Model GST bill cleared, covers e-com as well

NEW DELHI: The empowered committee of state finance ministers on Tuesday cleared the model goods and services tax (GST) bill, preparing the ground for the introduction

NEW DELHI: The empowered committee of state finance ministers on Tuesday cleared the model goods and services tax (GST) bill, preparing the ground for the introduction of the bill in the upcoming monsoon session.

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The law, which addresses almost all concerns of states and the industry, has brought online purchases within its ambit.

The Bill says that in place of local levies, GST will be levied at the first point of financial transaction. This addresses the issue of goods that are sold in one state but delivered in another.

The model GST law has also provisioned for jail terms of up to five years and fine for violation of the provisions of the statute.

“We request all stakeholders to give their suggestions/ comments to secretariat of Empowered Committee of FMs and or to finance ministry,” revenue secretary Hasmukh Adhia said in a tweet on Tuesday.

Virtually all states have supported the idea of GST except Tamil Nadu which has “some reservations,” finance minister Arun Jaitley said after the meeting of empowered committee in Kolkata.

The finance minister, however, said there was “no deadline as such” for implementation of the GST, which aims to subsume a gamut of state and central level levies.

The law provides for voluntary disclosures, implying that every registered taxable person shall himself assess the taxes payable under this act and furnish a return for the tax period.

Any tax payer who fails to furnish the details of outward or inward supplies or returns by the due date will be liable to a late fee of 100 a day, subject to a maximum of 5,000.

It further provides for setting up of a Consumer Welfare Fund to be utilised by the Centre or states. “The central/state government shall maintain proper and separate account and other relevant records in relation to the fund in such form as may be prescribed in consultation with the comptroller auditor general (CAG),” the model law said.

The model law also provides for a chapter of the Authority for Advance Ruling and an Appellate Authority in each state.

It further clarifies that a levy of not less than 1% will be taxed as compositional levy on a person whose annual turnover on sale of goods and services in a single state is less than 50 lakh.

The empowered Committee has also cleared the model Integrated GST law, which has to be approved by both the Centre and states. IGST will apply on inter-state sale of goods and services. The central GST law has to be approved by the Centre while each state will have to pass their own state GST laws.

INDUSTRY HAILS DRAFT

“We look forward to the positive movement and with these initiatives, it is expected that implementation of GST with effect from April 1, 2017 will become a reality,” said CII director general Chandrajit Banerjee.

“Lot of hard work seems to have been put in for arriving at broader consensus with the states... Hectic times ahead for industry. All eyes on the monsoon session now for passage of the constitutional amendment bill,” said Pratik Jain, leader, indirect tax, PwC India.

(With PTI inputs)