CA Bimal Jain

CA Bimal JainRed-carpet entry of GST from July 1, 2017 and gist of the various GST Notifications

“India will now have one tax. GST is actually a Good and Simple Tax……”

Hon’ble Prime Minister, Shri Narendra Modi

When the clock struck midnight on June 30, 2017, the Country India witnessed the biggest indirect tax reform namely Goods and Services Tax (“GST”) receiving a red carpet welcome in Parliament’s Central Hall. It was a luxury welcome for the long-awaited GST, ending a 14-year struggle to enlist political support for a move that will replace around 17 federal and state levies and unify a country of 1.3 billion people into one of the world’s biggest common markets.

Today is indeed a memorable and historic day for Country India.

Gist of the various GST Notifications:

Recently, the Government has released various Notifications under CGST, UTGST and IGST for giving kick start to the mammoth indirect tax reform in India. Various Notifications issued by the Government are as under:

Category Notification No. Date
CGST 01/2017 –  06/2017 June 19, 2017
  07/201708/2017 June 27, 2017
  09/201713/2017 June 28, 2017
CGST(Rate) 01/201717/2017 June 28, 2017
  18/2017 June 30, 2017
IGST 01/201702/2017 June 19, 2017
  03/201706/2017 June 28,2017
IGST(Rate) 01/201714/2017 June 28,2017
  15/201716/2017 June 30, 2017
UTGST 01/2017 June 21, 2017
  02/2017 June 27, 2017
  03/2017 June 28, 2017
UTGST(Rate) 01/201717/2017 June 28, 2017
  18/2017 June 30, 2017
Compensation Cess 01/2017 June 28, 2017
Compensation Cess(Rate) 01/2017 02/2017 June 28, 2017

We are summarizing herewith gist of the various Notifications for easy digest:

1. The Government has eased out requirement to mention HSN code of items in tax invoice under GST as mentioned in a table below:-

Serial No. Annual turnover in the preceding Financial Year Number of Digits of HSN Code
1 Up to rupees one crore fifty lakhs Nil
2 More than rupees one crore fifty lakhs and upto rupees five crores 2
3 More than rupees five crores 4

2. The Government has fixed the rate of interest for the following cases as mentioned in table below:-

Serial No. Description Rate of Interest
1 In case of non-payment of tax amount 18%
2 In case of undue or excess claim of input tax credit or undue or excess reduction in output liability 24%
3 In case refund is withheld and which as a result of appeal or further proceedings is sanctioned 6%
4 In case of refund not granted within 60 days from the date of making application for refund 6%
5 In case of refund not granted within 60 days from the date of receipt of application filed consequent to an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or Court 9%

3. The Government has prescribed the list for the goods on which GST is applicable on reverse charge basis.

S.No. Tariff item, sub-heading, heading or Chapter Description of supply of Goods Supplier of goods Recipient of supply
1. 0801 Cashew nuts, not shelled or peeled Agriculturist Any registered person
2. 1404 90 10 Bidi wrapper leaves (tendu) Agriculturist Any registered person
3. 2401 Tobacco leaves Agriculturist Any registered person
4. 5004 to 5006 Silk yarn Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn Any registered person
5. Supply of lottery. State Government, Union Territory or any local authority Lottery distributor or selling agent. Explanation.- For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the 2 provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

4. The Government has exempted the Intra- State supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the GST leviable thereon, if amount of such supply from any or all the un-registered suppliers is upto Rs. 5,000 in a day. +

5. The registered person may issue a consolidated invoice at the end of a month for all supplies from unregistered suppliers covered under RCM, where the aggregate value of such supplies exceeds Rs. 5,000 from any or all the suppliers.

6. The Government has exempted intra- State supplies of second hand goods received by a registered person, dealing in buying and selling of second hand goods and who pays the GST on the value of outward supply of such second hand goods, from any supplier, who is not registered, from the whole of the tax leviable thereon under RCM.

7. The Government has exempted intra- State supplies of goods/services received by a TDS deductor, from any supplier, who is not registered, from the whole of the tax leviable under RCM, subject to the condition that the deductor is not liable to be registered otherwise than under the category of mandatory registration

8. The rate of tax on services namely, construction 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 after its first occupation, whichever is earlier, has been increased from 12% to 18%.

However, the requirement to include land value from computation of tax liability has been removed and it has been stated that the value of land or undivided share of land, as the case may be, in such supply shall be deemed to be 1/3rdof the total amount charged for such supply.

9. The Government has notified that, no refund of unutilised Input Tax Credit shall be allowed in relation to taxes paid on supply of services, relating to construction of complex, building, civil structure or 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.

10. The word “room tariff & room rent” as mentioned in the rate schedules approved by the GST council has been replaced “declared tariff”. With effect of this amendment, the GST rate applicable on room rent shall be determined based on declared tariff. However, tax shall be levied on the transaction value.

11. The Government notifies that in case of following categories of services, the GST on supplies shall be paid by the electronic commerce operator –

a. Services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle

b. Services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under GST Act.

12. Rate of GST on fertilizers has been reduced from 12% to 5%.

(Author can be reached at Email: bimaljain@hotmail.com)

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