Though Dual GST is scheduled to be implemented, information on the shape of things to come is hazy. The broad contour of the GST as perceived by the Empowered Committee of State Finance Ministers and the response of the Department of Revenue, Ministry of Finance, Government of India gives a broad outline of the probable design of Dual GST.
Goods and Service Tax, GST as is popularly known changed the rules of the game for doing business in India. With the idea of One Nation One Tax, it unified and bonded the businesses across India into a single law. Replacing the earlier Excise Duty (on Manufacturing), Central Sales Tax and State Value Added Tax (On transfer of property in goods or sale) and Service Tax (on provision of Services) as applicable prior to 1.7.2017, it brought the concept of Supply which covered both Sale and Services into its ambit and freed the manufacturing from an event attracting Tax. In addition, it also eliminated Entertainment Tax, Luxury Tax, Entry Tax and a many other State and Central levies.
It was the biggest Tax reform in India and a bold decision. Such a major change was expected to get with it some initial hiccups and the management of these was the major challenge the implementing agencies faced. Organising a lot of training sessions and seminars for both the implementers and stake holders pre and post implementation was another major task. And to top it all was the sea change in the procedural part where a lot of reliance was on electronic means as contrasted with manual compliances business India was used to. In the true spirit of digital India, all the compliances under GST will be online with minimal human interface.
Time lines were strict, not only for the business community but also for the implementing agencies. Being electronically implemented and automatic imposition of late filing fees and penalties, it also bound the implementers with time bound actions on documents submitted for registrations, modifications or refunds lest they being automatically accepted in certain cases or liable to payment of interest in others.
GST revolves around supply. We have to determine supply, identify the time of supply, establish the value of supply and then apply the applicable rate of tax. Payment of tax along with applicable returns and availing the benefit of Input Tax Credit completes the chain of business. Care has to be taken on identifying the activities which can be supply. Its proper classification to applicable HSN/SCN code is important to determine the correct rate of tax. Identification of inputs eligible for Input Tax Credit is also important to avoid wrong claims resulting into penalisation later or missing out claims resulting into loss to business.
Time to time updates on various aspects of GST will be an endeavour. Do give your feedback, raise you queries and subscribe to the site for a fruitful discussion.
One Year of GST By CA Alok Krishan History was written one year back when the biggest tax reform was ushered in on the midnight of 30th June […]
GST on Medical Profession By CA Alok Krishan Goods and Service Tax has modified the complete indirect taxation regime in India. Such a massive change in taxation coming […]
GST ON RENTAL INCOME By CA Alok Krishan GST on Renting of immovable property has been an issue of discussion for a long time. From basic questions like […]