The Central Goods and Service Tax Bill 2017 (CGST)

Key highlights of the bill

Ø The Central Goods and Services Tax Bill, 2017 was introduced in Lok Sabha on March 27, 2017.  The Bill provides for the levy of the Central Goods and Services Tax (CGST).

Ø Levy of CGST :

The CGST will levy  on the supply of goods and services within the boundary of a state.  Supply include sale, transfer and lease made for a consideration to further a business.

Ø Tax rates :

The tax rates will be recommended by GST Council. It will not exceed 20%. Further it allows flat rate of GST on turnover, instead on the value of supply of goods and services (under composition levy) to certain taxpayers whose turnover is less than Rs. 50 lakh.

Ø Exemptions from CGST :

Certain goods may exempt from the purview of GST through notification based on the recommendation of GST council.

Ø Liability to pay CGST :

Liability to pay CGST will arise on the date of (a) issue of invoice or (b) receipt of payment whichever is earlier in relation to supply of goods and services.

Ø Value of supply for levy of CGST (Taxable value):

Taxable value of goods and service for levy of CGST will include :

(a)  Price paid on the supply

(b) Taxes and duties levied under a different tax law

(c)  Interest, late fee, penalties for delayed payments.

Ø Input Tax credit under CGST :

Every taxpayer while paying taxes on outputs, may take credit equivalent to taxes paid on inputs.  However, this will not be applicable on supplies related to:

 (a) personal consumption,

 (b) supply of food, outdoor catering, health services, etc. unless they are further used to make a supply.

Ø Registration :

Threshold limit for mandatory registration under GST :

Rs. 20 Lakh for other than special Category of States.

Rs. 10 Lakh for Special category of states*

* Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

Ø Returns :

Every taxpayer will require to file return on monthly basis. In addition to monthly return taxpayer will also require to file annual return.

Ø Transition to the new regime:

Taxpayers with unutilised input tax credit obtained under the current laws such as CENVAT may utilise it under GST.  In addition, businesses may also avail input tax credit on stock purchased before the start of implementation of GST.

Ø Anti-profiteering measure:

The central government may by law set up an authority or designate an existing authority to examine if reduction in tax rate has resulted in commensurate reduction in prices of goods and services.  The powers of the authority will be prescribed by the government.

Ø Compliance rating

Every taxpayer shall be assigned a GST compliance rating score based on his record of compliance with the provisions of this Bill.  The compliance rating score will be updated at periodic intervals and be placed in the public domain.

The Central Goods and Service Tax Bill 2017 (CGST)