BACKGROUND OF IMPLEMENTATION OF GST IN INDIA AND RECENT UPDATE OF GST IN INDIA

BACKGROUND OF GST

1. Gradual implementation of GST

S.N.	YEAR	EVENT
1	2000	1.     Prime Minister of India initiated the concept of GST 2.     Committee was set up to form GST model
2	2003	Central Government formed task force.
3	2006-07	Finance Minister of India declared that GST will come into effect from 01 April 2010.
4	2014	19 December NDA Government tabled the (122 nd Amendment) Bill 2014 in the Parliament.
5	2015	06 May Lok Sabha passed the bill.
6	2016	03 August Rajya Sabha passed the bill
7	2016	08 September President signed the same and Constitution (101 Amendment) Act 2016 comes into effect.
8	2017	27 March the following Bils comes into effect: Central GST Bill 2017 Integrated GST Bill 2017 Union Territory GST Bill 2017 GST (Compensation) Bill 2017
9	2017	29 March, Loke Sabha Passed the bills.
10	2017	17 April GST got Presidents Assent.
11	2017	30 June, all the states except J & K passed GST Act.
12	2017	01 July, GST introduced.
13	2017	08            08 July, GST is implemented in J & K.

2.       GST subsumes multiple Indirect Tax including Entertainment Tax and Entry Tax.

3.       FRANCE was the first country in the world who introduced GST in 1954.

4.       India adopted DUAL GST model where both Central and State Govt. charged separate GST.

5.       Before GST double taxation was there, for example Software was subject to Service Tax and GST.

6.       In pre GST era Cen VAT and State Vat was also imposed on same supply.

7.       GST is DESTINATION based tax.

8.       The threshold amount of compulsory registration  is different under different situation. The Maximum amount is amount of exempted threshold limit is  Rs. 40 Lakhs in case of supply of goods. And in case of supply of service it is 20 Lakhs.)

9.        Set off against IGST cabn be made with IGST / CGST / SGST.

10.    IGST set off will have to made first against CGST and then SGST.

11.    GST Portal is named as www.gst.gov.in owned by GST NETWORK is a Section 8 Company.

12.           Functions of GST Portal

i)               Registration

ii)             Return filing

iii)            Settlement of IGST.

iv)             Matching tax payment with Bank

v)             MIS report generation

vi)             Tax payers profile analysis.

13.      Portal for generation of waybill www.waybillgst.gov.in managed by NIC, ministry of Electronics and Information Technology, GOI.

14.    GST Subidha Providers (GSP) are certain IT, ITes and Financial Technology companies which develop certain applications may be used by Taxpayers. They may take help of ASP( Application Service Providers)

15.    Compensation Cess is governed by GST (Compensation to States) Cess Act 2017 for the purpose of compensation to States. It is applicable on

i)               Luxurious  items

ii)             Demerit Goods (Pan Masala, Tobaco, Aerated Water, Motor Car etc.)

iii)            On intra and Inter State transactions

16.    GST is not livyable on:

S.N.	ITEM	NATURE OF DUTY AT PRESENT
1	Alcoholic liquor for human consumption	Subject to CST / VAT
2	Petroleum Crude	Cen VAT applicable on Production CST / VAT is applicable on sale.
3	Diesel
4	Petrol
5	ATF
6	Natural Gas

17. Tobaco is still subject to GST & Central Excise both.
18. Opium, Indian Hemp, Other Narcotic Drugs and Narcotics are subject to GST and State GST.
19. Different benefits of GST:

i)               Unified National Market is created with common tax rate and procedure

ii)  Boost to “Make in India Strategy” by making the production and service of India competitive in National and International market, which will create India as a manufacturing hub.

iii)                   Enhancement of Investment and Employment:

a)     By subsuming major Central and State Taxes

b)    Complete and comprehensive set of principles of ITC on Goods and Services.

c)     Phasing out of CST, which will ultimately help Investment and boost Indian Export, with a boost in manufacturing activities

d)    Generation of employment.

iv)                    Simplified tax structure:

a)     Ease of doing business

-       in the simplified tax regime, 

-       reduction of multiplicity of taxes,

-       simplification and uniformity of law

b)    Certainty of Tax Administration by common classification of Goods and Services. 

v)                     Ease of Tax Compliance:

a)     Simplified and automated procedure and all work through common portal.

b)    Reduction of compliance cost

-       Reduction of record keeping of varity of taxes

-       Uniformity of law and procedure

20. Advantages for Trade and Industry:

1.              Benefits of Agriculture and Industry

i)               Comprehensive  and wider coverage of ITC setoff.

ii)             Subsuming of several taxes

iii)           Better Tax compliance.

iv)            Lowering tax burden

2.              Mitigation of ill effect of cascading and liquidity of business is improved

3.              Benefits to small traders and entrepreneurs:

i)               Increased Threshold

ii)             Single registration in one state

iii)           Availability Composition scheme

iv)            Participation in seamless national market.

21. Constitutional Provision:

21.1Federal structure of India is three tyre

·       Union Government

·       State Government

·       Local Government

21.2Constitution of India has Preamble and 25 Parts containing 448 Articles and 12 Schedules.

  

21.3     Different Articles of constitution and dealing with:

Article	Dealing with
265	Authority of law is necessary for levy and collection of tax, which means there should be legislative provisions.
245	Power of Enactment of law  is conferred on the Parliament with regard to whole of India State Legislature for respective state. Note: Parliament can make law with extra territorial operation
246	Respective authority to Indian and State Government. List 1 (Entry 82 -91):  Central Government has exclusive right to make law. List 2 (Entry 45-63):  State Government has exclusive right. List 3 : Both the Govt. has power. Note: Parliament has the power to make law for matters even which is mentioned in part 2, if the law is applicable a place which does not fall in any state.
82	Central Government has the power to tax on income except on Agricultural Income.
83	Is related to Custom duty.
246 A	Is introduced by (101st Constitutional Amendment Act) 2016.

22.           Duty applicability:

22.1Central Excise by Central Government on Manufacturing.

22.2 VAT by State Government once the goods entered the stream of trade.

22.3On Inter State transaction CST Central Government has the power of levy and the collection is made by State Government.

22.4For implementation of GST the amendment of Constitution was made.

22.5Integration of Cenvat, Additional Duty of Customs, State VAT and other State specific taxes.