, is perhaps one of the principal causes of the prosperity of Great Britain; every great country being necessarily the best and most extensive

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Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. As per Article 246 of the Constitution, Parliament has exclusive powers to make laws in respect of matters given in Union List (List I of the Seventh Schedule) and State Government has the exclusive jurisdiction to legislate on the matters containing in State List (List II of the Seventh Schedule). In respect of the matters contained in Concurrent List (List III of the Seventh Schedule), both the Central Government and State Governments have concurrent powers to legislate. 2.2 Before advent of GST, the most important sources of indirect tax revenue for the Union were customs duty (entry 83 of Union List), central excise duty (entry 84 of Union List), and service tax (entry 97 of Union List). Although entry 92C was inserted in the Union List of the Seventh Schedule of the Constitution by the Constitution (Eighty-eighth Amendment) Act, 2003 for levy of taxes on services,

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ON IN POSTINDEPENDENCE INDIA TILL GST: 3.1 In post-Independence period, central excise duty was levied on a few commodities which were in the nature of raw materials and intermediate inputs, and consumer goods were outside the net by and large. The first set of reform was suggested by the Taxation Enquiry Commission (1953-54) under the chairmanship of Dr. John Matthai. The Commission recommended that sales tax should be used specifically by the States as a source of revenue with Union governments' intervention allowed generally only in case of inter-State sales. It also recommended levy of a tax on inter-State sales subject to a ceiling of 1%, which the States would administer and also retain the revenue. 3.2 The power to levy tax on sale and purchase of goods in the course of interState trade and commerce was assigned to the Union by the Constitution (Sixth Amendment) Act, 1956. By mid-1970s, central excise duty was extended to most manufactured goods. Central excise duty was levi

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with the New Economic Policy of 1991. The Tax Reforms Committee under the chairmanship of Prof. Raja J Chelliah was appointed in 1991. This Committee recommended broadening of the tax base by taxing services and pruning exemptions, consolidation and lowering of rates, extension of MODVAT on all inputs including capital goods. It suggested that reform of tax structure must have to be accompanied by a reform of tax administration, if complete benefits were to be derived from the tax reforms. Many of the recommendations of the Chelliah Committee were implemented. In 1999-2000, tax rates were merged in three rates, with additional rates on a few luxury goods. In 2000-01, three rates were merged into one rate called Central Value Added Tax (CENVAT). A few commodities were subjected to special excise duty. 3.5 Taxation of services by the Union was introduced in 1994 bringing in its ambit only three services, namely general insurance, telecommunication and stock broking. Gradually, more and m

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n ten in some States and these varied for the same commodity in different States. Inter-state sales were subjected to levy of Central Sales Tax. As this tax was appropriated by the exporting State credit was not allowed by the dealer in the importing State. This resulted into exportation of tax from richer to poorer states and also cascading of taxes. Interestingly, States had power of taxation over services from the very beginning. States levied tax on advertisements, luxuries, entertainments, amusements, betting and gambling. 3.7 A report, titled Reform of Domestic Trade Taxes in India , on reforming indirect taxes, especially State sales tax, by National Institute of Public Finance and Policy under the leadership of Dr. Amaresh Bagchi, was prepared in 1994. This Report prepared the ground for implementation of VAT in States. Some of the key recommendations were; replacing sales tax by VAT by moving over to a multistage system of taxation; allowing input tax credits for all inputs, i

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implement VAT, in 2003. In 2005, VAT was implemented in most of the states. Uttar Pradesh was the last State to implement VAT, from 1st January, 2008. 4. INTERNATIONAL PERSPECTIVES ON GST / VAT: 4.1 VAT and GST are used inter-changeably as the latter denotes comprehensiveness of VAT by coverage of goods and services. France was the first country to implement VAT, in 1954. Presently, more than 160 countries have implemented GST / VAT in some form or the other. The most popular form of VAT is where taxes paid on inputs are allowed to be adjusted in the liability at the output. The VAT or GST regime in practice varies from one country to another in terms of its technical aspects like definition of supply , extent of coverage of goods and services , treatment of exemptions and zero rating etc. However, at a broader level, it has one common principle, it is a destination based consumption tax. From economic point of view, VAT is considered to be a superior system over sales tax of taxing c

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eparately are called non- participating provinces , whereas provinces which have teamed up with the Federal Government for tax administration are called participating provinces . 4.3 The rate of GST varies across countries. While Malaysia has a lower rate of 6% (Malaysia though scrapped GST in 2018 due to popular uproar against it), Hungary has one of the highest rate of 27%. Australia levies GST at the rate of 10% whereas Canada has multiple rate slabs. The average rate of VAT across the EU is around 19.5%. 5. NEED FOR GST IN INDIA: 5.1 The introduction of CENVAT removed to a great extent cascading burden by expanding the coverage of credit for all inputs, including capital goods. CENVAT scheme later also allowed credit of services and the basket of inputs, capital goods and input services could be used for payment of both central excise duty and service tax. Similarly, the introduction of VAT in the States has removed the cascading effect by giving set-off for tax paid on inputs as w

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akes place. Despite remarkable harmonization in VAT regimes under the auspices of the EC, the national market was fragmented with too many obstacles in free movement of goods necessitated by procedural requirement under VAT and CST. 5.4 In the constitutional scheme, taxation powers on goods was with Central Government but it was limited upto the stage of manufacture and production while States have powers to tax sale and purchase of goods. Centre had powers to tax services and States also had powers to tax certain services specified in clause (29A) of Article 366 of the Constitution. This sort of division of taxing powers created a grey zone which led to legal disputes. Determination of what constitutes a goods or service is difficult because in modern complex system of production, a product is normally a mixture of goods and services. 5.5 As can be seen from the previous paragraphs, India moved towards value added taxation both at Central and State level, and this process was complete

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request, would work with the Central Government to prepare a road map for introduction of GST in India. After this announcement, EC decided to set up a Joint Working Group in May 10, 2007, with the then Adviser to the Union Finance Minister and Member-Secretary of the Empowered Committee as its Co-conveners and four Joint Secretaries of the Department of Revenue of Union Finance Ministry and all Finance Secretaries of the States as its members. This Joint Working Group got itself divided into three Sub-Groups and had several rounds of internal discussions as well as interaction with experts and representatives of Chambers of Commerce & Industry. On the basis of these discussions and interaction, the Sub-Groups submitted their reports which were then integrated and consolidated into the report of Joint Working Group (November 19, 2007). 6.3 This report was discussed in detail in the meeting of the EC on November 28, 2007, and the States were also requested to communicate their obse

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e EC released its First Discussion Paper (FDP) on GST in November, 2009. This spelled out the features of proposed GST and has formed the basis for discussion between the Centre and the States. 7. CHALLENGES IN DESIGNING GST: 7.1 In the discussion that preceded amendment in the Constitution for GST, there were a number of thorny issues that required resolution and agreement between Central Government and State Governments. Implementing a tax reform as vast as GST in a diverse country like India required the reconciliation of interests of various States with that of the Centre. Some of the challenging issues, addressed in the run up to GST, were the following: 7.2 Origin-based versus Destination-based taxation: GST is a destination based consumption tax. Under destination based taxation, tax accrues to the destination place where consumption of the goods or services takes place. The existing VAT regime was based on origin principle where Central Sales Tax was assigned to the State of or

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ands the sales tax base of the producing states and thereby contributes to their revenues. In fact, to the extent that consumer expenditures are dependent on the level of income of the residents of a State, it is the producing States that stand to gain the most in additional sales tax revenues (even under the destination basis of consumption taxes) from increased export output. 7.3 Rate Structure and Compensation: There was uncertainty about gains in revenue after implementation of GST. Though attempts were made to estimate a revenue neutral rate, nonetheless it remains an estimate only. It was difficult to estimate accurately as to how much the States will gain from tax on services and how much they will lose on account of removal of cascading effect and phasing out of CST. In view of this, States asked for compensation during the first five years of implementation of GST. 7.3.1 A Committee headed by the Chief Economic Adviser Dr. Arvind Subramanian on possible tax rates under GST sug

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akeholders stick to the decisions taken by the supreme body, which was later constituted as the Goods and Services Tax Council (the Council). However, the possibility of departure from the recommendations of such body cannot be completely ruled out. Any departure would definitely affect other stakeholders and in such circumstances there must be a statutory body to which affected parties may approach for dispute resolution. The nature of such dispute resolution body was a bone of contention. Under the Constitution (One Hundred Fifteenth Amendment) Bill, 2011, a Goods and Services Tax Dispute Settlement Authority was to be constituted for this purpose. This body was judicial in nature. The proposed constitution of this Authority was challenged because it s powers would override the supremacy of the Parliament and the State Legislatures. The Constitution (One Hundred Twenty Second Amendment) Bill, 2014 departed from the previous GST amendment bill and proposed that the Goods and Services

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lso under GST. Thus, to ensure smooth transition and provide fiscal buffer to States, it was agreed to keep alcohol completely out of the ambit of GST. 8. CONSTITUTIONAL AMENDMENT: 8.1 As explained above, unification of Central VAT and State VAT was possible in form of a dual levy under the constitutional scheme. Power of taxation is assigned to either Union or States subject-wise under Schedule VII of the Constitution. While the Centre is empowered to tax goods upto the production or manufacturing stage, the States have the power to tax goods at distribution stage. The Union can tax services using residuary powers but States could not. Under a unified Goods and Services Tax scheme, both should have power to tax the complete supply chain from production to distribution, and both goods and services. The scheme of the Constitution did not provide for any concurrent taxing powers to the Union as well as the States and for the purpose of introducing goods and services tax amendment of the

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in the Rajya Sabha and thereafter by Lok Sabha in August, 2016. Further the bill was ratified by required number of States and received assent of the President on 8th September, 2016 and has since been enacted as Constitution (101st Amendment) Act, 2016 w.e.f. 16th September, 2016. 8.4 The important changes introduced in the Constitution by the 101st Amendment Act are the following: a) Insertion of new article 246A which makes enabling provisions for the Union and States with respect to the GST legislation. It further specifies that Parliament has exclusive power to make laws with respect to GST on interState supplies. b) Article 268A of the Constitution has been omitted. The said article empowered the Government of India to levy taxes on services. As tax on services has been brought under GST, such a provision was no longer required. c) Article 269A has been inserted which provides for goods and services tax on supplies in the course of inter-State trade or commerce which shall be lev

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services have been defined. h) Article 368 has been amended to provide for a special procedure which requires the ratification of the Bill by the legislatures of not less than one half of the States in addition to the method of voting provided for amendment of the Constitution. Thus, any modification in GST Council shall also require the ratification by the legislatures of one half of the States. i) Entries in List I and List II have been either substituted or omitted to restrict power to tax goods or services specified in these Lists or to take away powers to tax goods and services which have been subsumed in GST. j) Parliament shall, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for five years. k) In case of petroleum and petroleum products, it has been provided that these goods shall not be subject to the levy of Goods and Services Tax

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GST; f) any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster; g) special provision with respect to the North- East States, J&K, Himachal Pradesh and Uttarakhand; and h) any other matter relating to the GST, as the Council may decide. 9.2 The Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services. 9.3 One half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings. The Goods and Services Tax Council shall determine the procedure in the performance of its functions. Every

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1.5 Cr after necessary amendments in the Act. Composition scheme shall not be available to interState suppliers, service providers (except restaurant service) and specified category of manufacturers. For special category States (except J&K and Uttarakhand) enumerated in article 279A of the Constitution, threshold exemption limit has been fixed at ₹ 75 lakh. c) Existing tax incentive schemes of Central or State governments may be continued by respective government by way of reimbursement through budgetary route. The schemes, in the present form, would not continue in GST. Further, 50% exemption of the CGST portion will be provided to CSD (Defense Canteens). d) Recommending GST laws, namely CGST Law, UTGST Law, IGST Law, SGST Law and GST Compensation Law paving the way for implementation of GST. e) In order to ensure single interface, all administrative control over 90% of taxpayers having turnover below ₹ 1.5 crore would vest with State tax administration and over 10% wi

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ving turnover upto ₹ 20 lakh, making inter State supplies; b. Suppliers of services, having turnover upto ₹ 20 lakh, making supplies through e-commerce platforms. k) The reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 and under sub-section (4) of section 5 of the IGST Act, 2017 has been suspended till 30.09.2019. l) There shall be no requirement on payment of tax on advance received for supply of goods by all taxpayers. m) Supply from GTA to unregistered persons has been exempted from tax. n) There would be a single cash ledger for each tax head. The modalities for implementation would be finalized in consultation with GSTN and the Accounting authorities. o) A scheme of single authority for disbursement of the refund amount sanctioned by either the Centre or the State tax authorities would be implemented on pilot basis. The modalities for the same shall be finalized shortly. p) The new return filing system shall be introduced on a trial bas

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ed till 07.02.2019. u) The due date for submitting FORM GST ITC-04 for the period July 2017 to December 2018 shall be extended till 31.03.2019. v) E-Wallet Scheme shall be introduced for exporters from 01.04.2019 and till then relief for exporters shall be given in form of broadly existing practice. w) All taxpayers are required to file return FORM GSTR-3B & pay tax on monthly basis. x) Taxpayers with turnover upto ₹ 1.5 Cr are required to file information in FORM GSTR-1 on a quarterly basis. Other taxpayers would have to file FORM GSTR-1 on a monthly basis. y) One more window for completion of migration process is being allowed. The due date for the taxpayers who did not file the complete FORM GST REG-26 but received only a Provisional ID (PID) till 31.12.2017 for furnishing the requisite details to the jurisdictional nodal officer shall be extended till 31.01.2019. Also, the due date for furnishing FORM GSTR3B and FORM GSTR-1 for the period July, 2017 to February, 2019 / qu

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ng types of refunds shall also be made available through FORM GST RFD-01A: (a) Refund on account of assessment / Provisional Assessment / Appeal / Any Other Order; (b) Tax paid on an intra-State supply which is subsequently held to be inter-State supply and vice-versa; (c) Excess payment of Tax; and (d) Any other refund. dd) Supply of services to Nepal and Bhutan shall be exempted from GST even if payment has not been received in foreign convertible currency – such suppliers shall be eligible for input tax credit. ee) Centralized UIN shall be issued to every Foreign Diplomatic Mission / UN Organization by the Central Government. ff) Rate of interest on delayed payments and delayed refund has been recommended. gg) A Group of Ministers has been constituted to look into the issues being faced by MSMEs and to provide solutions for the same. hh) A Group of Ministers has been constituted to study the revenue trend, including analyzing the reasons for structural patterns affecting the revenue

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or boosting real estate sector under the GST regime. kk) A Group of Ministers has been constituted to address issues related to taxation on lottery under the GST regime. ll) State of Kerala has been allowed to levy cess at the rate of 1% for not more than two years in order to overcome losses due to natural calamity. 9.5 In its 28th meeting held in New Delhi on 21.07.2018, the GST Council recommended certain amendments in the CGST Act, IGST Act, UTGST Act and the GST (Compensation to States) Act. These amendments have been passed by Parliament and have been enacted wef 01.02.2019, as the Central Goods and Services Tax (Amendment) Act, 2018, the Integrated Goods and Services Tax (Amendment) Act, 2018, the Union Territory Goods and Services Tax (Amendment) Act, 2018 and the Goods and Services Tax (Compensation to States) Amendment Act, 2018, respectively. The major amendments brought about by these Acts are as below: a) Upper limit of turnover for opting for composition scheme raised fro

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o are required to collect tax at source. g) Registration to remain temporarily suspended while cancellation of registration is under process, so that the taxpayer is relieved of continued compliance under the law. h) The following transactions to be treated as no supply (no tax payable) under Schedule III: a. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India b. Supply of warehoused goods to any person before clearance for home consumption c. Supply of goods in case of high sea sales. i) Scope of input tax credit has been widened, and it would now be made available in respect of the following: a. Most of the activities or transactions specified in Schedule III b. Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft c. Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircr

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ferent State/Union territories. p) The order of cross-utilisation of input tax credit has been rationalized. q) The amount of IGST not apportioned to the Centre or the States/UTs may, for the time being, on the recommendations of the Council, be apportioned at the rate of fifty per cent. to the Central Government and fifty per cent. to the State Governments or the Union territories, as the case may be, on adhoc basis and this amount shall be adjusted against the amount finally apportioned. r) Fifty per cent of such amount, as may be recommended by the Council, which remains unutilised in the Compensation Fund, at any point of time in any financial year during the transition period shall be transferred to the Consolidated Fund of India as the share of Centre, and the balance fifty per cent. shall be distributed amongst the States in the ratio of their base year revenue. s) In case of shortfall in the amount collected in the Fund against the requirement of compensation to be released for

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invoices uploaded by the buyer and the supplier. Simply put, the process would be UPLOAD – LOCK – PAY for most tax payers. d) Taxpayers would have facility to create his profile based on nature of supplies made and received. The fields of information which a taxpayer would be shown and would be required to fill in the return would depend on his profile. e) NIL return filers (no purchase and no sale) shall be given facility to file return by sending SMS. f) There shall be quarterly filing of return for the small taxpayers having turnover below ₹ 5 Cr as an optional facility. Quarterly return shall be similar to main return with monthly payment facility but for two kinds of registered persons – small traders making only B2C supply or making B2B + B2C supply. For such taxpayers, simplified returns have been designed called Sahaj and Sugam. In these returns details of information required to be filled is lesser than that in the regular return. g) The new return design provides facili

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ut tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger. 9.8 The GST Council in its 32nd Meeting held on 10.01.2019 took the following major decisions to give relief to MSME (including Small Traders) among others: a) Increase in Turnover Limit for the existing Composition Scheme: The limit of Annual Turnover in the preceding Financial Year for availing Composition Scheme for Goods shall be increased to ₹ 1.5 crore. Special category States would decide about the Composition Limit in their respective States. The compliance under Composition Scheme shall be simplified as now they would need to file one Annual Return but Payment of Taxes would remain Quarterly (along with a simple declaration). This would be made effective from 01.04.2019 b) Higher Exemption Threshold Limit for Supplier of Goods: There would be two threshold limits for exemption from registration for suppliers of Goods i.e. ₹ 40 lakhs and ₹ 20 lakhs. St

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t of the Real Estate Sector. b) to examine the GST Rate Structure on Lotteries. 9.10 GST Council in its 32nd Meeting held on 10.01.2019 also approved levy of Cess on Intra-State Supply of Goods and Services within the State of Kerala at a rate not exceeding 1% for a period not exceeding 2 years. Kerala Government has, accordingly, decided to levy one per cent. Kerala Flood Cess on value of intrastate supply of all goods by registered dealers, at the last supply point, coming within the GST tax bracket of 12%, 18% and 28%. 0.25% flood cess will be levied on all goods coming under the fifth schedule including gold, silver and platinum ornaments on the value of supply. All services will attract one per cent. cess. The Kerala government has also decided to allow local bodies to collect entertainment tax on movie tickets up to 10 per cent. 10. THE DESIGN OF INDIAN GST: 10.1 Concurrent dual model of GST: India has adopted dual GST model because of its unique federal nature. Under this model,

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l transfer to the Centre the credit of SGST used in payment of IGST. The person based in the destination State will claim credit of IGST while discharging his output tax liability in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST. The relevant information will also be submitted to the Central Agency which will act as a clearing house mechanism, verify the claims and inform the respective governments to transfer the funds. The major advantages of IGST Model are: a) Maintenance of uninterrupted ITC chain on inter-State transactions. b) No upfront payment of tax or substantial blockage of funds for the interState supplier or recipient. c) No refund claim in exporting State, as ITC is used up while paying the tax. d) Self-monitoring model. e) Model takes Business to Business as well as Business to Consumer transactions into account. 10.3 Tax Rates: Owing to unique Indian socio-economic milieu, four rates namely 5%, 12%, 18% and 28%

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tion amount in any financial year, year 2015-16 will be assumed to be the base year, for calculating the revenue to be protected. The growth rate of revenue for a State during the five-year period is assumed be 14% per annum. The base year tax revenue consists of the states tax revenues from: (i) State Value Added Tax (VAT), (ii) central sales tax, (iii) entry tax, octroi, local body tax, (iv) taxes on luxuries, (v) taxes on advertisements, etc. However, any revenue among these taxes arising related to supply of alcohol for human consumption, and five specified petroleum products, will not be accounted as part of the base year revenue. A GST Compensation Cess is levied on the supply of certain goods and services, as recommended by the GST Council to finance the compensation cess. 10.5 E-Way Bill System: The introduction of e-way (electronic way) bill is a monumental shift from the earlier Departmental Policing Model to a SelfDeclaration Model . It envisages one e-way bill for movement

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6.1 National Anti-profiteering Authority (NAPA) has been constituted under GST by the Central Government to examine the complaints of non-passing the benefit of reduced tax incidence. The Authority shall cease to exist after the expiry of two years from the date on which the Chairman enters upon his office unless the Council recommends otherwise. 10.6.2 The Authority may determine whether any reduction in the rate of tax or the benefit of input tax credit has been passed on to the recipient by way of commensurate reduction in prices. It can order reduction in prices, imposition of penalty, cancellation of registration and any other decision as may deem fit, after inquiry into the case. 10.7 Concept of Supply: GST would be applicable on supply of goods or services as against the present concept of tax on manufacture of goods or on sale of goods or on provision of services. It includes all sorts of activities like manufacture, sale, barter, exchange, transfer etc. It also includes suppli

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creased to ₹ 1.5 crore. 10.10 Zero rated Supplies: Export of goods and services are zero rated. Supplies to SEZs developers and SEZ units are also zero-rated. The benefit of zero rating can be taken either with payment of integrated tax, or without payment of integrated tax under bond or Letter of Undertaking. 10.11 Cross-utilization of ITC: IGST credit can be used for payment of all taxes. CGST credit can be used only for paying CGST or IGST. SGST credit can be used only for paying SGST or IGST. The credit would be permitted to be utilized in the following manner: a) ITC of CGST allowed for payment of CGST & IGST in that order; b) ITC of SGST allowed for payment of SGST & IGST in that order; c) ITC of UTGST allowed for payment of UTGST & IGST in that order; d) ITC of IGST allowed for payment of IGST, CGST & SGST/UTGST in that order. ITC of CGST cannot be used for payment of SGST/UTGST and vice versa. It has been further provided that IGST balances shall be exhaus

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ment agencies, who are recipients of supply, to deduct tax at the rate of 1% from the payment made or credited to the supplier where total value of supply, under a contract, exceeds two lakh and fifty thousand rupees. The provision for TDS has been operationalized wef 01st October, 2018. Exemption from the provisions of TDS has been given to certain authorities under the Ministry of Defence. 10.15 Refunds: Refund of tax to be sought by taxpayer or by any other person who has borne the incidence of tax within two years from the relevant date. Refund of unutilized ITC also available in zero rated supplies and inverted tax structure. 10.16 Tax Collection at Source: Obligation on electronic commerce operators to collect tax at source , at such rate not exceeding two per cent of net value of taxable supplies, out of payments to suppliers supplying goods or services through their portals. The provision for TCS has been operationalized wef 01st October, 2018. 10.17 Self-assessment: Self-asses

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gainst the orders passed by the Appellate Authority or the Revisional Authority. States would adopt the provisions relating to Tribunal in respective SGST Act.10.20 Advance Ruling Authority: Advance Ruling Authority would be constituted by States in order to enable the taxpayer to seek a binding clarity on taxation matters from the department. Centre would adopt such authority under CGST Act. 10.20 Transitional Provisions: Elaborate transitional provisions have been provided for smooth transition of existing taxpayers to GST regime. 10.21 Subsuming of taxes, duties etc.: Among the taxes and duties levied and collected by the Union, Central Excise duty, Duties of Excise (Medicinal and Toilet Preparations), Additional Duties of Excise (Goods of Special Importance), Additional Duties of Excise (Textiles and Textile Products), Additional Duties of Customs (commonly known as CVD), Special Additional Duty of Customs (SAD), Service Tax and cesses and surcharges insofar as they related to supp

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CGST Act, IGST Act, UTGST Act and the GST (Compensation to States) Act. These amendments have been passed by Parliament and have been enacted wef 01.02.2019, as the Central Goods and Services Tax (Amendment) Act, 2018, the Integrated Goods and Services Tax (Amendment) Act, 2018, the Union Territory Goods and Services Tax (Amendment) Act, 2018 and the Goods and Services Tax (Compensation to States) Amendment Act, 2018, respectively. 11.3. On 22nd June, 2017, the first notification was issued for GST and notified certain sections under CGST. Since then, 161 notifications under CGST Act have been issued notifying sections, notifying rules, amendment to rules and for waiver of penalty, etc. 16, 32 and 1 notifications have also been issued under IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Further 78, 82, 78 and 9 rate related notifications each have been issued under the CGST Act, IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Similar noti

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a total project value of ₹ 2,256 Cr. 12.2 Augmentation of human resources would be necessary to handle large taxpayers base in GST scattered across the length and breadth of the country. Capacity building, particularly in the field of Accountancy and Information Technology for the departmental officers has to be taken up in a big way. A massive four-tier training programme has been conducted under the leadership of NACIN. This training project is aimed at imparting training on GST law and procedures to more than 60,000 officers of CBIC and Commercial Tax officers of State Governments. 12.3 CBIC would be responsible for administration of the CGST and IGST law. In addition, excise duty regime would continue to be administered by the CBIC for levy and collection of central excise duty on five specified petroleum products as well as on tobacco products. CBIC would also continue to handle the work relating to levy and collection of customs duties. 12.4 Director General of Anti-profit

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ies and 1 Commissioner of Commercial Taxes (CCT, Karnataka), to be called GST Suvidha Providers (GSPs). GSPs would develop applications to be used by taxpayers for interacting with the GSTN. The diagram below shows the work distribution under GST. 13.2 Central Government holds 24.5 percent stake in GSTN while the state government holds 24.5 percent. The remaining 51 percent are held by non-Government financial institutions, HDFC and HDFC Bank hold 20%, ICICI Bank holds 10%, NSE Strategic Investment holds 10% and LIC Housing Finance holds 10%. The GST Council in its 27th meeting held on 04th May, 2018 has approved the change in shareholding pattern of GSTN. Considering the nature of state function performed by GSTN, the GST Council felt that GSTN be converted into a fully owned Government company. Accordingly, the Council approved acquisition of entire 51 per cent of equity held by non-Governmental institutions in GSTN amounting to ₹ 5.1 Cr, equally by the Centre and the State Gov

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o a long way in reducing the compliance cost. 14.3 Benefits to small traders and entrepreneurs: GST has increased the threshold for GST registration for small businesses. Those units having aggregate annual turnover more than ₹ 20 lakhs (10 lakh in case of North Eastern States) have be registered under GST. Unlike multiple registrations under different tax regimes earlier, a single registration is needed under GST in one State. An additional benefit under Composition scheme has also been provided for businesses with aggregate annual turnover upto ₹ 1.5 Cr. With the creation of a seamless national market across the country, small enterprises will have an opportunity to expand their national footprint with minimal investment. 14.4 Benefits to agriculture and Industry: GST will give more relief to industry, trade and agriculture through a more comprehensive and wider coverage of input tax set-off and service tax set-off, subsuming of several Central and State taxes in the GST

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thus boosting aggregate demand. It will result in harmonization of laws, procedures and rates of tax. It will boost export and manufacturing activity, generate more employment and thus increase GDP with gainful employment leading to substantive economic growth. Ultimately it will help in poverty eradication by generating more employment and more financial resources. More efficient neutralization of taxes especially for exports thereby making our products more competitive in the international market and give boost to Indian Exports. It will also improve the overall investment climate in the country which will naturally benefit the development in the states. Uniform CGST & SGST and IGST rates will reduce the incentive for evasion by eliminating rate arbitrage between neighboring States and that between intra and inter-State supplies. Average tax burden on companies is likely to come down which is expected to reduce prices and lower prices mean more consumption, which in turn means m

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uniform formats of tax return, common tax base, common system of classification of goods and services will lend greater certainty to taxation system. 15. EXPERIENCE OF REGISTRATION, RETURN FILING & REVNUE: 15.1 Registration & Returns Snapshot: S. No. Details As on 1st February, 2019 1. No. of transited (migrated) taxpayers 66,25,077 2. Total No. of new applications received for registration 72,47,326 3. No. of applications approved 61,89,300 4. No. of applications rejected 10,10,121 5. Total No. of taxpayers; new + migrated (1 + 3) 1,28,14,377 6. No. of taxpayers who have opted for composition scheme 17,74,379 7. No. of 3 (B) returns filed for July, 2017 65,26,282 8. No. of 3(B) returns filed for August, 2017 70,81,816 9. No. of 3(B) returns filed for September, 2017 74,07,507 10. No. of 3(B) returns filed for October, 2017 71,44,420 11. No. of 3(B) returns filed for November, 2017 71,78,519 12. No. of 3(B) returns filed for December, 2017 72,36,629 13. No. of 3(B) returns file

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r, 2017 67,00,075 31. No. of GSTR 1 returns filed for January, 2018 25,58,477 32. No. of GSTR 1 returns filed for February, 2018 25,54,257 33. No. of GSTR 1 returns filed for March, 2018 67,52,855 34. No. of GSTR 1 returns filed for April, 2018 26,93,815 35. No. of GSTR 1 returns filed for May, 2018 27,10,608 36. No. of GSTR 1 returns filed for June, 2018 69,30,688 37. No. of GSTR 1 returns filed for July, 2018 27,00,050 38. No. of GSTR 1 returns filed for August, 2018 26,66,940 39. No. of GSTR 1 returns filed for September, 2018 68,01,925 40. No. of GSTR 1 returns filed for October, 2018 25,45,880 41. No. of GSTR 1 returns filed for November, 2018 24,32,892 42. No. of GSTR 1 returns filed for December, 2018 55,58,053 43. No. of GSTR 2 returns filed for July, 2017 25,72,552 44. No. of GSTR 4 returns filed for quarter July-September, 2017 9,69,966 45. No. of GSTR 4 returns filed for quarter October- December, 2017 14,49,970 46. No. of GSTR 4 returns filed for quarter January-March, 2018

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ut also for business community, tax administration and even common citizens of the country. Some of these challenges relate to the unfamiliarity with the new regime and IT systems, legal challenges, return filing and reconciliations, passing on transition credit. Lack of robust IT infrastructure and system delays makes compliance difficult for the taxpayers. Many of the processes in the GST are new for small and medium enterprises in particular, who were not used to regular and online filing of returns and other formalities. 16.2 Based on the feedback received from businesses, consumers and taxpayers from across the country, attempt has been made to incorporate suggestions and reduce problems through short-term as well as long-term solutions. After rectifying system glitches, E-way bill for inter-State movement of goods has been successfully implemented from 1st April 2018. As regards intra-State supplies, option was given to States to choose any date on or before 3rd June, 2018. All S

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