CA Chandrasekhar Yaragani
Key Features of GST in India
- In India the GST will have two components one is levied by the centre, hereafter referred to as (CGST) central goods and service Tax and other is levied by the state hereafter referred to as (SGST) state goods and service tax.
- Many taxes has been subsumed under GST which are as under
|Central Indirect Taxes & Levies||Central Excise Duty|
|Additional Excise Duties|
|Excise Duty levied under the Medicinal Preparations (Excise Duties) Act, 1955|
|Additional Customs Duty (CVD)|
|Special Additional Duty of Customs|
|Central Surcharges and Cesses|
|State Indirect Taxes & Levies||VAT / Sales Tax|
|Entertainment tax (other than the tax levied by local bodies)|
|Central Sales Tax|
|Octroi and Entry Tax|
|Taxes on Lottery|
|Betting and Gambling|
|State Cesses and Surcharges|
- With the introduction of Constitution Amendment Bill in December 2014, the concept of ‘declared goods of special importance’ has been dispensed.
- All goods and services, except alcoholic liquor for human consumption are covered for the levy of GST. In case of petroleum products i.e Crude Oil, High Speed Diesel, Motor Spirit, Natural Gas and Aviation Turbine Fuel, it has been provided that these goods shall not be subject to the levy of GST till a date notified on the recommendation of the GST Council.
- Location based tax exemptions to Industrial units would be phased out (protected up to eligibility period but will be made GST compatible)
- Intra State Transactions: In case of Intra State transactions, Seller collects both CGST & SGST from the buyer and CGST needs to be deposited with Central Govt and SGST with State Govt
- Inter State Transactions: Integrated Goods and Service Tax (IGST) shall be levied on Inter State transactions of goods and services which is based on destination principlee Tax gets transferred to Importing state. More over it is proposed to levy an additional tax on supply of goods, not exceeding one percent, in the course of inter-state trade or commerce, to be collected by the Govt of India for a period of two years, and assigned to the States where the supply originates.
Valuation of stock transfers to be determined. Exports and Supplies to SEZ units will be zero rated.
- Requirements of IGST Model
- Uniform e-registration
- Common e- Return for CGST, SGST & IGST
- Common periodicity of Returns for a class of dealers
- Uniform Cut-off date for filing of Returns
- Mandatory reporting of sales and purchase invoice details prior to or along with filing of e-Return
- System based verification of returns on monthly basis
- System based validations / consistency checks on the ITC availed, utilized & Tax Payments
- Credit of IGST, CGST & SGST: Setoff of IGST, CGST & SGST will be as follows in the below mentioned chronological order only
|Credit of||To be Adjusted with|
- Determination of Place of Supply & Service Rules
Determining the place of supply of goods and services is important as it determines the taxing jurisdiction.
In case of goods, the place of supply is generally based on the delivery, physical location of the goods. Where goods are not removed, the place of supply could be deemed to be the place where the goods are located at the time when the supply takes place.
Determining the place of supply of services is complex. Supply of service is intangible; it can be continuous over a period of time; can be spread over many places; location of service recipient and place of consumption of service is often different. Rules for electronically transmitted services, banking, insurance, road & air transport service etc needs to be resolved.