FNB News - Model GST Bill released by Union government; likely to be passed in Monsoon

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Model GST Bill released by Union government; likely to be passed in Monsoon

Saturday, 25 June, 2016, 08 : 00 AM [IST]

Ashwani Maindola, New Delhi

The much-awaited Goods and Services Tax Bill is likely to be passed by Parliament in the Monsoon Session commencing next month.

The reason being most of the opposition parties have pledged their support to the Bill and except Congress, the majority of the members belonging to different parties have expressed their desire in support of the Bill in the Rajya Sabha.

Recently the Communist party led government in Kerala also expressed its support to the Bill thereby making conducive conditions in the upper house of Parliament for passing of the Bill. And experts feel that the government would get desired 2/3 votes in the Rajya Sabha to pass this constitutional amendment Bill.

Meanwhile, the Union government recently released the draft Goods and Services Tax legislation that would eventually form the foundation for GST. The draft was endorsed by the empowered committee of state finance ministers. The draft talks in detail about taxation, assessment, inspection, penalties and so on.

The law proposes that the revenue threshold of traders who will come under GST should be Rs 10 lakh. This is lesser than the Rs 25 lakh that the Centre was proposing. Also, agriculturalists have been left out of the definition of taxable persons. The draft has also proposed a tax on e-commerce transactions for states. Small traders having less than Rs 50 lakh turnover are given the option of paying a nominal tax of 1% to reduce the compliance burden.

According to the draft, for Levy and Collection of Central/State Goods and Services Tax, there shall be levied a tax called the Central/State Goods and Services Tax (CGST/SGST) on all intra-State supplies of goods and/or services at the rate specified in the prescribed Schedule to this Act and collected in such manner as may be prescribed.

The CGST/SGST shall be paid by every taxable person in accordance with the provisions of this Act. The Central or state government may, on the recommendation of the Council, by notification, specify categories of supply of goods and/or services the tax on which is payable on reverse charge basis and the tax thereon shall be paid by the person receiving such goods and/or services and all the provisions of this Act shall apply to such person as if he is the person liable for paying the tax in relation to such goods and/or services.
The draft also talks about power for audit, search, seizure arrest and appellate tribunal and authority for advance ruling.

Sagar Kurade, president, AIFPA, states that the food processing industry welcomes the GST Bill as it is expected to help in keeping the cost of delivery of food products low.

Further, the Confederation of All India Traders (CAIT) has expressed its happiness over the release of GST draft. In a statement, Praveen Khandelwal, secretary-general, CAIT, states, “At least it will give a basic idea to trade and commerce about fundamentals of proposed GST. It is heartening to note that except Tamil Nadu all other states are now on board. The finance minister needs to be complemented for bringing one and all together. Dual authority and reasonable tax rate are major concern for traders and it is appreciated that finance minister also does have same concerns in his mind. Putting draft GST for public comments is a welcome step but it will be appropriate if finance minister began consultation with stakeholders which will result in amicable solutions for some of the core issues and procedures to make GST a simplified and rationalised tax system in India.”

He adds, “Traders do have certain concerns but it is hoped that the same can be addressed well by a dialogue process. The CAIT stands in support of GST and urges upon Congress leadership now to extend support and give safe passage to GST Bill in Rajya Sabha.”