aspects of GST

GST applicable on supply of goods or services:

In GST, all the legal regime such as sales, bartering, leasing, transferring, importing or exporting of goods/services made for consideration. GST will be applicable on supply of goods/services erstwhile other taxable events such as sale, manufacture, provision of services etc. may lose their relevance.

Further, even if some of the supplies are not made into consideration such as permanent transferring of assets, retaining the assets after deregistration, self-supply of goods or services will also attract GST. Bartering of goods transaction was untaxed in VAT regime, but it attracts GST.

GST payable as per time of supply:

The liability to pay CGST/SGST will determined at the time of supply of goods or services. In this provision, it will clearly prescribe what time will be good for the supply of goods and services.

It may be with so many parameters to determine the time of supply. But the important thing is to reconciliation between the revenue of the financial and as per the GST rules would be the greatest challenge to meet.

The main key is to determine the place of supply:

In order to over rid the ambiguity between the interstate and intra state supplies of goods and services. Draft GST law have introduced separate provisions which facilitates to assessee for determining the place of goods/services.

Typically, for goods, the place of supply will be the place where the goods got delivered. For services, the place of supply is where the location of the recipients. There are multiple scenarios to determine the supply of services in relation with the immovable property etc. wherein this generic principle will not be applicable to determine. Specific provisions only are able to determine the place of supply. Thus the business scrolls through all the place of supply provisions before determining the place of supply.

Valuation in GST:

GST would be payable on the transaction value. Transaction value is the price paid/payable for the supply of goods or services between two un-related parties. The transaction value is also said to include all the expenses such as packing, commission etc. If subsidies involved in this supply, it also could be included. Discounts/incentives can be given before or at the time of supply is permissible and it can be deducted from the transaction value.

Input tax credits in GST:

Current CENVAT disallows credit on various areas such as catering services, employee insurance, Catering services, construction of civil structure etc. As like centre, State VAT also restricts input tax credit in respect of motor vehicle, construction etc. this denial of ITC creates unnecessary burden on assessee. It was expected that in GST, there will be seamless credits to the business houses without any denial or restriction (except the goods or services which are used for personal purposes rather than official uses). The credits proposed to be denial to the private or personal consumption to the extent. This continuation leads to substantial cascading (as the rates of GST will be more than the current rate of service tax).

There would be 33 GST laws in India:

As per GST regime, there will be 1 CGST law and 32 SGST law for each of the states including two union territories. One IGST law, this is for the inter supply of goods/services.

Time limit for show cause notices:

Before going to the time limit, first we need to understand what is “Show Cause Notices”?

It’s a court order that requires a person to stand before the court and provides the information that why the court should not allow the course of action to be taken against it. If the person fails to show the cause or not appear in the court, then the particular action can be taken.

Time limit for issuance of SCN for fraud, suppression etc. cases would be five years, other than fraud; suppression etc. cases would be three years. It is pertinent to note that the GST proposed time limit is much more than the existing excise law i.e. 12 months and service tax legislation i.e. 18 months. This will give the leeway to authorities to assess it by taking the duration of 3 years.

Old provision re-introduced:

Most of the existing provisions such as tax deduction, reverse charge, pre-deposit, arrest, prosecution etc. have been continued in the GST law.