1. Managing Change and Transition

2. Constitutional Amendment and GST
1/12/2019

3. Why Constitutional Amendment ?
Clear demarcation in the Constitution between fiscal powers of the Centre and the States
Constitutional amendment to empower the Centre and States to concurrently levy and collect GST (Dual GST)
First concrete proposal the budget of and proposed to be levied from 1st April 2010
Constitutional amendment bill passed by Rajya Sabha on 03/08/2016 and Lok Sabha on 08/08/2016
Notified as Constitution (101st Amendment) Act 2016 on 08/09/2016
States to be compensated for any revenue loss for a period of five years
Notified as Constitution (101st 7

4. Alcohol for human consumption Entertainment tax levied by local bodies
Features of Constitution Amendment Act
Alcohol for human consumption
Power to tax remains with the State
Five petroleum products – crude oil , diesel, petrol, natural gas and ATF
GST Council to decide the date from which GST will be applicable
Part of GST but power to levy additional excise duty with Central Government
Tobacco
Entertainment tax levied by local bodies
Power to tax remains with the State 6

5. Indirect Tax Structure after GST
Central Taxes
State Taxes
Central Excise duty
Additional duties of excise
Excise duty levied under Medicinal & Toilet Preparation Act
Additional duties of customs (CVD & SAD)
Service Tax
Surcharges & Cesses
State VAT / Sales Tax
Central Sales Tax
Purchase Tax
Entertainment Tax (other than that levied by local bodies)
Luxury Tax
Entry Tax (All forms)
Taxes on lottery, betting & gambling
Surcharges & Cesses
GST 4

6. GST Council - Constitution
Chairperson – Union FM
Vice Chairperson - to be chosen amongst the Ministers of State Government
Members - MOS (Finance) and all Ministers of Finance / Taxation of each State
Quorum is 50% of total members
States - 2/3 weightage and Centre - 1/3 weightage
Decision by 75% majority
Council to make recommendations on everything related to GST including laws, rules and rates etc.
24 meetings held so far 7

7. Key Concepts in GST Law
1/12/2019

8. Key features of the GST Law (1/3) L
Destination-based Consumption Taxation
Tax on supply of goods or services rather than manufacture / production of goods, provision of services or sale of goods
On Intra-State supplies of goods or services - CGST & SGST shall be levied by the Central and State Government respectively
On Inter -State supplies of goods or services - IGST shall be levied by the Central Government
Availability of Input Tax Credit at every stage
Invoice level matching to claim input tax credit

9. GST SCENARIO (INTRA STATE TRADE OF GOODS) S A B C E CGST = 10%
SGST = 10%
VALUE ADDITION = 10%
ITC = INPUT TAX CREDIT
STATE TAX TOTAL = RS ( )
SGST =
ITC = (11)
Cash =
SGST =10 S
SGST = 11
ITC = (10)
Cash=
DEALER
CONSUMER
INPUT MANUFACTURER
CAR MANUFACTURER A B C
CGST = 11
ITC = (10)
Cash = 1
CENTRAL TAX TOTAL = RS ( )
CGST =
ITC = (11)
Cash =
CGST = 10 E
TAX INVOICE C
COST = 110
VALUE = 121
CGST =
SGST =
INVOICE VALUE =
TAX INVOICE B
COST = 100
VALUE = 110
CGST =
SGST =
INVOICE VALUE = 132
TAX INVOICE A
VALUE = 100
CGST =
SGST = 10
INVOICE VALUE = 120

10. Union territory without legislature
Understanding CGST, SGST, UTGST & IGST
CGST +
SGST
IGST
State 1
Foreign Territory
IGST
CGST +
SGST
IGST
IGST
CGST +
UTGST
State 2
Union territory without legislature 5

11. Key Features of the GST Law (2/3)
All transactions and processes only through electronic mode – Non-intrusive administration
PAN Based Registration
Registration only if turnover more than Rs. 20 lac
Deemed Registration in three working days
Provision of Composition Scheme: Quarterly return
Invoice Level matching to claim input tax credit 11

12. Key Features of the GST Law (3/3)
Tax can be deposited by internet banking, NEFT/ RTGS, Debit/ credit card and over the counter
Refund to be granted within 60 days
Provisional release of 90% refund to exporters within 7 days
Refund to be directly credited to bank accounts
Anti-Profiteering provision 12

13. GST Network (GSTN)
A section 25 non profit company with Strategic Control of the Government
To function as a Common Pass-through portal for taxpayers-
submit registration application
file returns
make tax payments
To develop back end modules for 27 States/UTs (MODEL –II)
Infosys appointed as Managed Service Provider (MSP)
73 GST Suvidha Providers (GSPs) appointed (34 in first round) 15

14. Main GST Council Decisions prior to 1st July 2017
1/12/2019

15. GST Council – Main Decisions prior to 1st July 2017
GST Council emerging as unique example of cooperative federalism
Approval of all laws, rules and rates in time bound manner
Four tax rates namely 5%, 12%, 18% and 28% plus exempt
Cess over peak rate of 28% on specified luxury and demerit goods
Fitment of goods/ services in different tax slabs
Threshold limit for exemption to be Rs. 20 lac (Rs. 10 lac for special category States)
Compounding threshold of Rs. 75 lakhs with -
Categories
Tax Rate
Traders 1%
Manufacturers 2%
Restaurants 5% 8

16. GST Council – Main Decisions prior to 1st July 2017
To ensure single interface – all administrative control over
90% of taxpayers having turnover below Rs. 1.5 cr would vest with State tax administration
10% of taxpayers having turnover below Rs. 1.5 cr. would vest with Central tax administration
taxpayers having turnover above Rs. 1.5 cr. would be divided equally between Central and State tax administration 9

17. Compensation Mechanism for States
Revenue of all taxes subsumed in GST by the State for as the base
Assumption of 14% Annual Growth Rate
Compensation to be provided through Cess
Cess only on few specified luxury and demerit goods 10

18. Managing Change and transition
1/12/2019

19. Three tier structure for GST implemetation
Revenue Secretary
GIC Implementation Committee
Seven Standing Committees
Law Committee
Fitment Committee
Single Interface Committee
Publicity and Outreach Committee
Capacity Building and Facilitation Committee
Fund Settlement Committee
Guidance Notes Committee
18 Sectoral Groups 10

20. Some important recent decisions of GSTC
GST Council responsive and agile to feedback of trade, industry and stakeholders
Introduction of Summary Return Form GSTR 3B
Extension of dates for filing returns from time to time
Rationalization of tax rate for many commodities
Constitution of two GoMs:
IT issues
Composition Scheme and Restaurant Tax Structure 10

21. Some important recent decisions of GSTC
Committee of officers under chairmanship of Revenue Secretary on export
Committee on simplification of returns under chairmanship of Chairman GSTN/ UIDAI
Constitution Law Review Committee and an advisory group to Law Review Committee 10

22. Responding to the needs of Exporters
Problem of Working Capital Blockage
Manual Refund system introduced to GST/IGST already paid
Imports permitted like before (Advance Authorization, EPCG and 100% EoU Schemes) and without payment of IGST/ Cess
Domestic supplies to be treated as deemed exports to holders of AA/ EPCG / EoU and suppliers to get refund
E-Wallet Scheme: Permanent long term solution
GST on duty credit scrips reduced from 5% to nil 10

23. Responding to the needs of the MSME sector
Threshold increased from Rs 75 Lacs to 1 Crore under composition scheme and also allowed to deal with exempt services
Inter state service providers with turnover of less than Rs 20 lacs also exempted from registration
Quarterly return filing for SMEs with turnover less than Rs 1.5 Crores
Reverse charge Mechanism under Section 9(4) of CGST Act suspended till
Taxpayers not to pay GST at the time on receipt of advance 10

24. Decisions on recommendations of GoM on Composition
Levy uniform rate of tax of 1% for manufacturers and traders
Turnover of only taxable goods counted towards tax in case of traders
Supply of services by composition taxpayers permitted up to Rs 5 Lacs
Amendment in law to enhance eligibility under composition scheme to Rs 2 Crore and then enhance eligibility for composition to Rs 1.5 Crore
Amendment in Law to allow composition scheme to job work services 10

25. Long term benefits of GST
One Tax in place of many taxes: Simplified tax regime
Common National Market: Same tax in all states
Reduction in cascading of taxes: Reduced prices
Non-Intrusive Electronic Tax System
Self-Regulating Tax System
Boost to exports, make in India and FDI
Poorer states to gain as GST is destination based tax 10

26. Way Forward
Handling initial IT glitches and timely development and implementation of remaining modules
GST Suvidha providers to be activated
User friendly offline utilities
More GST outreach and awareness
Handholding of small taxpayers
Introducing E-Wallet Scheme for exporters
Further rationalization of rates
Introducing nation wide E-Way Bill System
Relook at the laws with focus on ease of doing business and reducing compliance burden 23

27. Thank You 23