Article 246A of the Constitution, which was introduced by the Constitution (101st Amendment) Act, 2016 confers concurrent powers to both parliament and state legislatures to make laws with respect to GST. However, -clause 2 of Article 246A read with Article 269A provides exclusive power to the Parliament to legislate with respect to inter-state trade or commerce.
In this note I have tried to analyse the provisions of Levy of tax and exemptions that can be availed from payment of tax and provisions as per SCHEDULE III
Supply of goods and/or services. CGST & SGST will be levied on intra-state supplies while IGST will be levied on inter-state supplies.
The Terms used in this sections needs to be understood as the New GST Act levy destination based tax.
If we go by the wordings of the tax as such we have many questions in mind that needs to be answered to clarify the situation.
The point wise summary of Levy under Act can be understood as explained hereunder.
1. The charging section is section 7 (1) of CGST/SGST Act and Section 4(1) of the IGST Act.
2. On the recommendations of Council the state govt/ central govt shall specify categories of supply of goods /services on which the tax is payable by reverse charge.
3. The Tax in such case shall be payable by person receiving the goods/services as he is liable to pay the tax in relation to such goods and services.
4. Composition Scheme is applicable to taxable persons u/s 8 of the act, whose turnover during the financial year does not exceed 50 lacs.
5. The Tax rate Composition scheme shall be such as may be prescribed but not less than 1% of the turnover during the year.
6. Based on Provision as above stated The GST Act talks of Aggregate Turnover Sec 2(6) . This provision of the section is silent and it is considered as Aggregate Turnover
7. Composition Scheme is not applicable in case the taxable Person effects Inter state Supplies of Goods & / or services.
8. Composition Scheme shall be Applicable to all the Business Verticals with the same PAN.
9. The taxable person Shall not be entitled for Input tax Credit ITC. Nor would he collect any tax from the recipient of supplies.
10. In case the person is not eligible for Composition Scheme, the tax liability shall be Tax + Interest and Penalty which is equivalent to the amount of tax.
11.Return filing under Composition Scheme has been prescribed under GSTN Quarterly return under GSTN 4 by 18th of the Next Month for the quarter ending. That means the date for quarterly returns will be 1st Qtr- by 18th July , 2nd Qtr –by 18th Oct, 3rd Qtr by 18th Jan, 4th Qtr by 18th April.
Section 9 of Model GST Act explains the concept of Taxable person.
Requirements:
Must have carried business in India and registered under Schedule III of Model GST Act with few exceptions.
a) Agriculturist
b) Any person who provides services as an employee to his employer, in the course of his employment.
c) Persons engaged in supplying goods and services which are not liable under the ACT.
d) Any person who is liable to pay tax under section 7(3) for receiving services for personal use. The exemption limit is yet to be finalised.
Schedule III of the Act LIABILITY TO BE REGISTERED Requirements:
1 Aggregate turnover is > 20 lacs and 10 lacs in NE states.(with effect from 23rd September, in the meeting of Finance minister Sri Jaitley Ji, this lacuna has been fixed at 20 lacs and 10 lacs in North Eastern States). If a trader's turnover is less than the threshold limit per annum, he won't be covered under the indirect tax.
2. The aggregate turnover of the supplier consists of only goods & services which are not liable to tax. Note that the threshold limit shall include all the supplies made on his on account and his principals. Supplies send for job work to registered Job Worker under section 43A shall not form part of aggregate turnover.
3. Every person who hold licence under the earlier Law shall be liable to be registered with effect from the appointed day.
4. In case the business is transferred by succession or going concern, the Transferee or the successor shall be liable to be registered.
5. In the case of any scheme of arrangement of amalgamation, merger, demerger by the order of the High court, the transfree company shall be liable to be registered with ROC on the date of issue of certificate of Incorporation.
Under Para 5 of Schedule III of the Act, the following persons shall be liable to be registered.
1. Persons making interstate supply. This seems simple but on an analytical view ew can imagine how interstate supply can be effected in states with different SGST/or Like SGST.
2. Casual taxable persons. (Not defined under the act)
3. Persons liable to pay tax under reverse charge.
4. Non-resident taxable persons.
5. Persons required to deduct the Tax under section 37.
6.Persons who supplies goods and services on behalf od other registered taxable person.
7. Input Service Distributor.
8. Persons who supplies goods other than the branded services through electronic commerce operator.
9. Every Electronic Commerce Operator
10. An Aggregator.
11. Any class of persons as may be notified by CG or SG or Council.
Remission of tax on supply
Section 11 says that by rules made under this subsection remission of tax on supplies which are deficient in qty by means of natural calamity
Rule may also set the limit or limits the % beyond which the remission shall not be allowed.
The author can also be reached at sanjayaggarwal2006@gmail.com
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