Monday, January 16, 2017

GST Bill- on the move

Important Changes

It is welcome that the revised Bill makes it clear that the supply of goods without consideration would not be liable for GST, except in specified transactions. The new draft includes scope for `Composite' and `Mixed' supply. It is notable that the revised definition of `Goods' now specifically
excludes securities. More importantly, the anti-profiteering mechanism in the new draft has hugely added to the paperwork and reporting requirements and also widen the very scope for disputes, charges and harassment. Instead of mandating and insisting that producers, pass on reduced tax rates
to consumers, it would usually make better sense to rely on the market mechanism and fair competition. Reportedly, no other jurisdiction has such a draconian anti-profiteering provision in the GST law. S&P Global Ratings said demonetisation and a likely GST rollout from September 2017 are likely to cast a "higher disruptive impact" on informal, rural, and cash-based segments of the economy. Agreed upon by GST Council 

Draft model GST bill

(1) Except division of administrative turf between centre and states.

Compensation bill
(1) Base year will be 2015-16
(2) Compensation to be paid every two months for first five years

For Next Meeting

Division of administrative turf between centre and states

(1) States want sole control over assesses up to Rs. 1.5 Cr annual turnover; sharing turf with centre above that.

Integrated GST bill

(1) Issue of whether states can control assesses with Inter-State supply 
(2) Constitution amendment bill empowers centre to collect IGST and distribute shares among states
(3) States and Centres to mull on who will get taxes for sale of goods within 12 Nautical miles of the sea coast's
(4) Committee of officers working on segment wise GST rates

What Next
(1) Central and State GST laws to be legally vetted
(2) Draft law will be sent to States for final views
(3) Legally vetted law to be put up before council for final endorsement
(4) Parliament and State Assemblies to approve the law
(5) IGST and administration issues to be taken up

GSTN on track to get taxpayers on board

Despite uncertainty over the GST roll-out, the information technology backbone GST Network (GSTN) has initiated the process to migrate over eight million taxpayers on its system. It will be compulsory for dealers, with a turnover of more than Rs 20 lakh, to register with GSTN,
and those with over Rs 10 lakh in northeastern and hilly states.

Council may reduce tax slabs in future

The Goods and Services Tax (GST) Council may, in future, decide to reduce the tax slabs under the GST regime after analysing the revenue garnered and the compensation payouts to states with industry demanding lowering of proposed GST rates of five per cent, 12 per cent, 18 per cent and 28 per cent after demonetisation. 


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