Goods and Services Tax (GST) is popularly known as VAT internationally. France was the first country to adopt GST as its Indirect Taxation Structure in 1954. Today, it has spread to around 164 Countries in the world which levies GST/VAT.
- Recently, on 3rd August, 2016 the much awaited Bill was passed in the Rajya Sabha as well. With the passage of 122nd Constitutional Amendment Bill, 2014 for the introduction of GST in both the houses of the Parliament, Government is clear in its intention of implementing GST by April 2017.
- The Draft Model GST law was placed on public portal by Government of India on 14th June 2016 inviting various comments and suggestions for the consideration
GST has been defined in Article 366 off the 122nd Constitutional Amendment Bill, 2014 [Constitution (One Hundred and First Amendment) Act 2016.
Legal Framework which will be required for the implementation of GST in India by April 2017 will be as follows:-
- Ratification of 122nd Constitutional Amendment Bill 2014 by 50% States,
- President Assent to the Constitution Amendments.
- Formation of GST Council.
- Cabinet Approval for CGST, SGST and IGST laws.
- Passage of CGST and IGST laws in the Centre and SGST laws in all states.
- Notification of GST Rules.
GST be administered in India
1.Central GST (CGST) and 2.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.
- Center would levy and collect Central Goods and Services Tax (CGST).
- 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.
- The credit of SGST paid on inputs would be allowed for paying the SGST on output.
- No cross utilization of credit would be permitted
1. Existing dealers: No Fresh Registration
Existing VAT/Central excise/Service Tax payers will not have to apply afresh for registration under GST.
2. New dealers:-
Single application to be filed online for registration under GST.
3. PAN based Registration Number:
The registration number will be PAN based and will serve the purpose for Center and State.
. Unified Application:
Unified application to Central and State tax authorities.
5. Unique ID GSTIN:
Each dealer to be given unique ID GSTIN.
6. Approval Within 3 Days:
Deemed approval within three days.
Post registration verification in risk based cases only.
Return filing procedure
1. Common return would serve the purpose of both Centre and State Government.
2. There are 8 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.
3. Small taxpayers: Small taxpayers who have opted composition scheme shall have to file return on quarterly basis.
4. Filing of returns shall be completely online. All taxes can also be paid online.
1. Electronic payment process
No generation of paper at any stage
2. Single point interface:
Single point interface for challan generation GSTN
3. Ease of payment:
Payment can be made through online banking, Credit Card/Debit Card, NEFT/RTGS and through cheque/cash at the bank
4. Common Challan form:
Common challan form with auto population features
5. Single challan:
Use of single challan and single payment instrument
6. Authorized Banks:
Common set of authorized banks
7. Accounting Code:
Common Accounting Codes
The country is eagerly looking out for the roll-out of GST from April 2017, as the regime focuses on creating one single market for all and introduces destination based taxation. GST will attract more investments from foreign investors as the country shall be more industry- friendly. Also, this shall result in generating more employment opportunities. Therefore, it is imperative that the government makes efforts to make the law clear and industry friendly so that the industry and the economy benefits as a whole.