4. • The union cabinet approved
on 17th Dec’14, the proposal
for introduction of a Bill in
the Parliament for amending
the Constitution of India to
facilitate the introduction of Goods and Service Tax
(GST) in the country.
• The Union Finance Minister Shri Arun Jaitley
introduced the said bill in the Lok Sabha on 19th
Dec’14.
• The proposed amendment in the Constitution will
confer powers both to the Parliament and State
legislatures for levying GST on the supply of goods
and rendering of services in the same transaction.
5. • A new Article 279A is proposed for the creation of a Goods &
Services Tax Council which will be a joint forum of the Centre
and the States.
• The Council will make recommendations to the Union and
the States on important issues like tax rates, exemptions,
threshold limits, dispute resolution modalities etc.
• Centre will compensate States for loss of revenue arising on
account of implementation of the GST for a period up to five
years.
• A provision in this regard has been made in the Amendment
Bill (The compensation will be on a tapering basis, i.e., 100%
for first three years, 75% in the fourth year and 50% in the
fifth year).
Legislative Update …. Cont’d
6. • GST is also a destination
based consumption
levy
• GST is proposed to be
in implemented by 1st
April 2016
• GST is a tax on supply of goods or rendering
of services. Accordingly, any person
supplying goods or rendering services will be
required to charge GST
Salient Features of GST
9. Taxes Subsumed under SGST
Note: Alcohol products are kept out of the purview of GST wherein
the power to levy is still with State Government
10. For Sales made/service rendered within the
state, GST will be levied by both the Central
Government (CGST) and State Government
(SGST) on the same transaction, making GST
a dual transaction tax structure.
To Illustrate: Transactions value of Goods
Sold or Services Rendered within the State is
Rs. 5,000
On the above transaction, CGST will be levied
at 5% i.e., 250 and SGST will be levied at 5%
i.e., 250
How Does GST Work?
11. • Under IGST, tax will be collected by Centre.
• Centre will remit the share of the state to the respective
state.
• As it is a consumption based tax, state share of tax will go to
the state were service/goods are consumed/sold and not to
the state from where the service/goods is rendered/sold.
To Illustrate: Transactions value of Goods Sold or Services
Rendered from Bangalore to Mumbai is Rs. 5,000
On this transaction, IGST will be levied at 10% i.e., Rs. 500.
This tax will be initially collected by Centre and then it will be
appropriated to Maharashtra (consumption state) at an
agreed ratio
How does IGST Works???
12. • For Goods Purchased within India –
Applicable taxes are CGST, SGST and IGST
• For Goods Imported into India –
Applicable taxes are Basic Custom Duty,
CGST & SGST
Taxes Applicable…
13. • Under GST, it is expected that Goods and
Services will have same rate of tax
Rate of Tax under GST
14. • It is proposed that credit of CGST paid will not be
CENVAT Credit Provisions
15. Scheme for Exporters under
GST
As compared to the existing mechanism,
there is no change in tax provision
for exporters wherein
the same principal of
“Zero Tax on
Exports” will
be applicable.
Note: Similar Benefits may be given to Special
Economic Zones (SEZ)
16. • Proposed threshold Limit for getting
covered under GST – Rs.25L
• Each taxpayer could be allotted a PAN
linked taxpayer identification number
with a total of either 13 or 15 digits
17. • The assessee is required to account for
CGST, SGST and IGST separately (for both
output tax and input tax)
• Common Return formats for CGST & SGST
Accounting & Returns
18. • Administration of the Central GST would
be with the Centre and for State GST with
the States
• Full computerisation of the compliance
and administrative systems
Administration
