14 Prominent features of Goods and Service Tax, bill

The prominent features of GST bill were first-time reviewed in its first discussion paper in the year 2009. We will recreate the features reviewed here again to recognise this act very well.

1. The GST should have two factors: one levied by the Centre (hereinafter referred to as Central GST), and the other levied by the States (hereinafter referred to as State GST). Rates for Central GST and State GST will be recommended suitably, showing revenue concerns and acceptability. This twin GST model will be applied via multiple statutes (one for CGST and SGST statute for every State).
2. Nevertheless, the primary features of law like changeability, the meaning of the taxable event and taxable person, assess of a levy which includes valuation conditions, basis of classification etc. would be standard across these regulations as far as feasible.
3. The Central GST and the State GST would be applicable to all dealings of goods and services produced for a concern apart from the exempted goods and services, goods which are external the purview of GST and the transactions that are under the prescribed limit limits.
4. The Central GST and State GST are to be paid to the accounts of the Centre and the States independently. It would’ve to be assured that account-heads for all services and goods would’ve indication if it relates to Central GST or State GST (with the identification of the State to whom the tax is to be credited).
5. Considering that the Central GST and State GST are to be handled independently, taxes paid towards the Central GST shall be permitted to be used as input tax credit (ITC) for the Central GST and could be utilised only towards the payment of Central GST.
6. Combine usage of ITC involving the Central GST and the State GST would not be given aside from in the situation of inter-State supply of goods and services under the IGST model which is defined afterwards.
7. Preferably, the problem relevant to credit accumulation on account of refund of GST should be avoided by both the Centre and the States except in the situations such as exports, purchase of capital goods, input tax at higher rate than output tax etc. in which, again refund/adjustment should be finished in a time bound manner.
8. To the scope possible, uniform process for the collection of both Central GST and State GST would be recommended in the respective legislation for Central GST and State GST.
9. The administration of the Central GST to the Centre and for State GST to the States would be provided. This would indicate that the Centre and the States would have contingency jurisdiction for the whole value chain and for all taxpayers on the basis of limits for goods and services recommended for the States and the Centre.
10. The existing threshold recommended in different State VAT Acts below which VAT is not applicable differs from State to State. A standard State GST limit over States is desirable and, for that reason, it is regarded that a limit of gross yearly turnover of Rs.10 lakh both for goods and services for all the States and Union Territories could be applied with appropriate compensation for the States where to lessen threshold had come out on top in the VAT regime. Keeping in view the interest of modest traders and small scale industries and to prevent dual command, the States also deemed that the limit for Central GST for goods may be kept at Rs.1.5 crore and the threshold for Central GST for services may also be properly high. It may be described that even now there is a different threshold of services (Rs. 10 lakh) and goods (Rs. 1.5 crores) in the Service Tax and CENVAT.
11. The States are also of the view that Composition/Compounding Scheme for the objective of GST should have a higher ceiling on total annual turnover and a floor tax rate with regard to gross annual turnover. In unique, there could be a compounding cut-off at Rs. 50 lakh of gross annual turnover and a floor rate of 0.5% across the States. The scheme would also allow an option for GST registration for dealers with turnover below the compounding cut-off.
12. The taxpayer would have to submit regular returns, in common structure as far as feasible, to both the Central GST authority and to the concerned State GST authorities.
13. Each taxpayer would be allocated a PAN-linked taxpayer identification number with an overall of 13/15 digits. This would carry the GST PAN-linked system in line with the existing PAN-based system for Income tax, assisting data exchange and taxpayer compliance.
14. Keeping in mind the need of tax payer’s comfort, features such as evaluation, enforcement, scrutiny and audit would be carried out by the authority which is gathering the tax, with details sharing between the Centre and the States.