GOODS AND SERVICES ACT, 2017

INTRODUCTION:

The GOODS AND SERVICES (GST) journey began in the year 2000 when a committee was set up to draft a law. It took 17 years from then for the Law to evolve. In 2017, the GST Bill was passed in the Lok Sabha and Rajya Sabha, and on 1st July 2017, the GST Law came into force. GST is an indirect tax (or consumption tax) used in India on the supply of goods and services. It is a comprehensive, multistage, destination-based tax: comprehensive because it has subsumed almost all the indirect taxes except a few state taxes. India adopted a dual GST model, meaning that taxation is administered by both the Union and state governments. Transactions made within a single state are levied with Central GST (CGST) by the Central Government and State GST (SGST) by the State governments. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central Government. GST is a consumption-based tax/destination-based tax, therefore, taxes are paid to the state where the goods or services are consumed not the state in which they were produced. IGST complicates tax collection for State Governments by disabling them from collecting the tax owed to them directly from the Central Government. Under the previous system, a state would only have to deal with a single government in order to collect tax revenue.

RATE

The GST is imposed at variable rates on variable items. The rate of GST is 18% for soaps and 28% for washing detergents. GST on movie tickets is based on slabs, with 18% GST for tickets that cost less than ₹100 and 28% GST on tickets costing more than ₹100 and 28% on commercial vehicles and private, and 5% on readymade clothes. The rate on under-construction property booking is 12%. Some industries and products were exempted by the government and remain untaxed under GST, such as dairy products, products of milling industries, fresh vegetables & fruits, meat products, and other groceries and necessities.

E-WAY BILL

An e-Way Bill is an electronic permit for shipping goods similar to a waybill. It was made compulsory for inter-state transport of goods from 1 June 2018. It is required to be generated for every inter-state movement of goods beyond 10 kilometers and the threshold limit of ₹50,000. A unique e-Way Bill Number (EBN) is generated either by the supplier, recipient, or transporter. The EBN can be a printout, SMS, or written on the invoice is valid. The GST/Tax Officers tally the e-Way Bill listed goods with goods carried with it. The mechanism is aimed at plugging loopholes like overloading, understating, etc. Each e-way bill has to be matched with a GST invoice.

Goods Not Covered under GST

• Petrol and petroleum products (GST will apply at a later date), i.e.
  • petroleum crude,
  • High-speed diesel,
  • Motor spirit (petrol),
  • Natural gas,
  • Aviation turbine fuel.
• Alcohol for human consumption (i.e. not for commercial use).

GST Council

GST Council is the governing body of GST having 33 members, out of which 2 members are off center and 31 members are from 28 states and 3 Union territories with legislation. GST Council is an apex member committee to modify, reconcile, or procure any law or regulation based on the context of goods and services tax in India.

The council contains the following members: (a) Union Finance Minister (as chairperson) (b) Union Minister of States in charge of revenue or finance (as a member) (c) the ministers of states in charge of finance or taxation or other ministers as nominated by each states government (as a member).

Goods and Services Tax Network (GSTN)

The GSTN software is developed by Infosys Technologies and the Information Technology network that provides the computing resources is maintained by the NIC. “Goods and Services Tax Network” (GSTN) is a nonprofit organization formed for creating a sophisticated network, accessible to stakeholders, government, and taxpayers to access information from a single source (portal). The portal is accessible to the Tax authorities for tracking down every transaction, while taxpayers have the ability to connect for their tax returns.