CA Srikantha Rao T
One subject which has been in the news in the last few years on the taxation front has been implementation of the Goods and Services Tax law. While the law should ideally have been introduced six years ago it has been pending implementation for various reasons with major reasons being political rather than legal. Considering the hurdles that have been faced by the successive Governments over time one would wonder whether a system of staggered implementation with initial introduction of Central GST incorporating central excise, central sales tax and service tax would have made more sense and would have been easier before implementing it at the State level. Nevertheless, we have made significant progress from the day the First Discussion Paper on GST was announced on November 10th 2009 containing the detailed view of the Empowered Committee of the State Finance Ministers regarding the structure of GST along with a FAQ (Frequently Asked Questions) on GST for discussion with industry and trade circles.
In this article the author has sought to analyse the basic provisions of the proposed GST law based on the Model GST Law released in public domain in June 2016. Being a model law that is proposed, readers may note that the same would be subject to changes based on developments from date of release till the date of actual implementation of the same. One of the features of the provisions contained in the Model law has been the similarity of certain aspects with the present provisions under Service Tax and Central Excise. This if followed in the final law would be a welcome step as the industry would be able to rely on the views/verdicts of Judiciary till date under Service Tax and Central Excise in terms of interpretation of statutes. This would be the case as long as the provisions/contents are more or less similar.
Is there a need for GST?
The present tax structure has quite a few shortcomings. At the Union level, we have non-inclusion of several Central taxes in the overall framework of CENVAT, such as additional customs duty, surcharges, etc., besides non-capturing of value added chain in the distribution chain beyond the manufacturer in the CENVAT scheme. The introduction of GST at the Central level will not only include comprehensively more indirect Central taxes and integrate goods and service taxes for the purpose of set-off relief avoiding cascading effect of taxes, but may also lead to revenue gain for the Centre through widening of the dealer base by capturing value addition in the distributive trade.
At the State level there are several taxes which are in the nature of indirect tax on goods and services, such as luxury tax, entertainment tax, etc., which are yet to be subsumed in the existing VAT. In addition to this, CENVAT load on the goods remains included in the value of goods to be taxed under State VAT, and leading to that extent to a cascading effect of taxes. Apart from this, present VAT does not involve integration between VAT on goods and tax on services which has also contributed to litigation before Courts on levy and valuation issues in respect of contracts where both goods and services are involved.
Resolving the above issues would mean constitutional amendments i.e. for instance to enable States to tax services. The objective of GST is to provide relief to industry and trade apart from consumers by lowering if not avoiding altogether the cascading effect of taxes through a more comprehensive and wider coverage of tax set off mechanism. It is also expected to result in higher tax collections for the Union in the long run on account of wider coverage of distribution chain as well as better compliances through revamped administrative processes.
Having said this, the ideal GST would be one with single tax being levied. This obviously poses problems where the tax jurisdiction is split between Union and States and where both of them do not wish to give up their rights to levy and collect tax. In such a scenario, the GST model would have to have more than one tax being levied.
A dual GST structure is being followed with two components – one levied by the Centre (hereinafter referred to as Central GST), and the other levied by the States (hereinafter referred to as State GST). This dual GST model would be implemented through multiple statutes (one for CGST and SGST statute for every State). However, the basic features of law such as chargeability, definition of taxable event and taxable person, measure of levy including valuation provisions, basis of classification etc. would be uniform across these statutes to the extent possible. The Central GST and the State GST would be applicable to all transactions of goods and services made for a consideration and to be paid to the accounts of the Centre and the States separately. Since these would be treated separately, no cross-utilisation between the two would be possible except in case of inter-state supply of goods and services. This would require due care in fixing the rates of tax so as to ensure there is no accumulation of input tax/credit owing to final product or service suffering lower rate of tax as well as absence of cross utilization between CGST and SGST laws.
How would it work?
It is essentially a tax only on value addition at each stage, and a supplier at each stage is permitted to set-off, through a tax credit mechanism, the GST paid on the purchase of goods and services as available for set-off on the GST to be paid on the supply of goods and services. 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.
Every transaction of supply of goods and services within a State that has to suffer GST would attract both Central GST and the State GST. 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 CENVAT. While the location of the supplier and the recipient within the country is immaterial for the purpose of CGST, the concerned SGST would be chargeable only when the supplier and the recipient are both located within the State. The tax in effect would only be on value addition owing to set offs available across the supply chain.
Concepts and definitions:-
Before we move on to discussion of certain provisions of the proposed law, it would be worthwhile looking at certain definitions and concepts which are of relevance from perspective of taxability of transactions.
One of them is the definition of the term “agent” under Section 2(5) which refers to a person on behalf of another whether or not the fact is disclosed. This would require review of relationship between certain service providers and service receivers or even between principals where goods are involved to see whether certain actions by one could be seen to signify actions on behalf of the other. This could happen where liaising or coordinating between two persons (including entities) are involved. It would even include an intermediary which should be seen in the context of reference to disclosure in the said clause. This definition would be wider in scope compared to the present definition of “intermediary” in service tax.
Concept of business
The term business has been defined to include any trade, commerce, manufacture, profession, vocation or any other similar activity (including activities incidental or ancillary thereto), whether or not it is for a pecuniary benefit. Regularity or otherwise of the transaction would be immaterial. Supply or acquisition of goods including capital assets (as understood under Income Tax Act 1961 and not including jewellery held for personal use or property not connected with business) and services in connection with commencement or closure of business would also be part of the definition. The definition would also cover –
i. provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members
ii. admission, for a consideration, of persons to any premises
iii. services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation
Readers who are familiar with the definition of “person” under Service Tax may note that the term has been similarly defined under proposed Section 2(74). The aforesaid definition of “business” is quite wide in terms of scope and would go beyond the traditional meaning of the term. Litigation on this definition cannot be ruled out altogether if one were to consider the views of the Supreme Court in Commissioner Sales Tax Vs Sai Publication Fund (2002 (3) TMI 45 (SC)) where the Court had focused on the main objects of the entity to decide whether or not it engaged in trade, commerce, manufacture or similar activity.
Casual taxable person and non-resident taxable person
These two terms have been defined under Sections 2(21) and 2(69) to refer to persons occasionally dealing in goods/services in the taxable territory i.e. State or in India as the case may be who do not have a fixed place of business within the State or in India who would also be required to register under law without any threshold being fixed for such registration. The dealings may even be on behalf of another as an agent. The registration once granted would be valid for 90 days (renewable for another 90 days) u/s 19A with tax liability to be estimated and paid in advance at the time of submission of application for registration.
Continuous supply of goods
The concept of continuous supply of goods has been introduced to determine time of supply thereon whereby supply on continuing basis under a contract where invoice is issued periodically have been sought to be covered. The time of supply u/s 12 would be the date of invoice or date of receipt of payment whichever is earlier. In case statements of accounts are prepared for such supply periodically or payments made for a period, the date of expiry of the period to which statements or payments relate would be the time of supply. This would impact cases where invoices are not issued at the time of supply but where advances are received or where statements of accounts are issued periodically. Readers may note here that works contracts have been regarded as services and consequently transfer of property in goods involved in their execution logically should not be covered by this clause.
Continuous supply of services
The concept of continuous supply of services as is prevalent under service tax has been carried forth in GST regime. Going by Section 13, the time when payment would fall due as per contract the service provider has with his customer would have to be tracked. Where the contract is silent regarding timing of payments, the earlier of invoice date of date of receipt of payment would be considered. Where payments can be linked to completion of an event, date of completion of event would be considered. So, it would be in the interests of the service provider to ensure due dates for payment are rightly specified in the contract. This in effect would mean supplier of services being required to review time of accrual of tax liability under both CGST as well as SGST. This would also have an impact in terms of timing of IGST liability.
Deemed Export & Refunds
The Central Government and/or the State Government can notify those transactions of supply where goods do not leave India as deemed exports in respect of which refund would be admissible u/s 38 of the Model law. The refund in respect of deemed exports would be available on tax paid on such supplies unlike in case of export of goods or services out of India where refund of tax on inputs and/or input services used in such export of goods/services is allowed. Refund is also allowed in case where input tax accumulates and is unutilized either on account of exports or on account of tax rate differential between inputs and outputs. The limitation period has been sought to be applied to all refunds though the time limit has been extended to two years from the relevant date. In respect of unutilized credit, it would have to be within two years from the last day of the financial year in which claim arises.
Electronic Cash Ledger and electronic credit ledger
The law introduces a concept of electronic ledgers for each registered taxable person on the common portal. There are two ledgers namely cash ledger for tracking payments and credit ledger for tracking credits. Assessees who are familiar with the Personal Ledger Account/Account Current concept under Central Excise would be able to appreciate the concept of cash ledger though this ledger would be in electronic form on the portal. This ledger would be applicable even to casual taxable persons and non-resident taxable persons. The cash ledger in the name of the tax payer would be used to pay off liability on tax, interest, penalty, fee or any other amount by a taxable person. When amount is deposited using NEFT/RTGS or credit/debit cards or by any other mode, the ledger is credited and then debited when the funds in the ledger are utilized for paying off said dues. Even IGST related payments would be routed through this ledger.
The cash ledger would also be credited u/s 37(5) with the tax deducted at source by the notified deductor on behalf of the tax payer and claimed by the said tax payer/deductee based on return filed by the deductor u/s 27(5). The cash ledger would also be used by the supplier of goods or services to e-commerce operator to claim credit of the tax collected at source u/s 43C by the said operator from amounts payable to him for the supply.
The credit ledger would be credited with input tax eligible for the recipient of goods/services and this can be used by him to pay off his tax dues. U/s 35(5)(a), the amount of input tax credit on account of IGST available in the electronic credit ledger shall first be utilized towards payment of IGST and the amount remaining, if any, may be utilized towards the payment of CGST and SGST, in that order. U/s 35(5)(b) the amount of input tax credit on account of CGST available in the electronic credit ledger shall first be utilized towards payment of CGST and the amount remaining, if any, may be utilized towards the payment of IGST. The input tax credit of CGST here cannot be utilized for SGST payment.
The amount of input tax credit on account of SGST available in the electronic credit ledger shall first be utilized towards payment of SGST and the amount remaining, if any, may be utilized towards the payment of IGST. Such credit i.e. of SGST cannot be utilized for CGST payment. An amendment is also proposed to be brought in SGST law to specify that the balance in the cash or credit ledger after payment of tax, interest, penalty, fee or any other amount payable under the Act or the rules made thereunder may be refunded.
The cash and credit ledgers are also relevant from the point of view of transitional provision especially where a non-composition supplier wishes to opt for composition scheme under GST. Both CGST and SGST laws would require the supplier of goods to debit his ledgers i.e. credit or cash (depending on balance in credit ledger) with the input tax credit on inputs in stock or in respect of inputs contained in semi-finished and/or finished goods in stock on the day prior to date of switching over to composition scheme. The balance credit if any would lapse.
Time of supply of goods and services
The liability to tax would arise at the time of supply of goods and/or services. The time of supply of goods shall be the earliest of the following –
a) the date on which the goods are removed by the supplier for supply to the recipient, in a case where the goods are required to be removed or the date on which the goods are made available to the recipient, in a case where the goods are not required to be removed (this would cover cases where goods are placed at the disposal of the recipient)
b) the date on which the supplier issues the invoice with respect to the supply
c) the date on which the supplier receives the payment with respect to the supply (i.e. earlier of date of entry in books or date of credit in bank account)
d) the date on which the recipient shows the receipt of the goods in his books of account.
e) Where for any reason the aforesaid clauses are found not to be applicable and a return is to be filed, the due date for the return would be the time of supply and in other cases, the date of payment of tax.
The aforesaid clause regarding the date on which goods are made available to the recipient would also apply to –
i. goods which are physically not capable of being moved,
ii. goods which are supplied in assembled or installed form
iii. goods which are supplied by the supplier to his agent or his principal
The tax invoice in case of supply of goods has to be issued by the supplier at the time of supply showing the description, quantity and value of goods, the tax charged thereon. In respect of services, the invoice would have to be issued within the prescribed time showing the description, the tax charged thereon and such other particulars as may be prescribed. Bill of supply would be issued in case goods or services happen to be non-taxable or where the supplier opts for benefit of composition scheme. Supplementary invoices can also be issued by suppliers when the need so arises.
The time of supply of services shall be –
a) The earlier of the date of issue of invoice or the date of receipt of payment (earlier of date of entry in books or credit in bank account) as long as invoice is issued within the prescribed period or
b) Earlier of the date of completion of the provision of service or the date of receipt of payment where the invoice is not issued within the prescribed period or
c) the date on which the recipient shows the receipt of services in his books of account where the aforesaid clauses cannot be followed
Where there is a change in rate of tax with regard to supply of services, the norms u/s 14 are similar to the one under Rule 4 of Point of Taxation Rules 2011 under service tax with regard to identification of liability in the event of change in rate of tax.
Place of business and fixed establishment
In addition to place of business (which is place from where business is ordinarily carried on and includes a warehouse or place from where goods or services provided or goods stored or books of accounts maintained or premises where business is carried on through an agent), the concept of fixed establishment has been sought to be defined to mean a place where there is suitable degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs. This could pose issues in terms of services provided at site where the business establishment happens to be located in one State while services being provided at customer site in another State.
While registration would be in terms of place of business there could be fixed establishments elsewhere which could be connected with supply or receipt of services which would then form the basis for determining location of the supplier or receiver of service respectively. The concept of fixed establishments would be relevant in the context of service whereas place of business would be relevant in the context of both goods as well as services.
Place of supply of goods
The place of supply of goods (u/s 5 of the proposed Integrated Goods & Services Tax Act 2016) shall be the location at which the movement of goods terminates for delivery to recipient where the supply involves movement of goods.
Where the goods are delivered by the supplier to a recipient or any other person, on the direction of a third person, (whether acting as an agent or otherwise, before or during movement of goods), either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person. This would mean the transaction being under purview of IGST.
Where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient. Where the location is in the same State as that of the location of supplier of goods i.e. place of business of supplier registered, CGST and SGST would be payable on the supply while IGST would be applicable if the location of the goods is in a different state.
Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly.
Where the goods are supplied on board a conveyance, such as a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board.
Place of supply of services
The place of supply of all services u/s 6 of the proposed IGST Act 2016, (except specified services) made to a registered person shall be the location of the recipient.
Where supply is to any person other than a registered person the place of supply shall be the location of the recipient where the address on record exists. Where there is no address on record, it shall be the location of the supplier of service. This issue could arise where the recipient happens to have multiple locations within a State where some units/locations are not registered and services happen to be supplied to those locations. What would be regarded as address on record could be a subject matter of debate here. The recipient of service would do well to intimate the locations to Revenue and confirm fact of such intimation to suppliers of services to avoid litigation in this regard.
The specified services referred to earlier for which place of supply has been specified could be listed below –
Services relating to immovable property or accommodation in hotel or on boat/vessel
Place of supply based on location of the immovable property or boat or vessel or place where they are intended to be located –
(a) Services in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or coordination of construction work or
(b) Services by way of lodging accommodation by a hotel, inn, guest house, homestay, club or campsite, by whatever name called and including a house boat or any other vessel, or
(c) Services by way of accommodation in any immovable property for organizing any marriage or reception or matters related therewith, official, social, cultural, religious or business function including services provided in relation to such function at such property.
Restaurant, catering and personal grooming etc.
Place of supply would be based on location where services are actually performed in respect of restaurant and catering services and services in relation to personal grooming, fitness, beauty treatment, health services including cosmetic and plastic surgery
Admission to sporting, entertainment and other events etc.
Place of supply would be based on location of the event or location of park or other place in respect of services by way of admission to a cultural, artistic, sporting, scientific, educational, or entertainment event or amusement park or any other place.
Training and performance appraisal services
The place of supply of services in relation to training and performance appraisal to a registered person, shall be the location of such person and where provided to a person not registered, the location where services are actually performed.
Organisation of events
The place of supply of services listed below supplied to a registered person would be the location of such person and where provided to a person not registered, the place where the event is actually held –
(a) Organization of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of service in relation to a conference, fair, exhibition, celebration or similar events, or
(b) Services ancillary to organization of any of the above events or services, or assigning of sponsorship of any of the above events.
Transportation of goods, courier services
Place of supply for services by way of transportation of goods, or mail or courier provided to registered person would be the location of the service recipient and where provided to an unregistered person, the location at which such goods are handed over for transportation.
Passenger transportation service
The place of supply of passenger transportation service shall be the place where the passenger embarks on the conveyance for a continuous journey where provided to a person not registered. Where provided to a person registered shall be the location of the recipient/said person. Where the right to passage is given for future use and the point of embarkation is not known, it would be the location of the service recipient where recipient is registered or his address on record exists and location of service provider where the recipient is not registered or has no address on record. (For the purpose, return journey would be treated as a separate journey)
Service on board conveyance/vessel/aircraft etc.
The place of supply of services on board a conveyance such as vessel, aircraft, train or motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for the journey.
Telecommunication and internet services
The place of supply of telecommunication services including data transfer, broadcasting, cable and direct to home television services to any person shall –
(a) in case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna, be the location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services;
(b) in case of mobile connection for telecommunication and internet services provided on post-paid basis, be the location of billing address of the service receiver on record of the service provider;
(c) in cases where mobile connection for telecommunication and internet service are provided on pre-payment through a voucher or any other means, be the location where such pre-payment is received or such vouchers are sold. However, location of service receiver as indicated in service provider’s records would be considered as place of supply where pre-payment or recharge is by internet banking or electronic means.
Banking and financial services, stock broking services
The place of supply of banking and other financial services including stock broking services to any person shall be the location of the service receiver on the records of the service provider subject to location of service provider being considered where services are not linked to account of the receiver.
The place of supply of insurance services shall:
a) to a registered person, be the location of the service receiver; and
b) to a person other than a registered person, be the location of the service receiver on the records of the service provider.
Advertisement services to Govt., local authority
The place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for identifiable States, shall be taken as located in each of such States and the value of such supplies specific to each State shall be in proportion to amount attributable to service provided by way of dissemination in the respective States as may be determined in terms of the contract or agreement entered into in this regard.
Goods and turnover
The term “goods” u/s 2(48) means every kind of movable property other than actionable claim and money but includes securities, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under the contract of supply. It would not include intangible property as this has been covered under the definition of “services”. The term “turnover in a state” means the aggregate value of all taxable and non-taxable supplies, including exempt supplies and exports of goods and / or services made within a State by a taxable person and inter-state supplies of goods and / or services made from the State by the said taxable person excluding taxes, if any charged under the CGST Act, SGST Act and the IGST Act, as the case may be.
In addition to this, we also have the concept of “aggregate turnover” which means the aggregate value of all taxable and non-taxable supplies, exempt supplies and exports of goods and/or services of a person having the same PAN, to be computed on all India basis and excludes taxes, if any, charged under the CGST Act, SGST Act and the IGST Act, as the case may be. This would exclude reverse charge liability cases and value of inward supplies. This has relevance from the point of view of eligibility for composition scheme as well as requirement to register under law.
Intra-state transaction or transaction within a State
Going by Section 3A of the proposed IGST Act 2016, this would cover supply of goods and/or services where the location of the supplier and the place of supply are in the same State. Readers may note that in the context of goods, location can be with reference to place of business of supplier that is registered while in respect of services, it can be either place of business registered or fixed establishment connected with the service. Intra state supplies would be subjected to levy of CGST and SGST but not IGST.
The Central Government would levy IGST (Section 4 of The Integrated Goods & Services Tax Act 2016) on all inter-State transactions of taxable goods and services. In order to constitute an inter-state sale, the location of supplier/service provider and the place of supply of goods or services are to be in different States going by Section 3 of The Integrated Goods & Services Tax Act 2016 proposed.
The location of the supplier of goods would be with reference to place of business registered while in respect of services, could be either place of business registered or fixed establishment connected with supply of service. The transitional provisions also provide for levy on transactions of supply of goods and/or service initiated prior to introduction of GST but concluded thereafter. Where dues partially cleared under existing law, the liability under new law would only be for the differential amount. This aspect though requires further clarity. Initiation would be in terms of either invoicing or receipt of payment (wholly or partly) prior to introduction of GST.
Import and Export
The concept of export in respect of goods would require the goods to be taken out of India to a place outside India. In respect of services, the supply would be regarded as export of service when the following conditions are satisfied – (a) supplier of service is located in India (b) recipient of service is located outside India (c) place of supply of service is outside India (d) payment for the service is received by the supplier of service in convertible foreign exchange (e) the establishments of the service supplier and receiver should not just be establishments of the same person i.e. they should be distinct legal entities. This clause is similar to the one presently prevalent in service tax. Readers may note the view of the Tribunal in Jet Airways (I) Ltd Vs CST Mumbai (2014 (4) TMI 363 CESTAT Mumbai) where distinction was made between branch office of the service provider and a distinct legal entity which would also be relevant here.
The concept of place of supply of service would require clarity in the context of services (other than specified services where place of supply is as specified) provided to recipients outside India. This is on account of the fact that there is reference to services being provided to registered premises or where address of the premises is available on record. This has potential to lead to litigation unless clarified.
The term import of goods would imply bringing goods into India from a place outside India. The service would be said to be imported into India if (a) supplier of service is located outside India (b) recipient of service is located in India (c) place of supply of service is in India. A person in India having a branch office or representational office or agency for business in any other territory i.e. outside India would be regarded as having an establishment in that territory to invoke liability. The establishment in India and those outside India would be treated as separate establishments for levying tax on the establishment in India under reverse charge mechanism.
Liability on import of services would be under proposed IGST Act 2016 and would arise even if transaction is initiated before GST coming into force but concluding post its introduction. For the purpose of initiation, either the invoice or the payment (either in part or full) should be prior to introduction of GST. Where any dues have been cleared on import prior to introduction of GST, balance liability if any would be under the new law.
Both import and export come under the purview of IGST law though there is a concept of zero rated supply under Section 2(109) of Model law where exports are sought to be treated as zero rated supply i.e. no tax payable but input tax credit being available with respect thereto. The concept of zero rating would however have to be reviewed in context of export of services where additional conditions for holding the same as export have been specified.
Concept of supply
The term supply would generally include all forms of supply such as sale, transfer, barter, exchange, license, rental, lease or disposal, and importation of services, made or agreed to be made for a consideration by a person in the course or furtherance of business and also includes a supply specified in Schedule I, made or agreed to be made without a consideration.
The proposed Schedule I to the Model GST law presently includes the following as supplies deemed to be without consideration for taxability –
1. Permanent transfer/disposal of business assets.
2. Temporary application of business assets to a private or non-business use.
3. Services put to a private or non-business use.
4. Assets retained after deregistration.
5. Supply of goods and / or services by a taxable person to another taxable or non-taxable person in the course or furtherance of business.
However, supply of goods by a registered taxable person to a job-worker in terms of section 43A shall not be treated as supply of goods. Supply of any branded service by an aggregator, as defined in section 43B, under a brand name or trade name owned by him shall also be deemed to be a supply of the said service by the said aggregator
Supplying or receiving goods and/or services by an agent on behalf of the principal for an agreed commission or brokerage would also be regarded as a supply of goods and/or services. Section 3 of the Model Law proposed also provides for the Central Government or the State Government to notify transactions/supplies which may not be regarded as supply of goods and/or supply of services.
Schedule II also contains matters which may be treated as supply of goods or as supply of services. The following is the specification under Schedule II –
i. Any transfer of the title in goods is a supply of goods.
ii. Any transfer of goods or of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of services.
iii. Any transfer of title in goods under an agreement which stipulates that property in goods will pass at a future date upon payment of full consideration as agreed, is a supply of goods.
iv. Any lease, tenancy, easement, licence to occupy land is a supply of services.
v. Any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services.
vi. Any treatment or process which is being applied to another person’s goods is a supply of services.
vii. Where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person.
viii. Where, by or under the direction of a person carrying on a business, goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods is a supply of services.
ix. Where any goods, forming part of the business assets of a taxable person, are sold by any other person who has the power to do so to recover any debt owed by the taxable person, the goods shall be deemed to be supplied by the taxable person in the course or furtherance of his business.
x. Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless-
(a) the business is transferred as a going concern to another person; or
(b) the business is carried on by a personal representative who is deemed to be a taxable person.
Entries in the declared services list under service tax have been sought to be regarded as supply of services. The following therefore would be treated as supply of services –
i. renting of immovable property
ii. construction (including additions, alterations, replacements or remodeling of any existing civil structure) of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or before its first occupation, whichever is earlier.
iii. temporary transfer or permitting the use or enjoyment of any intellectual property right
iv. development, design, programming, customization, adaptation, upgradation, enhancement, implementation of information technology software
v. agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act
vi. works contract including transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract
vii. transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration
viii. supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.
ix. Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration would however be regarded as supply of goods.
Job work u/s 2(62) means undertaking any treatment or process by a person on goods belonging to another registered taxable person. Section 43A provides for job work scenario with the permission of the Commissioner and subject to conditions to be specified by him. Goods can either be brought back to principal’s place of business or even removed to another job worker’s premises or even cleared from the job worker’s premises post completion of processing within India on payment of applicable tax or for export. Principal would be held liable for payment of tax and for accounting of goods and not the job worker. Direct despatch from job worker location would be permitted where the principal specifies such location as his additional place of business or job worker himself happens to be registered under law. Government concerned could also notify goods where direct despatches from job worker location would be allowed.
Section 16A provides for availment of credit of input tax on inputs and capital goods sent to the job worker by the principal and the time limit for receiving back the goods is same as what is prevailing presently under Central Excise. i.e. one hundred and eighty days for inputs and two years from the date of sending goods for capital goods. Non receipt of the said goods within the stipulated period would require reversal of credit with facility of re-credit being available once the goods are actually received back.
Readers are required to note the transitional provision with regard to job work where there is a time limit of six months from the date provisions under this law take effect, to receive goods back from the job worker. This would pertain to cases where goods were sent to job worker prior to this law coming into force but which are pending to be received as of that date. Extension would be available only up to a period of two months beyond the six month time line. Where goods are pending receipt beyond the period, applicable tax would have to be paid. The above relaxation would be available only if the inputs stock with job worker held on behalf of supplier on the appointed day is declared in the manner required.
The concept of job work as confirmed by the Supreme Court in Prestige Engineering (India) Ltd Vs CCE Meerut (1994 (9) TMI 66 (SC)) would be relevant here and consequently minor additions by job worker should not result in transaction not being regarded as job work. This would be more relevant in the context of SGST as assessees for the first time would have to address this issue at the State level.
The term taxable person u/s 9 would mean a person who carries on any business at any place in India or the concerned State and who is registered or required to be registered under Schedule III of this Act for payment of tax. This Schedule requires all taxable persons having turnover above the threshold being required to register. Turnover would include supplies on his own account as well as those on account of principal. A person supplying inter-state would be liable to register irrespective of his turnover. Casual taxable person (occasional supplier with no fixed place of business in the taxable territory) as well as non-resident taxable person dealing in India without fixed place of business and person liable on reverse charge mechanism have also been covered.
Readers may note that while employees providing services to employer have been excluded from being regarded as taxable person, Central Government and State Government along with local authorities would be regarded as taxable person in respect of activities or transactions in which they are engaged as public authorities unless the activities happen to be those covered illustratively under Schedule IV.
The following persons would not be regarded as taxable persons –
(a) employee providing services to his employer in the course of, or in relation to his employment, or by any other legal ties creating the relationship of employer and employee as regards working conditions, remunerations and employer’s liability
(b) any person engaged in the business of exclusively supplying goods and/or services that are not liable to tax under this Act
(c) person, liable to pay tax u/s 7(3) on services received where value does not exceed limit specified in this regard for the year, which are for personal use, i.e. other than for use in the course or furtherance of his business
Going by the provisions on composition in Model law, the benefit of opting for the same would arise in case of a registered taxable person whose aggregate turnover during a financial year does not exceed rupees fifty lakhs. This benefit would not be available to a person undertaking inter-state supply of goods and/or services. Service providers including those into works contract execution would have to note that since States would also levy tax on services, the requirement of not providing inter-state services (to opt for composition benefit) would apply in respect of all services provided by the entity. The benefit would be linked to PAN meaning all units covered by the PAN i.e. all units within a legal entity being required to opt for composition. One would have to hope that the turnover based limits for composition as well as requirement for all units to opt for composition would be reviewed at least over time if not now. Collection of composition tax from recipient of supplies has been specifically barred along with claiming input tax credit or set off.
A composition tax payer under present laws can also opt for non-composition scheme under GST and would be entitled to avail credit of eligible taxes/duties under Cenvat scheme and of VAT under local law within the State at the time of transitioning to the new law. For the purpose, the inputs in stock as well as contained in goods to be supplied on tax payment under new law would have to be ascertained and the credit would only be available on those procurements during twelve months preceding date of introduction of new law.
Input tax credit
The definition of “capital goods” under proposed Section 2(20) for the purpose of availing credit of input tax is similar to the one prevailing presently under Cenvat Credit Rules 2004. Since there is a reference to specified chapters and headings in the Schedule to the Act, one gets the impression that the classification norms and the codification under Harmonised System of Nomenclature might find a mention in one of the Schedules yet to be confirmed as of now. The term “factory” has been replaced by the concept of place of business. While the definition talks about linkage between goods and place of business for supplier of goods i.e. in terms of usage at place of business, such linkage is absent in case of supplier of service implying these could be used anywhere as long as being used for supply of services.
The concept of usage for supplying service in itself has been subject matter of considerable litigation under service tax in recent years under present provisions. This may continue under GST as well owing to possible differences in perception between Revenue and assessee. Readers could note some decisions already in their favour under service tax which could be of use for interpreting the said clause under GST. In Adani Port & Special Economic Zone Ltd Vs CST Ahmedabad (2016 (42) STR 1010 (Tri-Ahmd)) the phrase “used for providing” was seen to expand the scope of the definition. As a thumb rule, goods which enable providing or supplying services efficiently could be seen as being used for supplying services.
The term “input” u/s 2(54) has been broadly defined to mean any goods other than capital goods, (subject to exceptions as may be provided under this Act or the rules made thereunder), used or intended to be used by a supplier for making an outward supply in the course or furtherance of business.
The term “goods” would exclude immovable property. Therefore readers are advised to go through the plethora of decisions/cases regarding movable/immovable property at the Supreme Court level available under Central Excise with the notable ones being Solid & Correct Engineering Works Vs CCE Ahmedabad (2010 (252) ELT 481 (SC)), Virdi Brothers Vs CCE Indore (2007 (207) ELT 321 (SC)) and Craft Interiors (P) Ltd CCE Bangalore (2006 (203) ELT 529 (SC)). This would help them in understanding what could be regarded as goods for availing credits on input tax. It is worthwhile noting that where works contract services in the nature of construction services are received by the supplier, credit would be admissible u/s 16 as long as services relate to setting up or putting up of plant and machinery.
The term “input service” u/s 2(55) has been defined to mean any service, (subject to exceptions as may be provided under this Act or the rules made thereunder), used or intended to be used by a supplier for making an outward supply in the course or furtherance of business. The term “business” itself has been defined to have wide scope. Though the definition of “inputs” and “input service” is wide in terms of scope, restrictions on credit availability have been indicated in Section 16.
Restrictions in terms of credits
Input tax credit (credit on goods and/or services) shall not be available in respect of the following –
(a) Motor Vehicles, except when they are supplied in the usual course of business or are used for providing the following taxable services –
i. transportation of passengers, or
ii. transportation of goods, or
iii. imparting training on motor driving skills
(b) goods and / or services provided in relation to food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as leave or home travel concession, when such goods and/or services are used primarily for personal use or consumption of any employee
(c) goods and/or services acquired by the principal in the execution of works contract when such contract results in construction of immovable property, other than plant and machinery
(d) goods acquired by a principal, the property in which is not transferred (whether as goods or in some other form) to any other person, which are used in the construction of immovable property, other than plant and machinery. This would ensure a works contractor getting credit as he himself would be charging tax on supply of the said service by him.
(e) goods and/or services on which tax has been paid under composition scheme
(f) goods and/or services used for private or personal consumption, to the extent they are so consumed. This clause leaves room for litigation especially where employees of a business enterprise use goods and/or services for carrying on their official duties where there could be some incidental usage for personal purposes.
(g) Where the registered taxable person has claimed depreciation on the tax component of the cost of capital goods under the provisions of the Income Tax Act, 1961, the input tax credit shall not be allowed on the said tax component
What could be regarded as plant could in itself be a subject matter of debate. The term could be capable of wide connotation at times. In general going by the meaning assigned in P Ramanatha Aiyar’s Advanced Law Lexicon (Vol. 3, 4th Edition LexisNexis Butterworths Wadhwa Nagpur), it could be seen to mean fixtures, machinery, tools, apparatus, appliances, etc. necessary to carry on trade or mechanical business or any mechanical operation or process. Whether or not building/civil structure could be taken as plant could be subject matter of debate based on the operations of the taxable person. Where a building is so planned or constructed so as to serve taxable person’s/assessee’s technical requirements, it should qualify as plant (CIT Vs Karnataka Power Corporation (2001 (247) ITR 268 (SC)).
Tax payment/reversal in case of supply of capital goods
Where capital goods on which input tax credit has been taken, are supplied by the taxable person, the registered taxable person shall pay an amount equal to the input tax credit taken on the said capital goods reduced by the percentage points as may be specified in this behalf or the tax on the transaction value of such capital goods under sub-section (1) of section 15, whichever is higher.
The registered taxable person would have to ensure he is in possession of a tax invoice, debit note, supplementary invoice or such other taxpaying document as may be prescribed, issued by the registered supplier. Where goods are received in lots, credit would be admissible on receipt of the last lot from supplier. The credit would be claimed in the electronic credit ledger. The details of claim would be matched electronically with the details of payment by the supplier supplying goods and/or services to the credit claimant/taxable person.
“Input tax” u/s 2(57) in relation to a taxable person, means the (IGST and CGST)/(IGST and SGST) charged on any supply of goods and/or services to him which are used, or are intended to be used, in the course or furtherance of his business. This would also include tax paid under reverse charge mechanism.
Where the goods or services received are used partly for business and partly for other purposes, the tax amount eligible for credit would be the amount attributable to business use. This attribution would have to be done for both inputs as well as capital goods as reference in Section 16(5) is to goods which would be exhaustive. For the purpose zero rated supplies (for instance, exports) by the supplier attributing the tax would be regarded as entitling him to credit.
Can input tax credit be transferred?
Where there is a change in the constitution of a registered taxable person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provision for transfer of liabilities, the said registered taxable person shall be allowed to transfer the input tax credit that remains unutilized in its books of accounts to such sold, merged, demerged, amalgamated, leased or transferred business.
Input service credit distribution
The facility of input service distribution similar to the one under service tax is also available where an office of a supplier of goods and/or services can distribute credits of CGST/SGST or IGST as the case may be paid on input services to the supplier. Credit amount distributed cannot exceed the credits originally available for distribution. Distribution would be possible as long as distributor and receiver of benefit happen to be covered by the same PAN. CGST and/or SGST and/or IGST could be distributed as IGST where the distributor and recipient of credit are located in different States.
CGST and/or IGST could be distributed as CGST where the distributor and credit recipient (being a business vertical) are located in the same State. SGST and/or IGST could be distributed as SGST where distributor and credit recipient (business vertical) are in the same State. The term “Business vertical” is supposed to have the meaning assigned to business segment under AS 17 issued by ICAI. Other conditions for distribution are similar to the ones prevailing under service tax.
Who is liable?
As per proposed Section 7(2), the liability to CGST/SGST would be on the taxable person. This has to be read with Section 7(1) where levy is on all intra-state supply of goods and services (with IGST being dealt with separately) and by the taxable person. In respect of supply of goods and/or services in the course of inter-state trade or commerce, IGST would be payable by the taxable person. Liability to CGST/SGST or IGST could also be cast upon the recipient on reverse charge basis in which case the tax would be payable by such recipient.
Once a person (not registered under existing law) engages in taxable supplies he would be liable to register unless the value does not exceed the limits to be set out in this regard. Once liable, registration to be applied for in each State where supplies undertaken within thirty days from the date on which he becomes liable for registration. Option of separate registration would be available where there are multiple business verticals within a State. Registration would be based on PAN of the taxable person and it would be compulsory to have PAN at the time of applying for registration.
Invoice, credit and debit notes
The taxable person is required to issue tax invoice u/s 23 with tax amount being indicated prominently on the invoice. Credit note can be issued to receiver of goods and/or services where tax is charged in excess of requirement, within 30th of September following the end of the financial year in which supply has been undertaken. Where annual return is filed before this date, credit note cannot be issued beyond date of filing of annual return. Credit note can also not be issued if incidence of tax has been passed on to any other person. Similarly a debit note can issued where the tax is short charged.
The credit/debit note issued by supplier and received by recipient would be disclosed in their respective returns for claiming tax adjustment, in the month of issue/receipt of any subsequent month not beyond the time period indicated above in respect of their issue.
Consideration and transaction value
The term “consideration” going by proposed Section 2(28) would include payment in money or kind or even monetary value of any act or forbearance (whether or not voluntary) in response to supply of goods or services and by the recipient or any other person. The concept of “consideration” is wide enough as long as there is nexus with supply of goods and/or services. This definition has to be seen in the context of proposed Section 15 which deals with value of taxable supply.
Luckily, the value of a supply of goods and/or services shall be the transaction value, that is the price actually paid or payable for the said supply of goods and/or services where the supplier and recipient of the supply are not related and the price is the sole consideration for the supply. There would be certain specified additions to this value which have been set out as follows –
i. Value of obligations of supplier in relation to supply met by the recipient of goods/services where not forming part of transaction value
ii. Value of goods/services supplied free of cost or at concessional rate (value of concession to be considered) by recipient for use in relation to supply of goods/services by the supplier to the extent it has not formed part of transaction value
iii. Royalty and license fees payable by recipient as condition for supply of goods/service in question to the extent these do not form part of transaction value
iv. Taxes or duties, fees/charges levied under any other statute (would not include SGST/CGST or IGST)
v. Charges incidental to supply of goods/services including any amount charged for anything done in relation to supply either at the time of or prior to delivery of goods or supply of services
vi. Subsidies provided in any form or manner as long as they are linked to supply
vii. Any reimbursable cost or expenses relating to supply charged for separately. This is however subject to concept of “pure agent” not being satisfied
viii. Discounts or incentives allowed post supply (unless known under agreement and linked to specific supplies)
The transaction value above shall not include any discount allowed before or at the time of supply provided such discount is allowed in the course of normal trade practice and has been duly recorded in the invoice issued in respect of the supply. This could mean post supply discounts being subjected to tax. The fact that transaction value concept has been followed here is vital as transaction value declared cannot be ignored by Authorities unless there is evidence of additional consideration flowing back to supplier going by the views of the Supreme Court in Strapex India Ltd Vs Commissioner (2016 (1) TMI 723 (SC)) in a case pertaining to valuation under Customs Act which would also be relevant in the context of GST.
Reference to Valuation Rules
The proposed GST Valuation (Determination of the Value of Supply of Goods and Services) Rules 2016 would have to be referred where transaction value cannot be followed. This would be in the following scenarios –
(a) the consideration, whether paid or payable, is not money, wholly or partly;
(b) the supplier and the recipient of the supply are related;
(c) there is reason to doubt the truth or accuracy of the transaction value declared by the supplier;
(d) business transactions in the nature of pure agent, money changer, insurer, air travel agent and distributor or selling agent of lottery;
(e) such other supplies as may be notified by the Central or a State Government in this behalf.
Valuation Rules – When can transaction value be ignored for goods and/or services?
The valuation provisions under the valuation rules could be summarised as follows –
i. The value of goods and/or services shall be the transaction value (value determined in monetary terms) unless the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any goods and/or services based on –
(a) the significantly higher value at which goods and/or services of like kind or quality supplied at or about the same time in comparable quantities in a comparable commercial transaction were assessed
(b) the significantly lower or higher value of the supply of goods and/or services compared to the market value of goods and/or services of like kind and quality at the time of supply; or
(c) any mis-declaration of goods and/or services in parameters such as description, quality, quantity, year of manufacture or production.
ii. Where transaction value cannot be followed, the value has to be determined by following the below steps sequentially –
the value shall be determined on the basis of the transaction value of goods and/or services of like kind and quality supplied at or about the same time to other customers, adjusted for
i. difference in the dates of supply,
ii. difference in commercial levels and quantity levels,
iii. difference in composition, quality and design between the goods and/or services being valued and the goods and/or services with which they are compared,
iv. difference in freight and insurance charges depending on the place of supply.
Where the value cannot be determined based on the aforesaid comparative method, it would be on computed value which shall include –
i. the cost of production, manufacture or processing of the goods or, the cost of provision of the services
ii. charges, if any, for the design or brand
iii. an amount towards profit and general expenses equal to that usually reflected in supply of goods and/or services of the same class or kind as the goods and/or services being valued which are made by other suppliers.
The Rules provide for residual method consistent with principles of the said Rules where both the aforesaid methods cannot be followed.
The author here is of the humble view that while analyzing comparative price details for goods would be easier, application of the same to services could pose problems. Problems could also arise in valuing services under computed value approach where there is a reference to brand. Where the intention is only to look at costs actually incurred it should not pose a problem as brand or design related charges incurred by the supplier of goods or services would be ascertainable. Where imputed costs are to be considered, there could be practical problems and litigation involved.
Pure agent concept for reimbursement
The concept of “pure agent” as is prevalent under service tax has been carried forth to GST in respect of services provided despite the Courts holding reimbursements as not being subjected to tax. The concept of transaction value includes anything charged by the supplier of goods and/or services at the time of or before delivery of goods or at the time of or before provision of services. This could mean reimbursements being kept out of tax net only where the concept of “pure agent” is satisfied. It is however worthwhile noting that the exclusion is only for service providers and not for supplier of goods.
Concept of “related person”
The definition proposed u/s 2(82) is wider in scope as compared to the present one under Section 4 of Central Excise Act 1944 and would apply to transaction in goods or services. Persons (including legal persons) shall be deemed to be “related persons’’ if only –
(a) they are officers or directors of one another’s businesses;
(b) they are legally recognized partners in business;
(c) they are employer and employee;
(d) any person directly or indirectly owns, controls or holds five per cent or more of the outstanding voting stock or shares of both of them;
(e) one of them directly or indirectly controls the other;
(f) both of them are directly or indirectly controlled by a third person;
(g) together they directly or indirectly control a third person; or
(h) they are members of the same family.
Persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other shall also be deemed to be related. The transaction value would be accepted even in case of related party transactions if the relationship has not influenced the price charged for the transaction.
Transfers between agent-principal and within business
Transaction value concept would also apply to transfers or supplies of goods from agent to principal or vice-a-versa or from one place of business to another place of the same business irrespective of State in which parties are located.
Reverse charge liability-whether mechanism exists?
It is worthwhile noting that proposed Section 7(3) allows Central or State Government to specify by Notification, the categories of supply of goods and/or services on which tax is payable on reverse charge basis. While this mechanism presently exists in service tax it is proposed to be extended to goods as well with the State Governments too having powers to notify goods and/or services for collecting tax on reverse charge basis. Similar to the existing mechanism under service tax, this liability would not be regarded as output tax for the payer u/s 2(72).
A similar provision exists in Section 4(3) of The Integrated Goods & Services Tax Act 2016 proposed which enables the Central Government to specify categories of supply of goods and/or services where the recipient would be liable to pay tax on reverse charge basis. This liability would not be regarded as output tax u/s 2(g) of the Act. Going by explanations 1 and 2 to Section 2(c) read with Section 4(3) of the Act, the Central Government would be in a position to notify cases where importer of goods or recipient of services would be required to pay tax on reverse charge basis where the goods are imported into or services received from abroad into the territory of India.
In respect of supply of goods/services where liability is to be discharged on reverse charge basis by the recipient, the time of supply would be the earliest of the following –
(a) date of receipt of goods/services
(b) date on which payment is made (i.e. earlier of date on which the payment is entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account)
(c) date of receipt of invoice
(d)date of debit in books of accounts
Then following returns would have to be filed electronically –
(a) Monthly return of outward supply of goods and/or services – Within 10th of succeeding month. Details relating to zero-rated supplies, inter-state supplies, return of goods received in relation to/ in pursuance of an inward supply, exports, debit notes, credit notes and supplementary invoices issued during the said tax period would be part of the return. (Proposed Form GSTR 1)
(b) Monthly return of inward supplies of goods and/or services – within 15 days from the end of the month to which it relates. It would also include details of receipt of credit/debit notes and reverse charge liability supplies received. (Proposed Form GSTR 2)
(c) Monthly return of inward and outward supplies of goods and/or services, input tax credit availed, tax payable, tax paid and other particulars as may be prescribed – Within 20 days from the end of the concerned month to which it relates. (Proposed Form GSTR 3). Composition tax payers would be required to file quarterly return (Form GSTR 4) within 18 days from the end of relevant quarter.
i. Return here would have to be filed for each month and default in filing one return could result in subsequent filing being affected.
ii. Partial tax payment while filing monthly return would result in return not being treated as a valid one for allowing credit based on such supplies.
(d) Monthly return of tax deduction at source – Within 10 days from the end of the relevant month. (Proposed Form GSTR 7)
(e) Monthly return for input service credit distribution by ISD – Within 13 days from the end of the relevant month to which it pertains. (Proposed Form GSTR 6)
(f) Annual return is to be filed by taxable person (other than ISD, casual and non-resident tax payers, tax deductor) within 31st December following the end of the relevant financial year to which return pertains. (Proposed Form GSTR 8). This would be accompanied by the audit report where the records are required to be audited under GST law.
The law also talks about first return of outward and inward supplies from the date liable to be registered upto the end of the month in which registration is obtained.
The supporting records would have to be preserved for sixty months from the last date for filing Annual Return pertaining to the relevant financial year.
Summing up one could say that while manufacturers and service providers in India who are well-versed in Central Excise and Service Tax would find it easy to come to terms with GST based on the model law discussed here, GST would succeed in its objective only if the tax rates are kept at a low to moderate level i.e. preferably not exceeding 20%. This as one would understand now, could be a challenge as the States are yet to arrive at a consensus on rates as at the date of this article going by published information/sources.
The author in this article has sought to summarise the basic provisions of the model GST law based on information available at the time of release of this article. Readers may also note that there could be changes in the proposed model law which could alter the nature of discussion moving forward from this date. They are therefore advised to keep themselves updated regarding further announcements by law makers in this regard. Readers who may have queries regarding this article may contact the author at firstname.lastname@example.org