Goods
and Services Tax GST) Council approves the Central Goods and Services Tax
(CGST) Bill and the Integrated Goods and Services Tax (IGST) Bill.
The
Goods and Services Tax GST) Council, in its meeting held today in Vigyan Bhawan
in New Delhi under the Chairmanship of the Union Minister for Finance &
Corporate Affairs, Shri Arun Jaitley has approved the draft CGST Bill and the
draft IGST Bill as vetted by the Union Law Ministry. This clears the deck for
the Central Government to take these two Bills to the Parliament for their
passage in the ongoing Budget Session.
Some
of the main features of the two Bills, as finalized by the GST Council, are as
follows:
i.
A State-wise single registration for a taxpayer forfiling returns, paying
taxes,and to fulfil other compliance requirements. Most of the compliance
requirements would be fulfilled online, thus leaving very little room for
physical interface between the taxpayer and the tax official.
ii.
A taxpayer has to file one single return state-wise to report all his supplies,
whether made within or outside the State or exported out of the country and pay
the applicable taxes on them. Such taxescan be Central Goods and Services Tax
(CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services
Tax (UTGST) and Integrated Goods and Services Tax (IGST).
iii.
A business entity with an annual turnover of upto Rs. 20 lakhs would not be
required to take registration in the GST regime, unless he voluntarily chooses
to do so to be a part of the input tax credit (ITC) chain. The annual turnover
threshold in the Special Category States (as enumerated in Article 279A of the
Constitution such as Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh,
Assam and the other States of the North-East) for not taking registration is
Rs. 10 lakhs.
iv.
A business entity with turnover upto Rs. 50 lakhs can avail the benefit of a
composition scheme under which it has to pay a much lower rate of tax and has
to fulfil very minimal compliance requirements. The Composition Scheme is
available for all traders, select manufacturing sectors and for restaurants in
the services sector.
v.
In order to prevent cascading of taxes, ITC would be admissible on all goods
and services used in the course or furtherance of business, except on a few
items listed in the Law.
vi.
In order to ensure that ITC can be used seamlessly for payment of taxes under
the Central and the State Law, it has been provided that the ITC entitlement
arising out of taxes paid under the Central Law can be cross-utilised for
payment of taxes under the laws of the States or Union Territories. For
example, a taxpayer can use the ITC accruing to him due to payment of IGST to
discharge his tax liability of CGST / SGST / UTGST. Conversely, a taxpayer can
use the ITC accruing to him on account of payment of CGST / SGST / UTGST, for
payment of IGST. Such payments are to be made in a pre-defined order.
vii.
In the Services sector, the existing mechanism of Input Service Distributor
(ISD) under the Service Tax law has been retained to allow the flow of ITC in
respect of input serviceswithin a legal entity.
viii.
To prevent lock-in of capital of exporters, a provision has been made to
refund, within seven days of filing the application for refund by an exporter,
ninety percent of the claimed amount on a provisional basis.
ix.
In order to ensure a single administrative interface for taxpayers, a provision
has been made to authorise officers of the tax administrations of the Centre
and the States to exercise the powers conferred under all Acts.
x.
An agriculturist, to the extent of supply of produce out of cultivation of
land, would not be liable to take registration in the GST regime.
xi.
To provide certainty in tax matters, a provision has been made for an Advance
Ruling Authority.
xii.
Exhaustive provisions for Appellate mechansim have been made.
xiii.
Detailed transitional provisions have been provided to ensure migration of
existing taxpayers and seamless transfer of unutilised ITC in the GST regime.
xiv.
An anti-profiteering provision has been incorporated to ensure that the
reduction of tax incidence is passed on to the consumers.
xv.
In order to mitigate any financial hardship being suffered by a taxpayer,
Commissioner has been empowered to allow payment of taxes in instalments.
The
remaining two Bills namely, State Goods and Services Tax (SGST) Bill and the
Union territory Goods and Services Tax (UTGST) Bill, which would be almost a
replica of the CGST Act, would be taken-up for approval after their legal
vetting in the next meeting of GST Council scheduled on 16 March 2017.
Source-Press
Information Bureau, Government of India, Ministry of Finance, 04-March-2017
