tag:blogger.com,1999:blog-25345522343138154992024-03-05T02:46:02.851-08:00GST IndiaAll about Goods and Services TaxAdarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comBlogger30125tag:blogger.com,1999:blog-2534552234313815499.post-36270787409954560552017-03-20T22:52:00.000-07:002017-03-20T22:55:20.203-07:00Lanch of gstindia.net Weekly Newsletter<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1T2x7xNuI7mvUYlBTTUeFkvFAwCxGzkgiApMhRdDjQ0Xij5fTLYCyYlkoIJ8r4buLWGcfaSoqo9q8xXzsU6bpkOTUEAOJS4QX8-pzc5g9_8UnlB46YPgXmC-5ZXoNZ7m4wr2ygwhHQBOX/s1600/gstindia+weekly+newsletter.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="478" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1T2x7xNuI7mvUYlBTTUeFkvFAwCxGzkgiApMhRdDjQ0Xij5fTLYCyYlkoIJ8r4buLWGcfaSoqo9q8xXzsU6bpkOTUEAOJS4QX8-pzc5g9_8UnlB46YPgXmC-5ZXoNZ7m4wr2ygwhHQBOX/s640/gstindia+weekly+newsletter.jpg" width="640" /></a></div>GST will be applicable from 1st July, reverse count down has already begun. Everyone is gearing up to be GST compliant, may it be knowledge, technology or business processes.<br />
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<h3 style="text-align: left;">ICAI has published 5 Books/Papers on GST</h3><a href="http://gstindia.net/" rel="nofollow" target="_blank">http://gstindia.net</a> has bought you fastest download links to these publications.<br />
Background Material on Revised Model GST Law<br />
Comprehensive<br />
material containing a clause by clause analysis of the revised Model<br />
GST Law along with FAQ’s, MCQ’s, Flowcharts and Illustrations etc. to<br />
make the reading and understanding easier.<br />
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<a href="https://goo.gl/MyV3xC" rel="nofollow" target="_blank">https://goo.gl/MyV3xC</a><br />
<br />
Study Paper on Taxation of E-Commerce under GST<br />
In-depth<br />
knowledge of provisions of upcoming GST pertaining to E-Commerce<br />
Transactions in a very practical and simplified manner.<br />
<a href="https://goo.gl/ivjhio" rel="nofollow" target="_blank">https://goo.gl/ivjhio</a><br />
<br />
Study Paper on Unjust Enrichment<br />
In-depth practical and theoretical knowledge of the concept of unjust enrichment<br />
<a href="https://goo.gl/HW75A3" rel="nofollow" target="_blank">https://goo.gl/HW75A3</a><br />
<br />
FAQ and MCQ on Revised Model GST Law<br />
Comprehensive coverage of GST in a question-answer format as an easy & lucid way to understand the law<br />
<a href="https://goo.gl/nU1u1D" rel="nofollow" target="_blank">https://goo.gl/nU1u1D</a><br />
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Simplified GST Guide for Manufacturer<br />
Covers aspects of transaction related to manufacturing like levy and exemption, registration, time and place of supply, valuation, input tax credit, job work and much more under foreseen GST in very simple and easy to comprehend language<br />
<a href="https://goo.gl/JhQetk" rel="nofollow" target="_blank">https://goo.gl/JhQetk</a><br />
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For more such file and discussion on GST, visit <a href="http://gstindia.net/forums" rel="nofollow" target="_blank">http://gstindia.net/forums</a> </div>Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-76176780757995455892016-12-25T23:41:00.000-08:002016-12-25T23:41:14.350-08:00Beta Launch of gstindia.net forum<div dir="ltr" style="text-align: left;" trbidi="on">
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<blockquote class="tr_bq">
Beta Launch of <a href="http://gstindia.net/">http://gstindia.net</a> It is a forum for tax experts. </blockquote>
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A website where all the tax experts can share their views. This will help them in build their professional brand and also showcase their forte.<br />
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Register at <a href="http://gstindia.net/register">gstindia.net</a> today and start building your professional brand.<br />
It is simple and easy to use.<br />
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Since it's still under development, if you come across any bug or if you have a suggestion, please share the same on below email address.<br />
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<a name='more'></a>Wish you a happy new year.<br />
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If you are interested in becoming a moderator, feel free to contact me via above email address. <br />
<br />
PS: This site is designed by <a class="g-profile" href="https://plus.google.com/116704277129182907648">+Adarsh Madrecha</a> and maintained by <a class="g-profile" href="https://plus.google.com/117335164923275419579">+Ashish Badala</a><br />
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-43491050478789118802016-11-27T00:22:00.001-08:002016-11-27T00:22:29.535-08:00What you Need to Know as a Trader<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHSSNxbpN1GKGdyTDClF71nBbvwKK_AY5k1P90-N-0hxbYMd8R_9PNENAD11iLmuMS5oVdhumOoB7rQUO44wO4dELraQDxw6ObhWGM65XSzW5O4gN0IdkqmAIujtQjKn2o2jCxcB8j2Ik/s1600/VAT-Excise-to-GST.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="260" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHSSNxbpN1GKGdyTDClF71nBbvwKK_AY5k1P90-N-0hxbYMd8R_9PNENAD11iLmuMS5oVdhumOoB7rQUO44wO4dELraQDxw6ObhWGM65XSzW5O4gN0IdkqmAIujtQjKn2o2jCxcB8j2Ik/s640/VAT-Excise-to-GST.jpg" width="640" /></a></div>
<br />
As a trader, today you are liable for registration under State VAT if your turnover exceeds the prescribed threshold limit. You are also liable for registration under Central Excise if you trade in Excisable goods. You are allowed to avail input VAT credit and set it off against the output tax liability. However, the excise duty you pay will not be available as credit, and it will be added to the cost of the product, and subsequently passed on to the buyer.<br />
<br />
In the GST regime, it does not matter if you are a manufacturer, a trader or a service provider. <a href="http://blogs.tallysolutions.com/gst-input-tax-credit-explained-video/">Input tax credit</a> is available across the supply chain until it reaches the end customer.<br />
<br />
<br />
You may have these questions: <br />
<ul style="text-align: left;">
<li>As a trader registered under VAT, can I carry forward the closing balance of input tax credit? </li>
<li>Can I claim Input Tax credit on the closing stock if I am registered under Excise? </li>
</ul>
<br />
<i>Let us now answer the questions scenario-wise.</i><br />
<div style="text-align: left;">
<br /></div>
<h3 style="text-align: left;">
Scenario 1 – A trader registered under both VAT and Excise</h3>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgq4igR5sCxXzVm4xwHj4nvVt8fLnUt8jgbvWt0i2RbQsFWx88rJUSDl0UQfQevBpiUa2uzMNYNTbD0LUyNAtHWdBfpaZs9Eowr4mXslY8lzrTeAqSviBh_adAqRwhyf0BlYYyKjPLeI8g/s1600/GST-Traders-Table-1.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgq4igR5sCxXzVm4xwHj4nvVt8fLnUt8jgbvWt0i2RbQsFWx88rJUSDl0UQfQevBpiUa2uzMNYNTbD0LUyNAtHWdBfpaZs9Eowr4mXslY8lzrTeAqSviBh_adAqRwhyf0BlYYyKjPLeI8g/s1600/GST-Traders-Table-1.png" /></a></div>
<div style="text-align: left;">
<br />
Conditions <br />
The closing balance of credit should reflect in the last VAT return filed by you <br />
The credit, as reflecting in the return, should be allowed as credit under current law <br />
It should also be allowed as input tax credit under GST <br />
<br />
The balance credit available on the last day, prior to the date on which GST is implemented, can be carried forward as i<a href="http://blogs.tallysolutions.com/gst-input-tax-credit-explained-video/">nput credit to GST</a>.<br />
<br />
As a trader registered under VAT, can I carry forward the closing balance of input tax credit?<br />
Yes, input VAT is allowed as a credit in the current regime as well as under GST. The input VAT credit amount can be fully carried forward as SGST Input Tax Credit.<br />
<br />
Can I claim the credit on the closing stock if I am registered under Excise?<br />
Excise duty is not allowed as input credit in the current regime. One of the conditions to carry forward the credit on closing stock is that on transiting to GST, the duty/tax should be allowed as a credit under the current statute. Today, a first stage or second stage dealer adds the excise duty paid on the price of the product. It is then sold to a manufacturer, who claims the input credit.<br />
Therefore, if you are a trader registered under Excise, you will NOT be eligible to claim the credit on closing stock.</div>
<h3 style="text-align: left;">
Scenario 2 – A trader who is not registered under VAT/CST</h3>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfL9n9i5lmDsZCT5orxoxZFEPut1I-1gah2bx6SK86HZX_l8KsC9hCry1Op_d_9yaGOS5NXwSkZ_IoZhtt_9efqIi3SJ8G-9RfXJ6YdPjzrqXDgnjXLqzKTIw56g8-cpYCiwo_aDA06VI/s1600/GST-Traders-Table-2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfL9n9i5lmDsZCT5orxoxZFEPut1I-1gah2bx6SK86HZX_l8KsC9hCry1Op_d_9yaGOS5NXwSkZ_IoZhtt_9efqIi3SJ8G-9RfXJ6YdPjzrqXDgnjXLqzKTIw56g8-cpYCiwo_aDA06VI/s1600/GST-Traders-Table-2.png" /></a></div>
<br />
You need to be registered under the VAT/CST regime if your turnover exceeds the specified threshold limit. If you are not registered under the VAT/CST regime but are liable for <a href="http://blogs.tallysolutions.com/apply-new-gst-registration/">registration under GST</a>, you can claim input credit if you meet the conditions listed below. <br />
The closing stock held must be used or intended to be used for taxable supplies. <br />
You were eligible for input VAT credit under current law, but not being liable for registration (turnover was less than the registration threshold limit), you could not claim input tax credit. <br />
You are eligible for input tax credit under GST<br />
In GST, you are eligible for input tax credit if you are a regular taxpayer only. A <a href="http://blogs.tallysolutions.com/gst-composition-levy-explained/">composition taxpayer</a> is not allowed to claim input tax credit. <br />
You should have invoices or any other prescribed duty/tax paying documents for the closing stock. <br />
The date of invoices or any other prescribed duty or tax paying documents must be within 12 months from the date of transitioning to GST.<br />
<br />
<h3 style="text-align: left;">
Scenario 3 – A trader who is registered under VAT, and engaged in the sale of exempted goods</h3>
<br />
On the date of transition to GST, you are a trader who is registered under VAT and engaged in the sale of exempted goods, but tax taxable under GST.<br />
<br />
Will you be allowed to claim input tax credit?<br />
Yes. You are entitled to carry forward the input VAT credit held in the closing stock.<br />
<br />
You were eligible for input VAT credit under current law, but as a trader engaged in exempted goods, you could not claim input tax credit. Other eligibility conditions applicable are same as discussed in Scenario 2.<br />
<br />
Cross Posted from Tally Blog. </div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-82273203662765425002016-11-26T01:06:00.000-08:002016-11-26T01:06:00.062-08:00GST Model Law - Draft GST Bill<div dir="ltr" style="text-align: left;" trbidi="on">
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</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIv1ZyOp9S68MlNLdniUNyGU7m90EhWNOeqXGm-GOIXTf6SRlTKFhVR0Exd5B14fLQ_cCsGR5fcL87PNkbtt_o7-r0EZ2u4EtTkesEe6psahvRkW4Ku2NfVEf9lzntNTQzw4NQlwYQIuQ/s1600/Revised+Model+GST+Law.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIv1ZyOp9S68MlNLdniUNyGU7m90EhWNOeqXGm-GOIXTf6SRlTKFhVR0Exd5B14fLQ_cCsGR5fcL87PNkbtt_o7-r0EZ2u4EtTkesEe6psahvRkW4Ku2NfVEf9lzntNTQzw4NQlwYQIuQ/s1600/Revised+Model+GST+Law.PNG" /></a></div>
<br />
CBEC has uploaded updated GST Bills which will be presented in parliament very soon.<br />
<br />
GST Bill (aka Model GST Law) has reduced from 193 pages to 163 pages.<br />
While we at <a class="g-profile" href="https://plus.google.com/106832032406385359112" target="_blank">+Madrecha Solutions</a> are going through the revised Model GST Law to study the changes in revised draft, you can also download the same from the links below.<br />
<br />
<blockquote class="tr_bq">
<a href="https://goo.gl/XeqhpZ" target="_blank">Revised Draft Model GST Law</a></blockquote>
<br />
<blockquote class="tr_bq">
<a href="https://goo.gl/SVck3r" target="_blank">Draft IGST Law</a></blockquote>
<br />
<blockquote class="tr_bq">
<a href="https://goo.gl/mpMRHc" target="_blank">Draft GST Compensation Law</a> </blockquote>
<br />
Looking for more files for download? Visit the updated <a href="http://indirecttaxin.blogspot.com/p/downloads.html" target="_blank">GST India Download Page </a></div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-6685027195362234462016-10-31T01:28:00.000-07:002016-10-31T09:56:39.607-07:00Welcome Videos, Bye Bye Boring Article<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdpyvVS08xzNvR9JnqIq5cwTZ0BzdWPQpLkY78zD6ta5Ep6X008XuoVHMJOlrbDD2nOE4-4rTWMWvxijvdrsuKLWd-9PHp8oZ_pFk-Rl_23CIXsQYa-OK5ivDDB9AylwrnaGA8p2YmUtc/s1600/00-+Introduction.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdpyvVS08xzNvR9JnqIq5cwTZ0BzdWPQpLkY78zD6ta5Ep6X008XuoVHMJOlrbDD2nOE4-4rTWMWvxijvdrsuKLWd-9PHp8oZ_pFk-Rl_23CIXsQYa-OK5ivDDB9AylwrnaGA8p2YmUtc/s640/00-+Introduction.jpg" width="640" /></a></div>
<div style="text-align: left;">
<br /></div>
<h2 style="text-align: left;">
Launching <a href="https://www.youtube.com/playlist?list=PLoPItgG3mfBGINJ54eMFxwCdtDLf5yBjJ" target="_blank">"GST Bites"</a>, Video Series on GST. </h2>
Since passage of Constitution Amendment bill for GST, we saw a plethora of sites writing / explaining GST and it's nitty-gritties. But, many GST learners found themselves lost in this ocean of GST articles / blog posts. More importantly, there is very little reliance on the articles that we read unless, you know credentials of the author. Hence, launching a video series which will be made by three Chartered Accountants.<br />
<i><b>Credentials of the authors for this Video Series -</b></i><br />
<b>Ashok Kumar Madrecha</b> (CA, BCom Hons) - Practicing CA since 1989<br />
<b>Adarsh Ashok Madrecha</b> (CA, DISA) - Consultant at EY (Ernst Young)<br />
<b>Priya Adarsh Madrecha</b> (CA, CS) - Ex Consultant at KPMG<br />
<br />
<h4 style="text-align: left;">
1st video is out, have a look and don't forget to subscribe for more such videos.</h4>
<br />
<iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/3r7Qctr_AtE" width="560"></iframe>
<br />
<h4 style="text-align: left;">
Some of the 1st Reaction of viewers. </h4>
<blockquote class="tr_bq">
Intuitive and interesting videos.</blockquote>
<blockquote class="tr_bq">
Finally some fun in learning Tax</blockquote>
<blockquote class="tr_bq">
So simple and unique way to explain GST</blockquote>
<blockquote class="tr_bq">
Great Initiative, video is just awesome</blockquote>
<br />
<br />
<h3 style="text-align: left;">
Small Background </h3>
When me and
my colleagues and friends started this blog, we were ahead of time in starting this GST blog. The topic
of GST was in and out of media just like a movie actor. Then
Constitution Amendment bill was passed unanimously by Parliament. It
paved the way for GST law and now we (as well as our beloved Finance
Minister <a class="g-profile" href="https://plus.google.com/107482058551157410621" target="_blank">+Arun Jaitley</a> ) are confident that GST will be applicable from 1st April 2017.</div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-32569406549998725162016-01-04T23:28:00.001-08:002016-01-04T23:28:40.820-08:00New Blog on Excel, Data Analytics, Office management<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div style="text-align: center;">
<blockquote class="tr_bq">
<a href="http://adarshmadrecha.blogspot.in/" target="_blank">Starting new blog on - Excel, Data Analytics, Office Management. </a><br />
<a href="http://adarshmadrecha.blogspot.com/">adarshmadrecha.blogspot.com</a></blockquote>
</div>
<br />
Since GST was delayed (5th time now), I was free to concentrate on new Idea for my Blog.<br />
I found that many office goers face difficulty in using Excel. After all, Excel is the most used software in any CA Firm or Company.<br />
<br />
Here, I shall be posting about<br />
<ul style="text-align: left;">
<li>Excel Tips and tricks</li>
<li>Excel Videos </li>
<li>Data analytics - How to get insights</li>
<li>Office Management</li>
<li>Excel Macros</li>
<li>Excel User Defined Function</li>
</ul>
<h3 style="text-align: left;">
Posts </h3>
Just to have a glimpse of what this blog will be about, have a look at the posts which are already posted last month.<br />
<ol style="text-align: left;">
<li><a href="http://adarshmadrecha.blogspot.com/2015/12/convert-text-to-date-when-importing.html" target="_blank">Custom Function in excel for all your Date problems when you import the data in excel.</a></li>
<li><a href="http://adarshmadrecha.blogspot.com/2015/12/must-have-software-in-ca-office.html" target="_blank">Must have Software in a CA Office (With Download links)</a></li>
<li><a href="http://adarshmadrecha.blogspot.com/2016/01/vendor-master-data-analytics.html" target="_blank">Vendor Master data analytics - Issues, Risks</a></li>
</ol>
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-19593328171686592622015-12-07T06:01:00.003-08:002015-12-07T06:01:34.927-08:00How key sectors will be affected with GST rollout?<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: left;">
Will food products become dearer? Will Land and Real estate be kept
under GST? Will Service providers be happy with GST? How Manufacturers
would be affected? What’s going to be in case of Works Contracts? How
Power and Telecommunication sector be adversely affected? What about
International Trade? Whether it will be zero rated or taxed??<br />
<br />
This article will elaborate us the impact of GST on our Key Sectors / Industries. Let’s go through these specific sectors of Indian Economy and understand how each sector will be affected with the introduction of GST.</div>
<div style="text-align: left;">
<br /></div>
<h3 style="text-align: left;">
1. AGRICULTURE:</h3>
<br />
Presently in India, most of the food items are exempt from CENVAT. Still then, there are some food products, including food grains and cereals, which are covered under State VAT @ 4% in many states. State VAT exemption is limited to only unprocessed or raw food e.g., fresh fruits, vegetables, meat, eggs and coarse grains. As far as Delhi is concerned, no such levy is there.<br />
<br />
When GST will be levied, combined rate would be 8% on food items. This clearly brings out that these items will be dearer by nearly 4%. There is no point in exempting food items totally as it will have adverse impact on Revenue Neutral Rate (RNR).<br />
<br />
<h3 style="text-align: left;">
2. TRADERS:</h3>
<br />
CST ACT will be abolished totally from India. No question of sale or purchase against Form C. Inter State transactions which presently attract minimum 2% of the purchase price will be zero rated. The Traders will be saved from this additional tax burden.<br />
<br />
<h3 style="text-align: left;">
3. MANUFACTURERS:</h3>
<br />
Presently, CENVAT is levied and administered by the Union Government. Rates of tax are uniform and no complications are seen in goods movement within the country. Threshold limit under Excise duty is Rs. 1.5 Crores.<br />
<br />
With GST rollout, tiny sector and household industry will be adversely affected. States will administer Central GST of dealers with turnover below Rs. 1.5 Crores. This means present exemption will be gone for manufacturers.<br />
<br />
Under GST, valuation of goods for levy of GST will be based on sale consideration. Purchasing of Capital goods from other states against Form C will be banned. No question of availing concessional rate will remain in force.<br />
<br />
<h3 style="text-align: left;">
4. WORK CONTRACTORS:</h3>
<br />
Under the current provisions, works contracts attract three different duties. First is VAT on supply of goods. Second is Service tax on service element. Third is Central Excise Duty if a new commodity comes in existence in executing works contract.<br />
<br />
It is quite clear that it is not easy to tax works contract. There are certain specific provisions and various rules in law for bifurcating goods and services element in this regard. Still lots of confusion and legislative compliances to go.<br />
<br />
Under GST, goods and services both are treated at par and taxed at a uniform rate. GST will subsume sale of goods, provision of services and manufacture. GST will have a simple structure. No more confusion will remain.<br />
<br />
One more point is that goods fabricated at site presently attract VAT or Service Tax. No CENVAT is levied. So, the contractors are required to pay maximum 12.5% which will be greatly affected in GST and might go upto 16-20%. Thus, additional burden for nearly 4- 8% will be created.<br />
<br />
<h3 style="text-align: left;">
5. POWER SECTOR:</h3>
<div style="text-align: left;">
<br />
Although electricity is goods yet it is free from sales tax. Therefore, no sales tax is levied. The basic impact will be on purchase of goods by Power sector for generation and distribution of electricity from other states which is currently 2% under CST.<br />
<br />
Abolition of CST will certainly affect this sector unless sale of electricity is brought within scope of GST and set off of input tax credit is allowed for tax paid on purchases.</div>
<h3 style="text-align: left;">
6. TELECOMMUNICATION:</h3>
<div style="text-align: left;">
<br />
GST will not have a major impact on this sector. Like power sector, Telecom Companies also purchase goods for telecommunication from other states at a concessional rate which will go away with GST.<br />
<br />
With the integration of Service tax and VAT under GST, controversy will be resolved with regard to confusion under composite transaction like sale of phone with talk time.</div>
<h3 style="text-align: left;">
7. INTANGIBLE GOODS:</h3>
<div style="text-align: left;">
<br />
Taxability with regard to transfer of Intangible goods like software, intellectual property rights and goodwill will become clear under GST. Controversies will be resolved to a great extent.</div>
<h3 style="text-align: left;">
8. LAND AND REAL ESTATE:</h3>
<div style="text-align: left;">
<br />
Till now, it is not clear whether land and real estate would fall within the ambit of GST or not. But many advanced nations are treating housing and construction activities just like a commodity and is subjected to VAT.<br />
<br />
Poddar-Ahmad Working Paper has suggested including land and real property under GST. It is therefore suggested not to exclude this sector as it would lead to unnecessary disputes and tax cascading as well.<br />
<br />
One view is that since this sector already attracts stamp duty, so exclude it totally from GST. But purpose of stamp duty is quite different from GST. Stamp duty is a cascading tax on each conveyance of title to real property while GST is tax on final consumption. Both are not substitutes in any sense. So, inclusion of real estate is appropriate.<br />
<br />
But still the structure should be rationalised and rates to be lowered if GST is to be applicable in the real estate sector.</div>
<h3 style="text-align: left;">
9. INTERNATIONAL TRADE:</h3>
<div style="text-align: left;">
<br />
GST will affect Importers in the sense that exemption which is available to them for High-seas sales under the CST Act will be withdrawn. Not only this, they will also be affected by change in tax rates.<br />
<br />
Exports will continue to be zero rates and refund of input tax credit will be available to them. No major impact on Exporters.</div>
<h3 style="text-align: left;">
10. PETROLEUM, LIQUOR AND TOBACCO PRODUCTS:</h3>
<div style="text-align: left;">
<br />
Presently, these goods are taxable at a higher rate of tax and multiple taxes are also levied on them. But these will be kept outside GST and therefore Government revenue will fall greatly. Manufacturers will also suffer cascading effect of taxes since they will not be entitled to claim input tax credit.</div>
<h3 style="text-align: left;">
11.SERVICE PROVIDERS:</h3>
<div style="text-align: left;">
<br />
Services which are currently taxed at the place of rendering will be taxed at the point of consumption under GST. This clearly shifts the base of service tax from service rendering state to service consuming state. More services will be added to the GST regime and exemptions will be withdrawn. Classification disputes will also be resolved to a great extent.</div>
<blockquote class="tr_bq">
The exact impact of GST can’t be guessed presently. It would be quantified once the GST ACT is finalised. Which sector will gain or lose will depend upon the tax schedules, final GST rates and the laws that will be framed subsequently. Be ready for GST.....whether you like or not!!!!</blockquote>
</div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-58197433232767998852015-01-17T01:02:00.000-08:002015-01-17T01:02:25.613-08:00Book on GST by ICAI - "Background Material on GST"<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-1D4i1wogtiklgpxwY3U3TxdaarXYDzm9qId4lObYJHpl7t6FwYBpybDDQdc6pOfZ_CpNC9razuQ0nlIoLSIlBl05HSwGZHAazJ4Rk888t3b77AJPa1PfGNcQBjrMwarihpuuyjO1Feo/s1600/Book+on+GST+by+ICAI.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-1D4i1wogtiklgpxwY3U3TxdaarXYDzm9qId4lObYJHpl7t6FwYBpybDDQdc6pOfZ_CpNC9razuQ0nlIoLSIlBl05HSwGZHAazJ4Rk888t3b77AJPa1PfGNcQBjrMwarihpuuyjO1Feo/s1600/Book+on+GST+by+ICAI.jpg" /></a></div>
<br />
<span style="font-family: Verdana,sans-serif;">The Institute of Chartered Accountants of India - ICAI, with a view to update the members and other stakeholder about GST, has launched a Background Material on GST. The material covers various topics like concept of GST, its pros and cons, its feasibility & impact in India, challenges for Indian economy, GST in other countries etc. It is an all-inclusive material, which would provide an insight to the basic concepts of proposed GST regime. You can download the Background Material on GST from Knowledge Portal of ICAI, which is also available on the following link:</span><span style="font-family: Verdana,sans-serif;"><span style="font-size: large;"><a href="http://ge.tt/6e41dk82">Download GST Book - http://ge.tt/6e41dk82</a></span></span><br />
<span style="font-family: Verdana,sans-serif;"><br />We would further like to inform you that you may purchase “Background Material on GST” and get it delivered by courier by visiting the following link:<br /><a href="http://www.icai.org/publications.html?bookcid=25&bpg=1">http://www.icai.org/publications.html?bookcid=25&bpg=1</a></span><br />
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiomKAr8kLvCQh-5Cr4_PSTdKj5LdZz1sUiaf_DuGLbwFS7Wd9V4CaVTT5I2tC_1Fd-DxkJGqQ94FLHZ4z_xcWQ1J93kWX1XyqriigpmAyyswyatmpQej7EsW2tOBNhd4Hia0519p_fNm4/s1600/Book+Contents.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="Contents of Background Material on GST - ICAI" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiomKAr8kLvCQh-5Cr4_PSTdKj5LdZz1sUiaf_DuGLbwFS7Wd9V4CaVTT5I2tC_1Fd-DxkJGqQ94FLHZ4z_xcWQ1J93kWX1XyqriigpmAyyswyatmpQej7EsW2tOBNhd4Hia0519p_fNm4/s1600/Book+Contents.JPG" height="581" title="Contents of Background Material on GST - ICAI" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-family: Verdana,sans-serif;">Contents of Background Material on GST - ICAI</span></td></tr>
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<tr class="tableizer-firstrow"><th>Section</th><th>Description</th><th>Page No</th></tr>
<tr><td>A-1</td><td>Indirect Tax Structure in India – An Introduction </td><td>1</td></tr>
<tr><td>A-2</td><td>What is GST, How it Works & its Advantages </td><td>15</td></tr>
<tr><td>A-3</td><td>Models of GST </td><td>20</td></tr>
<tr><td>A-4</td><td>Expected Model of GST in India </td><td>27</td></tr>
<tr><td>A-5</td><td>Revenue Neutral Rate (RNR) </td><td>38</td></tr>
<tr><td>A-6</td><td>Taxes/Duties to be Subsumed in GST </td><td>42</td></tr>
<tr><td>A-7</td><td>Inter-State Transactions and GST </td><td>44</td></tr>
<tr><td>A-8</td><td>Present Taxation vs. GST </td><td>57</td></tr>
<tr><td>A-9</td><td>Roadmap to GST in India </td><td>61</td></tr>
<tr><td>A-10</td><td>Challenges before the Government & Transitional Issues </td><td>69</td></tr>
<tr><td>A-11</td><td>Impact on Key Industries/Sectors </td><td>77</td></tr>
<tr><td>A-12</td><td>Expectations of Industry from GST </td><td>88</td></tr>
<tr><td>A-13</td><td>GST in other Countries </td><td>95</td></tr>
<tr><td>A-14</td><td>GST- Role of Chartered Accountants </td><td>103</td></tr>
<tr><td>B-1</td><td>Working Paper [No. 1/2009-DEA] on Goods & Services Tax </td><td>106</td></tr>
<tr><td>B-2</td><td>ICAI’S Concept Paper - GST Model for India – Suggestions </td><td>158</td></tr>
<tr><td>B-3</td><td>Relevant Articles of the Constitution of India </td><td>169</td></tr>
<tr><td>B-4</td><td>Entries in Schedule VII to the Constitution of India </td><td>178</td></tr>
<tr><td>C-1</td><td>First Discussion Paper on Goods and Services Tax in India </td><td>184</td></tr>
</tbody></table>
</div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-34429052950663653252015-01-16T10:00:00.000-08:002015-01-24T23:59:39.961-08:00Decoding 122nd Constitutional Amendment Bill for GST<div dir="ltr" style="text-align: left;" trbidi="on">
<a href="https://in.linkedin.com/pub/vinod-kaushik/43/a95/9ab" target="_blank">By CA Vinod Kaushik</a>
<br />
<div style="text-align: left;">
<br /></div>
<h3 style="text-align: left;">
Background </h3>
Before going into the depth of Constitution of India and its amendments we have to first understand why it needs to be amended to bring the GST Law. The GST Law is seen as one of the biggest tax reform in our country since Independence. The man who is behind this concept of GST in India is Mr. Atal Bihari Vajpayee who was the prime minister of India from 1998-2004. The Domestic and Foreign Industry Players are always having concerns with our present Indirect Tax System and its administration. India is Federal Country where Centre and State has its own taxation powers inbuilt in our constitution. The Union is levying Excise duty, Service Tax, Custom duty and States are levying and collecting VAT, CST, entry Tax, entertainment Tax. The Constitution is required to be amended because the Power of State and Centre shall be restructured in the Constitution itself and the Seventh Schedule which contains Union and State List shall be amended.<br />
<br />
<h3 style="text-align: left;">
Development in Goods and Service Tax from 2006 till Date</h3>
<div style="text-align: left;">
In this phase of my write up I am trying to explain the step by step events from the date when the concept of GST was first introduced by Union Finance Minister in his Budget Speech of 2006-2007. In his Budget Speech of 2007-2008 Mr. P. Chidambaram requested the Empowered Committee of State Finance Ministers (EC) headed by Dr. Asim Dasgupta to work with central Government to prepare the road map for introduction of GST from 01-04-2010. After this delegation by Union FM to EC the EC then formed a Joint working Group to study the International Models of GST across the world. In November 2007 the Joint Working Group submitted its report to EC which contains the Dual GST structure for Indian Economy.<br />
<br />
After due discussion between Central Government and Empowered Committee of State Finance Ministers the First Discussion Paper was prepared to make the GST Law a reality in India. The First attempt to introduce GST was made by then Finance Minister Shri Pranab Mukherjee on 16-03-2011 by introducing the Constitutional 115th Amendment Bill 2011 and the bill contains the amendments which were necessary to make the GST Law. The Bill was then sent to Parliamentary Standing Committee on Finance headed by Yashwant Sinha former Union Finance Minister and after due discussion with stakeholders and States the Committee submitted its Report with recommendation in August 2013 to both the Houses of Parliament. As usual the Centre Revised the Draft Constitutional Amendment Bill by accepting most of the recommendations made by Standing Committee and after this the Centre discussed the revised bill with States to reach on some conclusions. Unfortunately the helpless, unwilling and scam driven UPA Government could not convince the States on revised bill soon after the election were declared and the regime of UPA was demolished by Modi wave.<br />
<br />
Now the BJP led NDA Government which people voted for development, growth and employment again started discussion with the states under leadership of Shri Arun Jaitley (Union Finance Minister) and finally reached on conclusion by drafting a fresh bill on Constitutional Amendment. The above said bill was drafted by keeping in mind the earlier developments and suggestion made by Standing Committee on Finance and pending demands of State Finance Ministers. The Constitutional (122nd) Amendment Bill, 2014 was introduced in Loksabha on 19-12-2014.<br />
<br />
Now I have made a small attempt to decode this Amendment Bill and give you clarity on each and every aspect of the Bill. Before that it’s worthwhile to understand the process of amendment of Constitution.<br />
<br />
<b>Article 368</b>: Power of Parliament to amend the Constitution and procedure thereof : Amendment in Constitution can be made by introducing a bill in either house of the Parliament and Bill has to be passed by 2/3 members of each house Present and voting, After this bill shall be sent to the president for its assent But if the bill need amendment in any of the list in 7th schedule ( Other articles also given) then it has to be ratified by at least half of the state assemblies After ratification by half of the state assembly it shall be sent to President of India for its assent. From above discussion you can understand that it is impossible for the Union Government to Introduce GST without support of States Assemblies and opposition in both the Houses of Parliament.<br />
<br />
Now the provisions of this Bill have been analyzed one by one, and wherever possible comparison has been made with the Bill drafted by the UPA Government.</div>
<h3 style="text-align: left;">
STEP BY STEP ANALYSIS OF 122ND CONSTITUTIONAL AMENDMENT BILL</h3>
<div style="text-align: left;">
<b>Insertion of Article 246A</b>: This Article was inserted in the main body of Indian Constitution after Article 246 to empower both the Centre and State to legislate on a common matter i.e. GST. Earlier the power of both the Governments were separate under Union list and State list, Without inserting 246A it is not possible for parliament to make Law on a matter which is neither mentioned in Union List and State List. The power to make laws on interstate transactions has been kept exclusively with Central Government.<br />
<br />
<b>Amendment in Article 248</b>: The article 248 has been amended to avoid contradiction between this Article and Article 246A. The article 248 gives exclusive powers to parliament to make laws on matters not mentioned in State and Concurrent list. The amendment has added word “subject to 246A” Parliament has exclusive power to make laws on matters not mentioned in State and Concurrent list.<br />
<br />
<b>Amendment in Article 249</b>: Earlier the above article was giving power to Parliament to make laws on the matters in State list if the same is necessary in the national interest. The above law can be made if the council of the states support this law by 2/3 majority. The amendment has inserted word Goods and Service tax also in this article so that Parliament can make law of GST.<br />
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<b>Amendment in Article 250</b>: This amendment is similar to that in 249, only difference is that this article comes into operation at the time of emergency and Article 249 comes when law is necessary in national interest.<br />
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<b>Amendment in Article 268</b>: Before amendment this article was giving power to Central Govt. to levy Stamp duties and Excise on Medicinal Toilet Preparations and collection powers were given to respective States. Now the amendment has deleted word Excise on Medicinal Toilet Preparations which means no more excise duty by states on Excise on Medicinal Toilet Preparations. This is a welcome move in GST to reduce the burden of multiplicity of taxes levied presently by State Govt.<br />
<br />
<b>Omission of Article 268A</b>: This Article was giving power to Centre to levy Service tax and such tax shall be collected and appropriated by Centre and States together. Now under GST Regime no service tax exist hence the importance of this Article was no more required in the Constitution of India accordingly the same has abrogated from Constitution.<br />
<br />
<b>Amendment in Article 269 and Insertion of Article 269A</b>: Before understanding the amendment made in Article 269 we have to understand the new Article 269A which grants exclusive power to Centre to levy integrated goods and Service Tax (IGST) on interstate transactions. This Article categorically says that Import of goods and Services into Indian Territory shall attract IGST. Now we can discuss 269 which was giving power to Central Govt. to levy taxes on Interstate sales i.e. CST and taxes on consignment of good and now the amendment has restricted the applicability of above article only on those taxes which are not mentioned in Article 269A i.e. IGST.<br />
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<b>Amendment in Article 270 and 271</b>: The Article 270 prescribe that the taxes levied by Union shall be distributed with the states and 271 has restricted the power of Parliament to increase the rate of GST by a surcharge for the purpose of Union. Under the GST Regime the increase of taxes shall be decided by the GST Council under Article 279A.<br />
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<b>Insertion of Article 279A</b>: In India the GST has been introduced in Dual structure i.e. Centre shall levy Central Goods and Service Tax (CSGT) and State shall levy State Goods and Service Tax (SGST) and in addition Centre shall levy Integrated goods and Service Tax (IGST). The above concept can only work on the basis of cooperative federalism between the Centre and State and this give rise to a platform where Centre and State can discuss various issues related to GST. Under 279A a council shall be constituted which shall be called GST Council consisting representation of Centre and States respectively.</div>
<h3 style="text-align: left;">
Salient Features of GST Council:</h3>
<div style="text-align: left;">
A. The GST Council shall consist Union Finance Minister as a Chairperson, Union Minister of State in charge of Finance as a member, the State Finance Minister or State Revenue Minister as a member of the Council and the State FM shall select one of them as Vice Chairperson of Council.<br />
<br />
B. The quorum of GST Council shall be ½ of its members.<br />
<br />
C. Every Decision of the Council shall be taken at a meeting by a majority of at least ¾ of the weighted votes of the members present and voting. The vote of Centre shall have a weightage of 1/3 of total vote cast and vote of States taken together shall have weightage of 2/3 of total vote cast. From this mathematics we can conclude that Centre has VETO Power in the GST Council for decision making.<br />
<br />
D. One of the contentious Clause of Article 279A is recommendation made by GST Council to the Union and the States on various critical matters. After so many meeting and deliberations this clause has been finalized and produced as under:<br />
<br />
The Council shall make recommendation to the Union and States on following matters:<br />
<br />
Which taxes, surcharge, Cesses levied by Union, States and Local bodies shall be subsumed in GST. The taxes levied at present by Centre i.e. Excise Duty, Additional Excise duty, Service Tax, Additional Custom Duty, Special additional duty, Excise on Medicinal Toilet Preparations and Central Cesses and surcharge shall be subsumed in GST and taxes levied by States i.e. VAT, Entertainment Taxes, Luxury tax, lottery tax, CST and Entry taxes or Octrio shall be subsumed in GST. Basic Custom duty will remain alive and shall be collected by Custom Authorities as usual.<br />
<br />
After taking several rounds of meeting by Union Finance Minister with State FM the above issue of items to be subsumed into GST has been resolved and still the alcohol is outside the ambit of GST and Petrol products has been included in the GST but they shall enjoy their present status unless recommended by GST Council as taxable under GST.<br />
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Second recommendation by GST Council shall be with regard to Goods and Services which shall be exempt under GST regime, threshold under GST Law, Model GST Law i.e. GST Act GST Rules, Principal which shall govern place of supply rules etc.<br />
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3. Third recommendation by GST Council shall be with regard to floor rate with band of goods and services; this recommendation was not included in 115th constitutional amendment bill drafted by UPA Government in 2011. Though states were adamant on this issue but in my personal opinion the power to change the rate of GST shall bring down the harmonization of GST Law. But any how the Union Finance Minister has VETO in the GST Council and we assume he shall not allow any such adverse decisions except under special circumstances.<br />
<br />
In this part I am merging rest of the recommendations and they are special provisions to some states including Jammu and Kashmir, special rates for specified period to meet natural calamity and disaster and last are the residuary power i.e. any other matter relating to GST as the Council may decide.<br />
<br />
We have not discussed one question which is coming into my mind about the disputes among various states or states with Centre; The earlier bill of UPA regime had provision of Dispute settlement Authority which was opposed by almost all of the states and also by Standing Committee on Finance and therefore this bill contains one provision that Council shall decide about the modalities to resolve the disputes arising out of its recommendations.<br />
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<b>Amendment of Article 286</b>: This article imposed restriction on States to make law on Interstate transactions and also the Import into Indian Territory. The amendment has just replaced the word sale or purchase of goods with supply of goods or Services or both. This amendment has deleted the concept of declared goods from Constitution itself. In the GST regime there is no concept of declared goods or goods of special importance.<br />
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<b>Amendment of Article 366</b> : In this Article law makers has inserted clause 12A, Clause 26A and Clause 26B, Now Clause 12A has defined word “goods and service tax” , Clause 26A has defined word “service” and Clause 26B has defined meaning of “State”. “Goods and service tax” means any tax on supply of goods or services or both except taxes on supply of alcoholic liquor for human consumption. Definition is very simple and technically barred the alcoholic liquor for human consumption from GST through constitution, Earlier the states were demanding petrol products in the same category as alcoholic liquor for human consumption.<br />
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“Service has been defined as anything other than goods” and States has been defined as “States includes Union Territory with legislature”.<br />
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<b>Amendment of Article 368</b>: The procedure of amendment has been discussed earlier in this write up and there are certain matters where the amendment of Constitution is to be ratified by half of state assemblies and therefore by this amendment article 279A (GST Council) has been kept into that category also.<br />
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<b>Amendment of Sixth Schedule</b>: The sixth schedule contains the provisions as to administration of tribal areas of Assam, Meghalaya, Tripura and Mizoram, by amending this schedule law maker has empowered district council of these states to levy and collect taxes on entertainment and amusements.<br />
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<b>AMENDMENT OF SEVENTH SCHEDULE</b>: This schedule contains the union list, state list and concurrent list and the amendment of this list before introducing GST was very crucial for law makers. The major amendments have been proposed in both union list and state list which are discussed hereunder.<br />
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<b>Changes proposed in union list</b>: Earlier entry 84 has empowered centre to levy excise on all products including tobacco products but excluding alcoholic liquor or human consumption, now the amendment will take away the power of centre to levy excise on manufacturing except tobacco and petrol products. In nutshell in place of excise centre shall levy CSGT and IGST. Entry 92 and 92C has been proposed to delete the concept of taxes on sale or purchase of newspaper and advertisement thereon and service tax as levied by centre at present on provision of service.<br />
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<b>Changes proposed in state list</b>: Entry tax has been subsumed in GST therefore entry 52 has been deleted from state list and entry 55 empowering states to levy the tax on advertisement has been deleted from constitution itself. By amending entry 54 states has been empowered to levy tax on petrol and its related products except the sale of these items in interstate business. Entry 62 has been proposed to subsume luxury tax in the GST and taxes on entertainment and amusement shall only be levied and collected by local bodies only.<br />
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GST is destination based consumption tax : GST is a destination based consumption tax hence revenue shall accrue to those states where goods or services are finally consumed, now the producer states shall be discouraged for such huge production and to compensate them an extra 1% tax on supply of goods shall be levied for 2 years.<br />
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Compensation for States for loss on account of GST implementation shall be adequately placed in constitution and the period of compensation may not go beyond 5 years.<br />
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The Indian Industry is waiting very desperately for GST because it will subsume major indirect taxes levied by Central Government and State Government which will remove the cascading effect of taxes on costing of the Industry. The GST if implemented shall make the tax structure simple and hassle free for trade and Industry.<br />
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Now as on date everyone including me is hopeful that this amendment bill get passed in budget session of the parliament and also ratified by the states concerned. If all goes well in next session specially Rajyasabha the GST become reality from 01-04-2016.<br />
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This article is written by <a class="g-profile" href="https://plus.google.com/116064440934178746199" target="_blank">+CA Vinod Kaushik</a> </div>
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-91233548264134694472015-01-06T07:54:00.000-08:002015-01-06T07:54:00.113-08:00Why need for Constitution Amendment for GST - Video<div dir="ltr" style="text-align: left;" trbidi="on">
2nd Video on GST Video Tutorials - <a href="https://www.youtube.com/watch?v=tCi_ICAL_EI&index=2&list=PLoPItgG3mfBGINJ54eMFxwCdtDLf5yBjJ" target="_blank">Why need for Constitution Amendment for GST</a><br />
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-82891825036046583562015-01-04T07:46:00.001-08:002015-01-04T07:46:05.424-08:00GST Introduction - Video<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana,sans-serif;">Starting <a href="https://www.youtube.com/playlist?list=PLoPItgG3mfBGINJ54eMFxwCdtDLf5yBjJ" target="_blank">GST Video tutorials</a>. </span></div>
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<span style="font-family: Verdana,sans-serif;">Many a times, learning by watching and hearing is better than just reading. With this in mind, starting <a href="https://www.youtube.com/playlist?list=PLoPItgG3mfBGINJ54eMFxwCdtDLf5yBjJ" target="_blank">GST video series on You-Tube</a>. <a href="http://www.youtube.com/channel/UCb63NWuWOmVrPeVkWmLawJw?sub_confirmation=1" target="_blank">Subscribe here</a>.</span></div>
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<span style="font-family: Verdana,sans-serif;">First Video in this series explains GST in brief, Taxes which will be substituted by GST, benefits of GST.</span></div>
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-28297587718817977302014-12-24T06:39:00.002-08:002014-12-29T05:23:49.093-08:00Starting GST Study Group <div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana,sans-serif;">Hello Friends, Indirect Tax Consultants, Visitors</span><br />
<span style="font-family: Verdana,sans-serif;">(Please read below only if you live in and around thane, as this post only applies to them)</span><br />
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<span style="font-family: "Courier New",Courier,monospace;"><b>Update 29/12/2014</b>: Now can track meetings and discussion through <a href="https://groups.google.com/forum/#!forum/thanegst" target="_blank">GST Forum</a>. Also all the meets and members shall be managed through "<a href="http://indirecttaxin.blogspot.com/p/study-circle.html" target="_blank">GST Study Circle</a>" page.</span><br />
<span style="font-family: Verdana,sans-serif;"></span><br />
<span style="font-family: Verdana,sans-serif;">There is a new career opportunity developing for all aspirational CA, CS, lawyers or who already are CA, CS, lawyers..<br /><br />The field I am talking about is <a href="http://indirecttaxin.blogspot.in/" target="_blank">GST (Goods and Service Tax)</a>..<br /><br />I need not specify all the new opportunities GST shall bring, but to list a few - Consultation, Systematic & In-depth accounting, Audit, Representing clients in tax Dept..<br /><br />We have to start early, if we were to grab this opportunity..<br />With this in mind, starting a GST forum for those who inspire to make career in GST for people living in and around thane.</span><br />
<span style="font-family: Verdana,sans-serif;"><br />We shall meet monthly, have chat group, undertake study of GST, effects of GST in particular industry, study all the aspects of GST.</span><br />
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<blockquote class="tr_bq">
<span style="font-family: Verdana,sans-serif;">The meet is scheduled on coming Sunday - 28th Dec 2014 at Korum mall - Food Court at 10.00 AM Sharp</span></blockquote>
<span style="font-family: Verdana,sans-serif;"><br />Forum is open to all<br />Share this info with your friends, may be they will be interested, if not you.<br /><br />10.00 to 10.30 introduction of Study Group Members<br />10.30 to 12.00 GST discussion on Constitution Amendment Bill (Can be Downloaded from - http://ge.tt/1m0EzG72)<br /><br />If interested,<br />Reply with your confirmation for the meet on <strike>9987166QQQ</strike> (SMS or Whatsapp)</span><br />
<span style="font-family: Verdana,sans-serif;">Also Join the event and see who all is coming on Facebook - <a href="https://www.facebook.com/events/387742061401651/">https://www.facebook.com/events/387742061401651/</a></span><br />
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<span style="font-family: "Courier New",Courier,monospace;">Update 29/12/2014 : Number Deleted bcoz of SPAM</span><br />
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<span style="font-family: Verdana,sans-serif;">For those who wants to keep track of GST,<a href="http://indirecttaxin.blogspot.com/"></a></span><br />
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-9563415607966296672014-12-22T04:06:00.001-08:002014-12-22T04:06:16.304-08:00122nd Constitution Amendment Bill for GST Explained<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBE4hR2iaLMWTYjxjTUoZUObK9pJrcBmGn71hr8KmAyzUOsntyNcRwMkIEGh5r4cz7qtqGstn_PLVk8zIX_WbSCS9z5B6H7K6qrxBLbN_tet3KbahxHqbsWO_d4dbJfMKOb_OH1-PcvSc/s1600/GST+122nd+Constitution+Amendment+Bill.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="GST 122nd Constitution Amendment Bill" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBE4hR2iaLMWTYjxjTUoZUObK9pJrcBmGn71hr8KmAyzUOsntyNcRwMkIEGh5r4cz7qtqGstn_PLVk8zIX_WbSCS9z5B6H7K6qrxBLbN_tet3KbahxHqbsWO_d4dbJfMKOb_OH1-PcvSc/s1600/GST+122nd+Constitution+Amendment+Bill.jpg" title="GST 122nd Constitution Amendment Bill" /></a></div>
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<span style="font-family: Verdana,sans-serif;">Introduction</span></h3>
<span style="font-family: Verdana,sans-serif;">GST will substitute many indirect taxes which are levied by Center and State Government. This shall require changes in constitution to give power to Central Govt to enact new taxation law.</span><br />
<span style="font-family: Verdana,sans-serif;">The Union Cabinet approved on 17th December, 2014 the proposal for introduction of a Bill in the Parliament for amending the Constitution of India to facilitate the introduction of Goods and Services Tax (GST) in the country. The Union Finance Minister Shri Arun Jaitley introduced the said Bill in the Lok Sabha on 19th December, 2014. Which can be downloaded from <a href="http://indirecttaxin.blogspot.in/p/downloads.html" target="_blank">Downloads</a> section. </span><br />
<span style="font-family: Verdana,sans-serif;">This is not the first time the Constitution Amendment Bill is brought for introduction of GST. Earlier UPA Govt had introduced similar bill, but was lapsed.</span><br />
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<span style="font-family: Verdana,sans-serif;">Before we discuss the Constitution Amendment Bill for GST, we need to know peculiarities of the Lists given in part XI of the Constitution of India. Which gives powers to Central and State Govt to enact laws. If you know, these already, please continue to Highlights of the bill.</span><br />
<ul style="text-align: left;">
<li><span style="font-family: Verdana,sans-serif;">The Union List or List-I is a list of 100 items (though last item is numbered 97) on which Parliament has exclusive power to legislate</span></li>
<li><span style="font-family: Verdana,sans-serif;">The State List or List-II is a list of 61 items (Initially there were 66 items in the list)</span></li>
<li><span style="font-family: Verdana,sans-serif;">The Concurrent List or List-III is a list of 52 items(though the last item is numbered 47) concerned with relations between the Union and States </span></li>
</ul>
<span style="font-family: Verdana,sans-serif;">Ordinarily speaking if govt had to bring a law which is subject matter of state list, then they would add that item in concurrent list or in union list. But there is a catch in this. The items specified in the concurrent list have a overriding power by Central Govt over State Govt.[<a href="http://indiankanoon.org/doc/77052/" target="_blank">Article 246</a>][<a href="http://indiankanoon.org/doc/76145/" target="_blank">Article 256</a>]. That's why to give equal powers, another article i.e. Article 246A is introduced. </span><span style="font-family: Verdana,sans-serif;"><span style="font-family: Verdana,sans-serif;">Article 246A</span> states</span><br />
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<span style="font-family: Verdana,sans-serif;">Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State. Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. </span></blockquote>
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<span style="font-family: Verdana,sans-serif;">The bill has 21 Clauses, most of which propose to make changes to Union, State and </span><span style="font-family: Verdana,sans-serif;">Concurrent List. Other important amendments are - Formation of new Council for overseeing GST, Compensation to Sates for a period of 5 years from Center. </span><br />
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<h3 style="text-align: left;">
<span style="font-family: Verdana,sans-serif;">Salient features of Bill</span></h3>
<ul style="text-align: left;">
<li><span style="font-family: Verdana,sans-serif;">L<a href="http://indirecttaxin.blogspot.in/2014/12/taxes-which-shall-replaced-by-gst.html" target="_blank">ist of Taxes which shall replace GST can be found here</a> </span></li>
<li><span style="font-family: Verdana,sans-serif;">It is proposed to do away with the concept of ‘declared goods of special importance’ under the Constitution.</span></li>
<li><span style="font-family: Verdana,sans-serif;"><a name='more'></a>Center 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).</span></li>
<li><span style="font-family: Verdana,sans-serif;">All goods and services, except alcoholic liquor for human consumption, will be brought under the purview of GST. Petroleum and petroleum products have also been Constitutionally brought under GST. However, it has also been provided that petroleum and petroleum products shall not be subject to the levy of GST till notified at a future date on the recommendation of the GST Council. The present taxes levied by the States and the Centre on petroleum and petroleum products, i.e., Sales Tax/VAT, CST and Excise duty only, will continue to be levied in the interim period.</span></li>
<li><span style="font-family: Verdana,sans-serif;">Both Center and States will simultaneously levy GST across the value chain. Center would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State.</span></li>
<li><span style="font-family: Verdana,sans-serif;">The Center would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. There will be seamless flow of input tax credit from one State to another. Proceeds of IGST will be apportioned among the States.</span></li>
<li><span style="font-family: Verdana,sans-serif;">GST is a destination-based tax. All SGST on the final product will ordinarily accrue to the consuming State.</span></li>
<li><span style="font-family: Verdana,sans-serif;">GST rates will be uniform across the country. However, to give some fiscal autonomy to the States and Center, there will a provision of a narrow tax band over and above the floor rates of CGST and SGST.</span></li>
<li><span style="font-family: Verdana,sans-serif;">It is proposed to levy a non-vatable additional tax of not more than 1% on supply of goods in the course of inter-State trade or commerce. This tax will be for a period not exceeding 2 years, or further such period as recommended by the GST Council. This additional tax on supply of goods shall be assigned to the States from where such supplies originate. </span></li>
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<h3 style="text-align: left;">
<span style="font-family: Verdana,sans-serif;">Goods and Services Tax Council</span></h3>
<span style="font-family: Verdana,sans-serif;">Creation of Goods and Services Tax Council to examine issues relating to goods and services tax and make recommendations to the Union and the States on parameters like rates, exemption list and threshold limits. The Council shall function under the Chairmanship of the Union Finance Minister and will have the Union Minister of State in charge of Revenue or Finance as member, along with the Minister in-charge of Finance or Taxation or any other Minister nominated by each State Government. It is further provided that every decision of the Council shall be taken by a majority of not less than three-fourths of the weighted votes of the members present and voting in accordance with the following principles:-<br />(A) the vote of the Central Government shall have a weightage of one-third of the total votes cast. and<br />(B) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast in that meeting. </span><br />
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-9924685816866952152014-12-07T06:59:00.001-08:002014-12-24T22:02:34.027-08:00Taxes which shall be replaced by GST<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana,sans-serif;">There is a talk of GST coming soon, and we all are happy about it as it shall substitute many taxes. But are we aware exactly which taxes shall go when GST comes?</span><br />
<span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;">New List of taxes as per 122nd Constitution Amendment Bill for GST.</span><br />
<ul style="text-align: left;">
<li><span style="font-family: Verdana,sans-serif;">Central Excise Duty</span></li>
<li><span style="font-family: Verdana,sans-serif;">Additional excise duty, </span></li>
<li><span style="font-family: Verdana,sans-serif;">Excise Duty levied under the Medicinal and Toilet Preparations (Excise Duties)Act, 1955, </span></li>
<li><span style="font-family: Verdana,sans-serif;">Service tax,</span></li>
<li><span style="font-family: Verdana,sans-serif;"><span style="font-family: Verdana,sans-serif;">Additional customs duty (CVD),</span></span></li>
<li><span style="font-family: Verdana,sans-serif;"><span style="font-family: Verdana,sans-serif;"><span style="font-family: Verdana,sans-serif;">Special additional duty of customs (SAD),</span></span></span><span style="font-family: Verdana,sans-serif;"> </span></li>
<li><span style="font-family: Verdana,sans-serif;">VAT / State Sales Tax & Central Sales Tax ,</span></li>
<li><span style="font-family: Verdana,sans-serif;">Octroi and Entry Taxes,</span></li>
<li><span style="font-family: Verdana,sans-serif;">Purchase Tax, </span></li>
<li><span style="font-family: Verdana,sans-serif;">Entertainment tax (Other than levied by Local Bodies),</span></li>
<li><span style="font-family: Verdana,sans-serif;">Luxury tax,</span></li>
<li><span style="font-family: Verdana,sans-serif;">Taxes on lottery betting and gambling,</span></li>
<li><span style="font-family: Verdana,sans-serif;"><span style="font-family: Verdana,sans-serif;">Central & State cesses and surcharges.</span> </span></li>
<span style="font-family: Verdana,sans-serif;">
</span></ul>
<span style="font-family: Verdana,sans-serif;">Source : </span><a href="http://ge.tt/1m0EzG72" target="_blank"><span style="font-family: Verdana,sans-serif;">122nd Constitution Amendment Bill for GST</span></a><br />
<br />
<span style="font-family: Verdana,sans-serif;">As per the old design, the central and state taxes to be subsumed in GST were</span><br />
<ul style="text-align: left;"><span style="font-family: Verdana,sans-serif;">
</span>
<li><span style="font-family: Verdana,sans-serif;">Central excise duty,</span></li>
<span style="font-family: Verdana,sans-serif;">
</span>
<li><span style="font-family: Verdana,sans-serif;">Additional excise duty, </span></li>
<li><span style="font-family: Verdana,sans-serif;">Service tax,</span></li>
<li><span style="font-family: Verdana,sans-serif;">Additional customs duty (CVD),</span></li>
<li><span style="font-family: Verdana,sans-serif;">Special additional duty of customs (SAD), </span></li>
<li><span style="font-family: Verdana,sans-serif;">Surcharge, </span></li>
<li><span style="font-family: Verdana,sans-serif;">Cess,</span></li>
<li><span style="font-family: Verdana,sans-serif;">VAT/sales tax, </span></li>
<li><span style="font-family: Verdana,sans-serif;">Entertainment tax, </span></li>
<li><span style="font-family: Verdana,sans-serif;">Luxury tax,</span></li>
<li><span style="font-family: Verdana,sans-serif;">Taxes on lottery betting and gambling, </span></li>
<li><span style="font-family: Verdana,sans-serif;">Entry tax not in lieu of octroi,</span></li>
<li><span style="font-family: Verdana,sans-serif;">State cesses and surcharges.</span></li>
</ul>
<br />
<br />
<span style="font-family: Verdana,sans-serif;">Source: <a href="http://www.nipfp.org.in/report/1152/" target="_blank">Report submitted to the Empowered Committee of State Finance Ministers</a> </span></div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-63438966389668589602014-11-26T22:00:00.002-08:002014-11-26T22:00:51.600-08:00How bill is passed - A detailed explanation<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana,sans-serif;">A Bill is the draft of a legislative proposal which has to pass through various stages before it becomes an Act of Parliament.<br /></span><br />
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<span style="font-family: Verdana,sans-serif;">First Reading</span></h2>
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<span style="font-family: Verdana,sans-serif;"></span></h2>
<span style="font-family: Verdana,sans-serif;">The legislative process starts with the introduction of a Bill in either House of Parliament-Lok Sabha or Rajya Sabha. A Bill can be introduced either by a Minister or by a Private Member. In the former case, it is known as a Government Bill and in the latter case it is called a Private Member's Bill. It is necessary for a Member-in-charge of the Bill to ask for leave to introduce the Bill. If leave is granted by the House, the Bill is introduced. This stage is known as the First Reading of the Bill. If the motion for leave to<br />introduce a Bill is opposed, the Speaker may, allow a brief explanatory statement to be made by the Member who opposes the motion and<br />the Member-in-charge who moved the motion. Where a motion for leave to introduce a Bill is opposed on the ground that the Bill initiates<br />legislation outside the legislative competence of the House, the Speaker may permit a full discussion thereon. Thereafter, the question is put to the vote of the House. However, the motion for leave to introduce a Finance Bill or an Appropriation Bill is forthwith put to the vote of the House.<br /></span><br />
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<span style="font-family: Verdana,sans-serif;">Publication in Gazette</span></h2>
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<span style="font-family: Verdana,sans-serif;"></span></h2>
<span style="font-family: Verdana,sans-serif;">After a Bill has been introduced, it is published in the Official Gazette. Even before introduction, a Bill might, with the permission of the Speaker, be published in the Gazette. In such cases, leave to introduce the Bill in the House is not asked for and the Bill is straightaway introduced. <br /><br />Reference of Bill to Standing Committee <br />After a Bill has been introduced, the Presiding Officer of the House concerned can refer the Bill to the Standing Committee concerned for examination and make report thereon. [w.e.f. fourth session of Fourteenth Lok Sabha, a time limit of three months for presentation of report is normally prescribed while referring a Bill to the Standing Committee]. If a Bill is referred to the Standing Committee,<br />the Committee shall consider the general principles and clauses of the Bill referred to them and make report thereon. The Committee<br />can also take expert opinion or the opinion of the general public who are interested in the measure. After the Bill has thus been considered, the Committee submits its report to the House. The report of the Committee, being of persuasive value, shall be treated as considered advice given by the Committee. <br /></span><br />
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<span style="font-family: Verdana,sans-serif;">Second Reading</span></h2>
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<span style="font-family: Verdana,sans-serif;"></span></h2>
<span style="font-family: Verdana,sans-serif;">The Second Reading consists of consideration of the Bill which is in two stages: </span><br />
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<span style="font-family: Verdana,sans-serif;">first Stage: </span></h3>
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<span style="font-family: Verdana,sans-serif;"></span></h3>
<span style="font-family: Verdana,sans-serif;">The first stage consists of general discussion on the Bill as a whole when the principle underlying the Bill is discussed. At this stage, it is open to the House to refer the Bill to a Select Committee of the House or a Joint Committee of the two Houses or to circulate it for the purpose of eliciting opinion thereon or to straightaway take it into consideration. If a Bill is referred to a Select/ Joint Committee, the Committee considers the Bill clause-by-clause just as the House does. Amendments can be moved to various clauses by Members of the Committee. The Committee can also take evidence of associations, public bodies or experts who are interested in the measure. After the Bill has thus been considered, the Committee submits its report to the House which considers the Bill again as reported by the Committee. If a Bill is circulated for the purpose of eliciting public opinion thereon, such opinions are obtained through the Governments of the States and Union territories. Opinions so received are laid on the Table of the House and the next<br />motion in regard to the Bill must be for its reference to a Select/ Joint Committee. It is not ordinarily permissible at this stage to move the motion for consideration of the Bill. </span><br />
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<span style="font-family: Verdana,sans-serif;">Second Stage: </span></h3>
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<span style="font-family: Verdana,sans-serif;"></span></h3>
<span style="font-family: Verdana,sans-serif;">The second stage of the Second Reading consists of clause-by-clause consideration of the Bill as introduced or as reported by Select/ Joint Committee. Discussion takes place on each clause of the Bill and amendments to clauses can be moved at this stage. Amendments to a clause which have been moved but not withdrawn are put to the vote of the House before the relevant clause is<br />disposed of by the House. The amendments become part of the Bill if they are accepted by a majority of Members present and voting. After<br />the clauses, the Schedules, if any, clause 1, the Enacting Formula and the Long Title of the Bill have been adopted by the House, the Second Reading is deemed to be over.<br /></span><br />
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<span style="font-family: Verdana,sans-serif;">Third Reading</span></h2>
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<span style="font-family: Verdana,sans-serif;"></span></h2>
<span style="font-family: Verdana,sans-serif;">Thereafter, the Member-in-charge can move that the Bill be passed. This stage is known as the Third Reading of the Bill. At this stage, the debate is confined to arguments either in support or rejection of the Bill without referring to the details thereof further than that are absolutely necessary. Only formal, verbal or consequential amendments are allowed to be moved at this stage. In passing an ordinary Bill, a simple majority of Members present and voting is necessary. But in the case of a Bill to amend the Constitution,<br />a majority of the total membership of the House and a majority of not less than two-thirds of the Members present and voting is required in each House of Parliament. Bill fn the other House After the Bill is passed by one House, it is sent to the other House for concurrence with a message to that effect, and there also it goes through the stages described above, except the introduction stage.<br />Money Bills Bills which exclusively contain provisions for imposition and abolition of taxes, for appropriation of moneys out of the Consolidated Fund, etc., are certified as Money Bills. Money Bills can be introduced only in Lok Sabha. Rajya Sabha cannot make amendments in a Money Bill passed by Lok Sabha and transmitted to it. It can, however, recommend amendments in a Money Bill, but must return all Money Bills to Lok Sabha within fourteen days from the date of their receipt. It is open to Lok Sabha to accept or reject any or all of the recommendations of Rajya Sabha with regard to a Money Bill. If Lok Sabha accepts any of the recommendations of Rajya Sabha, the Money Bill is deemed to have been passed by both Houses with amendments recommended by Rajya Sabha and accepted by Lok Sabha and if Lok Sabha does not accept any of the recommendations of Rajya Sabha, the Money Bill is deemed to have been passed by both Houses in the form in which it was passed by Lok Sabha without any of the amendments recommended by Rajya Sabha. If a Money Bill<br />passed by Lok Sabha and transmitted to Rajya Sabha for its recommendations is not returned to Lok Sabha within the said period of<br />fourteen days, it is deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by Lok Sabha.<br /></span><br />
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<span style="font-family: Verdana,sans-serif;">Consideration of the Bill at a Joint Sitting</span></h2>
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<span style="font-family: Verdana,sans-serif;"></span></h2>
<span style="font-family: Verdana,sans-serif;">If a Bill passed by one House is rejected by the other House, or, the Houses have finally disagreed as to the amendments to be made in<br />the Bill, or more than six months elapse from the date of the receipt of the Bill by the other House without the Bill being passed by it, the President may call a joint sitting of the two Houses to resolve the deadlock. If, at the joint sitting of the Houses, the Bill is passed by a majority of the total number of Members of both the Houses present and voting, with the amendments, if any, accepted by them, the Bill is deemed to have been passed by both the Houses.<br />There cannot be a joint sitting of both Houses on a Constitution Amendment Bill.<br /></span><br />
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<span style="font-family: Verdana,sans-serif;">Assent of the President </span></h2>
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<span style="font-family: Verdana,sans-serif;"></span></h2>
<span style="font-family: Verdana,sans-serif;">When a Bill is passed by both Houses, the Secretariat of the House which is last in possession of the Bill obtains the assent of the<br />President. In the case of a Money Bill or a Bill passed at a joint sitting of the Houses, the Lok Sabha Secretariat obtains assent of the President. The Bill becomes an Act only after the President has given assent to it. The President may give assent or withhold assent<br />to a Bill. The President may also return the Bill (except a Money Bill) with recommendations to the Houses for reconsideration, and if the Houses pass the Bill again with or without amendments the President cannot withhold assent to the Bill. The President, however, is bound to give assent to a Constitution Amendment Bill passed by the Houses of Parliament by the requisite special majority and, where necessary, ratified by the States.</span><br />
<span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;">Source : <a href="http://loksabha.nic.in/">http://loksabha.nic.in</a> Publication</span></div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-67404027420904974232014-11-14T23:55:00.002-08:002014-12-05T02:25:05.568-08:00Understanding Revenue Neutral Taxation<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Verdana,sans-serif;">You might have heard that, GST Rates will be decided on the principle of Revenue neutrality.</span><br />
<span style="font-family: Verdana,sans-serif;">Today, we are going to understand what exactly is </span><br />
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<span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;">The true definition of revenue neutrality if you ask, it will be: </span><br />
<ul style="text-align: left;">
<li><span style="font-family: Verdana,sans-serif;">A condition of fiscal policy making in which any increase or decrease in tax revenues be achieved with a commensurate increase or decrease in tax revenues.For example, a proposal to decrease taxes for one economic group must include a mechanism to increase tax revenues from another source in order to offset the revenue decrease. </span></li>
<li><span style="font-family: Verdana,sans-serif;">Taxing procedure that allows the government to still receive the same amount of money despite changes in tax laws. The government may lower taxes for one particular group of people, but raise taxes for another group. This allows the revenue that they receive to remain unchanged (neutral). </span></li>
</ul>
<span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;">In Our case, GST sense, it will be imposing some taxation and to remove few other taxation in a way that, there is no loss of revenue to government. The purpose if to simplify the taxation structure at the same time take care that, there is no loss of revenue to government as GST will be a major overhaul in the Indirect taxation in India.</span><br />
<span style="font-family: Verdana,sans-serif;">Let's take an example, Govt collects 10Rs from Excise on 100Rs manufactured, 12Rs from Service Tax on 100Rs Services provided, 15 from Sales Tax on 100Rs of Sales. So, total amount collected is 37 (10+12+15) on 300 Rs of activity. If we were asked to calculate a revenue neutral rate for a new taxation which replaces these 3 taxation, we will calculate it to 12.33% (37/300). This way even if the govt looses revenue from abolishing the 3 taxes, it would earn exactly the same from new tax. This is revenue neutral taxation, or call it a revenue neutral tax rate.</span><br />
<span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;">National Institute of Public Finance and Policy (NIPFP) is tasked with recommending a revenue neutral tax rate for the goods and services tax. The <a href="http://www.nipfp.org.in/" target="_blank">NIPFP website</a> lists the below <a href="http://www.nipfp.org.in/our-work/research/taxation-revenue/" target="_blank">description for work they do</a>.</span><br />
<blockquote class="tr_bq">
<span style="font-family: Verdana,sans-serif;">Tax Policy and tax administration has been among the core areas of
interest in the Institute. The Institute was and continues to be at the
forefront of research on tax policies in India. The Chelliah Committee
Report, which formed the basis for economic reform initiatives in the
early nineties, was supported by work at the Institute. The debate on
introduction and design of State-level Value Added Tax in India was
anchored around a study by the Institute on Reform of Domestic Trade
Taxes in India. One of the first systematic studies on Unaccounted
Incomes in India was undertaken at the Institute in 1982. The team at
the Institute has been consistently providing policy inputs through
research papers on issues relating to tax policy reforms in India. In
recent times, the focus areas of research have been understanding
unaccounted incomes in India, issues in the design of GST for India,
evaluation of major tax incentives and analysis of state specific tax
regimes for identifying mechanisms for augmenting revenues.</span></blockquote>
<br />
<span style="font-family: Verdana, sans-serif;">Now let's discuss some technicality. Below is a publication by NIPFP discussing </span><br />
<span style="font-family: Verdana, sans-serif;">Revenue Implications of GST and Estimation of Revenue Neutral Rate: A State Wise Analysis<br />Publication date - Jan, 2013<br />Report submitted to the Empowered Committee of State Finance Ministers<br />Authors<br />R. Kavita Rao, Pinaki Chakraborty,<br />The study was undertaken at the request of the Empowered Committee of State Finance Ministers to assess the state specific GST tax base and corresponding revenue neutral rates. As a part of this study, state wise possible revenue loss/gain in the event of introduction of GST was also done.</span><br />
<span style="font-family: Verdana, sans-serif;"><a href="http://www.nipfp.org.in/media/medialibrary/2013/08/Empowered_Committee_GST_Report_January_2013.pdf" target="_blank">Full details can be found here </a></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">A few summarized para from this publication.</span><br />
<br />
<span style="font-family: Verdana, sans-serif;">An exercise of this nature requires an estimation of correct base for GST which in any form of taxation is the key for the measurement of tax potential. Theoretically, the applicable base of GST depends on a number of factors related to its design, e.g., whether it is origin or destination based, of the income or consumption type, implemented with a credit invoice or subtraction method and contains many or few exemptions. As discussed, the proposed GST will be destination based, consumption type system implemented with a credit invoice method, like the present VAT.<br /><br />The starting point for the estimation of base is the gross domestic product of an economy, in the case of states, the gross state domestic product, since it represents the sum total of the value added in the production of goods and services within a state economy. However, for a destination based consumption type GST, the legitimate question that arises is whether final consumption expenditure, which represents the sum total of value added of domestic consumption is not a more direct starting point in estimating the base. Though at the outset it appears to be correct, in practice, it depends to a large extent on the scope and the nature of exemptions under consideration. For a destination based consumption type of GST levied comprehensively with no exemptions, the base is simply the final consumption on goods and services, which may not be possible in the real life situation. Like in the case of goods, even in the proposed GST regime, there are many services that would be exempted from the service taxation.<br />Generally, there are three alternative methods of estimating base of GST, viz., GDP adjusted for exports and imports, the consumption expenditure and the taxable turnover of goods and services. GDP adjusted for external sector transactions would represent the total expenditure on private consumption, government consumption, fixed capital formation and changes in business inventories. The estimated GDP adjusted for the value of services of exempted sector, government wages, fixed capital formation and net consumption abroad would precisely define the GST base. Although GDP data is available from the national account statistics, it is very difficult to get disaggregated data on exempted sectors and on value of goods and services to be excluded from GST base. Use of GDP, thus as GST base becomes problematic even at the national level GST calculation. It becomes even more difficult in the case of states as there is no reliable data available on exports and imports from and to the states apart from the items to be excluded from the estimation of GST base within the exempted sector from the state GSDP. In many states it has been argued that a substantial portion of the IT services are exported out of the state and this is not available for taxation. However, we do not have reliable data on state level IT export.<br /><br />Another alternative, which can be used as the base of GST, is consumption expenditure on goods and services. The consumption expenditure data is available at the state level as well as at all India level. The state specific consumption expenditure data can be used as a proxy for GST base. The aggregate private consumption expenditure data for the country as a whole is provided by the National Accounts Statistics (NAS). State wise consumption expenditure data is also available from national sample survey on 5 yearly bases. This method of estimating GST base is called consumption expenditure approach. However, the consumption expenditure method is not free from limitations, primarily due to the non-availability of data on exempted commodity consumption and exemption of dealers with turnover below the taxable limit. Given these limitations, it is difficult to estimate the GST revenues of individual states through consumption expenditure approach.<br />Another limitation of the National Sample Survey consumption expenditure data is that it suffers from the problem of underestimation of consumption expenditure for both goods and services when compared with the private final consumption expenditure provided in the national accounts statistics. In fact, as per the 61st round (2004-05) consumption expenditure survey, the total private final consumption expenditure was Rs. 931415 crore, and as per the National Accounts Statistics, the same was Rs. 1873729 crore. In other words, NSS estimates of private final consumption expenditure was 49.7 percent lower than the NAS estimates. Given this gross underestimation of base by the NSS consumption expenditure survey, we have not used it. Also the listing of goods and services in the NSS schedule is quite different from the actual taxable base of goods and services. Also as the consumption expenditure data reflects household consumption, relying on it for the purpose of tax base would be erroneous. There exist issues of concordance between the two estimates of consumption based on their methodologies. While NSS is a household survey and their estimates of private consumptions are based on only household information and does not include consumptions of the private non-profit organisations serving the households, NAS on the other hand is derived from a commodity flow approach.<br /><br />It is possible to estimate GST revenues through "tax turnover" method. Advantage of tax turnover method is that it is based on the data of taxable turnover of goods available with the respective sales tax department of states on goods. As under GST, like in VAT, tax paid on input by a VAT registered dealer would have to be rebated, one has to estimate the inputs eligible for input tax rebate from the tax turnover data. It is also to be noted that inputs eligible for credit will be the taxable inputs alone. Thus, one has to determine not only the input component from the taxable turnover, but also the structure of input used, viz., taxable input and non-taxable/exempted inputs. Another issue that requires attention is the quantification of locally produced inputs and the use of imported inputs within the taxable inputs as they are treated differently in current VAT regime.<br />In case of goods, as it is well known, taxable goods produced within a state is sold via (i) local sales, (ii) taxable inter-state sales, (iii) consignment/branch transfers and (iv) international exports. We have not been able to obtain the VAT data available with individual sales tax department on turnover in a short span of time and also there are major data issues on taxation of goods specific turnover in many states. Thus, we have used the alternative approach to arrive at turnover of goods. We have used weighted average tax rates for the estimation of taxable turnover from the data on tax collected under VAT excluding those which would not form part of the GST, viz., liquor, diesel, petrol and ATF. </span><br />
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-66671452829746887772014-09-30T02:01:00.000-07:002014-12-05T02:22:47.251-08:00Developments in September 2014<div dir="ltr" style="text-align: left;" trbidi="on">
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September's Goods and Service Tax News Round Up </h2>
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No Opposition to GST : Chhattisgarh CM</h3>
Date : 26th Septmeber 2014<br />
Chhattisgarh has no objection to implementation of the Goods and Services Tax (GST), state Chief Minister Raman Singh said on Friday "Chhattisgarh has no objection on GST. We only want that state's loss of revenue is taken care of as there will be annual loss of Rs 1,000-1,200 crore," Singh told reporters here. The Chief Minister said he had raised the matter earlier with the then Finance Minister Pranab Mukherjee.<br />
<br />
Source : <a href="http://www.dnaindia.com/india/report-no-opposition-to-gst-raman-singh-2021718" target="_blank">DNA</a> - <br />
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<h3 style="text-align: left;">
GST Implementation From April 2016, Feasible: Revenue Secretary</h3>
Date : 20th Septmeber 2014<br />
As negotiations with states on GST enter a critical stage, the Centre is looking forward to implementation of the new indirect tax regime from April 1, 2016. "The deadline for actual implementation of GST from April 1, 2016, would be feasible. It all depend on how quickly we are able to reach consensus on critical issues," Revenue Secretary Shakti Kanta Das said at an event here.<br />
<br />
"The discussions are at a very critical stage and we hope to make very good progress. We are quite optimistic we will be able to reach convergence in the coming weeks or months," Mr Das added. He said there are 4-5 issues with the states that are outstanding and on each there have been discussions in recent weeks.<br />
<br />
Earlier this week, Prime Minister Narendra Modi held a meeting to take stock of the proposed new indirect tax regime and decided to soon clear the pending CST compensation for revenue loss incurred by states.<br />
Source: <a href="http://profit.ndtv.com/news/industries/article-gst-implementation-from-april-2016-feasible-revenue-secretary-668543" target="_blank">NDTV</a> , <a href="http://www.indiatvnews.com/business/india/gst-implementation-from-april-2016-14534.html" target="_blank">India TV</a> , <a href="http://articles.economictimes.indiatimes.com/2014-09-20/news/54135501_1_gst-implementation-new-indirect-tax-regime-gst-ambit" target="_blank">Economic Times</a> <br />
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No objection to Goods and Services Tax: Madhya Pradesh CM Shivraj Singh Chouhan</h3>
Date : 20th September 2014<br />
Madhya Pradesh has no objection to the implementation of the Goods and Services Tax (GST) in the country, Chief Minister Shivraj Singh Chouhan said.<br />
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"We were never against GST. We have put forth our stand on a GST structure through which states were to face losses in state taxes. The (central) government will find a solution to that... There is no objection to it (GST)," Chouhan told PTI here today. Madhya Pradesh has been demanding a mechanism for full CST (Central Sales Tax) compensation.<br />
Source : <a href="http://articles.economictimes.indiatimes.com/2014-09-21/news/54160976_1_services-tax-gst-structure-gst-regime" target="_blank">Economic Times</a><br />
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Telangana state favours the introduction of Goods and Service Tax : CM, Rao</h3>
Date : 19 September 2014<br />
Stating that the state favours the introduction of Goods and Service Tax (GST), Rao called for ensuring that there is no accentuation of vertical imbalances and compromise of autonomy of states. He said an adequate compensatory mechanism should be put in place. He suggested that petroleum and liquor be kept out of the purview of the GST.<br />
Source : <a href="http://www.india.com/news/india/telangana-seeks-40-percent-tax-devolution-to-states-152740/">India.com</a> <br />
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Modi gives approval for introducing Goods and Services Tax</h3>
Date : 15th September 2014<br />
Prime Minister Narendra Modi has given the approval for going ahead with the biggest tax reform initiative - the Goods and Services Tax. The government will now try to introduce the Constitutional Bill for GST in the Winter Session of Parliament.<br />
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The government has decided to make a few amendments. In the Constitution Bill, both the Centre and States would be allowed to levy GST on petroleum products. But practically, the states would continue to levy their excise rates, preventing a revenue loss for them.<br />
The official said the ministry was considering keeping petroleum under GST, instead of excluding it constitutionally, as demanded by states, but to address the latter’s concerns on loss of revenue from this source, these could be zero-rated. Meaning, states can continue to levy sales tax or value-added tax on petroleum products, while the Centre would retain its right to impose excise duty.<br />
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The Centre is also trying to convince the Sates on allowing a GST compensation mechanism. Finance Minister Arun Jaitley will be meeting state finance ministers next month. He met the Prime Minister over the issue on Tuesday. <br />
Several states have expressed concerns over losing autonomy and facing revenue losses if GST comes into play.<br />
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Source: <a href="http://ibnlive.in.com/news/pm-modi-gives-approval-for-introducing-goods-and-services-tax-reform/499380-37-64.html" target="_blank">IBN Live</a> , <a href="http://www.business-standard.com/article/economy-policy/gst-gets-a-modi-booster-114091501393_1.html" target="_blank">Busniess Standard</a> , <a href="http://www.hindustantimes.com/business-news/pm-modi-pushes-for-gst-chairs-crucial-meet/article1-1264397.aspx" target="_blank">Hindustan Times</a> , <a href="http://www.moneycontrol.com/news/economy/pm-modi-takes-stockgst-bill-likelywinter-session_1179850.html" target="_blank">Money Control</a> <br />
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Central excise & service tax dept plans revamp</h3>
Date : 6th September 2014<br />
A one taxpayer-one table formula was also proposed by the BIA members. who said the current one-stop system was convenient but if the restructuring is imperative, then at least both CE and ST collection should be ensured at one place. "With the cadre restructuring in the pipeline, a number of new posts will be created in the organization and we will be better prepared to implement the goods and services tax (GST) as and when it is enforced,"<br />
Source : <a href="http://timesofindia.indiatimes.com/city/patna/Central-excise-service-tax-dept-plans-revamp/articleshow/41890018.cms" target="_blank">Times of India</a> <br />
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If implemented, GST can contribute 2% to GDP growth: Adi Godrej</h3>
Date : 2nd September 2014<br />
ET Now: But, has the administrative efficiency, which was lacking in the previous government, improved on the ground?<br />
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Adi Godrej: Certainly! The new government has taken many steps to improve the ease of doing business. Now, it's but obvious that everything cannot change within 100 days. However, suffice to say that the trend has been good. Looking forward to, say, 6 months to 12 months from now, the ease of doing business in India would have improved considerably.<br />
Moreover, the biggest reform that can help India's growth accelerate is GST - the goods and services tax legislation - which the finance minister Arun Jaitley is working on, to bring in force by April 1, 2015.<br />
Source : <a href="http://articles.economictimes.indiatimes.com/2014-09-02/news/53479786_1_adi-godrej-gdp-growth-gst" target="_blank">Economic Times</a> <br />
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FM Says, Threshold limit for goods, services tax proposed by States too low</h3>
Date : 1st September 2014<br />
he ?10-lakh threshold limit for imposition of Goods & Services Tax (GST) proposed by States is ‘too low’ for creating a business-friendly tax administration, according to the Finance Ministry. The Empowered Committee on State Finance Ministers, in its meeting on August 20, agreed on setting a ?10-lakh threshold limit for general category States and ?5 lakh for special category and North Eastern States. Earlier, the proposed limit was ?25 lakh.<br />
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“States are proposing ?10 lakh and ?5 lakh as the gross turnover. Considering various kind of reliefs and exemptions, the taxable limit will be much lower. Such a limit will not be very conducive for a business-friendly tax administration,” a senior Finance Ministry official told BusinessLine. He, however, refused to divulge the limit which the Centre thinks is appropriate. <br />
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Source : <a href="http://www.thehindubusinessline.com/economy/macro-economy/threshold-limit-for-goods-services-tax-proposed-by-states-too-low-finmin/article6370390.ece" target="_blank">Busniess Line</a> </div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-28556723519501852132014-09-10T23:14:00.001-07:002014-09-10T23:14:32.387-07:00The Constitutional Amendment Bill - 115th for GST<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana,sans-serif;">This Act may be called the Constitution (One Hindered and Fifteenth Amendment).</span></div>
<span style="font-family: Verdana,sans-serif;">It shall come into force on such date as the Central Government may, by notification in the official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.</span><br /><span style="font-family: Verdana,sans-serif;">
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Goods and services tax on supplies in the course of inter-State trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be prescribed by Parliament by law.</span><br /><span style="font-family: Verdana,sans-serif;">
For the purposes of this clause, supply of goods or of services or both in the course of import into the territory of India shall be deemed to be supply of goods, or of services, or both in the course of inter-State trade or commerce.</span><br /><span style="font-family: Verdana,sans-serif;">
Parliament may, by law, formulate the principles for determining when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.</span><br /><span style="font-family: Verdana,sans-serif;">
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<span style="font-family: Verdana,sans-serif;">
Goods and Services Tax Council</span></h3>
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The President shall, within sixty days from the date of commencement of the Constitution (One Hundred and Fifteenth Amendment) Act, 2011, by order, constitute a Council to be called the Goods and Services Tax Council.<br />
The Goods and Services Tax Council shall consist of the following members, 4 5<br />
namely :<br />
(a) the Union Finance Minister - Chairperson;<br />
(b) the Union Minister of State in charge of Revenue - Member<br />
(c) the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government - Members<br />
The Members of the Goods and Services Tax Council shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide.<br />
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The Goods and Services Tax Council shall make recommendations to the Union and the States on-<br />
(a) the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed in the goods and services tax;<br />
(b) the goods and services that may be subjected to or exempted from the goods and services tax;<br />
(c) the threshold limit of turnover below which goods and services tax may be exempted;<br />
(d) the rates of goods and services tax; and<br />
(e) any other matter relating to the goods and services tax, as the Council may decide.<br />
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While discharging the functions conferred by this article, the Goods and<br />
Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services. 0ne-third 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<br />
performance of its functions. Every decision of the Goods and Services Tax Council taken at a meeting shall be with the consensus of all the members present at the meeting.<br />
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<h3 style="text-align: left;">
<span style="font-family: Verdana,sans-serif;">Goods and Services Tax Dispute Settlement Authority</span></h3>
<span style="font-family: Verdana,sans-serif;">Parliament may, by law, provide for the establishment of a Goods and Services Tax Dispute Settlement Authority to adjudicate any dispute or complaint referred to it by a State Government or the Government of India arising out of a deviation from any of the recommendations of the Goods and Services Tax Council constituted under article 279A that results in a loss of revenue to a State Government or the Government of lndia or affects the harmonised structure of the goods and services tax.</span><br />
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The Goods and Services Tax Dispute Settlement Authority shall consist of a Chairperson and two other members. The Chairperson of the Goods and Services Tax Dispute Settlement Authority shall be a person who has been a Judge of the Supreme Court or Chief Justice of a High Court to be appointed by the President on the recommendation of the Chief Justice of lndia. The two other members of the Goods and Services Tax. Dispute Settlement Authority shall be persons of proven capacity and expertise in the field of Jaw, economics or public affairs to be appointed by the President on the recommendation of the Goods and Services Tax Council. The Goods and Services Tax Dispute Settlement Authority shall pass suitable orders including interim orders. No Court other than the Supreme Court shall exercise jurisdiction in respect of any such adjudication or dispute or complain.
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-27103115084406993662014-09-01T04:02:00.000-07:002014-09-01T04:02:00.040-07:00Internationally - Goods and Service Tax<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana,sans-serif;">VAT/GST provisions in countries other than India are quite streamlined and stable. As the Law in India is still not a reality we might look into the provisions which are in place since quite long and access the structure of rate, exemptions etc.<br /><br /><b>Australia</b><br />(a) The standard rate of GST is 10 %.<br />(b) There is a reduced rate of 0% which is applicable on some food products, medical and health services, drugs, medical aids and appliances, exports of goods and services, supply of a business as a going concern, etc.<br />(c) Supplies of certain goods and services are exempt from GST. For e.g. Financial services, Residential rent, Residential premises etc.<br /><br /><b>Bangladesh</b><br />(a) The standard rate of VAT is 15%.<br />(b) There are reduced rates of 0% - 9% and these reduced rates are applicable on certain categories of advertisement, supply of electricity, air conditioned bus services, engineering services, security services, services rendered by construction contractors, audit and accounting firms, consultants, printing presses, architects, interior and graphic designers, immigration advisers, coaching centers, english medium schools, non-government medical and engineering colleges, photo producers, courier and EMS services, specialized doctors, legal advisers; supplies of goods and services through participation in a tender/quotation and for pathological laboratory work, supplies of goods and services by hospitals and petroleum carriers, maintenance and cleaning of building floors/premises, dental medical centers, trading services, land development and construction of apartments, retail sales of furniture and exports of goods and services.<br />(c) Examples of certain supplies which are exempt from VAT:-<br /> a. Certain food items (such as meat, fish, potatoes, vegetable and fruits);<br /> b. Jute and jute goods;<br /> c. Social welfare & cultural training;<br /> d. Rehabilitation services; and<br /> e. Agricultural development.<br /><br /><b>Cayman Islands</b><br /> No VAT or GST is applicable in Cayman Islands.<br /><br /><b>France</b><br />(a) The standard rate of VAT is 19.6 %.<br />(b) There are reduced rates of 5.5 %, 2.1 %, and 0%, and these reduced rates are applicable on food, water, passenger transportation, some pharmaceutical products, books, hotel accommodation, newspapers, medicines for human health when reimbursed by social security, and export of goods and intra-community supplies.<br />(c) Certain supplies of goods and services are exempt from VAT:-<br /> a. Medical supplies;<br /> b. Postal services;<br /> c. Education;<br /> d. Certain Financial transactions; and<br /> e. Insurance services.<br /><br /><b>Germany</b><br />(a) The standard rate of VAT is 19 %.<br />(b) Reduced rates can be applied on certain examples like on food, plants, animals, books/newspapers, entrance fees to cultural sites, and short distance passenger transport, for cross-border air passenger transport, financial services to non-EU recipients, exports and certain transactions involving ships and aircrafts.<br /><br /><b>Hong Kong</b><br />No VAT or GST is applicable in Hong Kong.<br /><br /><b>Japan</b><br />(a) The standard rate of consumption tax is 5 %.<br />(b) There is a reduced rate of 0%, and this reduced rate is applicable on sale or leasing of goods as export transactions; sales or leasing of foreign cargoes; international transportation services; services provided to non-residents.<br />(c) Supplies of certain goods and services are exempt from consumption tax, for example, sale and leasing of land; rental of housing; sales of securities, and similar instruments; medical treatment under public medical insurance laws; social welfare activities; school tuition; and examination services.<br /><br /><b>Mauritius</b><br />(a) The standard rate of value-added tax is 15 %.<br />(b) There is a reduced rate of 0 % which is applicable on export of goods other than exempt goods, sugar, wheat flour, books, booklets, supply of electricity, water, certain pharmaceutical products, international transport of passengers and goods, supplies of services to non-residents.<br />(c) Supplies of certain goods and services are exempt from VAT, for example, rice, wheat, bread, butter, milk and cream, medical, hospital and dental services, educational and training services provided by registered institutions, postal services, cargo handling, and certain residential buildings.<br /><b><br />Pakistan</b><br />(a) Indirect taxes in Pakistan include a sales tax and a federal excise duty.<br />(b) The standard rate of sales tax is 16 %; however, certain goods are subject to sales tax at higher rates of 18.5 % and 21 %.<br />(c) There is a reduced rate of 0 %, which is applicable on, all export of goods, local supplies of raw materials, supplies of specified export sectors, import and local supplies of capital goods.<br />(d) Certain examples of supplies which are exempt from sales tax are agricultural products, unprocessed food items, animals and their meat, fisheries, dairy products, construction materials, computer software, ships, navigation equipments, sale to hospitals and educational non-profit organizations.<br /><b><br />Russia</b><br />(a) The standard rate of VAT is 18 %.<br />(b) There are reduced rates of 10% and 0 % and these reduced rates are applicable on food products, specific goods intended for children, books and periodicals, pharmaceutical and other medical products; exports of goods related services, services related to transit of goods through Russia, international passenger transportation and fuel for ships and aircraft.<br />(c) Examples of certain supplies which are exempt from VAT are lease of premises to foreign companies accredited in Russia, medical services and certain medical products, educational services, public transportation, sale of securities, banking and insurance services, rent of apartments, sale of apartments and residential property.<br /><br /><b>Singapore</b><br />(a) The standard rate of GST is 7 %.<br />(b) There is a reduced rate of 0 %, which generally applies to export of goods and international services.<br />(c) Supplies of certain financial services and sale or lease of residential properties are exempt from GST.<br /><br /><b>Thailand</b><br />(a) The standard rate of VAT is 7 %.<br />(b) There is a reduced rate of 0 % which is applicable on export of goods or services.<br />(c) Supplies of certain goods and services are exempt from VAT, for example, domestic transportation, health care, education, leasing of immovable property, sale of agricultural products, newspapers, magazines and textbooks, services rendered by libraries, museums, and zoos.<br /><br /><b>United Arab Emirates</b><br />No VAT or GST applicable in the United Arab Emirates.<br /><br />This article is written by <a href="http://www.delhicamohan.com/" target="_blank">CA Rajat Mohan</a></span></div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-77258177112872637392014-08-26T06:00:00.000-07:002014-08-26T06:00:02.040-07:00GSTN - The solution architecture<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana,sans-serif;">This is the 2nd of the 3 posts which describes IT Strategy for Implementation of GST.</span></div>
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<span style="font-family: Verdana,sans-serif;">A common GST portal</span></h3>
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<span style="font-family: Verdana,sans-serif;">The solution architecture should be designed to meet the design goals for GSTN, described in the previous post. For the purpose of simplicity for taxpayers, uniformity of tax administration, digitization of all documents, and automation of related processes, it is necessary to have:</span></div>
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<ol style="text-align: justify;">
<li><span style="font-family: Verdana,sans-serif;">Common PAN-based registration </span></li>
<li><span style="font-family: Verdana,sans-serif;">Common standardized return for all taxes (with different account heads for CGST, SGST, IGST)</span></li>
<li><span style="font-family: Verdana,sans-serif;">Common standardized challan for all taxes (with different account heads for CGST, SGST, IGST)</span></li>
</ol>
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<span style="font-family: Verdana,sans-serif;">A common GST portal, operated by GSTN, is the fastest and most cost-effective way to provide common PAN-based registration, common returns, and common challans for all stakeholders. It can marry the taxpayers standard interface with the varied systems of the tax administrations. Each tax authority will have full flexibility in using this data for in-house automation, integration, and enforcement.</span></div>
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<h3 style="text-align: justify;">
<span style="font-family: Verdana,sans-serif;">Basic solution architecture</span></h3>
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<span style="font-family: Verdana,sans-serif;">Given the need for a common GST portal, the basic solution architecture is as follows:</span></div>
<ol style="text-align: justify;">
<li><span style="font-family: Verdana,sans-serif;">Taxpayer files through a standardized taxpayer interface. </span></li>
<li><span style="font-family: Verdana,sans-serif;">States and CBEC implement tax administration systems for assessments, audits, and enforcement within their domain. This is desirable but not a pre-condition since the GSTN can provide support for states that do not have the necessary IT systems in place.</span></li>
<li><span style="font-family: Verdana,sans-serif;">The taxpayer and tax authority systems are connected with a Common GST Portal, operated by GSTN.</span></li>
<li><span style="font-family: Verdana,sans-serif;">Policy decisions are captured in GST Business Rules Engine that defines the tax rates, revenue sharing rules, and exceptions for all parties.</span></li>
</ol>
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<span style="font-family: Verdana,sans-serif;">The Business Rules Engine is a component of the solution architecture that spans all entities. It codifies policies and business rules such as the rates of taxation, the revenue sharing between states and centre, a framework for exemption, and thresholds, among other things. All systems in the rest of the solution architecture will be designed so that they load business rules from the Business Rules Engine. This decoupling of the business rules from the rest of the solution architecture allows for a great deal of flexibility. At a later date, if rates are changed or new items are added to the list of taxable items, or if existing items are exempted; these changes can be reflected in the Business Rules Engine, without affecting the rest of the system. This also makes it possible to start the design and implementation of all IT systems, even while policies and rates are debated. Once the policies and rates are fixed, they can simply be reflected in the Business Rules Engine.<br />In addition to common registration, returns, and challans, the Common GST portal will provision for selected information needs of states.</span></div>
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<h3 style="text-align: justify;">
<span style="font-family: Verdana,sans-serif;">Information Flow</span></h3>
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<span style="font-family: Verdana,sans-serif;">The information flows are shown in Figure 5 are designed keeping the constitutional autonomy of states in mind, while simultaneously building intelligence in the system to plug leakages. The common GST portal is simply a pass-through device. The taxpayer files the return with GSTN, which keeps a copy of the return for analysis, and forwards it in near real-time to the respective state and CBEC. The taxpayer pays the actual duty in the bank, which uploads only the challan details into the GSTN. Actual funds never pass through the GSTN.<br />The common GST portal reconciles the returns and the challans. In addition to its pass-through role, the common GST portal also plays two other critical roles:</span></div>
<ol style="text-align: justify;">
<li><span style="font-family: Verdana,sans-serif;">It acts as a tax booster, matching the input tax credits in the returns to detect tax evasion. It can also integrate with various other systems at MCA, CBDT for verification of PAN or other corporate information and perform data mining and pattern detection to detect tax fraud. It sends this information as alerts/ reports to the respective tax authorities. </span></li>
<li><span style="font-family: Verdana,sans-serif;">It also computes inter-state settlement, netting IGST across states.</span></li>
</ol>
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<span style="font-family: Verdana,sans-serif;">Fund Flow</span></h3>
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<span style="font-family: Verdana,sans-serif;">Just like the information flows, the funds flows (Figure 6) are also designed keeping the constitutional autonomy of states in mind. The design ensures smooth and timely availability of funds as soon as they are deposited. The SGST funds that are intended for the states directly go from the taxpayer to the state treasuries. Similarly, the CGST funds go directly to the centre. With the help of information from GSTN, IGST will be settled between states and centre by RBI.</span></div>
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-64636468708705900732014-08-25T09:20:00.000-07:002014-08-27T03:19:46.581-07:00GSTN - IT Strategy for GST<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana,sans-serif;">Government has come up with an IT Strategy for Implementation of GST. This Post is 1st of the 3 post to state this Strategy.</span></div>
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<span style="font-family: Verdana,sans-serif;">This page contains </span></div>
<ul style="text-align: left;">
<li><a href="http://indirecttaxin.blogspot.in/2014/08/gstn-it-strategy-for-gst.html#features"><span style="font-family: Verdana,sans-serif;">Desirable Features </span></a></li>
<li><a href="http://indirecttaxin.blogspot.in/2014/08/gstn-it-strategy-for-gst.html#stakeholders"><span style="font-family: Verdana,sans-serif;">Stakeholders</span></a></li>
<li><a href="http://indirecttaxin.blogspot.in/2014/08/gstn-it-strategy-for-gst.html#workflow"><span style="font-family: Verdana,sans-serif;">Workflow </span></a></li>
<li><span style="font-family: Verdana,sans-serif;"><a href="/2014/08/gstn-it-strategy-for-gst.html#strategy">Download IT Strategy</a> </span></li>
</ul>
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<a href="https://www.blogger.com/null" name="features">
<span style="font-family: Verdana,sans-serif;">Desirable features of Goods & Service Tax Network (GSTN)</span></a></h3>
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<span style="font-family: Verdana,sans-serif;"><b>Simplicity for taxpayers</b>: The process of filing of tax returns and payment of tax should be simple and uniform and should be independent of taxpayer’s location and size of business. In addition, the compliance process should not place any undue burden on the taxpayer and should be an integral part of his business process.<br /><br /><b>Respect autonomy of states</b>: The design of the IT system should respect the constitutional autonomy of the states. Several business processes will be re-engineered as a new IT system for GST is put into place. There should be no dilution of the autonomy of states as a result of the IT system, or the re-engineering. On the contrary, it should strengthen the autonomy of states. This is a key factor in the design of the IT system presented in the rest of this document.<br /><b><br />Uniformity of policy administration</b>: The business processes surrounding GST need to be standardized. Uniformity of policy administration across states and centre will lead to a better taxpayer experience, and cut down costs of compliance as well as tax administration.<br /><br /><b>Enable digitization and automation of the whole chain</b>: All the business processes surrounding GST should be automated to the extent possible, and all documents processed electronically. This will lead to faster processing and reconciliation of tax information and enable risk based scrutiny by tax authorities. For small taxpayers, facilitation centres can be set up to ease the migration.<br /><br /><b>Reduce leakages</b>: A fully electronic GST can dramatically increase tax collections by reducing leakages. Tools such as matching the input tax credit, data mining and pattern detection will deter tax evasion and thus increase collections.<br /><br /><b>Leverage existing investments</b>: Existing IT investments of states should be leveraged. The Mission Mode Project on Commercial Tax should be aligned with the GST implementation going forward.</span><br />
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<a href="https://www.blogger.com/null" name="stakeholders">
<span style="font-family: Verdana,sans-serif;">Stakeholders</span></a></h3>
<span style="font-family: Verdana,sans-serif;"><b>Small taxpayers</b>: Much of the economic activity in India is concentrated among small taxpayers. They may not have the skill or the resources to effectively migrate to GST. Thus, adequate preparations must be done to ensure smooth migration for small taxpayers to GST. This includes extensive consultations, setting up of facilitation centres, education and training.<br /><br /><b>Corporate taxpayers</b>: Corporate taxpayers may operate across various states and typically have sophisticated IT systems for accounting, e-filing returns, payments etc. Common file formats and message specifications should be released early to allow IT vendors that provide software to corporate taxpayers to modify and release updated versions with GST support.<br /><b><br />State tax authorities</b>: The state tax authorities would be responsible for collecting SGST. Common file formats, interfaces, and policy administration will enable accurate and timely assessment, and risk-based investigations resulting in enhanced productivity and revenues.<br /><b><br />CBEC</b>: CBEC would be responsible for collecting CGST and IGST. Common file formats, interfaces, and policy administration will increase the productivity of CBEC. It will allow for accurate and timely assessment, risk-based investigations and facilitate IGST settlement by Centre at agreed time intervals.<br /><b><br />RBI</b>: The Reserve Bank of India will facilitate the interface with various banks to facilitate movement of states’ and center’s funds. The processes of funds settlements and documentary compliance are independent.<br /><br /><b>Banks</b>: Banks will accept duty from the taxpayers and process challans. All tax collections (whether physical or electronic) will happen at bank branches, or through the banks’ IT systems. Banks will route the tax collected to the concerned authorities through the RBI channel.<br /><br />Other Stakeholders include <b>CAG, GSTN, TRPs</b> and facilitation agencies.</span><br />
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<span style="font-family: Verdana,sans-serif;">Workflows</span></a></h3>
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<span style="font-family: Verdana,sans-serif;">The following three processes constitute the most important workflows of the GST administration and would be covered in the first phase:<br /><br /><b>Registration</b>: A unique ID is necessary to identify each taxpayer. The PAN based ID should be common to both the states and the centre. A common PAN-based taxpayer registration has several benefits including a unified view of taxpayers for all tax authorities. A PAN based registration system has already been implemented in CBEC and several states are also capturing PAN data.<br /><b><br />Returns</b>: Both, the states and centre require taxpayers to file periodic returns to assess whether the taxpayers have computed, collected, and deposited their taxes correctly. ITC credit can also be verified on the basis of the returns filed and revenues reconciled against challan data from banks.<br /><br /><b>Challans</b>: Challans are the payment instruments used by taxpayers to actually pay their taxes. Challans are deposited at collecting banks and are forwarded by them to the tax administrations.<br /><br /><b>IGST</b>: Under GST, inter-state trade will be leviable to IGST. Under IGST, the tax paid by the selling dealer in the exporting state will be available as ITC to the purchasing dealer in the importing state. This requires verification of ITC claims and transfer of funds from one state to another. Further, in an interstate business to consumer transaction, tax collected in one state has to be transferred to another state as finalized by the business processes. Thus, periodic inter-state settlement is required.<br /><br />In addition, there are several other workflows such as processing refunds, taxpayer audits, and appeals. It is reiterated that the core services envisaged through common portal are limited to registration, payments and returns in the first phase. Other value added services will be added subsequently based on the needs of the Stakeholders. The IT infrastructure should be designed taking into account all stakeholders, and all related workflows.</span><br />
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<span style="font-family: Verdana,sans-serif;">Apart from this, there are other important topics such as:</span><br />
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<li><span style="font-family: Verdana,sans-serif;">Solution Architecture - A common GST portal, Basic solution architecture, Information Flow, Funds flow</span></li>
<li><span style="font-family: Verdana,sans-serif;">Tax booster - Tax computation and accounting and boosting tax collection</span></li>
</ul>
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<span style="font-family: Verdana,sans-serif;">These are separately stated in other posts.</span><br />
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<a href="https://www.blogger.com/null" name="strategy">
<span style="font-family: Verdana,sans-serif;">Source : </span></a><span style="font-family: Verdana,sans-serif;"><a href="http://finmin.nic.in/gst/IT_Strategy_GST.asp" target="_blank">IT Strategy for GST version 0.85</a></span> <a href="https://www.blogger.com/null"></a></div>
<a class="button blue" href="http://finmin.nic.in/gst/IT_Strategy_for_GST_ver0.85.pdf"> Download Full IT Strategy for GST in PDF </a>
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-29859499187844267662014-08-21T07:08:00.000-07:002014-08-21T07:37:22.256-07:00Developments in August 2014<div dir="ltr" style="text-align: left;" trbidi="on">
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GST was in headlines today (21st August 2014) in Economic Times<br />
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FMs agree on Rs 10 lakh limit for levying GST</h3>
Date : 20th August 2014 <br />
State Finance Ministers on Wednesday (20th Aug 2014) pressed for lowering the threshold limit to Rs 10 lakh for imposing Goods and Service tax (GST) on entities and asked the Centre to specify GST compensation structure for five years in the Constitutional Amendment Bill. The Empowered Committee of state Finance Ministers, which met here to deliberate on various issues connected with GST rollout, regretted that it has yet to hear the response of Centre on the structure of the new tax regime proposed by it. "So far as shape of GST is concerned, we have made recommendation to Central Government after the last meeting.<br />
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The state FMs had proposed to keep products such as petroleum, tobacco and alcohol out of GST ambit and had demanded that the exemption list be included in the Constitutional Amendment Bill.<br />
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As regards the compensation structure, the states have demanded that a five year compensation mechanism be given by the Centre and same should be made in the Constitutional Amendment Bill.<br />
As regards dual control, the states demanded legal powers, and not only administrative powers, to collect tax from businesses with an annual turnover of up to Rs 1.5 crore.<br />
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Under the dual control of traders - by both the Centre and states - in GST structure, taxpayers with annual turnover of over Rs 1.5 crore would be taxed by the Centre, which will later disburse to states their share. Those entities with turnover below Rs 1.5 crore would pay their taxes to states, which would subsequently pass on to the Centre its share.<br />
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Source : <a href="http://businesstoday.intoday.in/story/stae-fm-goods-and-service-tax-finance-minister-arun-jaitley/1/209431.html" target="_blank">Business Today</a><br />
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States drop compensation hurdle for proposed Goods and Services Tax</h3>
Date : 19th August 2014<br />
With State Finance Ministers having dropped the issue of compensation in lieu of a cut in the central sales tax from the agenda of their upcoming meeting on implementing the Goods and Services Tax (GST), the major hurdle appears to have cleared in reforming India's indirect tax regime.<br />
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Seen as a key to facilitating industrial growth and improving the business climate in the country, the GST Bill requires to be passed by a two-thirds majority in both houses of Parliament and by the legislatures of half of the 29 states to become law.<br />
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CST was one of the major roadblocks for a GST, which was originally scheduled to come into from April 1, 2010.<br />
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Article 268A has not been operationalized in the last 10 years. Operationalizing the Constitution (88th Amendment) Act will fulfill the promise made during the previous NDA regime. Still we do not have the required IT infrastructure to effectively deal with the complexities in the proposed GST regime. <br />
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"Some states have been apprehensive about surrendering their taxation jurisdiction, others want to be adequately compensated. I do hope we are able to find a solution in the course of this year and approve the legislative scheme, which enables the introduction of GST," Jaitley had said in his maiden budget speech in the Lok Sabha in July.<br />
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On the design of GST, states are insisting that petroleum and alcohol be kept out of its purview . The Empowered Committee of state finance ministers has also demanded that the centre's share of GST should be made a part of the divisible pool between the centre and the states.<br />
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The finance minister has assured parliament that the government will seek to move the amendments to the constitution this year itself for implementing GST, besides already assuring states that he would clear their CST compensation dues of about Rs.34,000 crore ($5.5 billion) over a three-year period.<br />
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States like Gujarat, Madhya Pradesh and Uttar Pradesh, which were earlier standing in the way of GST, have now said they are not opposed to it as long as their concerns are addressed.<br />
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Source : <a href="http://businesstoday.intoday.in/story/states-drop-gst-goods-and-services-tax-compensation-demand/1/209365.html" target="_blank">Business Today</a><br />
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Jayalalithaa seeks compensation for losses under Goods & Services Tax</h3>
Date : 18th August 2014<br />
The Central Government should provide an independent, permanent compensation mechanism for revenue losses that State Governments will face under the proposed Goods and Services Tax, said the Chief Minister J Jayalalithaa in a letter to the Prime Minister, <a href="http://www.narendramodi.in/" target="_blank">Narendra Modi</a>.<br />
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The GST Amendment Bill should contain such a provision `enshrined in the Constitution itself and not reduced to an instrument of Union policy which may change from time to time’, she said. The demand is based on the State’s experience with the Centre’s compensation mechanism on VAT and the reduction of Central Sales Tax. Jayalalithaa said it would be simpler to delegate levy, collection and appropriation of the substitutes for VAT, Central Excise Duty and Service Tax to the State machinery with the Centre focusing on inter-State taxation.<br />
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The Centre should address state government concerns before moving to the new tax regime.<br />
Issues such as dual rate bands, taxation threshold, inter state GST, commodities outside GST, dual administrative control and compensation should be sorted out between states and with the Centre before the Constitutional Amendment Bill on GST becomes a law.<br />
The Bill also does not allow states levy higher taxes on tobacco and tobacco products. States should be allowed to continue to levy tax on tobacco as the products pose a public health hazard.<br />
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Update (21 Aug 2014) : In the revised draft amendment States are allowed to levy additional taxes on petroleum products. However, this dual levy of GST and an additional tax is not acceptable as a portion of the tax on petroleum products would still be eligible for input tax credit which will be a revenue loss to the State.<br />
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Source : <a href="http://www.thehindubusinessline.com/news/states/jayalalithaa-seeks-compensation-for-losses-under-goods-services-tax/article6329310.ece?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication" target="_blank">Business Line</a><br />
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<h3 style="text-align: left;">
Centre to give states Rs 25k cr to help push GST</h3>
Date : 7th August 2014<br />
Finance ministry is set to immediately release about Rs 25,000 crore to the states to make good their past losses on central sales tax (CST) revenue.<br />
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Anxious to keep the promise that a pan-India goods and services tax (GST) would soon be a reality, the government is planning to take a couple of steps soon, accommodating states’ concerns over the proposed comprehensive indirect tax system that analysts and industry vouch for. Finance ministry is set to immediately release about Rs 25,000 crore to the states to make good their past losses on central sales tax (CST) revenue. North Block will also seek the law ministry’s consent to amend the Constitution to give “financial guarantee” to all 29 states against any revenue losses from embracing GST.<br />
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The states had pegged their unmet CST revenue losses until FY13 end at Rs 34,000 crore.<br />
The idea is to build consensus quickly on contentious issues through a process of give-and-take so that a Bill to amend the Constitution to facilitate a new tax regime could be tabled in the Lok Sabha in the winter session of Parliament, sources told FE. <br />
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According to sources, in return for releasing compensation and for a constitutional mechanism to deal with “GST losses” of states, the central government expects state finance ministers to drop their demand for keeping petroleum and alcohol out of GST through a provision in the Constitution itself. Sushil Kumar Modi, former chairman of the empowered committee of state finance ministers, told FE that petroleum products should not be constitutionally barred from GST. He added that the GST Council proposed in the Constitutional Amendment Bill could decide when to subsume petroleum products in GST.<br />
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The Centre is willing to keep GST rate on these items at zero initially, but is against excluding them constitutionally, which will make it difficult to bring them under the ambit of GST in the future.<br />
Only a small part of the R9,300 crore approved by Parliament in the Union Budget for FY14 as CST compensation was released to states. For extra funds, the finance ministry can seek supplementary demands for grants in any of the coming Parliament sessions.<br />
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States insist on a financial guarantee under the Constitution for compensating GST losses saying their experience of getting compensation for losses on account of replacing sales tax with value-added tax was miserable.<br />
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“We can certainly introduce the Constitution (115th Amendment) Bill in the winter session, after which it will have to be referred to a new parliamentary standing committee, which would be set up in the next few days,” said a person familiar with the discussions in the government.<br />
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An earlier version of the Bill that was reviewed by the previous standing committee led by the BJP’s Yashwant Sinha had lapsed at the end of the UPA government’s term. The Sinha panel had taken about three years to give its report on the earlier Bill, which indicates that it might take at least a couple of years for the next panel to give the final version of the Bill.<br />
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Source : <a href="http://www.financialexpress.com/news/centre-to-give-states-rs-25k-cr-to-help-push-gst/1277145/2" target="_blank">Financial Express</a><br />
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-41511736953629818182014-08-05T01:55:00.000-07:002014-08-05T04:24:00.115-07:00Impact of GST on Transportation and Logistics Industry<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">As
the Indian transportation and logistics industry looks forward to the next
level of growth, efficiency and sophistication, it gradually leaves behind the
traditional issues pivoted around inefficiencies and regulatory challenges.<i><o:p></o:p></i></span></span></div>
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<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">It is
in this context, that regulatory reforms proposed in the form of Goods and
Services Tax (GST) are much needed now than perhaps ever before.</span></span><br />
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<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><b><span style="line-height: 115%;">PREFACE:</span></b><span style="line-height: 115%;"><o:p></o:p></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;">With a potential to
additionally contribute over one percent1 to India’s Gross Domestic Product
(GDP), the proposed Goods and Services Tax is eagerly being looked forward to.
Not only will this reform usher in perhaps a never-seen-before opportunity to
revisit, rationalize and re-engineer transportation and logistics networks in
India, but will also unleash a new era of developing logistics infrastructure
and taking investments to the next level. Given that the inefficient shape of
longer supply chains with warehouses in almost every state is fiscally
preferred in the existing regime, it is now time to overhaul and compress the
entire logistics setup.<o:p></o:p></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;">Further, the
international experiences of GST, which over 140 countries have introduced in
some or the other variants, the delay in implementation in the Indian context
seems to become all the more a cause of concern. The below framework summarizes
the milestones in the evolution of GST, since the time it was proposed by the
Union Government in 2006-07.<o:p></o:p></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;"><b>In the Year 2000</b><o:p></o:p></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;">Vajpayee Government
started discussion on GST by setting up an empowered committee. The committee
was headed by Asim Dasgupta.<o:p></o:p></span></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;"><br /></span></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;"><b>In the Union Budget 2006-07 </b><o:p></o:p></span></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0in;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;">The Union Budget for the first time announced
that Levy of Taxes on Goods & Services will be at National Level rather
than State level at present. <o:p></o:p></span></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0in;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;">(Deadline to implement GST was April 01, 2010)<o:p></o:p></span></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;"><b>In the year 2007-08</b><o:p></o:p></span></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;">The Empowered
Committee of State Finance Ministers (ECSFM) agreed to prepare a roadmap to
Introduce GST on National Level (since revenue of states are concerned, it was
necessary to prepare committee consisting of
finance ministers of all states)<o:p></o:p></span></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;"><br /></span></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><span style="line-height: 115%;"><b>On November 10, 2009</b><o:p></o:p></span></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">ECSFM issued <a href="http://finmin.nic.in/gst/Empowered%20Committee%20of%20SFM%20%20First%20Discussion%20paper.pdf"><span style="color: windowtext;">First Discussion Paper On Goods and Services Tax In
India</span></a><o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<h3 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">Change in
business strategies for logistics and warehousing service providers<o:p></o:p></span></span></h3>
</div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">Currently, the decision to base inventory and
distribution models are based on levy of Central Sales Tax and varied state-Value
Added Tax (VAT) rates and provisions. Tax optimization and administration is
often considered over the operational and logistics efficiency. However, under
the GST regime the tax will be levied on stock transfers and full credit will
be available on inter-state transactions. This will free the decisions on warehousing
and distribution from tax considerations and decisions will be based purely
upon operational and logistics efficiency. This will lead to change in
dimensions for logistics requirements of the clients forcing logistics service
providers to rethink their business operations including creating new
warehousing and logistics locations and expanding /closing existing warehouses
at certain locations. In fact, networks and infrastructure associated with
warehousing and logistics hubs are expected to be most impacted in the entire
supply chain. Network and infrastructure related businesses would get
drastically realigned, ensuring proximity to manufacturing locations or
consumption markets and ultimately resulting into several hub-and-spoke models.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">From the infrastructure perspective, the scenario
would consist of lesser number of warehouses but with larger sizes, amounting
to consolidation of widely spread warehouses almost one in each state. This
would translate into expansion of some of the existing warehouses, development
of new ones and indeed shutting down of several existing setups. In addition,
locations of strategic significance for warehousing and logistics networks
would eventually also turn out to be critical transportation hubs. Such impacts
would command fulfillment of certain pre-requisites pivoted around
infrastructure including land availability, road/rail/multimodal connectivity,
power, etc. This would in turn require all stakeholders –Logistics Service
Providers (LSPs), end users, industry associations and the government – to plan
in advance so that foreseeable issues could be addressed in time and would help
evolve a more agile, efficient, flexible and futuristic supply chain. LSPs and
their end users both would need to re-engineer their supply chains, focusing on
optimal locations for warehouses and logistics centres. Some of the target
regions would include Chennai-Bangalore belt in the<o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">South, Nagpur region in the Central part and
Mumbai-Gujarat-Rajasthan-National Capital Region (NCR) corridor in the
North-West, driven by the high potential for upcoming manufacturing activities
and the planned Delhi-Mumbai Industrial Corridor (DMIC).<o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: left;">
<h3>
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><br /></span></span></h3>
</div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: left;">
<h3>
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">Impact on Cash Planning<o:p></o:p></span></span></h3>
</div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">Currently,
abatements are available to transport service providers under the Service Tax
law. These are not likely to continue in the GST regime. Also, the liability to
pay tax may shift from the recipient of service to provider of transport
service requiring it to pay full taxes on accrual basis. On account of this, a
major impact will be seen on the cash flow for transport service providers who
generally operate on marginal profit basis. Businesses need to quantify the
cash impact and realign their working capital strategies to reduce / mitigate
the cash flow impact.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<h3 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">Place of Supply, Tax Administration and Input Tax
Credits<o:p></o:p></span></span></h3>
</div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">The
most important change will be the transition from the present central tax regime
(service tax) to the dual GST regime requiring payment of taxes simultaneously
to the Centre and States and compliances across the country.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">The
Place of Supply rules will govern the State where the tax will be payable on
any transaction of Transportation & Logistics. In the case of warehousing,
the Place of Supply can be defined as the place where the warehouse is
situated.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">On
the other hand, for transportation contracts, taxes may be levied by each State
through which the goods move, perhaps based on the distance traversed in each
State or alternatively in the State from where the journey of transport
commences. The latter that is, the State from where the journey of transport
commences, would be an ideal basis for taxation. Though being a simplistic
model, the same would pose challenges to the transportation service providers
such as registration and compliances requirements across all the locations from
where the goods are loaded and dispatched. Also, another challenge envisaged is
the ability of the transportation service providers to capture credits in
respect of the expenses incurred enroute. Transportation service providers may incur
expenses in different States during the journey from one location to another
and it will be essential to avail input tax credits on such costs. In the event,
appropriate rules are not framed under the GST law for claim of these credits,
the transportation sector will have to be ready to absorb the impact on account
of these tax costs.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<h3 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">Conclusions<o:p></o:p></span></span></h3>
</div>
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;"></span></span><br />
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="font-family: Verdana,sans-serif;">As
India prepares for a transition to the next level of logistics growth
trajectory, regulatory policies need to evolve well ahead of the introduction.
Further, on account of the delay in implementation of GST, it is critical to
gauge the advantages the industry at large and the various stakeholders specifically
are currently losing out. It is in this context that this paper analyzes the
key fiscal as well as business implications of the proposed GST. The below
table summarizes the key business implications that may accrue to the wider
industry owing to increased organization in post-GST scenario.<o:p></o:p></span></span></div>
</div>
Amit Ravalhttp://www.blogger.com/profile/17187790955374353951noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-70768383144072360082014-08-05T00:26:00.001-07:002014-08-07T15:50:26.753-07:00[Video] Service tax amendmend 2014 - Interest on delayed payment<div dir="ltr" style="text-align: left;" trbidi="on">
<div>
<span style="font-family: Verdana,sans-serif;">This Video by <a class="g-profile" href="https://plus.google.com/116704277129182907648" target="_blank">+Adarsh Madrecha</a> and <a class="g-profile" href="https://plus.google.com/104863886533961349180" target="_blank">+Ashish Badala</a> in short gives updates about what are the changes in Interest rate on delayed payment of service tax</span><br />
<br />
<br />
<iframe allowfullscreen="" frameborder="0" height="360" src="//www.youtube.com/embed/NQYU1svJ7lE" width="640"></iframe>
<br />
<br />
<span style="font-family: Verdana,sans-serif;">Interest rate on delayed payment has been increased from 18% to 30%. But this increased interest rate is on slab basis. </span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRtCS5bzA8Q-PVNNIAzsk-60MirLvZcs6If2tq9PswHa2s8yhNWzC0rNjEPeq8B4kikRgC3MZ5SW0c9scHVVOSxbdW8HVzUCuhgquVi6c6smrKQLL6-mwSEUPEgni9ijSPxrpAhat8ohE/s1600/Service+tax+amendmend+.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRtCS5bzA8Q-PVNNIAzsk-60MirLvZcs6If2tq9PswHa2s8yhNWzC0rNjEPeq8B4kikRgC3MZ5SW0c9scHVVOSxbdW8HVzUCuhgquVi6c6smrKQLL6-mwSEUPEgni9ijSPxrpAhat8ohE/s1600/Service+tax+amendmend+.jpg" height="360" width="640" /></a></div>
<span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;">Interest has to be paid if the assessee does not make the payment of service tax by the due date. Due date for payment of service tax is 6th of the succeeding quarter (in case of individual or Partnership firm) or Month (in case of Others) </span><br />
<br />
<div style="text-align: justify;">
<span style="font-family: Verdana,sans-serif;">The Payment Schedule has been summarized below for your ready reference</span></div>
<span style="font-family: Verdana,sans-serif;">
</span>
<br />
<table align="center" border="1" cellpadding="0" cellspacing="0">
<tbody>
<tr>
<td rowspan="2" valign="top" width="155"><div align="center">
<span style="font-family: Verdana,sans-serif;">Particulars</span></div>
</td>
<td rowspan="2" valign="top" width="84"><div align="center">
<span style="font-family: Verdana,sans-serif;">Frequency</span></div>
</td>
<td colspan="2" valign="top" width="269"><div align="center">
<span style="font-family: Verdana,sans-serif;">Due Date</span></div>
</td>
</tr>
<tr>
<td valign="top" width="137"><div align="center">
<span style="font-family: Verdana,sans-serif;">Paid Physically</span></div>
</td>
<td valign="top" width="132"><div align="center">
<span style="font-family: Verdana,sans-serif;">Paid Online</span></div>
</td>
</tr>
<tr align="center" valign="middle">
<td valign="top" width="155"><span style="font-family: Verdana,sans-serif;">Individual/Partnership</span></td>
<td valign="top" width="84"><span style="font-family: Verdana,sans-serif;">Quarterly</span></td>
<td valign="top" width="137"><span style="font-family: Verdana,sans-serif;">5th of the Following Quarter</span></td>
<td valign="top" width="132"><span style="font-family: Verdana,sans-serif;">6th of the Following Quarter</span></td>
</tr>
<tr align="center" valign="middle">
<td valign="top" width="155"><span style="font-family: Verdana,sans-serif;">Others</span></td>
<td valign="top" width="84"><span style="font-family: Verdana,sans-serif;">Monthly</span></td>
<td valign="top" width="137"><span style="font-family: Verdana,sans-serif;">5th of the Following Month</span></td>
<td valign="top" width="132"><span style="font-family: Verdana,sans-serif;">6th of the Following Month</span></td>
</tr>
</tbody>
</table>
<span style="font-family: Verdana,sans-serif;">
</span><span style="font-family: Verdana,sans-serif;">Since budget 2014 has made online payment compulsory "5th" now becomes redundant.</span><br />
<span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;">Interest rate earlier was 18% pa simple interest. This was irrespective of the period of delay.</span><br />
<span style="font-family: Verdana,sans-serif;"><br />Now interest rate is divided into 3 slabs based on period of delay. </span><br />
<ul style="text-align: left;">
<li><span style="font-family: Verdana,sans-serif;">18% - For first 6 months</span></li>
<li><span style="font-family: Verdana,sans-serif;">24% - For more than 6 months to 1 year</span></li>
<li><span style="font-family: Verdana,sans-serif;">30% - For more than 1 year.</span></li>
</ul>
</div>
<span style="font-family: Verdana,sans-serif;">This shall cause genuine hardship to tax payers if the service tax dues are contested at Adjudication or Tribunal or Court. As they will have to pay 30% interest now as the case in almost 100% of cases takes more than 1 year to have final verdict.</span><br />
<span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;">The penalty clause (which was same earlier) is levied similar like interest. Penalty is levied at 1% per month (that comes to 12% pa). Thus making total liability to increase at the rate of 42% (30% interest + 12% penalty)</span><br />
<span style="font-family: Verdana,sans-serif;">Only Silver lining is that penalty is restricted to 25% of service tax liability.</span><br />
<span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;">The more shocking news is that, no one (Political party or Professional Institution or Trade body) has agitated on such a move by the government or not even shown a concern towards this.</span><span style="font-family: Verdana,sans-serif;"><br /></span>
<span style="font-family: Verdana,sans-serif;"><br />
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Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.comtag:blogger.com,1999:blog-2534552234313815499.post-8498730636480675192014-07-31T07:24:00.000-07:002014-08-27T04:30:25.854-07:00Developments in July 2014<div dir="ltr" style="text-align: left;" trbidi="on">
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<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbAgHPOW9mIjlAgFkA9AE13KB7xli7HE-O5ieNIfCGjyXmib_m1xYohu7a8emm4zcWrMhROCxKJVlzoBgiqZ-bVpuRhOVcaQJwsAC-0R8Y8WOnPu1JeJ5xCIcpb5QddMYzeHnkyhNS30g/s1600/GST+News+July+2014.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbAgHPOW9mIjlAgFkA9AE13KB7xli7HE-O5ieNIfCGjyXmib_m1xYohu7a8emm4zcWrMhROCxKJVlzoBgiqZ-bVpuRhOVcaQJwsAC-0R8Y8WOnPu1JeJ5xCIcpb5QddMYzeHnkyhNS30g/s1600/GST+News+July+2014.jpg" /></a></div>
<div style="text-align: left;">
<br /></div>
<h3 style="text-align: left;">
Govt to resolve issues related to Goods and Services Tax roll-out within this year</h3>
Date : 1st August 2014<br />
Finance Minister Arun Jaitley has said the government is aiming to resolve the issues hampering the roll out of Goods and Services Tax (GST) within this year.<br />
"The government targets to find a solution in the course of this year and approve the legislative scheme which enables the introduction of GST," he said during Question Hour in Lok Sabha on Friday. Asserting that government is "willing to take a pragmatic view", Jaitley said it does not want a "token GST, but a substantial GST... There should be consensus (with states)".<br />
<br />
He assured the House that no decision on GST introduction will be taken without consulting the states. Government has also assured states that it will compensate for any revenue loss incurred by them, from the date of introduction of GST, for a period of three years.<br />
<br />
Referring to GST implementation, Jaitley said: "Time has come for pragmatic approach...one or two exceptions the government can consider. If too many taxes are excluded, the objectives of GST will not succeed...It (GST) is a good cause that everybody fall in line,"<br />
<br />
The Finance Minister said various issues such as compensation to states, rate of taxation and possible exemptions are all on the drawing board. "States' concerns with regard to the GST mainly relate to loss of revenue, fiscal autonomy, compensation, keeping certain items out of GST, subsuming of certain taxes in GST etc," Jaitley said.<br />
Certain states may face problems in initial stages of GST implementation. GST proposals would help in spurring growth and employment.<br />
<br />
Source : <a href="http://businesstoday.intoday.in/story/govt-to-resolve-goods-and-services-tax-issues-within-2014/1/208307.html" target="_blank">Business Today,</a> <a href="http://economictimes.indiatimes.com/news/economy/policy/government-to-introduce-gst-this-year-after-consultation-with-states/articleshow/38642420.cms" target="_blank">Economic Times</a><br />
<br />
<br />
<h3 style="text-align: left;">
IT firms seek clarity on GST implementation</h3>
Date : 7th July 2014<br />
Technology companies are looking for more clarity on implementation of GST, tax on software licences and thrust on developing infrastructure in small cities in the first budget of new government led by prime minister Narendra Modi.<br />
<br />
Technology majors like Microsoft and BlackBerry, software services firms and industry bodies like Nasscom expect the Modi government to focus on leveraging ICT for economic growth and maximising the reach of policies.The government has already indicated boosting indigenous electronics manufacturing to check dependence on imports and has said that electronic manufacturing will be a priority.<br />
<br />
Source : <a href="http://timesofindia.indiatimes.com/tech/tech-news/Budget-2014-IT-firms-seek-clarity-on-taxes-GST-implementation/articleshow/37960709.cms" target="_blank">Times of India</a></div>
Adarsh Madrechahttp://www.blogger.com/profile/16918521228130374721noreply@blogger.com