GST tax reform; supportive legislations passed
Q. Which of the following statements are true about the CGST?
1. This legislation is from MoF.
2. It was introduced on March 27, 2017.
3. It was passed by the LS on March 29, 2017.
4. It was passed by the RS on April 6, 2017.- Published on 20 Apr 17a. 1,3 and 4
b. 2,3 and 4
c. 1,2 and 3
d. All 4
ANSWER: All 4
A. Union Territory Goods and Services Tax Bill, 2017
Bill provides for the levy of Union Territory Goods and Services Tax on the supply of goods and services within the boundary of the UT.
The tax rates of the UTGST will be recommended by the GST Council– this rate will not exceed 20 percent.
Centre can exempt certain goods and services from the UTGST through notification based on recommendation of the GST Council.
Officers of Police, Railways, Custom and Land Revenue Collection Officers including Village and Central Tax Officers will help the tax administration to implement the Act.
B. The Integrated Goods and Services Tax Bill, 2017
Bill provides for the levy of IGST by centre on inter-state supply of services and goods.
Centre will levy IGST on the basis of:
a. inter-state supply of goods and services
b. imports and exports
c. supplies to and from SEZ
Supply includes sale, transfer, exchange and lease made to further a business.
Additionally, IGST will be levied on any supply not under the purview of Central and State GST Acts.
IGST will be levied at rate recommended by GST Council and capped at 40%.
Centre will exempt goods and services from IGST through notification based on recommendation of the GST Council.
The IGST revenue obtained by the Union government will be apportioned between centre and state to which supply of services or goods was received.
Collected revenue will be apportioned to the centre to the state where the goods and services supplied were received.
Collected revenue will be apportioned to Union government at tax rate specified in the CGST Act and the rest to the state.
C. The Goods and Services Tax (Compensation to States) Bill, 2017
This bill was introduced in the LS on March 27, 2017.
The bill provides for compensation to states for revenue loss during GST implementation.
Compensation will be provided to the state for 5 years from the date on which the state brings the State GST Act into force.
For calculating the compensation amount in a given financial year, the base year will be assumed to be 2015-2016. Revenue will be projected from this year.
The revenue growth rate for a state during the 5 year period will be assumed to be 14 percent per year.
Base year revenue comprises tax revenue of state from:
a. State value added tax
b. Central state tax
c. Entry Tax
d. OCTROI
e. Local body tax
f. Tax on luxuries
g. Tax on ads etc.
Revenue among these taxes arising for supply of alcohol for consumption by people and certain petrol products will not be part of the base year revenue.
D. The Central Goods and Services Tax Bill, 2017
It was introduced in the LS on March 27, 2017.
Bill provides for levying of CGST.
Centre will levy CGST on supply of goods and services within state boundary. Supplies include sale, transfer and lease made for consideration to move a business further.
The CGST tax rates will be recommended by the GST Council, not exceeding 20 percent. Additionally, the Bill permits taxpayers with a turnover of less than INR 50 lakhs to pay GST at flat rate known as composition levy, rather than value of supply of goods and services.
This rate will be capped at 2.5%.
Centre may exempt certain goods and services from GST purview through notification based on GST Council recommendations.
Liability for paying CGST related to supply of goods and services will be based on one of the two (whichever is earlier):
Issue of invoice
Receipt of payment
CGST will be levied on supply of goods and services where value includes:
a. taxes and duties under different tax lay
b. price paid on supply
c. interest, late fee, penalties for delayed payments
