CA in Dwarka – GST Kendra

September 2, 2023

What is the GST Collection of August 2023 in India?

The gross GST revenue collected in the month of August, 2023 is ₹1,59,069 crore, which is 11% higher than the GST revenue collected in the same month last year. The revenue from import of goods was 3% higher and the revenues from domestic transactions (including import of services) are 14% higher than the revenues from these sources during the same month last year.

The total GST income collected in August 2023 was ₹1,59,069, of which CGST was 28.328 billion, SGST was 35.794 billion, IGST was 83.251 billion (including 43.550 billion in revenue from the import of goods), and Cess was 11.695 billion (including 1.01 billion in revenue from the import of goods).

The government has paid 31,408 crores in SGST from IGST and 37,581 crores to CGST. After routine settlement, the total income for the CGST and SGST for the month of August 2023 is 65,909 crore for the Centre and 67,202 crore for the States.

The details of the GST revenue collected in August 2023 are as follows:

CGST: ₹28,328 crore
SGST: ₹35,794 crore
IGST: ₹83,251 crore (including ₹43,550 crore collected on import of goods)
Cess: ₹11,695 crore (including ₹1,016 crore collected on import of goods)

The total revenue of Centre and the States in the month of August, 2023 after regular settlement is ₹65,909 crore for CGST and ₹67,202 crore for the SGST.

The August 2023 revenues are 11% greater than the GST revenues from the same month in the previous year. In comparison to the same month last year, the income from imports of products was up 3% and the revenue from domestic transactions, which includes the import of services, was up 14%.

The graph below illustrates the yearly trends in monthly gross GST receipts. Table 1 compares the state-by-state amounts of GST collected in each State in August 2023 to August 2022, and Table 2 lists the amounts of SGST and the SGST component of the IGST received by the States and UTs in August 2023.

Table-1: State-wise Y-o-Y growth of GST Revenue in August, 2023^{^[1]} (Rs. In crore)

State/UT	August’22	August’23	Growth(%)
Jammu and Kashmir	434	523	21
Himachal Pradesh	709	725	2
Punjab	1651	1813	10
Chandigarh	179	192	7
Uttarakhand	1094	1353	24
Haryana	6772	7666	13
Delhi	4349	4620	6
Rajasthan	3341	3626	9
Uttar Pradesh	6781	7468	10
Bihar	1271	1379	9
Sikkim	247	320	29
Arunachal Pradesh	59	82	39
Nagaland	38	51	37
Manipur	35	40	17
Mizoram	28	32	13
Tripura	56	78	40
Meghalaya	147	189	28
Assam	1055	1148	9
West Bengal	4600	4800	4
Jharkhand	2595	2721	5
Odisha	3884	4408	14
Chhattisgarh	2442	2896	19
Madhya Pradesh	2814	3064	9
Gujarat	8684	9765	12
Daman and Diu and Dadra and Nagar Haveli	311	324	4
Maharashtra	18863	23282	23
Karnataka	9583	11116	16
Goa	376	509	36
Lakshadweep	0	3	853
Kerala	2036	2306	13
Tamil Nadu	8386	9475	13
Puducherry	200	231	15
Andaman and Nicobar Islands	16	21	35
Telangana	3871	4393	13
Andhra Pradesh	3173	3479	10
Ladakh	19	27	39
Other Territory	224	184	(18)
Center Jurisdiction	205	193	(6)
Grand Total	100526	114503	14

Table-2: Amount of SGST & SGST portion of IGST settled to States/UTs in August, 2023 (Rs. In crore)

State/UT	SGST collection	SGST portion of IGST	Total
Jammu and Kashmir	220	420	640
Himachal Pradesh	182	210	392
Punjab	603	1,201	1,804
Chandigarh	51	119	171
Uttarakhand	382	255	637
Haryana	1,585	1,094	2,679
Delhi	1,113	1,209	2,322
Rajasthan	1,265	1,730	2,994
Uttar Pradesh	2,378	3,165	5,544
Bihar	654	1,336	1,990
Sikkim	42	43	85
Arunachal Pradesh	40	100	140
Nagaland	23	59	82
Manipur	21	62	83
Mizoram	17	54	72
Tripura	36	84	120
Meghalaya	50	86	136
Assam	440	691	1,131
West Bengal	1,797	1,516	3,313
Jharkhand	802	120	922
Odisha	1,333	401	1,734
Chhattisgarh	710	488	1,198
Madhya Pradesh	978	1,447	2,425
Gujarat	3,211	1,723	4,933
Dadra and Nagar Haveli and Daman and Diu	51	40	90
Maharashtra	7,630	3,841	11,470
Karnataka	3,029	2,627	5,656
Goa	174	111	285
Lakshadweep	0	2	2
Kerala	1,035	1,437	2,472
Tamil Nadu	3,301	2,212	5,513
Puducherry	43	51	94
Andaman and Nicobar Islands	10	22	33
Telangana	1,439	1,746	3,186
Andhra Pradesh	1,122	1,481	2,603
Ladakh	14	43	57
Other Territory	13	182	195
Grand Total	35,794	31,408	67,202

September 6, 2018September 6, 2018

Charitable trust liable to pay GST in Maharashtra- AAR (Authority of Advance ruling)

Advance Ruling Mechanism in GST

An advance ruling helps the applicant in planning his activities, which are liable for payment of GST, well in advance. It also brings certainty in determining the tax liability, as the ruling given by the Authority for Advance Ruling is binding on the applicant as well as Government authorities. Further, it helps in avoiding long drawn and expensive litigation at a later date. Seeking an advance ruling is inexpensive and the procedure is simple and expeditious. It thus provides certainty and transparency to a taxpayer with respect to an issue which may potentially cause a dispute with the tax administration. A legally constituted body called Authority for Advance Ruling (AAR) can give a binding ruling to an applicant who is a registered person or is desirous of obtaining registration. The advance ruling given by the Authority can be appealed before an Appellate authority for Advance Ruling (AAAR).There are time lines prescribed for passing an order by AAR and by AAAR.

Objectives of Advance Ruling

The broad objectives for setting up a mechanism of Advance Ruling include:

Provide certainty in tax liability in advance, in rela- tion to an activity proposed to be undertaken by the applicant;
Attract Foreign Direct Investment (FDI);
Reduce litigation;
Pronounce ruling expeditiously in transparent and inexpensive manner;

What is an Advance Ruling?

“Advance ruling”means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 of the CGST Act, 2017, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.

The definition of Advance ruling given under the Act is a broad one and an improvement over the existing systems of advance rulings under Customs and Central Excise Laws. Under the present dispensation, advance rulings can be given only for a proposed transaction, whereas under GST, Advance ruling can be obtained for a proposed transaction as well as a transaction already undertaken by the appellant.

Charitable trust liable to pay GST in Maharashtra- AAR (Authority of Advance ruling)

Goods and services provided by charitable trusts for a consideration would classify as supply, making it liable for GST, the authority of advanced ruling (AAR) for GST in Maharashtra has ruled.

The ruling further states that trusts would need to register under GST if its annual turnover was above the threshold of Rs 20 lakh. The trust in its application argued that since its main activity was that of a charitable trust engaged in spreading religious knowledge by organising camps (satsang, shibirs), its ancillary activity of selling religious material in the forms of books, CDs, DVDs, pamphlets and statues shouldn’t be considered as business. #GSTonNGO #AAR #Wealth4India.

(Information compiled from the source available at PIB)

June 30, 2018

GST Day – 1st July 2018 to be celebrated as “GST day” – #GST “ONE NATION, ONE TAX, ONE MARKET”

1st July 2018 to be celebrated as ‘GST day’, to commemorate the first year of the unprecedented reform of Indian taxation

Government of India is celebrating the 1^st Anniversary of the Goods and Services Tax (GST) coming into force, here tomorrow. GST was launched on the 1^st July, 2017 in a majestic ceremony held in the Central Hall of Parliament on the midnight of 30^th June, 2017. The first year has been remarkable both for the sheer variety of challenges that its implementation has thrown up and for the willingness and ability of policy makers and tax administrators to rise up to these challenges and respond befittingly.

But more importantly, the first year of GST has been an example to the world of the readiness of the Indian taxpayer to be a partner in this unprecedented reform of Indian taxation. Accordingly, it has been decided that Sunday, the 1^st of July, 2018 shall be commemorated as ‘GST Day’. Union Minister for Railways, Coal , Finance & Corporate Affairs Shri Piyush Goyal will preside over as the Chief Guest of the event and Minister of State for Finance, Shri Shiv Pratap Shukla will be the Guest of Honour.

Before implementation of GST, Indian taxation system was a farrago of central, state and local area levies. In the constitutional scheme, taxation power on goods was with Central Government but it was limited up to the stage of manufacture and production while States had power to tax sale and purchase of goods. Centre had the exclusive power to tax services. This sort of division of taxing powers created a grey zone which led to legal disputes since determination of what constitutes a goods or service became increasingly difficult.

In the discussions that preceded amendment in the Constitution for GST, there were a number of thorny issues that required resolution and agreement between Central Government and State Governments. Implementing a tax reform as vast as GST in a diverse country like India required the reconciliation of interests of various States with that of the Centre. Some of these issues included origin-based versus destination-based taxation, rate structure and compensation, Dispute Settlement, inclusion of Alcohol and Petroleum products under GST. Resolution of these issues took some time and finally, the Constitution (122nd Amendment) Bill, 2014 was introduced in the Parliament on 19^th December, 2014 and has been enacted as Constitution (101st Amendment) Act, 2016 w.e.f. 16^th September, 2016.

As provided for in Article 279A of the Constitution, the Goods and Services Tax Council (the Council) was notified with effect from 12^th September, 2016. The Council is comprised of the Union Finance Minister (who is the Chairman of the Council), the Minister of State (Revenue) and the State Finance/Taxation Ministers as members and is empowered to make recommendations to the Union and the States on all GST related issues. The Council has met for 27 times and no occasion has arisen so far that required voting to decide any matter. All the decisions have been taken by consensus. This is a fitting tribute to the spirit of cooperative federalism which has prevailed throughout all Centre-State interactions in relation to all aspects of GST.

Four Laws namely CGST Act, UTGST Act, IGST Act and GST (Compensation to States) Act were passed by the Parliament and since been notified on 12^th April, 2017. All the other States (except Jammu & Kashmir) and Union territories with legislature have passed their respective SGST Acts. The economic integration of India was completed on 8th July, 2017 when the State of J&K also passed the SGST Act and the Central Government also subsequently extended the CGST Act to J&K. On 22^nd June, 2017, the first notification was issued for GST and notified certain sections under CGST Act. Since then, one hundred and three notifications under CGST Act have been issued notifying sections, notifying rules, amendment to rules and for waiver of penalty, etc. Thirteen, twenty eight and one notifications have also been issued under IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Further 59, 63, 59 and 8 rate related notifications each have been issued under the CGST Act, IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Similar notifications have been issued by all the States under the respective SGST Act. Apart from the notifications, 53 circulars and 14 orders have also been issued by CBIC on various subjects like proper officers, ease of exports, and extension of last dates for filling up various forms, etc.

India has adopted dual GST model because of its unique federal nature. Under this model, tax is levied concurrently by the Centre as well as the States on a common base, i.e. supply of goods or services or both. GST to be levied by the Centre would be called Central GST (Central tax / CGST) and that to be levied by the States would be called State GST (State Tax / SGST). State GST (State Tax / SGST) would be called UTGST (Union territory tax) in Union Territories without legislature. CGST & SGST / UTGST shall be levied on all taxable intra-State supplies. Inter-State supply of goods or services shall be subjected to Integrated GST (Integrated tax / IGST). The IGST model is a unique contribution of India in the field of VAT. The IGST Model envisages that Centre would levy IGST (Integrated Goods and Service Tax) which would be CGST plus SGST on all inter-State supply of goods or services or both.

The introduction of e-way (electronic way) bill is a monumental shift from the earlier ‘Departmental Policing Model’ to a ‘Self-Declaration Model’. It envisages one e-way bill for movement of the goods throughout the country, thereby ensuring a hassle free movement of goods throughout the country. The e-way bill system has been introduced nation-wide for all inter-State movement of goods with effect from 1^st April, 2018. As regards intra-State movement of gods, all States have notified e-way bill rules for intra-State supplies last being NCT of Delhi where it was introduced w.e.f. 16^th June, 2018.

GST will have a multiplier effect on the economy with benefits accruing to various sectors such as exporters, small traders and entrepreneurs, agriculture and industry, common consumers. GST has already promoted ‘Make in India’ and has improved the ‘Ease of Doing Business’ in India. By subsuming more than a score of taxes under GST, the road to a harmonized system of indirect tax has been paved making India an economic union.

Any new change is accompanied by difficulties and problems at the outset. A change as comprehensive as GST is bound to pose certain challenges not only for the government but also for business community, tax administration and even common citizens of the country. Some of these challenges relate to the unfamiliarity with the new regime and IT systems, legal challenges, return filing and reconciliations, passing on transition credit. Many of the processes in the GST are new for small and medium enterprises in particular, who were not used to regular and online filing of returns and other formalities.

Based on the feedback received from businesses, consumers and taxpayers from across the country, attempt has been made to incorporate suggestions and reduce problems through short-term as well as long-term solutions. National Anti-Profiteering Authority has initiated investigation into various complaints of anti-profiteering and has passed orders in some cases to protect consumer interest. To expedite sanction of refund, manual filing and processing of refunds has been enabled. Clarificatory Circulars and notifications have been issued to guide field formations of CBIC and States in this regard. The government has put in place an IT grievance redressal mechanism to address the difficulties faced by taxpayers owing to technical glitches on the GST portal.

The introduction of GST is truly a game changer for Indian economy as it has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology–driven tax regime. It will integrate India into a single, common market by breaking barriers to inter-State trade and commerce. By eliminating cascading of taxes and reducing transaction costs, it will enhance ease of doing business in the country and provide an impetus to ‘Make in India’ campaign. GST will result in ‘ONE NATION, ONE TAX, ONE MARKET’. (Information compiled from the source PIB)

February 19, 2018

Tax Treaty with Iran to prevent Double Taxation and Fiscal Evasion

India and Iran signed in New Delhi today an Agreement for the Avoidance of Double Taxation (DTAA) and the Prevention of Fiscal Evasion with respect to taxes on income.

India and Iran signed here in New Delhi today an Agreement for the Avoidance of Double Taxation (DTAA) and the Prevention
of Fiscal Evasion with respect to taxes on income.

The Agreement is on similar lines as entered into by India with other countries.The Agreement will stimulate flow of investment, technology and personnel from India to Iran& vice versa, and will prevent double taxation. The Agreement will provide for exchange of information between the two Contracting Parties as per latest International Standards. It will improve transparency in tax matters and will help curb tax evasion and tax avoidance.

The Agreement also meets treaty related minimum standards under G-20 OECD Base Erosion & Profit Shifting (BEPS) Project, in which India participated on an equal footing. (Source – PIB)

February 15, 2018

GST Council recommends relief in GST on Circus, Dance and Theatrical Performances

Threshold Exemption under GST for admission to such cultural and sports events in the country increased from Rs. 250 to Rs. 500 per person

In its Meeting held on 18^th January, 2018, the GST Council has recommended that for the purpose of GST exemption, the threshold price limit of Admission Ticket for circus, dance,theatrical performances including drama or dance, award functions, pageants, concerts, musical performances, and recognized sporting events may be increased from Rs. 250 per person to Rs.500 per person. The Council has further recommended that admission to planetarium may also been given the benefit of this threshold exemption up to Rs.500 per person.

The Notifications giving effect to the recommendations of the Council have been issued on 25^thJanuary, 2018. Accordingly, from 25^th January 2018, the Admission Ticket to circus, dance, theatrical performances including drama or dance, award functions, pageants, concerts, musical performances, recognized sporting events and planetarium up to Rs.500 per person have been exempted from GST.This measure is expected to promote such cultural and sports events in the country. (Source-PIB)

December 29, 2017

Planning to Invest in Bitcoin? – Finance Ministry & RBI cautioned people of India to do at their own risk – Bitcoin is not a Legal Tender

There has been a phenomenal increase in recent times in the price of Virtual ‘Currencies’ (VCs) including Bitcoin, in India and globally. The

VCs don’t have any intrinsic value and are not backed by any kind of assets.Government Cautions People Against Risks in Investing in Virtual ‘Currencies’ – Says VCs are like “Ponzi Schemes”.

The Ministry of Finance has issued the following statement today on Virtual ‘Currencies’.

“There has been a phenomenal increase in recent times in the price of Virtual ‘Currencies’ (VCs) including Bitcoin, in India and globally. The VCs don’t have any intrinsic value and are not backed by any kind of assets. The price of Bitcoin and other VCs therefore is entirely a matter of mere speculation resulting in spurt and volatility in their prices. There is a real and heightened risk of investment bubble of the type seen in ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes. VCs are stored in digital/electronic format, making them vulnerable to hacking, loss of password, malware attack etc. which may also result in permanent loss of money. As transactions of VCs are encrypted they are also likely being used to carry out illegal/subversive activities, such as, terror-funding, smuggling, drug trafficking and other money-laundering Acts.

VCs are not backed by Government fiat. These are also not legal tender. Hence, VCs are not currencies. These are also being described as ‘Coins’. There is however no physical attribute to these coins. Therefore, Virtual ‘Currencies’ (VCs) are neither currencies nor coins. The Government or Reserve Bank of India has not authorised any VCs as a medium of exchange. Further, the Government or any other regulator in India has not given license to any agency for working as exchange or any other kind of intermediary for any VC. Persons dealing in them must consider these facts and beware of the risks involved in dealing in VCs.

The users, holders and traders of VCs have already been cautioned three times, in December, 2013, February, 2017 and December, 2017, by Reserve Bank of India about the potential financial, operational, legal, customer protection and security related risks that they are exposing

themselves to by investing in Bitcoin and/ or other VCs. RBI has also clarified that it has not given any licence/ authorization to any entity/ company to operate such schemes or deal with Bitcoin or any virtual currency. The Government also makes it clear that VCs are not legal tender and such VCs do not have any regulatory permission or protection in India. The investors and other participants therefore deal with these VCs entirely at their risk and should best avoid participating therein.” (Compiled from Information available at PIB)

December 28, 2017

Impact of GST on the Prices of Goods and Services

Since GST bill has been introduced in the Parliament, economists across the country have started analyzing its impact on the economy. Recommended as the biggest reform of Indian economy, GST has a distinctive impact on every touch point from manufacturer and trader to buyer. Since it is about to proceed in the next couple of months, it is the time to analyze the impact of GST on a common man.

GST has been drafted to create a single window for indirect taxation which was incurred under various names until now. It is estimated to boost GDP by 2% in the short-term and will be a mix bag for the people. Many services may become expensive while goods may witness a fall in their prices due to GST. Though there is a mixed reaction from economists on implementation or transition phase, but everyone is sure that impact of GST will be positive in the longer term. But, everyone is concerned about its immediate impact. So, here we’ve analyzed the anticipated impact of GST on a common man’s lifestyle:

Services That May Become Costlier:

Under GST, these services may become expensive:

Healthcare
Residential Tenancy
Courier Expenses
School fees
Transport Communication

Some of the services might get less expensive. Prices of movie tickets may reduce due to impact of GST while dining at restaurant can become cheaper in the states where taxes are higher. Essential commodities and few vehicles can be cheaper.

Essential goods and commodities have been exempted or categorized in the low rates column. Also, it may bring down the cost of these products.

SUVs/ Luxury Vehicle/ Premium Car
Compact Sedan
Two Wheelers

Effect of GST on Consumer Durables

GST might have marginal impact on Consumer Durables. People can expect + or – 2 to 3% impact on these products.

Stoves
Washing Machine
Television

Impact of GST on Unhealthy Products

Unhealthy products or sin goods like aerated drinks, tobacco products and other such products have been categorized in a higher tax segment. Government has proposed tax around 40% on such goods, hence these may witness increase with the implementation of GST.

Apart from these factors, details are still awaited for many other categories of products and services. Government is categorizing various goods and services. Hence, it is difficult to measure their impact on common man. But, it is sure that GST will decrease the supply cost. This reduction of cost will bring benefit for the end users in the longer term.

December 28, 2017December 28, 2017

Inter-State E-Way Bill compulsory from 1st February 2018 – GST Council Decided in its 24th Meeting

The 24th GST Council Meeting held on 16th December 2017, through video conferencing decides that Inter-State e-way Bill to be made compulsory from 1st of February, 2018.
The System to be ready by 16th of January, 2018; The Uniform System of e-way Bill for Inter-State as well as Intra-State movement will be implemented across the country by 1st June, 2018.

The 24th Meeting of the GST Council held on 16th December 2017, through video conference under the Chairmanship of the Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley. It discussed about the implementation of e-way Bill system in the country. Till such time as the National e-way Bill is ready, the States were authorized to continue their own separate e-way Bill systems. However, it was represented by the trade and transporters that this is causing undue hardship in the Inter-State movement of goods and therefore, bringing in an early all India system of e-way Bill has become a necessity. The GST Council today reviewed the progress of readiness of hardware and software required for the introduction of nationwide e-way Bill System. After discussions with all the States, the following decisions were taken :-

i) The nationwide e-way Bill system will be ready to be rolled out on a trial basis latest by 16th January, 2018. Trade and transporters can start using this system on a voluntary basis from 16th January, 2018.

ii) The Rules for implementation of nationwide e-way Bill system for Inter-State movement of goods on a compulsory basis will be notified with effect from 1st February, 2018. This will bring uniformity across the States for seamless inter-State movement of goods.

iii) While the System for both inter-State and intra-State e-way Bill generation will be ready by 16th January, 2018, the States may choose their own timings for implementation of e-way Bill for intra-State movement of goods on any date before 1st June, 2018. There are certain States which are already having system of e-way Bill for intra-State as well as inter-State movement and some of those States can be early adopters of national e-way Bill system for intra-State movement also. But in any case, the Uniform System of e-way Bill for inter-State as well as intra-State movement will be implemented across the country by 1st June, 2018. (Compiled from Sources available at PIB)

December 28, 2017

Frequently Asked Questions (FAQs) with answers on GST

Question 1. What is GST? How does it work?

Answer: GST is one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

Question 2. What are the benefits of GST?

Answer: The benefits of GST can be summarized as under:

For business and industry –

Easy compliance: A robust and comprehensive IT system would be the foundation of the GST regime in India. Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which would make compliance easy and transparent.
Uniformity of tax rates and structures: GST will ensurethat indirect tax rates and structures are commonacross the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business.
Removal of cascading: A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce hidden costs of doing business.
Improved competitiveness: Reduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry.
Gain to manufacturers and exporters: The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.

For Central and State Governments –

Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being replaced by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre and State levied so far.
Better controls on leakage: GST will result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an inbuilt mechanism in the design of GST that would incentivize tax compliance by traders.
Higher revenue efficiency: GST is expected to decrease the cost of collection of tax revenues of the Government, and will therefore, lead to higher revenue efficiency.

For the consumers –

Single and transparent tax proportionate to the value of goods and services: Due to multiple indirect taxes beinglevied by the Centre and State, with incomplete or no input tax credits available at progressive stages of value addition, the cost of most goods and services in the country today are laden with many hidden taxes. Under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final consumer.
Relief in overall tax burden: Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers.

Question 3. Which taxes at the Centre and State level are being subsumed into GST?

Answer: At the Central level, the following taxes are being subsumed:
a. Central Excise Duty,
b. Additional Excise Duty,
c. Service Tax,
d. Additional Customs Duty commonly known as Countervailing Duty, and
e. Special Additional Duty of Customs.
At the State level, the following taxes are being subsumed:
a. Subsuming of State Value Added Tax/Sales Tax,
b. Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States),
c. Octroi and Entry tax,
d. Purchase Tax,
e. Luxury tax, and
f. Taxes on lottery, betting and gambling.

Question 4. What are the major chronological events that have led to the introduction of GST?

Answer: GST is being introduced in the country after a 13 year long journey since it was first discussed in the report of the Kelkar Task Force on indirect taxes. A brief chronology outlining the major milestones on the proposal for introduction of GST in India is as follows:
a. In 2003, the Kelkar Task Force on indirect tax had suggested a comprehensive Goods and Services Tax (GST) based on VAT principle.
b. A proposal to introduce a National level Goods and Services Tax (GST) by April 1, 2010 was first mooted in the Budget Speech for the financial year 2006-07.
c. Since the proposal involved reform/ restructuring of not only indirect taxes levied by the Centre but also the States, the responsibility of preparing a Design and Road Map for the implementation of GST was assigned to the Empowered Committee of State Finance Ministers (EC).
d. Based on inputs from Govt of India and States, the EC released its First Discussion Paper on Goods and Services Tax in India in November, 2009.
e. In order to take the GST related work further, a Joint Working Group consisting of officers from Central as well as State Government was constituted in September, 2009.
f. In order to amend the Constitution to enable introduction of GST, the Constitution (115th Amendment) Bill was introduced in the Lok Sabha in March 2011. As per the prescribed procedure, the Bill was referred to the Standing Committee on Finance of the Parliament for examination and report.
g. Meanwhile, in pursuance of the decision taken in a meeting between the Union Finance Minister and the Empowered Committee of State Finance Ministers on 8th November, 2012, a ‘Committee on GST Design’, consisting of the officials of the Government of India, State Governments and the Empowered Committee was constituted.
h. This Committee did a detailed discussion on GST design including the Constitution (115th) Amendment Bill and submitted its report in January, 2013. Based on this Report, the EC recommended certain changes in the Constitution Amendment Bill in their meeting at Bhubaneswar in January 2013.
i. The Empowered Committee in the Bhubaneswar meeting also decided to constitute three committees of officers to discuss and report on various aspects of GST as follows:-
(a) Committee on Place of Supply Rules and Revenue Neutral Rates;
(b) Committee on dual control, threshold and exemptions;
(c) Committee on IGST and GST on imports.
j. The Parliamentary Standing Committee submitted its Report in August, 2013 to the Lok Sabha. The recommendations of the Empowered Committee and the recommendations of the Parliamentary Standing Committee were examined in the Ministry in consultation with the Legislative Department. Most of the recommendations made by the Empowered Committee and the Parliamentary Standing Committee were accepted and the draft Amendment Bill was suitably revised.
k. The final draft Constitutional Amendment Bill incorporating the above stated changes were sent to the Empowered Committee for consideration in September 2013.
l. The EC once again made certain recommendations on the Bill after its meeting in Shillong in November 2013. Certain recommendations of the Empowered Committee were incorporated in the draft Constitution (115th Amendment) Bill. The revised draft was sent for consideration of the Empowered Committee in March, 2014.
m. The 115th Constitutional (Amendment) Bill, 2011, for the introduction of GST introduced in the Lok Sabha in March 2011 lapsed with the dissolution of the 15th Lok Sabha.
n. In June 2014, the draft Constitution Amendment Bill was sent to the Empowered Committee after approval of the new Government.
o. Based on a broad consensus reached with the Empowered Committee on the contours of the Bill, the Cabinet on 17.12.2014 approved the proposal for introduction of a Bill in the Parliament for amending the Constitution of India to facilitate the introduction of Goods and Services Tax (GST) in the country. The Bill was introduced in the Lok Sabha on 19.12.2014, and was passed by the Lok Sabha on 06.05.2015. It was then referred to the Select Committee of Rajya Sabha, which submitted its report on 22.07.2015.

Question 5. How would GST be administered in India?

Answer: Keeping in mind the federal structure of India, there will be two components of GST – Central GST (CGST) and State GST (SGST). Both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and services. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State. The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage. Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output. No cross utilization of credit would be permitted.

Question 6. How would a particular transaction of goods and services be taxed simultaneously under Central GST (CGST) and State GST (SGST)?

Answer : The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services except on exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of Central Excise.

A diagrammatic representation of the working of the Dual GST model within a State is shown.

Question 7. Will cross utilization of credits between goods and services be allowed under GST regime?

Answer : Cross utilization of credit of CGST between goods and services would be allowed. Similarly, the facility of cross utilization of credit will be available in case of SGST. However, the cross utilization of CGST and SGST would not be allowed except in the case of inter-State supply of goods and services under the IGST model which is explained in answer to the next question.

Question 8. How will be Inter-State Transactions of Goods and Services be taxed under GST in terms of IGST method?

Answer: In case of inter-State transactions, the Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supplies of goods and services under Article 269A (1) of the Constitution. The IGST would roughly be equal to CGST plus SGST. The IGST mechanism has been designed to ensure seamless. flow of input tax credit from one State to another. The inter-State seller would pay IGST on the sale of his goods to the Central Government after adjusting credit of IGST, CGST and SGST on his purchases (in that order). The exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The importing dealer will claim credit of IGST while discharging his output tax liability (both CGST and SGST) in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST. Since GST is a destination-based tax, all SGST on the final product will ordinarily accrue to the consuming State. A diagrammatic representation of the working of the IGST model for inter-State transactions is shown.

Question 9. How will IT be used for the implementation of GST?

Answer: For the implementation of GST in the country, the Central and State Governments have jointly registered Goods and Services Tax Network (GSTN) as a not-for-profit, non-Government Company to provide shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders. The key objectives of GSTN are to provide a standard and uniform interface to the taxpayers, and shared infrastructure and services to Central and State/UT governments. GSTN is working on developing a state-of-the-art comprehensive IT infrastructure including the common GST portal providing frontend services of registration, returns and payments to all taxpayers, as well as the backend IT modules for certain States that include processing of returns, registrations, audits, assessments, appeals, etc. All States, accounting authorities, RBI and banks, are also preparing their IT infrastructure for the
administration of GST. There would no manual filing of returns. All taxes can also be paid online. All mis-matched returns would be autogenerated, and there would be no need for manual interventions. Most returns would be self-assessed.

Question 10. How will imports be taxed under GST?

Answer : The Additional Duty of Excise or CVD and the Special Additional Duty or SAD presently being levied on imports will be subsumed under GST. As per explanation to clause (1) of article 269A of the Constitution, IGST will be levied on all imports into the territory of India. Unlike in the present regime, the States where imported goods are consumed will now gain their share from this IGST paid on imported goods.

Question 11. What are the major features of the Constitution (122nd Amendment) Bill, 2014?

Answer : The salient features of the Bill are as follows:

Conferring simultaneous power upon Parliament and the State Legislatures to make laws governing goods and services tax;
Subsuming of various Central indirect taxes and levies such as Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty commonly known as Countervailing Duty, and Special Additional Duty of Customs;
Subsuming of State Value Added Tax/Sales Tax, Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States), Octroi and Entry tax, Purchase Tax, Luxury tax, and Taxes on lottery, betting and gambling;
Dispensing with the concept of ‘declared goods of special importance’ under the Constitution;
Levy of Integrated Goods and Services Tax on inter-State transactions of goods and services;
GST to be levied on all goods and services, except alcoholic liquor for human consumption. Petroleum and petroleum products shall be subject to the levy of GST on a later date notified on the recommendation of the Goods and Services Tax Council;
Compensation to the States for loss of revenue arising on account of implementation of the Goods and Services Tax for a period of five years;
Creation of Goods and Services Tax Council to examine issues relating to goods and services tax and make recommendations to the Union and the States on parameters like rates, taxes, cesses and surcharges to be subsumed, exemption list and threshold limits, Model GST laws, etc. The Council shall function under the Chairmanship of the Union Finance Minister and will have all the State Governments as Members.

Question 12. What are the major features of the proposed registration procedures under GST?

Answer: The major features of the proposed registration procedures under GST are as follows:
i. Existing dealers: Existing VAT/Central excise/Service Tax payers will not have to apply afresh for registration under GST.
ii. New dealers: Single application to be filed online for registration under GST.
iii. The registration number will be PAN based and will serve the purpose for Centre and State.
iv. Unified application to both tax authorities.
v. Each dealer to be given unique ID GSTIN.
vi. Deemed approval within three days.
vii. Post registration verification in risk based cases only.

Question 13. What are the major features of the proposed returns filing procedures under GST?

Answer: The major features of the proposed returns filing procedures under GST are as follows:
a. Common return would serve the purpose of both Centre and State Government.
b. There are eight forms provided for in the GST business processes for filing for returns. Most of the average tax payers would be using only four forms for filing their returns. These are return for supplies, return for purchases, monthly returns and annual return.
c. Small taxpayers: Small taxpayers who have opted composition scheme shall have to file return on quarterly basis.
d. Filing of returns shall be completely online. All taxes can also be paid onine.

Question 14. What are the major features of the proposed payment procedures under GST?

Answer: The major features of the proposed payments procedures under GST are as follows:
i. Electronic payment process- no generation of paper at any stage
ii. Single point interface for challan generation- GSTN
iii. Ease of payment – payment can be made through online banking, Credit Card/Debit Card, NEFT/RTGS and through cheque/cash at the bank
iv. Common challan form with auto-population features
v. Use of single challan and single payment instrument
vi. Common set of authorized banks
vii. Common Accounting Codes

(Complied from the Data available on PIB)

December 27, 2017

What is the Impact of GST on the Export of Services and Goods?

Previously, the export of services and goods was subject to a bevy of indirect taxes. Excise tax, customs duty, VAT, service tax, etc. was standard taxes charged from an exporter. Under the GST regime, all these taxes are subsumed into one. However, customs duty is an exemption and still levied on importers as usual.

Currently, there is no duty charged on exporters of services and goods. Above that, an exporter can claim any inputs that are received for purchasing of their raw materials. The government of India is aiming to increase the export of services and goods. To boost their ‘Make in India’ program, the government has offered various perks including zero duty on the exports. However, there is still some ambiguity in this arrangement and traders are looking for more clarification on the subject matter.

How Will It Be Levied?

Since the export of goods and services is considered a zero-rated supply, there is no GST levied on the same. Under the previous laws, a duty drawback was given for the taxes paid on inputs, provided these inputs were meant for export of goods exempted from taxes. It was truly daunting to claim this drawback. GST will mitigate these issues. Under this new system, duty drawback will be available only for the payment of customs duty on imported goods. Also, it will be allowed on some tobacco and petroleum products that are used as fuel or inputs for captive power generation in India.

Meaning of Export of Services under IGST Act 2017:

Services are treated as an export under below-mentioned circumstances when:

Service supplier is located in India
Service recipient is located outside India
Place of service supplied is located outside India
Supplier receives payment for such services in convertible foreign exchange

Here, supplier and recipient should be distinct person. For example- ABD consultancy firm in Delhi, India is providing services to XYZ firm in Dubai. Here, the location of supplier is in India, recipient location is Dubai, payment is made in Dirham (convertible foreign exchange) and supplier and recipient are different persons.

The Treatment on Zero-Rated Exports:

The government has issued a guidance note for clearing the doubts related to claims of input tax credits on the zero-rated products. Such exporters can claim refunds for zero-rated goods under two main options, viz.

They should supply the goods or services, or even both under a Letter or Undertaking or Bond subject to the prescribed safeguards, procedures, and conditions. It can be provided without paying integrated taxes. Then, the exporter can claim a refund of the input tax credit that is unutilized. It requires filing an application for the refund either directly on the common portal or through a notified facilitation centre. Also, an export report must be filed under the Customs Act before filing this application for claiming refunds.
Refunds can also be claimed by an exporter, Embassy, United Nations, agencies other than those specified in section 55 if they are paying IGST after fulfilling the prescribed conditions, procedures, and safeguards. This refund can be claimed on the tax paid on the goods and services supplied or both. Here, the applicant should follow the rules specified in Section 54 of CGST Act. In this context, the exporter has to submit the shipping bill for the goods exported. The person in charge of the shipment should also provide a complete report with the number and dates of all shipping bills mentioned clearly. The forms are available on the official website of the department.

How Are the Exports of Zero-Rated Services Treated Under GST?

Before claiming a refund of input tax credit, it is essential to determine if as service is covered under the definition given in the law. Any new conditions are not added to the existing definition of Export of Services. The rules for place of supply will vary on a case to case basis for determining their taxability. The location of service recipient is the default place of supply for export of services. The address mentioned in the records of the recipient must exist with the exporter in this case. This rule applies to IT/ITES services including intermediary services, software support, and maintenance.

There are separate implications of GST on software transactions including cloud computing. This is the packaged software that should be treated as ‘Goods’. It should be taxed as per the rates and place of supply applicable to export of goods. The customized software is charged as ‘Services’. Also, the software supplied electronically is charged as ‘Services’ because the definition of goods does not include intangible products. Same goes for the transfer of cloud computing services.

Refund of Input Tax Credit in Export of Goods:

The rules are clearly specified in this regard. They state:

If the supply of zero-rated goods is made without paying taxes, refund of input tax credit can be claimed under section 54(2) of CGST Act.
Unutilized input tax credit is not liable to refund in cases other than the zero-rated exports. Also, it states that refund will be available if credit is accumulating due to rate of tax on inputs being higher than the tax on output supplies. Also, this rule exempts nil rated and fully exempted products.
If the goods exported are subject to export duty, no refund will be allowed on an unutilized tax credit.
If exporter avails duty drawbacks of SGST/CGST/UTGST or claims refunds on IGST already paid on such exports, no refund will be allowed in these circumstances.

Deemed Exports:

Global tenders are invited for the prestigious projects in India financed by the foreign aid from Asia development bank, World Bank, etc. Indian suppliers face tough competition to win such projects from foreign suppliers. Since services are invited for a project funded with free foreign exchange, there is no customs duty involved in the bids. Supplies to such project where goods and services do not leave the country and payments are received by a supplier under Para 7.02 of Foreign Trade Policy (2015-2020) are termed as Deemed Export.

Following Transactions are treated as Deemed Exports under Foreign Trade Policy (2015-2020):

Export supplies for UN Agencies
Export against EPCG
Export against DFIA/ Advance Authorisation
Supplying for international competitive bidding project
Exporting marine freight containers
Supplying for EOU/ BTP/ EHTP/ STP
Supplying goods and services for project with zero customs duty
Supplying services and goods through competitive bidding to a nuclear project
Supplying services and goods to mega power projects

How Is the Government Looking for Export Promotion under GST?

Export is a priority but WTO recommends free and fair global trade. This rule binds on India as well. Hence, giving incentives to the exporters is against the norms of fair trade. However, these exporters are equally compensated by making their goods and services free from domestic taxes.

Following Are The Benefits Enjoyed By An Exporter Under GST:

GST exempted from final product
Refund of ITC on GST paid

Also, the government has planned few schemes for the exporters. These include:

SEZ allowed importing inputs without paying duty and export finished goods
Schemes of Advance Authorisation, DEPB, and DFIA
Duty Drawback Scheme
Scheme for Export Oriented Undertakings

With this comprehensive knowledge about GST implication on Export of Goods and Services, you can run your business smoothly and contribute to the cause of nation building.