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Greetings!
First Set of GST Notifications under Central Law Issued
The following Notifications have been issued under the CGST Act and IGST Act on June 19, 2017.
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Notification No. |
Subject |
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Notification No. 1/2017 – Central Tax |
Appoints the 22nd day of June, 2017, as the
date on which the provisions of sections 1,
2, 3, 4, 5, 10, 22, 23, 24, 25, 26, 27, 28,
29, 30, 139, 146 and 164 of the the CGST Act, 2017 shall come into force. |
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Notification No. 2/2017 – Central Tax |
Notifying jurisdiction of Central Tax
Officers |
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Notification No. 3/2017 – Central Tax |
Notifying the CGST Rules, 2017 on
registration and composition levy |
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Notification No. 4/2017 – Central Tax |
Notifying
www.gst.gov.in
as the Common Goods and Services Tax
Electronic Portal |
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Notification No. 5/2017 – Central Tax |
Seeks to exempt from registration persons
only engaged in making taxable supplies,
total tax on which is liable to be paid on
reverse charge basis by the Recipient. |
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Notification No. 6/2017 – Central Tax |
Modes of verification under CGST Rules, 2017
specified as Aadhaar based Electronic Verification Code
(EVC); and Bank account based One Time
Password (OTP). |
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Notification No. 1/2017 – Integrated Tax |
Appoints the 22nd day of June, 2017, as the
date on which the provisions of sections 1,
2, 3, 14, 20 and 22 IGST Act, 2017 shall come into force. |
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Notification No. 2/2017 – Integrated Tax |
Seeks to empower the Principal Commissioner
of Central Tax, Bengaluru West to grant
registration in case of online information
and database access or retrieval services
provided or agreed to be provided by a
person located in non-taxable territory and
received by a non-taxable online recipient. |
Click to download
Notifications.
Date: 20-06-17
Photo Courtesy: GST_Goi Twitter
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GST to be implemented from July 1,2017
Briefing the press after the meeting of the GST Council on June 18, 2017, Union Finance Ministers Shri Arun Jaitley reaffirmed that GST would be implemented from July 1, 2017.
He also
announced the formal launch of GST on midnight of 30th
June 2017.
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He stated
that West Bengal has issued an Ordinance and that Tamil
Nadu would pass the SGST Act on 19th June,
2017. The only other State to Pass SGST Act is Jammu &
Kashmir.
We do hope
that Jammu & Kashmir would pass the SGST Act and join
the main stream on July 1,2017.
Relaxation in filing of Returns
Considering
the concerns on the preparedness of Trade and Industry,
the GST Council decided to relax the Rules for filing of
returns for July and August 2017.
The
relaxations are
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The Returns for July and August 2017 would be filed on
self assessment by 20th of the following
month in Form GSTR 3 B, which will be a summary of
Inward and Outward Supplies and the applicable tax is to
be paid.
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GSTN would make available the return filing module by 15th
July. GSTR 1 and GSTR 2 will have to be filed for July
2017 by 5th September and for August 2017 by
20th September 2017, No late fee or penalties
would be levied.
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The timelines for filing of Returns would be strictly
adhered to from the return period from September 2017.
Review of Rate of Tax on Goods
The GST
Council decided not to review rate of tax now. The
Finance Minister stated that any review of rate of tax
would be taken up after 3 months.
However the
rate of tax on lottery Tickets and Hotel Rooms were
announced.
For hotel
rooms with tariff between Rs.2,000 and Rs.5,000 the rate
of tax would be 18% and rooms with tariff above Rs.7,500
the rate of tax would be 28%. GST on restaurants in
these hotels will be 18%, at par with other
air-conditioned restaurants.
State-run
lotteries will be taxed at 12% of the face value and
state authorised lotteries would be taxed at 28%.
Composition Scheme
The
threshold limit to opt for composition for North Eastern
States is fixed at annual turnover of Rs.50 lakhs. For
Uttarakhand and Jammu & Kashmir the threshold limit
would be annual Turnover of Rs.75 Lakhs.
Rules for Anti Profiteering Provision
The Rules for Anti Profiteering Clause have been
announced. Shri Arun Jaitley stated that the Anti
Profiteering Clause is more of a deterrent.
It is learnt that action under Anti Profiteering Clause
would be invoked on specific complaint of profiteering.
The proposal as reported is to set up a committee of
State and Central Officials who would look into the
complaints.
The Anti Profiteering Authority would have powers to to
summon a person whose attendance is considered
necessary, in line with judicial and would be functional
for 2 years from implementation of GST. The Anti
Profiteering Body would have powers to direct reduction
of price and also decide on the punitive action.
Click to download Anti - Profiteering Rules.
Rules Approved
The GST
Council approved Rules relating to Advance Ruling,
Appeal and Revision, Assessment and Audit, Anti
Profiteering and Funds Settlement.
Click to download
Advance Ruling Authority Rules and
Formats,
Appeal and Revision Rules and
Formats,
Assessment and Audit Rules and
Assessment Formats and
Audit Formats.
E Way Bill Rules
The final E
Way Bill Rules have not been finalized. It is stated
that transient rules to be announced. It is likely that
the State E Way Bills may be made applicable till then.
It is stated
that it would take 3-4 months for GSTN to put in place
the necessary hardware and software to administer the E
Way Bill Rules, after it is finalized.
Next meeting of the GST Council
The next
meeting of the GST Council is scheduled on June 30,
2017.
Date: 19/06/2017
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GST - Update on Migration of Registration
Here is the update in www.gst.gov.in on Migration of Registration to GST.
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For those who have not enrolled in GSTN yet
If you have not enrolled for GST yet, or If you have activated your account under enrolment but not submitted the application,
enrolment window will reopen on June 25, 2017 and continue for 3 months as per rule.
For those who have saved enrollment details but not submitted
If you have saved the enrolment form with all details but has not submitted the same with DSC, E-Sign or EVC:
• You will receive the ARN at your registered email ID, if the data given are suc cessfully validated after 27th June 2017.
• In case of validation failure (data like PAN not matching), you should be able to login at the same portal from 27th June 2017 onwards and correct the errors. You can refer the registered email for details of the errors.
If you have partially completed the enrolment form, you can login at the portal on or after June 27, 2017 date and complete the rest of the form.
Provisional ID is GSTIN – Download Provisional Registration Certificate
It is stated that your provisional ID will be your GST Identification Number (GSTIN).
Those who have received Acknowledgement Reference Number (ARN), the Provisional Registration Certificate can be downloaded from
"Download Certificates" at www.gst.gov.in from June 27, 2017.
New Registrations in GST
Taxpayers who are presently not registered under the existing laws but are required to register or intend to register, the window for registration will be available from June 25, 2017.
Date: 17/06/2017
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GST
Council
– Meeting on June 11, 2017
The GST Council has in the meeting on June 11, 2017 reduced / rationalized the rate of tax on certain goods and services, increased the threshold for composition dealers and also decided on exemption from the levy of IGST on certain imports and also approved the Accounts and Record Rules.
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The next meeting of the council is scheduled on June 18, 2017 (Sunday) to finalise the remaining issues including taxation of lotteries and E - way bills.
It is learnt that a committee of officials is working the mechanism for implementing the anti-profiteering provision.
Here are the highlights of the decision of the GST Council in the meeting held on June 11, 2017.
GST - Rate of Tax on Goods
The GST Council approved revision of rates on certain commodities based on representations received from the industry and on the principles of “maintaining equivalence and utilization behavior".
Here are the highlights of the Rate of Tax Reduced
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Commodity |
GST rate fixed earlier |
Revised rate as decided in 11/06/2017
meeting |
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Plastic tarpaulin |
28% |
18% |
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School bags |
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Pre-cast concrete pipes |
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Some Tractor components |
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Computer printers |
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Ball bearings |
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Packaged food (fruit, vegetable products,
pickles, toppings, sauces, instant food
items etc.) |
18% |
12% |
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Exercise Books |
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Cutlery |
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Cashew Nut |
12% |
5% |
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Agarbatti |
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Insulin |
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Children Colouring book |
12% |
0% |
Click to download Details of Rates reduced on certain Goods.
GST – Service Tax Exemption
The GST Council approved further Exemption / Reduction in rate of GST on certain Services.
Here are the highlights of the Rate of Tax Reduced
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Description |
GST rate fixed earlier |
Revised rate as decided in 11/06/2017
meeting |
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Job work in textile, leather, printing, jewellery Gems and diamond processing |
18% |
5% |
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Movies |
28% |
18% for the ticket value <Rs.100 and 28% for
the ticket value > Rs.100 |
Further exemption has been granted from registration for Individual advocates (including senior advocates) and Individual sponsorship service providers (including players).
Click to download Details of Exemption / Rates reduced on Certain Services.
GST Rules
The GST Council approved Accounts and Record Rules and Formats.
Click to download Accounts and Record Rules and
Formats.
Threshold for Composition
The GST Council expanded the scope of the composition scheme for the benefit of small traders, manufacturers, and restaurateurs increasing the threshold from Rs.50 lakhs to Rs.75 lakhs. However, whether the same increased turnover limit for Composition levy will apply in case of Special Category States or not will be decided in the next GST Council meeting.
The rate of tax applicable would be
 1% of turnover in State or turnover in Union Territory in case of a manufacturer;
2.5% of turnover in State or turnover in Union Territory in case of persons engaged in making supplies referred to in Paragraph 6(b) of Schedule II to the Act; and
0.5% of turnover in State or turnover in Union Territory in case of other suppliers.
Click to download Revised Composition threshold
IGST Exemption under GST
The GST Council decided to exempt from levy of IGST on certain imports under Agreement between India and Pakistan / Bangladesh for regulation of Bus Service and decided on certain Technical Exemptions for Temporary import / Re-Import.
Click to download Details of IGST Exemption.
Date: 12/06/2017
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Is D-Day of July 1, 2017 for Roll out of GST Sacrosanct
Though the Finance Minister Sri Jaitley and GSTN exude confidence on roll out of GST from July 1, 2017, there are apprehensions on the robustness of GSTN portal on processing / matching of about 300 crore invoices a month and whether GSTN is fully geared up.
We have received communications complaining of inability to submit the application for migration of registration to GST, using either DSC or Aadhar card. The GSTN portal was also shut down temporarily for maintenance. Though any electronic platform is not immune from glitches in the early phase of roll out, the enormity of the transactions to be processed and the short time to configure the return formats finalized only on June 2, 2017 raises concerns on smooth flow of credit which is most critical for success of GST.
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Besides, GSPs and ASPs offerings is not yet made available obviously because the return formats have been finalized only on June 2, 2017. The efficiency and functionality of the software offered by ASPs are not yet available and the assessees may have to file the returns directly on the GSTN Portal.
Though it can be said that time is available till August 1, to properly configure the returns, GSTN needs to do more than merely asserting its readiness by making available details of test results soon after the new revised format of returns are tested.
It is not just the readiness of GSTN, the greater concern is the preparedness of Trade and Industry for GST as also highlighted in surveys published.
GST Council meets on June 11,2017 and being better informed of the status of preparedness of GSTN and the tax administration, we hope that a considered decision would be taken on the date of implementation of GST.
Having crossed all major hurdles and the stage is set for roll out, in our view, the determination to implement GST from July 1, 2017 is not sacrosanct and can be deferred to August 1 or September 1,2017 so as to provide sufficient time for all stakeholders to be better prepared.
Let us hope for the best!
Date: 09/06/2017
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GST – Should implementation scheduled on July 1, 2017, be postponed?
The question uppermost in the minds of all stakeholders is whether GST would be implemented on July 1, 2017 or postponed to maybe August 1 or September 1, 2017.
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While we would know for certain on June 3, 2017 when the GST Council meets, preparedness of Trade and Industry is a matter of concern which we hope the GST Council would also review.
The legislative agenda for the GST Council on June 3, 2017 is to decide on rate of tax for certain Goods and Services and approve the GST Transition and Return Rules, respective formats and also review the preparedness of the IT infrastructure of GSTN.
The concerns are:-
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Readiness of GSP / ASP
One of the concerns expressed is that the time required for GSP / ASP to prepare the software for the revised format of returns which is expected to be approved on June 3, 2017. GSTN would make available the API thereafter and it would take 3-4 weeks to get ready the software for filing of returns.
Though the first Returns are required to be filed only in August, 2017, small dealers most of whom may not use the services of ASP and would be using excel based utility need time to understand and configure reporting formats.
It is expected that Excel Utility would be made available by GSTN to upload data to populate the returns.
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Transition Credit Entitlement
Transition Rules and Formats are expected to be finalized on June 3,2017. With less than 4 week available after approval of Transition Rules and Formats, trade and industry would have very little time to configure their software to prepare details for filing the returns to claim transition tax credit.
The short time to prepare details to claim transition credit would disable claiming of transition credit in the first return period itself creating cash flow issues.
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E Way Bill
E Way Bill is another concern. The E Way Bill Rules are not yet approved and it is not sure if this would be taken up in the GST Council Meeting on June 3,2017.
Besides the time constraint on Trade and Industry to put in place necessary software to generate E way Bills, the Tax Administration also needs to put in place the software for uploading of E way Bills and monitoring. As on date there is no information on the preparedness of the Tax Administration.
It is therefore likely that implementation of E Way Bill Rules may
have to be delayed.
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SGST Acts / Notifications
Many States are yet to pass the SGST Act. States that have passed the SGST law have not yet made available the SGST Act in the public domain. (we checked the State VAT websites).
Though details of Goods and Services exempt from GST and list of services liable to service tax is announced, Notifications to give effect to this and several other notifications, issuing of which is specified in the GST Acts, have to be issued by the Central Government as well as the State Governments. All these notifications after they are issued are to be understood. This would be a great effort for SMEs and small traders, which requires time.
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Mapping HSN with description of Goods as in present VAT Schedules
Traders who hitherto were liable to pay VAT only are familiar only with the simple and commercial description of the Goods listed in the Schedules to the VAT Acts of the respective States.
Though HSN is noted against description of Goods in the Schedule to the VAT Act of most of the States, the traders would mostly go by the description of the Goods only.
Since under GST, the schedule of goods is listed Chapter wise with description of Goods as in the HSN, traders would find it very difficult to understand.
It is therefore important that as in the present schedule to the VAT Acts, Goods liable to tax at different rates under GST is made available with the simple and commercial description ( as in present VAT Schedule of Goods) appropriately mapped to HSN. This is essential for easy adoption of GST by traders.
This can be made available with the disclaimer that it is only for guidance and description as in the GST Schedule of tax rates of Goods will prevail.
It is surprising that the concerns on roll out of GST from July 1,2017 have not been publicly aired by the Stakeholders except perhaps Sri Amit Mitra, Finance Minister, West Bengal and Chairman of the empowered committee of State Finance Ministers. Here is what he is reported to have stated in his letter to Sri Jaitley, Union Finance Minister:
"My particular concern relates to the small and medium enterprises of India who are nowhere close to being ready to comply with this major fiscal reform. It is noteworthy that these MSMEs produce around 40 per cent of India's GDP and provide employment to nearly 100 million people."
"By introducing GST before the due preparedness of all links in the production chain, a domino effect could be let loose on the economy, undermining all sectors of the economy and particularly adversely affecting the states."
"I am concerned that while larger industries may be better prepared, their vendors at tier II and III levels are still struggling to create the wherewithal to cope with the GST mechanism. You would agree that if tier II and III vendors are not ready to operationalise GST, it would simply mean that larger industries, even if ready on their own, will not be able to seek input tax credit from the production chain. A fractured production chain would create huge problems,"
In most countries where GST was implemented, the time between the publication of Draft Laws and date of implementation was one to two years.
Undoubtedly lot of ground work has been done meticulously by the GST Council, Finance Ministry and Officials and the team deserves all praise for what is accomplished.
Though details of the GST Act and Rules have been in the public domain for quite some time now, the larger entities with expert professional assistance would be better prepared than the SMEs and smaller entities.
While the law is broadly in line with the present tax system, it is the compliance that the smaller entities are yet to understand. There is a need for intensive training programmes on the compliances particularly filing of returns, for GST transition to be smooth.
We are sure the GST Council would take a considered decision on the date of implementation of GST.
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