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2016
  • Goods and Services Tax (GST) is by far the most significant and comprehensive reform in Indian taxation history. Every business, small or big, is bound get impacted by it. Therefore, it becomes all the more important to prepare for GST well in advance. Should GST roll out from April 2017, this is your 7 point list that need your attention for seamless transition to GST:
    1. Re-vamp ERP: Your ERP structuring has to undergo a major change, be it coding or invoice generation. Be it purchase order booking or expense recording. The first thing that needs attention is ERP.
    2. Modify contracts: Companies, in practice, enter into annual contracts. Therefore, many contracts entered today would speak of delivery of service/ goods post April 2017 also i.e. post GST. Make sure an appropriate addendum is made to contracts to align it with GST.

2016

INTRODUCTION:

  • Tax point or time of supply provided under revised Model GST Law is different from current scenario. In excise, time of supply is removal of goods. In service tax, point of taxation is date of invoice and date of payment subject to date of completion of service. However, in VAT Laws, tax point is date of invoice since sale cannot be made without invoice. But under GST, provisions for time of supply of goods and services have been provided separately to avoid such ambiguities. Here we are providing decoding of time of supply under GST Model Law.

DECODING OF TIME OF SUPPLY OF GOODS

  • Revised Model GST Law has defined the time of supply of GOODS under 4 categories:
    • Time of supply of goods under forward charge.
    • Time of supply of goods under reverse charge.
    • Time of supply in case of supply of vouchers.
    • Residuary clause.

2016
  • Finally, anti profiteering will become a reality in lieu of Section 163 incorporated under the Revised Model GST Act, 2016. It must be known that the GST Council secretariat has issued the revised model GST Act,2016 through CBEC on 25.11.2016.

Section 163. Anti-profiteering Measure

(1) The Central Government may by law constitute an Authority, or entrust an existing Authority constituted under any law, to examine whether input tax credits availed by any registered taxable person or the reduction in the price on account of any reduction in the tax rate have actually resulted in a commensurate reduction in the price of the said goods and/or services supplied by him.
(2) The Authority referred to in sub-section (1) shall exercise such functions and have such powers, including those for imposition of penalty, as may be prescribed in cases where it finds that the price being charged has not been reduced as aforesaid.

2016

Key changes in Revised Model GST Law and suggestions invited for submission to Government

  • Taking into consideration majority of the concerns raised by the Trade and Industry, the Government has, on November 26, 2016, released the Revised version of the Model GST Law along with Draft GST Compensation Bill. Apart from addressing key concerns of the Industry in a very decent manner, the Revised Model GST Law has also proposed an anti-profiteering mechanism to ensure benefit of lower taxes is shared with consumers, and also ensures no tax on securities and subsidies provided by the Government.
  • The Draft GST Law is a model which the Central Government and each of the State Governments would use to draft their respective Central and State GST Acts. Further, a Revised Model of the Integrated GST Act, 2016, which will govern levy of GST on inter-State supplies by the Central Government, is also issued.

2016
  • The threshold limit has been provided as the person whose aggregate turnover in a financial year exceeds Rs 20 lacs for all over India except north eastern states and Rs 10 lacs for north eastern states regarding the taxable supply of goods and services. Person Under GST includes proprietorship, HUF, company, partnership firm, LLP and any other legal entity.
    • Persons making Interstate supply, irrespective of any threshold limit
    • Casual taxable persons irrespective of the threshold limit
    • Persons who are required to pay tax under reverse charge for personal use beyond threshold limit or for other use

2016
  • By now you would have woken up to the news of Rajya Sabha passing GST bill and being one step closer to implementation of the biggest tax reform in India since 70 years. GST is set to replace at least 17 federal and state taxes to implement a single and unified tax – Goods and Services Tax. The reason that our Hon’ble Prime minister Mr. Narendra Modi was vouching fervently for the bill to pass because it will help to increase at least 2% in the current GDP and that is a huge amount in itself, stemming India as one of the fastest growing economies in the world.
  • For long India’s tax system had layers of direct and indirect taxes which added somewhere between 25% and 40% to the COGS. Currently, abolishing all the taxes in between, GST is pegged at between 18% and 20%, with only 8 months left to implement the same – a timeline that Mr. Narendra Modi has set for the rollout.
  • It is beyond doubt that all industries will get affected by this news. With a standard of 18% being speculated to being implemented, there will be some areas that the consumers may benefit and some places where it might not. Looking at banking and financial sector, one of the crucial sectors for consumers, one might say that it can get a bit expensive for the consumers.

Financial Management