Goods and Service Tax Updates

1. TRAINING NEW EMPLOYEES
GST – India-Updates
Rajesh Sharma
AGM-IT
Dainik Bhaskar Group

2. SAP – GST - Updates
• The Goods and Services Tax (GST) is going to
impact every industry opening up many
opportunities. However, migrating to a GST
compliant system will bring a lot challenges
as well. Here are the some latest updates on
the new tax reform to help you prepare for
the implementation.

3. GST Roll Out

4. While the implementation date is 3
months behind the schedule that is July 1,
2017, it is expected that the indirect tax
rate under the current regime, may get
aligned to the GST rates and taxation
framework, pending the enactment.
The new date has provided industries
with a time frame to plan for initiatives
that require process and technology
changes to leverage the business benefit
that will accrue to the economy.

5. GST Rates

6. In November 2016, the GST council
recommended key slab rates as 28%,
18%, 12% and 5%. The goods of mass
consumption might attract
NIL/lowest slab rate of tax. Also, the
rate of service tax is likely to increase
from current 15% to 18%.
Under the GST regime, the State and
Centre will collect taxes at identical
rates. In addition to this, the luxury or
sin goods can be subjected to
additional cess.

7. Challenge for Industry to Maintain
Status Quo for Profits
• With GST, industries are
expected to maintain status
quo on profits. India Inc. needs
to be aware and conscious of
the anti-profiteering
provisions that may become
applicable in case the benefit
of availability of the input
credit or reduction in the GST
is not adequately passed on to
the consumers. The GST
legislation provides for an
authority to examine whether
GST benefits are passed to
consumer through appropriate
pricing changes.

8. AUTHORITY FOR
GST
ADMINISTRATION

9. Authority for GST Administration
The appropriate GST administration authority
for assessments for State or Centre, will be
decided by the program. Thus there will be
sharing of the entire tax base of assesses by
the Centre and the State as per pre-
determined ratio.

10. Authority for GST Administration
• During the GST council meeting on January
16, 2017; following were the key decisions
with respect to administration of GST law by
the States
• Powers to levy tax on economic activity
within 12 nautical miles of territorial waters
• Powers to assess and administer 90% of the
tax payers under INR 1.5 crore
annual turnover

11. Authority for GST Administration
Assessee with a turnover over INR 1.5 crore will be
administratively controlled by the Centre and the States in
equal measure. However, the above decisions of the GST
council are being widely contested on the grounds of
constitutional validity.
The States are also expected to receive significant level of
financial assistance to sail smoothly through the GST
transition.

12. Authority for GST Administration
• The industry could face a
challenge in supply
destination. In case there
is a dispute between the
States over the supply
destination, it is agreed
that the Centre will have
the power to administer
those assessed. Further, in
all situations the Centre
has the power to collect
the taxes.

13. Way Forward

14. Way Forward
• The issues that reached an
agreement will be appropriately
included in the IGST, CGST and
SGST law. The draft laws will be
discussed and submitted for
approval to respective
legislative bodies in the ensuing
GST council meeting. Also, the
GST officials are expected to
complete the classification of
various goods and services
under the respective rates by
end of March 2017. Following
this, a dry/pilot run will be
carried out on the GSTN.

15. Waiting
• A meeting of GST council is convened and
scheduled to be held on February 18, 2017.
Watch out for a detailed calendar of the
events of enactment and other notifications
under the GST law.

16. • Stay tuned for more updates and latest news
on the game changing reform in India.
Rajesh Sharma