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Content at Glance :-

1.0 Editor’s Column1. The Indirect Tax Dispute Resolution Scheme 2016

2. Appeals and Revision Mechanism under Model GST Law

2.0 News & Updates

1. Monsoon Session: Congress to line up allegations of 'scams', GST under threat

2. GST bill may get a new life

3. Congress hints at dropping key GST demand

4. Traders' bodies seek changes in GST draft

5. We hope that the (GST) System would be ready by February: GST Network's Navin Kumar

6. Industry demands cut in excise duty on dairy products

7. Excise relief to jewellers to end with implementation of GST

8. Naidu urges Azad to push GST bill in Monsoon session

9. GST may see another roadblock over SC verdict on Arunachal Pradesh

10. New-look Session; All Eyes on Whether GST Gets Nod

11. PM Narendra Modi: Thank all for stand on Kashmir, now need to pass GST Bill

12. GST Bill: The sticky points and what is possible

13. BJD makes stand clear, will support GST Bill with riders

14. Monsoon Session: Opposition may spare GST bill, not Arunachal and Uttarakhand issue

15. GST may address dual taxation impact on media sector: Deloitte

16. GST Bill: Will respond after seeing draft of legislation, says P Chidambaram

17. BSP to support GST with some proposals

18. Will fulfill nation's expectations with passage of GST: Govt.

19. Congress, not BJP, may now profit from GST

20. GST hopes brighten, govt plans 5-hr debate in RS

21. Here Is How Goods & Services Tax (GST) Will Benefit Indian Economy

22. Will GST be Levied on Securities Such as Shares?

23. GST Bill: Odd numbers

24. Rahul Gandhi vs RSS: What does it mean for GST Bill?

25. GST to unify indirect taxes regime: report

26. GST to help track evasion of CVD

27. GST Bill: Furore amongst taxpayers; here’s why


28. Can proposed GST be called Indirect tax?

29. All Cargo Logistics sees efficiency gains after passage of GST

30. Nitish backs centre on GST, pressure mounts on Cong

31. Government counts on regional parties for GST numbers

32. Countdown to showdown on GST begins

33. GST is a Big Reform but Beware Its Implementation

34. Reduce stamp duty for affordable housing: Naidu

35. One India, one market

36. After passing GST Bill, remove the serious flaws in it

37. 'GST will bring competitive taxation'

38. Tea to be costlier after GST

39. Internal differences in BJP delaying passage of GST bill: Congress

40. ‘GST has to be flexible to embrace new businesses’

41. GST: Bihar govt to oppose dual tax on small farmers

42. GST Bill: Congress objections ‘purely political’, should reconsider stand, says India Inc

43. Consensus On Tax Reform GST Appears To Crumble, Congress Furious

44. GST in limbo, but Centre works to include fuels

45. GST and its wrinkles

46. States reject GST rate proposed by Arvind Subramanian panel

47. Hope floats again for GST bill: Centre and states agree on fixing rate

48. GST Bill: Uncertainty continues as states don’t agree on rate

49. GST Bill: Support it Rahul Gandhi, and show who is the boss in the Congress

50. Cabinet approves amendments to GST Constitution bill

51. How GST deal was clinched

52. GST is also about trucks moving freely

53. Circular No. 196/06/2016-ST dated 27-07-2016

54. GST bill pending in Rajya Sabha requires amendment: P Chidambaram

55. Streamline tax disbursal under GST regime: States tell Centre

56. GST in RS next week, govt's fingers crossed

57. Cabinet drops 1% additional tax from GST Bill

58. India Inc waits for timely rollout of GST

59. Logistics stocks rally as govt paves way for GST bill clearance

60. Rajya Sabha to take up GST bill next week

61. Government considering industry suggestions for ideal GST Bill: CBEC


62. Why some economists think GST is over-hyped: It won't help you or me

63. GST Bill: Good job Cabinet, it's only a matter of time now

64. Final GST rate may be as low as 15%

65. GST: Lessons from countries that have implemented the Goods and Services Tax

66. GST Bill: Will the first step be taken next week?

67. GST not to apply to J&K in current shape, state FM

68. Parties give thumbs up to GST, but with riders

69. PM Modi holds meeting with top ministers to discuss GST

70. RS Likely To Pass GST Bill This Week

71. GST dispute resolution system a temporary measure

72. PM Modi meets ministers to discuss GST bill

73. GST to be simple with 1% additional tax removal, say experts

74. Grandfathering geographical exemptions in GST


1.0 Editor’s Column :

1.1 The Indirect Tax Dispute Resolution Scheme2016

1. IntroductionThis scheme has been introduced with the purposeof solving the disputes between the assessee and thedepartment. Under the scheme it is provided that incase of any dispute one has to just pay the basicduty, interest and 25% of the penalty imposed in theimpugned order and thereby the proceeding willcome to an end. Let us see the statutory provisionsof the scheme first. Relevant Notification 29/2016-CE(NT) dated 31.05.20162. Statutory Provision(1) This Scheme may be called the Indirect Tax Dispute

Resolution Scheme, 2016(2) It shall be applicable to the declarations made up to

the 31st day of December, 2016(3) It shall come into force on the 1st day of June, 2016.

(1) In this Scheme, unless the contextotherwise requires-

a) "Act" means the Customs Act,1962 or the Central ExciseAct, 1944 or Chapter V of theFinance Act, 1994 as the casemay be;

(b) "Assistant Commissioner"means the AssistantCommissioner of Customs orthe Assistant Commissioner ofCentral Excise or the AssistantCommissioner of Service Tax,as the case may be,

(c) "Commissioner" means theCommissioner of Customs orthe Commissioner of CentralExcise or the Commissioner ofService Tax, as the case maybe:

(d) "declarant" means any personwho makes a declaration undersub-section (1) of section 214;

(e) "designated authority" meansan officer not below the rank ofAssistant Commissioner whois authorised to act asAssistant Commissioner bythe Commissioner for thepurposes of this Scheme;

(f) "impugned order" means anyorder which is under challengebefore the Commissioner(Appeals);

(g) "indirect tax dispute" means a

dispute in respect of any of theprovisions of the Act which ispending before theCommissioner (Appeals) as anappeal against the impugnedorder as on the 1st day ofMarch, 2016;

(h) "prescribed" means prescribedby rules made under thisScheme;

(i) "tax" includes duty or taxlevied under the Act.

(2) Words and expressions used herein andnot defined but defined in the Act or therules made thereunder shall have themeanings respectively assigned to themin the Act or the rules made thereunder.

(1) Subject to the provisions of thisScheme, a person may make adeclaration to the designated authorityon or before the 31st day of December,2016 in such form and manner as maybe prescribed.

(2) The designated authority shallacknowledge the declaration in suchform and manner as may be prescribed.

(3) The declarant shall pay tax due alongwith the interest thereon at the rate asprovided in the Act and penaltyequivalent to twenty-five per cent. ofthe penalty imposed in the impugnedorder, within fifteen days of the receiptof acknowledgement under sub-section(2) and intimate the designatedauthority within seven days of makingsuch payment giving the details ofpayment made along with the proofthereof.

(4) On receipt of the proof of payment oftax, interest and penalty under sub-section (3), the designated authorityshall, within fifteen days of the receiptof such proof; pass an order of dischargeof dues referred to in sub-section (3) insuch form as may be prescribed.

The provisions of this Scheme shall not apply, if-(a) the impugned order is in

respect of search and seizureproceeding; or

(b) prosecution for any offencepunishable under the Act hasbeen instituted before the 1stday of June, 2016: or

(c) the impugned order is in


respect of narcotic drugs orother prohibited goods; or

(d) impugned order is in respect ofany offence punishable underthe Indian Penal Code, theNarcotic Drugs andPsychotropic SubstancesAct,1985 or Prevention ofCorruption Act. 1988: or

(e) any detention order has beenpassed under the Conservationof Foreign Exchange andPrevention of Smuggling Act,1974.

(1) Notwithstanding anything contained inany provision of the Act, upon thepassing of an order under sub-section(4) of section 214, the appeal pendingbefore the Commissioner (Appeals) shallstand disposed of and the declarantshall get immunity from all proceedingsunder the Act, in respect of the indirecttax dispute for which the declarationhas been made under this Scheme.

(2) A declaration made under sub-section(1) of section 214 shall becomeconclusive upon the issuance of anorder under sub-section (4) of section214 and no matter relating to theimpugned order shall be reopenedthereafter in any proceedings under theAct before any authority or court.

(1) Any amount paid in pursuance of adeclaration made under sub-section (1)of section 214 shall not be refunded.

(2) Any order passed under sub-section (4)of section 214 shall not be deemed to bean order on merits and has no bindingeffect.Explanation.-For the removal of doubts,it is hereby declared that nothingcontained in this Scheme shall beconstrued as conferring any benefit,concession or immunity on thedeclarant other than the benefit,concession or immunity granted undersection 216.

(1) The Central Government may, bynotification in the Official Gazette,make rules for carrying out theprovisions of this scheme.

(2) Without prejudice to the generality ofthe foregoing power, such roles mayprovide for all or any of the following

matters, namely:-(a) the form and the manner in

which a declaration may hemade under sub-section (1) ofsection 214;

(b) the form and the manner ofacknowledging the declarationunder sub-section (2) ofsection 214:

(c) the form and the manner ofissuing an order of dischargeunder sub-section (4) ofsection 214;

(d) any other matter which is tobe, or may be, prescribed, or inrespect of which provision is tobe made. by rules.

(3) Every rule made under this Schemeshall be laid, as soon as may be after itis made, before each House ofParliament, while it is in session, for atotal period of thirty days which may becomprised in one session or in two ormore successive sessions, and if, beforethe expiry of the session immediatelyfollowing the session or the successivesessions aforesaid, both Houses agree inmaking any modification in the rule orboth Houses agree that the rule shouldnot be made, the rule shall thereafterhave effect only in such modified formor be of no effect, as the case may be, so,however, that any such modification orannulment shall be without prejudice tothe validity of anything previously doneunder that rule.

3. AnalysisScheme is applicable from 1st day of June 2016. It isapplicable to all the declarations made by 31st

December 2016.It comprises of 7 sections in total starting fromSection 212 of the Finance Act 2016 and ending onSection 218 of the said act.Various terms used in the scheme are defined underSection 213:Clause (g) of Sub Section (1) of Section 213 of theFinance Act 2016 defines “indirect tax dispute” as,-“a dispute in respect of any of the provisions of the Actwhich is pending before the Commissioner (Appeals) asan appeal against the impugned order as on the 1st day ofMarch 2016”.

Procedure for making declaration (Section 214) read withRule 3, 4 and 5 of Indirect Tax Dispute ResolutionScheme Rules, 2016 Person shall make the declaration in the

prescribed form and manner on or before


the 31st day of December 2016. Prescribedform, as per Indirect Tax Dispute ResolutionScheme Rules, 2016, is Form 1. Such form is tobe filed in respect of amount payable underthe Scheme.

Declaration shall be furnished in duplicateto the designated authority.

Once the application is made the designatedauthority shall acknowledge the same. Suchacknowledgement shall be issued by thedesignated authority in Form 2 within 7days of the receipt of the declaration.

Applicant shall make the payment of thetax, interest thereon and 25% of the penaltyimposed in the impugned order, within 15days of the receipt of the acknowledgmentby the designated authority. Also a copy ofdeclaration made under this scheme alongwith the acknowledgment issued by thedesignated authority, shall be furnishedwithin 15 days of the receipt of theacknowledgment to the concernedCommissioner (Appeals) before whom theappeal in respect of which the declarationhas been made is pending.

On the receipt of the declaration andacknowledgement, Commissioner (Appeals)shall not proceed with the appeal in respectof which the declaration has been made fora period of sixty days from the date ofreceipt of information under sub-rule (5) ofthe Indirect Tax Dispute Resolution SchemeRules, 2016.

Once the payment is made, within 7 days,the designated authority shall be informedabout the payment. Such information shallbe in Form 3 as prescribed under theIndirect Tax Dispute Resolution SchemeRules, 2016.

He on receipt of payment details shall,within 15 days, the designated authorityshall pass an order of discharge of dues inForm 4 as prescribed under the Indirect TaxDispute Resolution Scheme Rules, 2016.

The Applicant shall intimate theconcerned Commissioner (Appeals), alongwith the copy of the order of discharge ofdues issued by the designated authority inForm 4, before the expiry of the period ofsixty days specified above.

On the receipt of the information along withthe copy of the order of discharge of duesissued by the designated authority,Commissioner (Appeals) shall remove theappeal from the list of pending appeals with

him and intimate the declarant within sevendays of the receipt of information.

Scheme is not applicable in the following cases (Section215)(a) the impugned order is in respect of search and

seizure proceeding; or(b) prosecution for any offence punishable under the

Act has been instituted before the 1st day ofJune, 2016: or

(c) the impugned order is in respect of narcoticdrugs or other prohibited goods; or

(d) impugned order is in respect of any offencepunishable under the Indian Penal Code, theNarcotic Drugs and Psychotropic SubstancesAct,1985 or Prevention of Corruption Act. 1988:or

(e) any detention order has been passed under theConservation of Foreign Exchange andPrevention of Smuggling Act, 1974.

Immunity from other proceedings under Act (Section216) Once the payment is made and the order of

discharge is passed by the designatedauthority, the appeal pending before theCommissioner (Appeals) shall standdisposed of.

Declarant shall get immunity from allproceedings under the Act in respect of theindirect tax dispute pertaining to which theapplication under the scheme is made.

Declaration made under sub section (1) ofSection 214 becomes conclusive upon theissuance of an order under sub-section (4) ofSection 214.

No matter related to impugned order shallbe reopened thereafter in any proceedingsunder the Act before any authority or court.

Consequences of order made under scheme (Section 217) No amount paid against the declaration

made under this scheme shall berefundable.

Order passed under section 214(4) shall notbe treated as an order passed on merit andhence has no binding effect.

Power to make rules (Section 218) Central Government is empowered to frame

the rules for carrying out the provisions ofthis scheme by way of issuance ofNotification in the official gazette.

Such rules shall provide for,-(a) the form and the manner in which a

declaration may he made under sub-


section (1) of section 214;(b) the form and the manner of

acknowledging the declaration undersub-section (2) of section 214:

(c) the form and the manner of issuing anorder of discharge under sub-section (4)of section 214;

(d) any other matter which is to be, or maybe, prescribed, or in respect of whichprovision is to be made by rules.

This scheme as a whole is not that attractive and asper my belief it may not be that much successful asthe earlier schemes, such as Voluntary ComplianceEncouragement Scheme 2013 or Service Tax DisputeResolution Scheme 2008, , etc., were.

Indirect Tax Dispute Resolution Scheme Rules,2016(Notification No 29/2016 – CE (NT) dated 31.05.2016In exercise of the power conferred by sub-sections(1) and (2) of section 218 of the Finance Act, 2016,(28 of 2016), the Central Government hereby makesthe following rules, namely:-

1. Short title and commencement.-(1) These rules may be called the Indirect Tax

Dispute Resolution Scheme Rules, 2016.(2) They shall come into force on the 1st day of

June, 2016.

2. Definitions. - In these rules, unless thecontext otherwise requires, -

(a) "Form" means the Form annexed to theserules;

(b) "Scheme" means the Indirect Tax DisputeResolution Scheme, 2016, specified underChapter XI of the Finance Act,2016 (28 of2016) ;

(c) "section" means section of the Finance Act,2016(28 of 2016) ;

(d) words and expressions used in these rulesand not defined in these rules but defined inthe Scheme under Chapter XI of the FinanceAct,2016 (28 of 2016), shall have themeanings respectively assigned to them inthat Scheme.

3. Form of declaration under sub section (1) ofsection 214 and manner of verification ofsuch declaration in respect the amountpayable.-

(1) The declaration under sub section (1) ofsection 214 of the Scheme shall be made inForm 1 in respect of the amount payableunder the Scheme.

(2) The declaration under sub section (1) of

section 214 shall be verified in the mannerindicated therein and shall be signed by theperson making such declaration or by anyperson competent to act on his behalf.

(3) The declaration under sub-rule (1) shall befurnished in duplicate to the designatedauthority.

(4) The designated authority, on receipt ofdeclaration, shall issue a datedacknowledgement thereof in Form 2 as persub section (1) of section 214 within sevendays of the receipt of declaration.

(5) Copy of the declaration made under sub-rule(1) and the acknowledgement issued by thedesignated authority under sub- rule (4) shallbe furnished within fifteen days of the receiptof acknowledgement by the declarant tothe concerned Commissioner (Appeals)before whom the appeal in respect of whichthe declaration has been made is pending.

(6) On the receipt of the declaration andacknowledgement, Commissioner (Appeals)shall not proceed with the appeal in respect ofwhich the declaration has been made for aperiod of sixty days from the date of receipt ofinformation under sub-rule (5)

4. Form of reporting deposits made by declarantunder sub-section (3) of section 214.-

(1) Declarant shall, within fifteen daysof the receipt of acknowledgementunder sub-rule (4) of rule 3, depositthe amounts.

(2) Declarant shall, within seven days of makingthe deposit, intimate the designatedauthority about the deposit made undersubsection (3) of section 214 in Form 3.

5. Form of order under sub-section (4) of section214.(1) The designated authority shall, within fifteen

days of receipt of the information about thedeposit made under sub-section (3) of section214, in Form 3, issue the order of discharge ofdues in respect of the declaration madeunder sub section (1) of section 214 in Form4.

(2) The declarant shall intimate theconcerned Commissioner (Appeals) alongwith the copy of the order of discharge ofdues issued by the designated authorityunder sub-rule (1) before the expiry of theperiod of sixty days specified in sub-rule (6) torule 3.

(3) On the receipt of the information along with


the copy of the order of discharge of duesissued by the designated authority,Commissioner (Appeals) shall remove theappeal from the list of pending appeals withhim and intimate the declarant within sevendays of the receipt of information under sub-rule (2).

Form 1[See rule 3(1)]

FORM OF DECLARATION UNDER SUB SECTION (1) OF SECTION 214 OF THE FINANCE ACT, 2016(28 OF 2016), IN RESPECT OF INDIRECT TAX DISPUTE RESOLUTION SCHEME, 2016

IN DUPLICATE To,The Designated Authority........................................................................................ Sir/Madam,I hereby make a declaration under sub section (1) of section 214 of the Finance Act, 2016 (28 of 2016).

1 Name of the declarant (in block letters)

2 Registration Number

3 Address (as mentioned in order inoriginal against which appeal has beenfiled before Commissioner (Appeals)

4 Telephone number

5 Order in original number

6 Date of order in original

7 Amounts demanded Duty/ TaxInterestPenalty

8 Commissioner (Appeals) before whomappeal is pending

9 Appeal No.

10 Amounts deposited Duty/ TaxInterest


Penalty

11 Any other information

VERIFICATION

I, ..................................................................... (name in block letters) son/daughter/of Shri............................................ solemnly declare that to the best of my knowledge and belief, -(a) the information given in this declaration is correct and complete and amount due and other

particulars shown therein are truly stated ;(b) I am not disqualified in any manner from making a declaration under the Scheme with

reference to the provisions of section 215 of Finance Act, 2016.(c) I further declare that I am making this declaration in my capacity as ...................

[(designation) (please specify if you are making a declaration on behalf of declarant)] andthat I am competent to make this declaration and verify it.

Place Signature of person making declarationDate Name of person making declaration

Instructions for filling the Form

1. This Form should be submitted to the Commissioner of Customs or the Commissioner of CentralExcise notified as designated authority under section 87(b)(ii) of the Finance (No. 2) Act, 1998.

2. Use separate Form for each appeal in respect of which declaration is being made.3. No column shall be left blank. Wherever the entry is not relevant the column shall be filled in as 'Not

applicable'.4. In Row 2, registration number is to be filed only in respect of registered Central Excise and

Service Tax Assessee. In respect of all others the row should be shown as “Not applicable”.5. In case of any deposits made in the matter against the amounts demanded please indicate the same

in row 10.6. Any other information relevant to the case may be briefly indicated under row 11.

Form 2 [See rule 2(4)]FORM OF ACKNOWLEDGEMENT UNDER SUB SECTION (2) OF SECTION 214 OF THE FINANCEACT, 2016 IN RESPECT OF INDIRECT TAX DISPUTE RESOLUTION SCHEME, 2016

Reference No ……………………………………………

To,........................................................................................……………………………….

Sir/Madam,

Whereas Mr./Mrs./M/s. ...................................................... (hereinafter referred to as the declarant) has fileda declaration under sub-section (1) of section 214 of the Finance Act, 2016 (28 of 2016); and the saiddeclaration has been received on ......................... in the office of the designated authority.

The designated authority hereby acknowledges the receipt of the declaration made and directs the declarantto pay the amounts due from him along with interest at the rate applicable and penalty equivalent to


twenty-five percent of the penalty imposed on him by the order in original No …………….. withinfifteen days of the receipt of this acknowledgement.

The declarant shall within seven days of making the payment furnish to the designated authority asundersigned the intimation of making the payment inForm 3 along with the proof payment.

Signature of the designated authority …………………………Place ……………… Name of the designated authority …………………………

Date ……………… Official Seal of the designated authority

Form 3 [See rule 4(2)]FORM OF REPORTING THE PAYMENT UNDER SUB SECTION (3) OF SECTION 214 OF THEFINANCE ACT, 2016 (28 OF 2016) IN RESPECT OF INDIRECT TAX DISPUTE RESOLUTIONSCHEME, 2016

To,The Designated Authority............................................……………………………….

Sir/Madam,Please refer to the declaration made by me in Form 1 dated ……………., and the acknowledgementissued by you in Form 2, vide your Reference No …………………………. dated …………………

As required I have deposited the amounts as follows on ………………….

Amount as per order in original Amount deposited

Duty

Interest

Penalty

Copy of the Challan dated ………………….. for making the payment as above are enclosed.

Place ……………….. Signature of person making declaration …………………………..Date ……………….. Name of person making declaration …………………………..

Form 4 [See rule 5(1)]

FORM OF ORDER OF DISCHARGE OF DUES UNDER SUBSECTION (4) SECTION 214 OFTHE FINANCE ACT, 2016 (28 of 2016).

Reference No ……………………………………………

Mr/ Mrs/ M/s ............................................................................. (Name and address of the declarant)(hereinafter referred to as declarant) had made a declaration under sub-section (1) of section 214 of theFinance Act, 2016 (28 of2016) on …………..; and

The designated authority by acknowledgement of even number in Form 2 dated ..............acknowledged the said declaration;


The Declarant has intimated as required under sub-section (3) of Section 214, the details of amountdeposited by him against the said order in original in Form 3 dated …………………………….

Now, therefore, in exercise of the powers conferred by sub-section (4) of section 214 read with section216 of the Finance Act, 2016, the designated authority hereby issues order of discharge of due the saiddeclarant –

(a) certifying the receipt of payment from the declarant towards full and final settlement of theamounts due from the declarant in terms of order in original No ………………………. dated…………………….;

(b) granting immunity, from all from all proceedings under the Act, in respect of theindirect tax dispute for which the declaration has been made under this Scheme.

Signature of the designated authority …………………………Place ……………… Name of the designated authority …………………………Date ……………… Official Seal of the designated authority

Copy To(1) The declarant(2) Assessing/Adjudicating Officer(3) Commissioner of Customs/ Central Excise/ Service Tax(4) Concerned appellant authorities


2.0 Appeals and Revision Mechanism underModel GST Law

IntroductionModel GST Law which was uploaded in the publicdomain on 14th June comprises of the following: Central Goods and Service Tax (CGST) and

State Goods and Service Tax (SGST) Act Integrated Goods and Service Tax (IGST)

Act Schedules (I to IV) GST Valuation (Determination of the value

of supply of goods and services) Rules, 2016Under this chapter we shall be discussing theprovisions related to Appeals and Revision. Weshall be discussing this chapter in three parts onethe provisions under CGST Law, then under SGSTLaw and finally the common provisions under bothCGST and SGST Law.

Appeal & Revision provisions under CGST Law

Appeals to the First Appellate Authority – Section79Statutory Provision

(1) Any person aggrieved by any decision ororder passed against him under this Act byan adjudicating authority, may appeal to theprescribed First Appellate Authority.

(2) The Commissioner of GST may, of his ownmotion, call for and examine the record ofany proceeding in which an adjudicatingauthority has passed any decision or orderunder this Act, for the purpose of satisfyinghimself as to the legality or propriety of thesaid decision or order and may, by order,direct any GST Officer subordinate to him toapply to the First Appellate Authority forthe determination of such points arising outof the said decision or order as may bespecified by the Commissioner of GST in hisorder.

(3) Where, in pursuance of an order under sub-section (2), the authorized officer makes anapplication to the First Appellate Authority,such application shall be dealt with by theFirst Appellate Authority as if it were anappeal made against the decision or order ofthe adjudicating authority and theprovisions of this Act relating to appealsshall, so far as may be, apply to suchapplication.

(4) Every appeal under this section shall befiled within three months from the date onwhich the decision or order sought to beappealed against is communicated to theCommissioner of GST, or, as the case maybe, the person preferring the appeal:

Provided that the First Appellate Authority may, ifhe is satisfied that the appellant was prevented bysufficient cause from presenting the appeal withinthe aforesaid period of three months, allow it to bepresented within a further period of one month.

(5) Every appeal under this section shall be inthe prescribed form and shall be verified inthe prescribed manner.

(6) No appeal shall be filed under sub-section(1) unless the appellant has deposited a sumequal to ten percent of the amount indispute arising from the said order, inrelation to which the appeal has been filed.

Explanation.- For the purposes of this sub-section,the expression “amount in dispute” shall include –

i. amount determined under section46 or 47 or 48 or 51;

ii. amount payable under rule-------ofthe GST Credit Rules 201…; and

iii. amount of fee levied or penaltyimposed.

(7) The First Appellate Authority shall give anopportunity to the appellant of being heard,if he so desires.

(8) The First Appellate Authority may, ifsufficient cause is shown at any stage ofhearing of an appeal, grant time, from timeto time, to the parties or any of them andadjourn the hearing of the appeal forreasons to be recorded in writing:

Provided that no such adjournment shall be grantedmore than three times to a party during hearing ofthe appeal.

(9) The First Appellate Authority may, at thehearing of an appeal, allow an appellant togo into any ground of appeal not specifiedin the grounds of appeal, if he is satisfiedthat the omission of that ground from thegrounds of appeal was not wilful orunreasonable.

(10)The First Appellate Authority shall, aftermaking such further inquiry as may benecessary, pass such order, as he thinks justand proper, confirming, modifying orannulling the decision or order appealedagainst:

Provided that an order enhancing any fee or penaltyor fine in lieu of confiscation or confiscating goodsof greater value or reducing the amount of refund orinput tax credit shall not be passed unless the


appellant has been given a reasonable opportunityof showing cause against the proposed order:Provided further that where the First AppellateAuthority is of the opinion that any tax has not beenpaid or short-paid or erroneously refunded, orwhere input tax credit has been wrongly availed orutilized, no order requiring the appellant to paysuch tax or input tax credit shall be passed unlessthe appellant is given notice to show cause againstthe proposed order and the order is passed withinthe time limit specified under section 51.

(11)The order of the First Appellate Authoritydisposing of the appeal shall be in writingand shall state the points for determination,the decision thereon and the reasons for thedecision.

(12)The First Appellate Authority shall, where itis possible to do so, hear and decide everyappeal within a period of one year from thedate on which it is filed:

Provided that where the issuance of order is stayedby an order of a Court or Tribunal, the period ofsuch stay shall be excluded in computing the periodof one year.

(13)On disposal of the appeal, the FirstAppellate Authority shall communicate theorder passed by him to the appellant and tothe adjudicating authority.

(14)A copy of the order passed by the FirstAppellate Authority shall also be sent to thejurisdictional Commissioner of CGST or theauthority designated by him in this behalfand the jurisdictional Commissioner ofSGST or the authority designated by him inthis behalf.

(15)Every order passed under this section shall,subject to the provisions of section 83, 87 or88, be final.

AnalysisAny person aggrieved by the decision ofadjudicating authority shall file an appeal againstsuch decision or order to the first appellate authority.On the other hand even the Commissioner of GSTmay on his own ask for and examine theproceedings and also the decision of theadjudicating authority and in case he findssomething dissatisfactory to him, he may ask theGST officer subordinate to him by way of an order,to file an application before the first appellateauthority on the points and grounds specified byhimself through his order.Such application made by the GST officer, to thefirst appellate authority, on the basis of order issuedby the Commissioner GST shall be treated as anappeal made against the decision of the order of the

adjudicating authority and the provisions of this Actrelating to appeals shall be applicable to suchapplication.Every appeal under this section shall be filed withina period of three months from the date on whichorder against which the appeal is to be filed hasbeen communicated or received by the aggrievedparty or the Commissioner of GST. In case there aresufficient causes or reasons due to which theappellant was prevented from presenting the appealwithin the said period of 3 months, the firstappellate authority may allow condonation for suchdelay of one month.Appeal shall be filed in the prescribed form and inthe prescribed manner.No appeal shall be filed under sub section (1) unless asum equal to 10% of the amount in dispute arising fromsuch order against which the appeal is filed. Amount indispute shall include:

(i) Amount determined under section 46 or47 or 48 or 51;

(ii) Amount payable under rule ……… ofthe GST Credit Rules 201..; and

(iii) Amount of fee levied or penaltyimposed.

Opportunity of being heard shall be given to theappellant by the first appellate authority. In casethere are sufficient causes the first appellateauthority shall grant adjourn the hearing of theappeal from time to time for the reasons to berecorded in writing. But such adjournment shall notbe granted for more than 3 times.First appellate authority may allow the appellant togo into even to that ground of appeal whichotherwise is not mentioned but such permission canbe given by the authority only when he has thebelief that inclusion of such ground was not omittedwillfully.First appellate authority shall after making suchfurther inquiry as may be necessary, pass suchorder, as he thinks just and proper, confirming,modifying or annulling the decision or orderappealed against. Here the appellate authority shallkeep in mind that any order that has the effect ofincreasing the liability or reducing the refund shallnot be made unless a show cause notice has beenissued and an opportunity of being heard is given tothe appellant. Also the order of such show causeshall be issued within the specified time limit.The order issued by the appellate authority shall bea reasoned and speaking order. First appellateauthority shall where it is possible to do so shallhear and decide the appeal within a period of 1 yearfrom the date in which it is filed. But the period for


which there is stay imposed by the court or tribunalshall be excluded while calculating the period of 1year. Such order shall be passed and copy of thesame shall be provided to the appellant and to theadjudicating authority.A copy shall also be sent to jurisdictionalcommissioner of CGST or an authority designatedfor this purpose and also the jurisdictionalcommissioner of SGST or the authority designatedby him for the said purpose.Each order passed under this section shall, subject tothe provisions of Section 83, 87 or 88, be final andconclusive.

Constitution of the National Appellate Tribunal –Section 81Statutory Provision

(1) The Central Government shall on therecommendation of the GST Councilconstitute a National Goods and ServicesTax Appellate Tribunal (hereinafter referredto as the Appellate Tribunal).

(2) The Appellate Tribunal shall be headed by aNational President.

(3) The Appellate Tribunal shall have onebranch for each state, which shall be calledas the State GST Tribunal.

(4) Every State GST Tribunal will be headed bya State President.

(5) Every State GST Tribunal shall consist of asmany Members (Judicial), Members(Technical - CGST) and Members (Technical- SGST) as may be prescribed, to exercise thepowers and discharge the functionsconferred on the Appellate Tribunal by thisAct.

(6) The qualifications, eligibility conditions andthe manner of selection and appointment ofthe National President, the State Presidents,and the Members shall be such as may beprescribed on the recommendations of theCouncil.

(7) The National President and the StatePresidents shall exercise such powers anddischarge such functions as may beprescribed on the recommendations of theCouncil.

(8) On ceasing to hold office, the NationalPresident, the State Presidents or otherMembers of the Appellate Tribunal shall notbe entitled to appear, act or plead before theAppellate Tribunal.

AnalysisNational Goods and Service Tax Tribunal shall beconstituted on being recommended, by the GSTCouncil, by the Central Government. It shall beheaded by a National President.Branch shall be established in each state and thatwill be known as State GST Tribunal which shall beheaded by State President.State GST Tribunal shall consist of members as maybe prescribed and the qualifications of beingmember shall also be prescribed on therecommendations of GST Council.Powers and functions of the National and StatePresidents shall also be prescribed on therecommendations of the council. And once themember cease to hold office he shall not be entitledto appear, act or plead before the AppellateTribunal.

Appeal to Appellate Tribunal – Section 82Statutory Provision

(1) Any person aggrieved by an order passedagainst him under section 79 may appeal tothe Appellate Tribunal against such order.

(2) The Appellate Tribunal may, in itsdiscretion, refuse to admit any such appealwhere the tax or input tax credit involved orthe difference in tax or input tax creditinvolved or the amount of fine, fee orpenalty determined by such order, does notexceed one lakh rupees.

(3) The Board may by order constitute suchCommittees as may be necessary for thepurposes of filing appeals against the ordersof the First Appellate Authority. Every suchCommittee shall consist of two designatedofficers of GST.

(4) The Committee of designated officers ofGST may, if it is of the opinion that an orderpassed by the First Appellate Authorityunder sub-section (10) of section 79, is notlegal or proper, direct any GST Officerauthorized by it in this behalf to apply to theAppellate Tribunal for the determination ofsuch points arising out of the order passedby the First Appellate Authority as may bespecified by the Committee in its order:

Provided that where the Committee of designatedofficers of GST differs in its opinion, it shall bedeemed that the Committee has formed the opinionthat the order under review is not legal or proper.

(5) Where in pursuance of an order under sub-section (4) the authorized officer makes anapplication to the Appellate Tribunal, such


application shall be dealt with by theAppellate Tribunal as if it were an appealmade against the order of the FirstAppellate Authority and the provisions ofthis Act shall, so far as may be, apply tosuch application, as they apply in relation toappeals filed under sub-section (1).

(6) Every appeal under this section shall befiled within three months from the date onwhich the order sought to be appealedagainst is communicated to theCommissioner of GST, or, as the case maybe, the person preferring the appeal.

(7) On receipt of notice that an appeal has beenpreferred under this section, the partyagainst whom the appeal has been preferredmay, notwithstanding that he may not haveappealed against such order or any partthereof, file, within forty-five days of thereceipt of the notice, a memorandum ofcross-objections, verified in the prescribedmanner, against any part of the orderappealed against and such memorandumshall be disposed of by the AppellateTribunal as if it were an appeal presentedwithin the time specified in sub-section (6).

(8) The Appellate Tribunal may admit anappeal or permit the filing of amemorandum of cross-objections after theexpiry of the period referred to in sub-section (6) or sub-section (7) respectively, ifit is satisfied that there was sufficient causefor not presenting it within that period.

(9) An appeal to the Appellate Tribunal shall bein the prescribed form and shall be verifiedin the prescribed manner and shall beaccompanied by a prescribed fee:

Provided that no such fee shall be payable in thecase of an appeal filed by the Commissioner referredto in sub-section (5) or a memorandum of cross-objections referred to in sub-section (7).

(10)No appeal shall be filed under sub-section(1) unless the appellant has deposited a sumequal to ten percent of the amount indispute arising from the said order, inrelation to which the appeal has been filed.

Explanation.- For the purposes of this sub-section,the expression “amount in dispute” shall include –

i. amount determined under section46 or 47 or 48 or 51;

ii. amount payable under rule-------ofthe GST Credit Rules 201…; and

iii. amount of fee levied or penaltyimposed.

(11)Every application made before theAppellate Tribunal, —

(a) in an appeal for rectification of mistakeor for any other purpose; or

(b) for restoration of an appeal or anapplication,

shall be accompanied by a prescribed fee :Provided that no such fee shall be payable in thecase of an application filed by or on behalf of theCommissioner of GST under sub-section (5).AnalysisAny person aggrieved by the order under section 79may appeal to the Appellate Tribunal against suchorder. Such an appeal may be rejected by theAppellate Tribunal in case the amount of fine, fee orpenalty determined by such order does not exceedRs 1 Lakh.Board may also by order constitute such committeesfor the purpose of filing appeals against the ordersof the first appellate authority. Such committee shallconsist of two designated officers of GST.Such committee of designated officers of GST, if notsatisfied with the order of first appellate authorityshall apply to the Appellate Tribunal fordetermination of such points arising out of the orderpassed by the first appellate authority as may bespecified by the committee in its order.Committee if having difference of opinion, it shallbe presumed that the order under review is not legalor proper. Such application made by the officer shallbe considered as an appeal made against the orderof first appellate authority and the provisions of theact pertaining to appeals shall be applicable inrelation to such appeals.Every appeal under this section shall be filed within3 months from the date on which the order soughtto be appealed against is communicated to theCommissioner or the aggrieved person.Once the appeal is filed and the other party becomesaware of the same, he may within 45 days, from theday he receives the notice about the filing of appeal,file a memorandum of cross objections. Suchmemorandum shall be disposed of by the AppellateTribunal as if it was an appeal presented within theprescribed time limit.Appellate Tribunal is empowered to condone thedelay, in filing appeal within the time limitprescribed, where it is satisfied that there was asufficient cause that has prevented the appellant fornot being able to file the appeal within the time limitspecified.Appeal shall be filed to the appellate Tribunal in theprescribed form and manner and should beaccompanies with prescribed fee. Here it shall bekept in mind that there is no requirement of any feeswhere the appeal has been preferred by theCommissioner i.e. by the department.


No appeal shall be filed under sub section (1) unless asum equal to 10% of the amount in dispute arising fromsuch order against which the appeal is filed. Amount indispute shall include:




Orders of Appellate Tribunal – Section 83(1) The Appellate Tribunal may, after givingthe parties to the appeal an opportunity of beingheard, pass such orders thereon as it thinks fit,confirming, modifying or annulling the decision ororder appealed against or may refer the case back tothe First Appellate Authority or to the originaladjudicating authority, with such directions as itmay think fit, for a fresh adjudication or decision, asthe case may be, after taking additional evidence, ifnecessary.

(2) The Appellate Tribunal may, if sufficientcause is shown, at any stage of hearing of an appeal,grant time, from time to time, to the parties or any ofthem and adjourn the hearing of the appeal forreasons to be recorded in writing:


(3) The Appellate Tribunal may amend anyorder passed by it under sub-section (1) so as torectify any mistake apparent from the record, if suchmistake is noticed by it on its own accord, or isbrought to its notice by the Commissioner of GST orthe other party to the appeal within a period of threemonths from the date of the order:Provided that no amendment which has the effect ofenhancing an assessment or reducing a refund orinput tax credit or otherwise increasing the liabilityof the other party, shall be made under this sub-section, unless the Appellate Tribunal has givennotice to him of its intention to do so and hasallowed him a reasonable opportunity of beingheard.

(4) The Appellate Tribunal shall, where it ispossible to do so, hear and decide every appealwithin a period of one year from the date on whichit is filed.

(5) The Appellate Tribunal shall send a copy ofevery order passed under this section to the FirstAppellate Authority, or to the original adjudicatingauthority, as the case may be, the appellant, thejurisdictional Commissioner of CGST and thejurisdictional Commissioner of SGST.

(6) Every order passed under this section shall,subject to the provisions of section 87 or 88, be final.

AnalysisAppellate authority may, after providing sufficientopportunity of being heard, pass such order as itthinks fit. It may confirm or modify or annul theorder appealed against and also it may refer the caseback to the first appellate authority or originaladjudicating authority with such directions as itmay think proper and fit.

If proper reason is given for nonappearance at thetime and date of hearing by the Appellate Tribunal,it may adjourn the hearing with the reasons for thesame to be recorded in writing. But no adjournmentshall be granted for more than three times to a party.

Order passed by the Appellate Tribunal can berectified in case of any mistake apparent from therecords, if such mistake is noticed by it on its ownaccord, or is brought to its notice by theCommissioner of GST or the other party to theappeal.

If the amendment has the effect of enhancingliability or reducing refund, no order pertaining tothe same shall be issued unless the AppellateTribunal has given notice to him of its intention todo so and has allowed him a reasonable opportunityof being heard.

Ever appeal shall be heard and decided within aperiod of one year from the date on which it is filed,where it is possible to do so.Copy of the order shall be sent to first appellateauthority, or the original adjudicating authority, asthe case may be, the appellant, the jurisdictionalCommissioner of CGST and the jurisdictionalCommissioner of SGST.Every order passed under this section shall be finalsubject to the provisions of Section 87 or 88.

Appeal & Revision provisions under SGST Law

Appeals to the First Appellate Authority – Section79Statutory Provision


(1) Any person aggrieved by any decision ororder passed against him under this Act by anadjudicating authority, may appeal to the prescribedFirst Appellate Authority.(2) Every appeal under this section shall befiled within three months from the date on whichthe decision or order sought to be appealed againstis communicated to the person preferring theappeal:

Provided that the First Appellate Authority may, ifhe is satisfied that the appellant was prevented bysufficient cause from presenting the appeal withinthe aforesaid period of three months, allow it to bepresented within a further period of one month.

(3) Every appeal under this section shall be inthe prescribed form and shall be verified in theprescribed manner.

(4) No appeal shall be filed under sub-section(1) unless the appellant has deposited –(a) in full, such part of the amount of tax,interest, fine, fee and penalty arising from theimpugned order, as is admitted by him, and(b) a sum equal to ten percent of the remainingamount in dispute arising from the said order, inrelation to which the appeal has been filed.

Explanation.- For the purposes of this sub-section,the expression “amount in dispute” shall include –i. amount determined under section 46 or 47or 48 or 51;ii. amount payable under rule-------of the GSTCredit Rules 201…; andiii. amount of fee levied or penalty imposed:

Provided that nothing in this sub-section shall affectthe right of the departmental authorities to apply tothe First Appellate Authority for ordering a higheramount of predeposit, not exceeding fifty percent ofthe amount in the dispute, in a case which isconsidered by the Commissioner of GST to be a“serious case”.

Explanation .- For the purpose of this proviso, theexpression “serious case” shall mean a caseinvolving a disputed tax liability of not less thanRupees Twenty Five Crores and where theCommissioner of GST is of the opinion (for reasonsto be recorded in writing) that the department has avery good case against the taxpayer.

(5) The First Appellate Authority shall give anopportunity to the appellant of being heard, if he sodesires.

(6) The First Appellate Authority may, ifsufficient cause is shown at any stage of hearing ofan appeal, grant time, from time to time, to theparties or any of them and adjourn the hearing ofthe appeal for reasons to be recorded in writing:


(7) The First Appellate Authority may, at thehearing of an appeal, allow an appellant to go intoany ground of appeal not specified in the grounds ofappeal, if he is satisfied that the omission of thatground from the grounds of appeal was not wilfulor unreasonable.

(8) The First Appellate Authority shall, aftermaking such further inquiry as may be necessary,pass such order, as he thinks just and proper,confirming, modifying or annulling the decision ororder appealed against:

Provided that an order enhancing any fee or penaltyor fine in lieu of confiscation or confiscating goodsof greater value or reducing the amount of refund orinput tax credit shall not be passed unless theappellant has been given a reasonable opportunityof showing cause against the proposed order:

Provided further that where the First AppellateAuthority is of the opinion that any tax has not beenpaid or short-paid or erroneously refunded, orwhere input tax credit has been wrongly availed orutilized, no order requiring the appellant to paysuch tax or input tax credit shall be passed unlessthe appellant is given notice to show cause againstthe proposed order and the order is passed withinthe time limit specified under section 51.

(9) The order of the First Appellate Authoritydisposing of the appeal shall be in writing and shallstate the points for determination, the decisionthereon and the reasons for the decision.

(10) The First Appellate Authority shall, where itis possible to do so, hear and decide every appealwithin a period of one year from the date on whichit is filed:

Provided that where the issuance of order is stayedby an order of a Court or Tribunal, the period ofsuch stay shall be excluded in computing the periodof one year.


(11) On disposal of the appeal, the FirstAppellate Authority shall communicate the orderpassed by him to the appellant and to theadjudicating authority.

(12) A copy of the order passed by the FirstAppellate Authority shall also be sent to thejurisdictional Commissioner of CGST or theauthority designated by him in this behalf and thejurisdictional Commissioner of SGST or theauthority designated by him in this behalf.

(13) Every order passed under this section shall,subject to the provisions of sections 80, 83, 87 or 88,be final.

AnalysisAny person aggrieved by the decision ofadjudicating authority shall file an appeal againstsuch decision or order to the first appellate authority.Every appeal under this section shall be filed withina period of three months from the date on whichorder against which the appeal is to be filed hasbeen communicated or received by the aggrievedparty or the Commissioner of GST. In case there aresufficient causes or reasons due to which theappellant was prevented from presenting the appealwithin the said period of 3 months, the firstappellate authority may allow condonation for suchdelay of one month.Appeal shall be filed in the prescribed form and inthe prescribed manner.No appeal shall be filed under sub section (1) unless theappellant has deposited (a) in full, such part oftax,interest, fine, fee and penalty arising from theimpugned order, as is admitted by him, and (b) a sumequal to 10% of the remaining amount in dispute arisingfrom such order against which the appeal is filed.Amount in dispute shall include:




Department has the right to apply to the firstappellate authority and ask for ordering a higheramount of pre-deposit, not exceeding 50% of theamount in dispute, in the case which is consideredto be a serious case.Explanation .- For the purpose of this proviso, theexpression “serious case” shall mean a caseinvolving a disputed tax liability of not less thanRupees Twenty Five Crores and where the

Commissioner of GST is of the opinion (for reasonsto be recorded in writing) that the department has avery good case against the taxpayer.Opportunity of being heard shall be given to theappellant by the first appellate authority. In casethere are sufficient causes the first appellateauthority shall grant adjourn the hearing of theappeal from time to time for the reasons to berecorded in writing. But such adjournment shall notbe granted for more than 3 times.First appellate authority may allow the appellant togo into even to that ground of appeal whichotherwise is not mentioned but such permission canbe given by the authority only when he has thebelief that inclusion of such ground was not omittedwillfully.First appellate authority shall after making suchfurther inquiry as may be necessary, pass suchorder, as he thinks just and proper, confirming,modifying or annulling the decision or orderappealed against. Here the appellate authority shallkeep in mind that any order that has the effect ofincreasing the liability or reducing the refund shallnot be made unless a show cause notice has beenissued and an opportunity of being heard is given tothe appellant. Also the order of such show causeshall be issued within the specified time limit.The order issued by the appellate authority shall bea reasoned and speaking order. First appellateauthority shall where it is possible to do so shallhear and decide the appeal within a period of 1 yearfrom the date in which it is filed. But the period forwhich there is stay imposed by the court or tribunalshall be excluded while calculating the period of 1year. Such order shall be passed and copy of thesame shall be provided to the appellant and to theadjudicating authority.A copy shall also be sent to jurisdictionalcommissioner of CGST or an authority designatedfor this purpose and also the jurisdictionalcommissioner of SGST or the authority designatedby him for the said purpose.Each order passed under this section shall, subject tothe provisions of Section 83, 87 or 88, be final andconclusive.

Revisional Powers of Commissioner – Section 80(1) Subject to the provisions of section 93 andany rules made thereunder, the Commissioner mayon his own motion or upon information received byhim, call for and examine the record of anyproceeding under this Act, and if he considers thatany decision or order passed under this Act by anyofficer subordinate to him is erroneous in so far as it


is prejudicial to the interest of the revenue, he may,if necessary, stay the operation of such decision ororder for such period as he deems fit and aftergiving the person concerned an opportunity ofbeing heard and after making such further inquiryas may be necessary, pass such order, as he thinksjust and proper, including enhancing or modifyingor annulling the said decision or order.

(2) The Commissioner shall not exercise anypower under sub-section (1), if.-(a) the order has been subject to an appealunder section 79 or under section 82 or undersection 87 or under section 88; or(b) more than three years have expired after thepassing of the decision or order sought to berevised.

(3) Notwithstanding anything contained in sub-section (2), the Commissioner may pass an orderunder sub-section (1) on any point which has notbeen raised and decided in an appeal referred to inclause (a) of sub-section (2), before the expiry of aperiod of one year from the date of the order in suchappeal or before the expiry of a period of three yearsreferred to in clause (b) of that sub-section,whichever is later.

(4) Every order passed in revision under sub-section (1) shall, subject to the provisions of sections83, 87 or 88, be final.

(5) If the decision or order passed under thisAct by an officer subordinate to the Commissionerinvolves an issue on which the Appellate Tribunalor the High Court has given its decision which isprejudicial to the interest of revenue in some otherproceedings and an appeal to the High Court or theSupreme Court against such decision of theAppellate Tribunal or as the case may be, the HighCourt is pending, the period spent between the dateof the decision of the Appellate Tribunal and thedate of the decision of the High Court or as the casemay be, the date of the decision of the High Courtand the date of the decision of the Supreme Courtshall be excluded in computing the period referredto in clause (b) of sub-section (2).

(6) Where the issuance of an order under sub-section (1) is stayed by the order of a Court orTribunal, the period of such stay shall be excludedin computing the period of three years under sub-section (2).

(7) For the purposes of this section, ‘record’shall include all records relating to any proceedings

under this Act available at the time of examinationby the Commissioner.

(8) For the purposes of this section, ‘decision’shall include intimation given by any officersubordinate to the Commissioner.

Constitution of the National Appellate Tribunal –Section 81Statutory Provision

(1) The Central Government shall on therecommendation of the GST Councilconstitute a National Goods and ServicesTax Appellate Tribunal (hereinafter referredto as the Appellate Tribunal).

(2) The Appellate Tribunal shall be headed by aNational President.

(3) The Appellate Tribunal shall have onebranch for each state, which shall be calledas the State GST Tribunal.

(4) Every State GST Tribunal will be headed bya State President.

(5) Every State GST Tribunal shall consist of asmany Members (Judicial), Members(Technical - CGST) and Members (Technical- SGST) as may be prescribed, to exercise thepowers and discharge the functionsconferred on the Appellate Tribunal by thisAct.

(6) The qualifications, eligibility conditions andthe manner of selection and appointment ofthe National President, the State Presidents,and the Members shall be such as may beprescribed on the recommendations of theCouncil.

(7) The National President and the StatePresidents shall exercise such powers anddischarge such functions as may beprescribed on the recommendations of theCouncil.

(8) On ceasing to hold office, the NationalPresident, the State Presidents or otherMembers of the Appellate Tribunal shall notbe entitled to appear, act or plead before theAppellate Tribunal.

AnalysisNational Goods and Service Tax Tribunal shall beconstituted on being recommended, by the GSTCouncil, by the Central Government. It shall beheaded by a National President.Branch shall be established in each state and thatwill be known as State GST Tribunal which shall beheaded by State President.


State GST Tribunal shall consist of members as maybe prescribed and the qualifications of beingmember shall also be prescribed on therecommendations of GST Council.Powers and functions of the National and StatePresidents shall also be prescribed on therecommendations of the council. And once themember cease to hold office he shall not be entitledto appear, act or plead before the AppellateTribunal.

Appeal to Appellate Tribunal – Section 82Statutory Provision(1) Any person aggrieved by an order passedagainst him under section 79 or under section 80may appeal to the Appellate Tribunal against suchorder.

(2) The Appellate Tribunal may, in itsdiscretion, refuse to admit any such appeal wherethe tax or input tax credit involved or the differencein tax or input tax credit involved or the amount offine, fee or penalty determined by such order, doesnot exceed one lakh rupees.

(3) Every appeal under this section shall befiled within three months from the date on whichthe order sought to be appealed against iscommunicated to the person preferring the appeal.

(4) On receipt of notice that an appeal has beenpreferred under this section, the party againstwhom the appeal has been preferred may,notwithstanding that he may not have appealedagainst such order or any part thereof, file, withinforty-five days of the receipt of the notice, amemorandum of cross-objections, verified in theprescribed manner, against any part of the orderappealed against and such memorandum shall bedisposed of by the Appellate Tribunal as if it werean appeal presented within the time specified insub-section (3).

(5) The Appellate Tribunal may admit anappeal or permit the filing of a memorandum ofcross-objections after the expiry of the periodreferred to in sub-section (3) or sub-section (4)respectively, if it is satisfied that there was sufficientcause for not presenting it within that period.

(6) An appeal to the Appellate Tribunal shall bein the prescribed form and shall be verified in theprescribed manner and shall be accompanied by aprescribed fee:

Provided that no such fee shall be payable in thecase of an appeal filed by the Commissioner or amemorandum of cross-objections referred to in sub-section (4).

(7) (a) No appeal shall be filed under sub-section (1) unless the appellant has deposited–(i) in full, such part of the amount of tax,interest, fine, fee and penalty arising from theimpugned order, as is admitted by him, and(ii) a sum equal to ten percent of the remainingamount in dispute arising from the said order, inrelation to which the appeal has been filed.Explanation.- For the purposes of this sub-section,the expression “amount in dispute” shall include –i. amount determined under section 46 or 47or 48 or 51;iii. amount payable under rule-------of the GSTCredit Rules 201…; andiii. amount of fee levied or penalty imposed:

Provided that nothing in this sub-section shall affectthe right of the departmental authorities to apply tothe Appellate Tribunal for ordering a higher amountof pre-deposit, not exceeding fifty percent of theamount in the dispute after taking into account theamount deposited in the first appeal, in a case whichis considered by the Commissioner of GST to be a“serious case”.

Explanation. - For the purpose of this proviso, theexpression “serious case” shall mean a caseinvolving a disputed tax liability of not less thanRupees Twenty Five Crores and where theCommissioner of GST is of the opinion (for reasonsto be recorded in writing) that the department has avery good case against the taxpayer.(b) The provisions of clause (a) shall also applymutatis mutandis to cross objections filed undersub-section (4).

(8) Every application made before theAppellate Tribunal, —(a) in an appeal for rectification of mistake orfor any other purpose; or(b) for restoration of an appeal or anapplication, shall be accompanied by a prescribedfee :Provided that no such fee shall be payable in thecase of an application filed by or on behalf of theCommissioner of GST.

AnalysisAny person aggrieved by the order under section 79or under section 80 may appeal to the Appellate


Tribunal against such order. Such an appeal may berejected by the Appellate Tribunal in case theamount of fine, fee or penalty determined by suchorder does not exceed Rs 1 Lakh.Every appeal under this section shall be filed within3 months from the date on which the order soughtto be appealed against is communicated to theCommissioner or the aggrieved person.Once the appeal is filed and the other party becomesaware of the same, he may within 45 days, from theday he receives the notice about the filing of appeal,file a memorandum of cross objections. Suchmemorandum shall be disposed of by the AppellateTribunal as if it was an appeal presented within theprescribed time limit.Appellate Tribunal is empowered to condone thedelay, in filing appeal within the time limitprescribed, where it is satisfied that there was asufficient cause that has prevented the appellant fornot being able to file the appeal within the time limitspecified.Appeal shall be filed to the appellate Tribunal in theprescribed form and manner and should beaccompanies with prescribed fee. Here it shall bekept in mind that there is no requirement of any feeswhere the appeal has been preferred by theCommissioner i.e. by the department.No appeal shall be filed under sub section (1) unless theappellant has deposited–(i) in full, such part of the amount of tax,interest, fine, fee and penalty arising from theimpugned order, as is admitted by him, and(ii) a sum equal to ten percent of the remainingamount in dispute arising from the said order, inrelation to which the appeal has been filed.Amount in dispute shall include:




Provided that nothing in this sub-section shall affectthe right of the departmental authorities to apply tothe Appellate Tribunal for ordering a higher amountof pre-deposit, not exceeding fifty percent of theamount in the dispute after taking into account theamount deposited in the first appeal, in a case whichis considered by the Commissioner of GST to be a“serious case”.

Explanation. - For the purpose of this proviso, theexpression “serious case” shall mean a caseinvolving a disputed tax liability of not less than

Rupees Twenty Five Crores and where theCommissioner of GST is of the opinion (for reasonsto be recorded in writing) that the department has avery good case against the taxpayer.

Every application made before the AppellateTribunal –

(a) In an appeal for rectification of mistake orfor any other purpose; or

(b) For restoration of an appeal or anapplication,

Shall be accompanied by the prescribed fee. Butwhere the application is filed by or an behalf ofCommissioner, no fees is payable.

Orders of Appellate Tribunal – Section 83(1) The Appellate Tribunal may, after givingthe parties to the appeal an opportunity of beingheard, pass such orders thereon as it thinks fit,confirming, modifying or annulling the decision ororder appealed against or may refer the case back tothe First Appellate Authority, or the revisionalauthority, as the case may be, or to the originaladjudicating authority, with such directions as itmay think fit, for a fresh adjudication or decision, asthe case may be, after taking additional evidence, ifnecessary.

(2) The Appellate Tribunal may, if sufficientcause is shown, at any stage of hearing of an appeal,grant time, from time to time, to the parties or any ofthem and adjourn the hearing of the appeal forreasons to be recorded in writing:


(3) The Appellate Tribunal may amend anyorder passed by it under sub-section (1) so as torectify any mistake apparent from the record, if suchmistake is noticed by it on its own accord, or isbrought to its notice by the Commissioner of GST orthe other party to the appeal within a period of threemonths from the date of the order:

Provided that no amendment which has the effect ofenhancing an assessment or reducing a refund orinput tax credit or otherwise increasing the liabilityof the other party, shall be made under this sub-section, unless the Appellate Tribunal has givennotice to him of its intention to do so and hasallowed him a reasonable opportunity of beingheard.


(4) The Appellate Tribunal shall, where it ispossible to do so, hear and decide every appealwithin a period of one year from the date on whichit is filed.

(5) The Appellate Tribunal shall send a copy ofevery order passed under this section to the FirstAppellate Authority or the revisional authority, orthe original adjudicating authority, as the case maybe, the appellant, the jurisdictional Commissioner ofCGST and the jurisdictional Commissioner of SGST.

(6) Save as provided in section 87 or section 88,orders passed by the Appellate Tribunal on anappeal shall be final.

AnalysisAppellate authority may, after providing sufficientopportunity of being heard, pass such order as itthinks fit. It may confirm or modify or annul theorder appealed against and also it may refer the caseback to the first appellate authority or originaladjudicating authority with such directions as itmay think proper and fit.

If proper reason is given for nonappearance at thetime and date of hearing by the Appellate Tribunal,it may adjourn the hearing with the reasons for thesame to be recorded in writing. But no adjournmentshall be granted for more than three times to a party.

Order passed by the Appellate Tribunal can berectified in case of any mistake apparent from therecords, if such mistake is noticed by it on its ownaccord, or is brought to its notice by theCommissioner of GST or the other party to theappeal.

If the amendment has the effect of enhancingliability or reducing refund, no order pertaining tothe same shall be issued unless the AppellateTribunal has given notice to him of its intention todo so and has allowed him a reasonable opportunityof being heard.

Ever appeal shall be heard and decided within aperiod of one year from the date on which it is filed,where it is possible to do so.Copy of the order shall be sent to first appellateauthority or the revisional authority, or the originaladjudicating authority, as the case may be, theappellant, the jurisdictional Commissioner of CGSTand the jurisdictional Commissioner of SGST.Every order passed under this section shall be finalsubject to the provisions of Section 87 or 88.

Common Appeal & Revision provisions underCGST and SGST Law (Section 84 to Section 93)

Procedure of Appellate Tribunal – Section 84(1) The powers and functions of the AppellateTribunal may be exercised and discharged byBenches constituted by the National President or theState Presidents from amongst the members thereof.

(2) Subject to the provisions contained in sub-section (3), a Bench shall consist of one Member(Judicial), one Member (Technical - CGST) and oneMember (Technical - SGST).

(3) The National President or a State President,or any other member of the Appellate Tribunalauthorized in this behalf by the National Presidentor a State President, may, sitting singly, dispose ofany case which has been allotted to the Bench ofwhich he is a member, where in any disputed case,the tax or input tax credit involved or the differencein tax or input tax credit involved or the amount offine, fee or penalty involved, does not exceed tenlakh rupees.

(4) If the members of a Bench differ in opinionon any point, the point shall be decided according tothe opinion of the majority, if there is a majority; butif the members are equally divided, they shall statethe point or points on which they differ and make areference to the National President or the StatePresident who shall either hear the point or pointshimself or refer the case for hearing on such point orpoints by one or more of the other members of theAppellate Tribunal and such point or points shall bedecided according to the opinion of the majority ofthese members of the Appellate Tribunal who haveheard the case, including those who first heard it.

(5) Subject to the provisions of this Act, theAppellate Tribunal shall have power to regulate itsown procedure and the procedure of the Benchesthereof in all matters arising out of the exercise of itspowers or of the discharge of its functions, includingthe places at which the Benches shall hold theirsittings.

(6) The Appellate Tribunal shall, for thepurposes of discharging its functions, have the samepowers as are vested in a court under the Code ofCivil Procedure, 1908 (5 of 1908), when trying a suitin respect of the following matters, namely :-a) discovery and inspection;b) enforcing the attendance of any person andexamining him on oath;


c) compelling the production of books ofaccount and other documents; andd) issuing commissions.(7) Any proceeding before the AppellateTribunal shall be deemed to be a judicial proceedingwithin the meaning of sections 193 and 228 and forthe purpose of section 196 of the Indian Penal Code(45 of 1860), and the Appellate Tribunal shall bedeemed to be a Civil Court for all the purposes ofsection 195 and Chapter XXVI of the Code ofCriminal Procedure, 1973 (2 of 1974).

Interest on delayed refund of pre-deposit- Section 85Where an amount deposited by the appellant undersub-section (6)/(4) of section 79 or under sub-section(10)/(7) of section 82 is required to be refundedconsequent to any order of the First AppellateAuthority or of the Appellate Tribunal, as the casemay be, interest at the rate specified under section39 shall be payable in respect of such refund fromthe date of payment of the amount till the date ofrefund of such amount.

Appearance by authorised representative – Section86(1) Any person who is entitled or required toappear before a GST Officer appointed under thisAct, or the First Appellate Authority or theAppellate Tribunal in connection with anyproceedings under the Act, may, otherwise thanwhen required under this Act to appear personallyfor examination on oath or affirmation, subject tothe other provisions of this section, appear by anauthorized representative.

(2) For the purposes of this section, “authorisedrepresentative” means a person authorised by theperson referred to in sub-section (1) to appear on hisbehalf, being —(a) his relative or regular employee; or(b) an advocate who is entitled to practice inany court in India, and who has not been debarredfrom practicing before any court in India; or(c) any chartered accountant, a cost accountantor a company secretary, who holds a valid certificateof practice and who has not been debarred frompractice; or(d) any person who has acquired suchqualifications as the Central Government (or theState Government) may, on the recommendation ofthe Council, prescribe for this purpose.

(3) Notwithstanding anything contained in thissection, no person who was serving in the indirecttax departments of the Government of India or ofany State Government, and has retired or resigned

from such service after having served for not lessthan two years as a Gazetted officer in thatdepartment shall be entitled to appear as anauthorised representative in any proceedings beforea GST Officer for a period of one year from the dateof his retirement or resignation, as the case may be.

(4) No person, —a) who has been dismissed or removed fromgovernment service; orb) who is convicted of an offence connectedwith any proceeding under this Act, the CustomsAct, 1962 (52 of 1962), the Central Excise Act, 1944 (1of 1944) or Chapter V of the Finance Act 1994 (25 of2014) or under any of the Acts passed by a statelegislature dealing with the imposition of taxes onsale of goods or supply of goods and/or services, orc) who has become an insolvent, shall bequalified to represent any person under sub-section(1) –(i) for all times in the case of a person referredto in clause (a),(ii) for such time as the Commissioner of GSTor the competent authority under the Acts referredto in clause (b) may, by order, determine in the caseof a person referred to in clause (b), and(iii) for the period during which the insolvencycontinues in the case of a person referred to inclause (c).

(5) If any person is found guilty of misconductby the prescribed authority in connection with anyproceedings under this Act or under any of the Actsreferred to in clause (b) of sub-section (4), theprescribed authority may direct that he shallthenceforth be disqualified to represent any personunder sub-section (1).

(6) Any order or direction under clause (b) ofsub-section (4) or sub-section (5) shall be subject tothe following conditions, namely:—a) no such order or direction shall be made inrespect of any person unless he has been given areasonable opportunity of being heard;b) any person against whom any such order ordirection is made may, within one month of themaking of the order or direction, appeal to thecompetent authority [Central/State Government] tohave the order or direction cancelled; andc) no such order or direction shall take effectuntil the expiration of one month from the makingthereof, or, where an appeal has been preferred,until the disposal of the appeal.

Appeal to the High Court – Section 87


(1) The Commissioner of GST or the other partyaggrieved by any order passed by the AppellateTribunal under section 83 may file an appeal to theHigh Court and the High Court may admit suchappeal if it is satisfied that the case involves asubstantial question of law.

(2) Notwithstanding the provisions of subsection (1), no appeal shall lie to High Court againstan order passed by the Appellate Tribunal undersection 83 if such order relates, among other things,to:-i) a matter where two or more States, or aState and Center, have a difference of viewsregarding the treatment of a transaction(s) beingintra-State or inter-State; orii) a matter where two or more States, or aState and Center, have a difference of viewsregarding place of supply.

(3) An appeal under sub-section (1) shall be -a) filed within one hundred and eighty daysfrom the date on which the order appealed againstis received by the Commissioner of GST or the otherparty;b) accompanied by a prescribed fee ;c) in the form of a memorandum of appealprecisely stating therein the substantial question oflaw involved.

(4) The High Court may admit an appeal afterthe expiry of the period of one hundred and eightydays referred to in clause (a) of sub-section (3), if it issatisfied that there was sufficient cause for not filingthe same within that period.

(5) Where the High Court is satisfied that asubstantial question of law is involved in any case, itshall formulate that question.

(6) The appeal shall be heard only on thequestion so formulated, and the respondents shall,at the hearing of the appeal, be allowed to argue thatthe case does not involve such question:Provided that nothing in this sub-section shall bedeemed to take away or abridge the power of theCourt to hear, for reasons to be recorded, the appealon any other substantial question of law notformulated by it, if it is satisfied that the caseinvolves such question.

(7) The High Court shall decide the question oflaw so formulated and deliver such judgmentthereon containing the grounds on which suchdecision is founded and may award such cost as itdeems fit.

(8) The High Court may determine any issuewhich -a) has not been determined by the AppellateTribunal; orb) has been wrongly determined by theAppellate Tribunal, by reason of a decision on suchquestion of law as herein referred to above.

(9) When an appeal has been filed before theHigh Court, it shall be heard by a bench of not lessthan two Judges of the High Court, and shall bedecided in accordance with the opinion of suchJudges or of the majority, if any, of such Judges.

(10) Where there is no such majority, the Judgesshall state the point of law upon which they differand the case shall, then, be heard upon that pointonly, by one or more of the other Judges of the HighCourt and such point shall be decided according tothe opinion of the majority of the Judges who haveheard the case including those who first heard it.

(11) Where the High Court delivers a judgmentin an appeal filed before it under this section, effectshall be given to such judgment by either side on thebasis of a certified copy of the judgment.

(12) Save as otherwise provided in this Act, theprovisions of the Code of Civil Procedure, 1908 (5 of1908), relating to appeals to the High Court shall, asfar as may be, apply in the case of appeals underthis section.

Appeal to the Supreme Court- Section 88(1) An appeal shall lie to the Supreme Courtfrom any judgment or order passed by the HighCourt in an appeal made under section 87, in anycase which, on its own motion or on an oralapplication made by or on behalf of the partyaggrieved, immediately after passing of thejudgment or order, the High Court certifies to be afit one for appeal to the Supreme Court.(2) An appeal shall lie to the Supreme Courtfrom any order passed by the Appellate Tribunalunder section 83 where such order is of the naturereferred to in sub section (2) of section 87.

Hearing before Supreme Court – Section 89(1) The provisions of the Code of CivilProcedure, 1908 (5 of 1908), relating to appeals to theSupreme Court shall, so far as may be, apply in thecase of appeals under section 88 as they apply in thecase of appeals from decrees of a High Court :


Provided that nothing in this sub-section shall bedeemed to affect the provisions of section 90.(2) The costs of the appeal shall be at thediscretion of the Supreme Court.

(3) Where the judgment of the High Court isvaried or reversed in the appeal, effect shall be givento the order of the Supreme Court in the mannerprovided in section 87 in the case of a judgment ofthe High Court.

Sums due to be paid notwithstanding appeal etc. –Section 90Notwithstanding that an appeal has been preferredto the High Court or the Supreme Court, sums dueto the Government as a result of an order passed bythe Appellate Tribunal under sub-section (1) ofsection 83 or an order passed by the High Courtunder section 87, as the case may be, shall bepayable in accordance with the order so passed.

Exclusion of time taken for copy – Section 91In computing the period of limitation prescribed foran appeal or application under this Chapter, the dayon which the order complained of was served, and ifthe party preferring the appeal or making theapplication was not furnished with a copy of theorder when the notice of the order was served uponhim, the time required for obtaining a copy of suchorder, shall be excluded.

Appeal not to be filed in certain cases – Section 92(1) The Board or the State Government may, onthe recommendation of the Council, from time totime, issue orders or instructions or directions fixingsuch monetary limits, as it may deem fit, for thepurposes of regulating the filing of appeal orapplication by the GST officer under the provisionsof this Chapter.

(2) Where, in pursuance of the orders orinstructions or directions, issued under subsection(1), the GST officer has not filed an appeal orapplication against any decision or order passedunder the provisions of this Act, it shall not precludesuch GST officer fromfiling appeal or application inany other case involving the same or similar issuesor questions of law.

(3) Notwithstanding the fact that no appeal orapplication has been filed by the GST Officerpursuant to the orders or instructions or directionsissued under sub-section (1), no person, being aparty in appeal or application shall contend that theGST officer has acquiesced in the decision on thedisputed issue by not filing an appeal or application.

(4) The Appellate Tribunal or court hearingsuch appeal or application shall have regard to thecircumstances under which appeal or applicationwas not filed by the GST Officer in pursuance of theorders or instructions or directions issued undersub-section (1).

Non Appealable decisions and orders – Section 93Notwithstanding anything to the contrary in anyprovisions of this Act, no appeal shall lie against anydecision taken or order passed by a GST officer ifsuch decision taken or order passed relates to anyone or more of the following matters:-(a) An order of the Commissioner or othercompetent authority for transfer of proceeding fromone officer to another officer;(b) An order pertaining to the seizure orretention of books of account, register and otherdocuments; or(c) An order sanctioning prosecution under theAct; or(d) An order passed under section 55.


2.0 News & Updates

1. Monsoon Session: Congress to line upallegations of 'scams', GST under threat

NEW DELHI: The Congress is generating politicalheat and lining up allegations of 'scams' in the runup to the monsoon session of Parliament in whichthe Modi government's declared priority is 'toisolate Congress' and push the GST bill through.

On Friday Congress firmed up a plank that hastraditionally queered the pitch for many pastgovernments - 'the defence acquisition scam' - byaccusing the Modi government of creating a 'singlevendor system' in purchase of Army carbines, 'byoverruling the objections' raised by then minister ofstate of defence Rao Inderjit Singh and 'by rejecting'the offer of Bel to partially manufacture the carbines.

Political circles foresee a stormy monsoon sessionfollowing Congress raising the carbine issue, even asit persisted with 'telecom scam'. Congress seems tobe readying with the 'carbine plank' to return fireafter the BJP targeted it over the Agusta-Westlandscam in the last session.

In Congress' allegations of 'telecom scam,' based ona CAG report, many see a 'reply' to the BJP's 2Gscam attack on the UPA regime, based on anotherCAG report.

Seizing on the ET report that 10 days before histransfer from the ministry, Rao Inderjit Singhobjected to the fact that only the Israeli firm IWI wasconsidered for the supply of carbines anddemanded inclusion of Italian firm Beretta too in thelist of vendors, Congress deputy leader of the RajyaSabha, Anand Sharma, demanded answers from theprime minister: Why was a single vendor systemcreated for the supply of the carbines?

Why did the government not accept public sectorBel's offer for partial manufacturing of carbines?Sharma also sought that the government makepublic the Singh-Parrikar communications on thecarbine issue.

Sharma charged the Modi government with'undermining the Cabinet Committee onSecurity(CCS)" in defence acquisitions, even inallowing FDI.

Why no CAG audit for 2010-16? Following up onThursday's allegations, AICC chief spokespersonRandeep Surjewala asked why the Modi

government 'has not ordered a CAG auditing for theyears 2010-11 to 2016-16 to find out whether telecomcompanies had underreported income during thatperiod as well'.

"Why is ex-telecom minister Ravi Shankar Prasadinsisting there is no underreporting of income by sixtelecom companies for 2010-11 to 2015-16? How canthe minister be enlightened without even an auditconducted by CAG," he asked.

http://economictimes.indiatimes.com/news/politics-and-nation/congress-carbine-shot-ahead-of-monsoon-session/articleshow/53123701.cms

2. GST bill may get a new life

NEW DELHI: As the Congress showed signs ofsoftening its stand on the Goods and Services Tax(GST) if the tax rate is "ring-fenced", a topgovernment functionary on Saturday said it is a"sensible suggestion" and talks will continue withthe opposition party. The Congress, whichoriginally mooted the GST in 2009 to replace allindirect taxes, has been demanding that the overalltax rate be capped at 18%.

It also wanted to scrap a proposed additional 1% taxdesigned to compensate manufacturing states thatfear losing out on revenue. Anand Sharma, seniorCongress leader, is reported to have said that hisparty is open to discussing its demand for includingthe tax rate in the Constitutional Amendment Bill ifthe government were to come out with a suggestionto ring-fence the tax rate. Since November last year,the Congress has been insisting that a specified GSTrate of 18 % should be capped in the ConstitutionalAmendment Bill, the 1% additional tax abolishedand a GST Disputes Settlement Authority formed tosettle state disputes.

Finance Minister Arun Jaitley has, however,consistently maintained that nowhere in the worldare tax rates put in the Constitution and thegovernment needs to have flexibility to change therates in case of contingencies like natural calamities.The government is keen to get the GST Bill clearedin the upcoming monsoon session of Parliament.

Jaitley is also said to be open to talking to the seniorleadership of the Congress before the session begins.The government is banking on support from smallerregional parties to pass the national sales taxlegislation in the Upper House of Parliament andthen get supporting laws enacted by the year-end sothat GST is introduced from April 2017.


The GST Bill, which intends to convert 29 states intoa single market, was earlier planned to beintroduced from April 1 this year, but the deadlinewas missed as the bill to remains in a limbo in theOpposition-dominated Rajya Sabha.

http://economictimes.indiatimes.com/news/economy/policy/gst-bill-may-get-a-new-life/articleshow/53128555.cms

3. Congress hints at dropping key GSTdemand

NEW DELHI: The gap between Congress and thegovernment over the GST bill might be narrowing.The main opposition has indicated that it mightrelax a key condition - the tax rate being written intothe Constitution amendment - as long as there arefirm legal commitments to a rate that Congressviews as reasonable and viable.Deputy leader of opposition in Rajya Sabha AnandSharma suggested that Congress may not insist oninclusion of an 18% tax cap in the bill - one of threeconditions the party has put forward and which hasheld up passage of the legislation for more than ayear. Some months ago, Congress vice-presidentRahul Gandhi had indicated that the differencesessentially boiled down to the tax rate."But the government would have to suggest waysfor legal ringfencing of the rate," Sharma said,adding that the Centre has not opened a dialoguewith them yet, without which there cannot be aresolution to the tricky obstacles.Sharma's upfront remark indicates a closeralignment between Congress and the Centre whohave differed bitterly on a host of issues ahead ofthe monsoon session starting July 18.According to observers, the change of heart inCongress may be a result of its weakening politicalclout after defeats in Assam and Kerala. There isapprehension in certain quarters that since mostregional parties, including those in the anti-BJP axis,have extended support to the GST, continuingblockade could mean political isolation forCongress. There is also concern that the governmentaccusations against Congress for "holding up"development is resonating with voters.There have been differences within Congress onGST. Many involved in party discussions felt aninsistence on the inclusion of a tax cap in the co-nstitutional amendment bill would not besustainable. "It was not part of the UPA bill," afunctionary said, though leaders like former financeminister P Chidambaram have defended thedemand.The party had decided to bargain hard and handedits three-point wishlist to the Centre, resulting in the

protracted stand-off. Congress may continue todemand a GST dispute redressal authority, anotherkey condition.

Sources said when the Centre opens talks, Congressmay bring up the subject of inclusion of petrol anddiesel, alcohol, electricity and tobacco in the GSTambit.Congress seems caught in a dilemma on how to dealwith the Modi regime rejuvenated by the change inpolitical atmospherics after the last round of polls.While an obstructionist attitude in Parliament mayrisk isolating allies who are in favour of GST,abruptly giving in on a long confrontation wouldshow it as surrendering to "political reality".

http://timesofindia.indiatimes.com/india/Congress-hints-at-dropping-key-GST-demand/articleshow/53135592.cms

4. Traders' bodies seek changes in GST draft

Jamshedpur: Traders' bodies have found the modeldraft of Goods and Services Tax (GST) 2016 of theUnion government unfavourable and plan tosuggest amendments to the state government andcentral government before it is tabled in theParliament in the upcoming monsoon session.

"The Centre will be doing disservice to the trade andindustry body if it passes through the GST modeldraft in Parliament without making certainchanges," said Suresh Sonthalia, functionary ofFederation of Jharkhand Chamber of Commerce andIndustry (FJCCI).

The trader's representative said firstly, there's noneed to have three different forms of GST (CentralGST, State GST and Inter-state GST).

Secondly, he said, the provision of paying tax eachtime a manufacturer transfers the goods to the buyerin another state is inconvenient.

"In the existing VAT law, the manufacturer isexempted from any such provision (of paying tax)when goods are sent to another state," saidSonthalia. The traders also do not approve of theconfusion over the amount of tax to be indicated in atax invoice and other documents .

"We have constituted a panel involvingrepresentatives from trade and industry and expertsfrom the legal field to work out an ideal GST draftfor the presentation to the state government and






Union government," said Bharat Vasani, functionaryof Singhbhum Chamber of Commerce and Industry.

The Adityapur Small Industries Association (ASIA)functionary, Santosh Khetan said: "The governmentshould increase the frequency of dialogue with thetrade and industry body representatives withouthastening to pass the bill in the next session ofParliament."

The Narendra Modi government has put the modelGST draft in public domain to elicit a feedback fromall stakeholders ahead of its presentation in theParliament during the monsoon session,commencing later this month.

Senior Congress leader Jairam Ramesh on Sundaysaid much of India's economic agenda remainsincomplete, including the passage of GST Bill.

In the last 25 years, India faced unprecedentedeconomic crisis particularly during 1990s. Ourexports were stagnant, oil prices went up. But as welook into the next 25 years, much of economicagenda remains incomplete," he said at the 16thAnnual General Meeting of Madras ManagementAssociation, here.

Sensex slipped into reverse gear last Friday withinvestors taking a cautious line before start of theearnings season next week amid muted overseascues. Despite all the global headwinds, an above-average monsoon so far and a strong chance ofpassage of the long-pending GST Bill in theupcoming Monsoon session are giving investorssome early hopes.

http://timesofindia.indiatimes.com/city/jamshedpur/Traders-bodies-seek-changes-in-GST-draft/articleshow/53146235.cms

5. We hope that the (GST) System would beready by February: GST Network's NavinKumar

The government is hoping to get the Goods andservices Tax (GST) Bill passed in the monsoonsession of Parliament. Business Today's DipakMondal spoke to Navin Kumar, Chairman of GSTNetwork, the company floated by the central andstate governments to build the information andtechnology (IT) network for GST, on whether thesystem is ready for the timely roll-out of the newlaw.

What's the status of the IT infrastructure need tobuild for GST?

We have taken Infosys as our IT partner. They willbuild the application and the infrastructure as perour specifications. In the RFP (request for proposal),we had given our requirement and specifications.We gave the contract to Infosys in October 2015, andwe had hoped that the constitutional amendmentwould happen in the winter session. That did nothappen, but we decided was to go ahead with theapplication development.

The entire system consists of hardware (serversstorage, network, connectivity, etc) and software.We decided to hold back the procurement ofhardware but decided to start the work on softwareand we have made very good progress on that. Weare hoping that in July when the Rajya Sabha meetsand passes the bill , we would give Infosys the go-ahead for the procurement of hardware. When thathappens, installation and testing part would beginand by then parallely the software developmentwould be completed, which would then be installedin the hardware and testing could be done.

So, we hope that our system would be ready byFebruary.

Would you explain how the system would work?

The IT system that we are building, the entiresystem involves all the tax authorities (all the state,union territory governments along with the Centre).We would build a common GST portal. On thisportal, three essential services would run-registration, filing of return and payment.

When a taxpayer comes on our portal and registershimself, then the information that he files at ourportal is sent to the tax authorities. As you knowGST is a dual tax--the state GST and the CentralGST-so his application would be sent to both, thecentral government and the state government. Theywill approve the application and then we wouldgenerate his GSTIN (GST Identification Number)and he becomes the registered taxpayer.

Every month or every quarter, depending on thekind of taxpayer, he would file returns. So he comesto our portal to file returns and again we send thisdata to concerned tax authorities. He can also paythe taxes from our website. The money would notcome to us but would go to the respective tax





authorities. The consolidated funds of states orconsolidated funds of the centre.

This is the front end, this is what we are doing. As Itold you all the data would go to the respective taxauthorities - the CBEC (Central Board for Excise andCustoms) and the tax department of states.Therefore, they should have their own system alsoto receive this data, and do their functions--audit,assessment, refund and recovery, etc. We call thatthe back end. The responsibility of developing theback end is with the respective tax authorities.

Have you assessed the preparation of back-endrequired to be built by the states and the CBEC?

When we started out in 2014, we realised that doingthe front-end alone was not sufficient and westarted asking the states what their status was. Thegovernment had done a study of all the states in2012 to see where did the computerisation of theirtax system stood. We updated and studied that data,and found that half of the states were not prepared.

We reported this to finance minister and told thatthese states would not be able to do it on their ownand that we are ready to help them in building theirsystem if they want us to. The revenue secretarythen convened a meeting of all the states and askedthem if they would be able to do the back end ontheir own or they would want GST Network to helpthem out. As many as 12 states and union territoriessaid that they would be happy to allow GSTN to dothe back end for them.

When we made that offer we made it clear that wecannot develop separate (customised) back end forthem, we create one application and they all have touse it. We basically wanted them to agree on acommon processes.VAT was standalone tax for eachstate and every state has its own processes. So, tomake them agree on a common set of processes wastough, but we made them do that.

The remaining states decided to build their ownsystem, but we had this sense that not all of themwould be able to do it on their own. So, we made anopen offer whichever states - up to the end of 2015 -would realise that they could not develop thesystem on their own could ask us to build it forthem. Later seven other states approached us tobuild the back-end for them.

So, we categorised the states as Model 1 states,which were building their own system and Model 2states for which we were building the system.

The CBEC and the remaining states are doing it ontheir own. I am happy to note that most of themhave made good progress and now if the GST Bill ispassed (in the monsoon session), all of them wouldtake the work in all seriousness and go full steam. Ithink they would be able do it on time.

We are interacting with the states on a regular basis.We have held eight workshops with them. Weinform them what progress we have made, whatthey need to do and they apprise us of the progressthey have made. We also keep reporting that to thecentral government so that if there is any problemthey can intervene.

What are the major challenges that you faced?

When we started, we approached the IT companies.We wanted to sensitise the industry about the kindof system we wanted and we also wanted theiradvice on the issue. We had planned to keep theproject in BOOT (Build-own-operate-transfer) modelwhich means that the company which gets theproject would invest their own money, and whenthe system starts working they would recover theirmoney through user charges. We wanted the systemto be built on BOOT model so that we do not haveany financial liabilities.

But the IT companies were reluctant to work onBOOT model. They said they had worked on thatmodel in the past and they have a lot of moneystuck with the government. They said somethinglike Rs 5,000 crore of their payments were stuckwith various government departments.

So, we were very worried that if companies did notcome forward for the project, we could not do it onour own.

So, we held three interactions with the industry inDecember 2014, and we asked them what theirconcerns were, how do they want the project to bemodelled. All these interactions helped and we wererelieved to see big companies like TCS, Infosys,Wipro, Tech Mahindra and Microsoft bid for theproject and finally Infosys got the project. We hadInfosys to do the work, but we have to tell them


How are you funding the IT infrastructure buildingsince companies were not ready to do the project onBOOT model?

So, we agreed to fund it ourselves. The total cost ofthe contract to Infosys is Rs 1,380 crore. We havealready made two payments to Infosys for twomilestones delivered. When GSTN was incorporatedin March 2013, the government sanctioned Rs 315crore and we have been able to spend only Rs 150crore. The two payments made to Infosys is fromthis Rs 150 crore only. We would borrow Rs 500crore from financial institutions and the rest of thefund would be generated from user charges whenthe system starts working.

The key to success of the GST is trained personnel.What have you done for training of tax officials?

All states have people doing VAT and the centralgovernment has people doing excise and service tax.All these people are well-versed in VAT, and GST isalso not very different from VAT. The law is similar,the logic is similar but the processes are different.Therefore, you have to train the officers. That workhas already begun. For the law part, department ofrevenue has already started a training programmefor state officers and CBEC officers. We are alsocollaborating with them.

For technology, that we will do. We have drawn upa training programme, we are waiting for the bill topass. Hopefully, we would start that from August.

This is going to be very important because in moststates the VAT system is not automated. While thefront end is computerised, the back end in manystates is still manually done. Therefore, the taxauthorities have to be trained in IT system. We alsohave a training programme for taxpayers.

There will be around one lakh tax officers in thestates and centre. We can't train all of them on ourown. So, our strategy is to train some mastertrainers. We would be training a number of officersfrom states and CBEC, and they would then go backand train other officers.

But for that training, on our portal we will makearrangements. We will give these master trainers aschedule--on our website we will have a schedulefor each of these master trainers - so when they putin request that on these particular days they want totrain these many officers, we would give themaccess to the system.

http://www.businesstoday.in/opinion/interviews/we-hope-that-the-gst-system-would-be-ready-by-february/story/234882.html

6. Industry demands cut in excise duty ondairy products

NEW DELHI: Animal Husbandry SecretaryDevendra Chaudhary today said taxation on dairyproducts could be rationalised via value-addedactivities of the milk produced as the industrypitches for excise duty cuts.

The industry also demanded that the dairy sectorshould be kept outside the ambit of goods andservices tax (GST) bill, which is not yet passed inParliament.

"The taxation on dairy products could berationalised through value-added activities of themilk produced," Chaudhary while addressing aseminar organised by industry body PHD Chamberof Commerce.

The secretary, however, did not comment on theindustry's demand to keep the dairy products tooutside the GST ambit, said the statement issued bythe industry body.

Reliance Dairy Foods CEO Anup Kalra,Agrinnovate India CEO Harsev Singh, AyurvetManaging Director Priyanka Mittal, were amongother private players present in the seminar on'Doubling Farmers Income Through Dairy Sector'.

In the seminar, the industry players gave a unifiedcall for reducing the excise duty structure for dairyproducts from present level of 5-6 per cent.

"The seminar recommended to the government thatindigenous dairy sector be a part and parcel of theagri activities, its excise levy be rationalised and thesector should be kept outside purview of GST," thestatement said.

It was also feared that with the enactment of GSTbill, the dairy sector may be subjected to about 18per cent of GST which would make it economicallyunviable at a time when talks for doubling thefarmers' income through dairy also are advancing, itadded.

NEW DELHI: Animal Husbandry SecretaryDevendra Chaudhary today said taxation on dairyproducts could be rationalised via value-added





activities of the milk produced as the industrypitches for excise duty cuts.

The industry also demanded that the dairy sectorshould be kept outside the ambit of goods andservices tax (GST) bill, which is not yet passed inParliament.

"The taxation on dairy products could berationalised through value-added activities of themilk produced," Chaudhary while addressing aseminar organised by industry body PHD Chamberof Commerce.

The secretary, however, did not comment on theindustry's demand to keep the dairy products tooutside the GST ambit, said the statement issued bythe industry body.

Reliance Dairy Foods CEO Anup Kalra,Agrinnovate India CEO Harsev Singh, AyurvetManaging Director Priyanka Mittal, were amongother private players present in the seminar on'Doubling Farmers Income Through Dairy Sector'.

In the seminar, the industry players gave a unifiedcall for reducing the excise duty structure for dairyproducts from present level of 5-6 per cent.

"The seminar recommended to the government thatindigenous dairy sector be a part and parcel of theagri activities, its excise levy be rationalised and thesector should be kept outside purview of GST," thestatement said.

It was also feared that with the enactment of GSTbill, the dairy sector may be subjected to about 18per cent of GST which would make it economicallyunviable at a time when talks for doubling thefarmers' income through dairy also are advancing, itadded.

http://economictimes.indiatimes.com/industry/cons-products/food/industry-demands-cut-in-excise-duty-on-dairy-products/articleshow/53119556.cms

7. Excise relief to jewellers to end withimplementation of GST

Yesterday government announced increase inexemption limit for jewellers, which has broughtcheer for jewellers who kept their businesses closedfor over 40 days from March following imposition ofexcise duty on gold jewellery.

Government addressed most of the issues thatjewellers had raise. Sudheesh Nambiath, leadanalyst for precious metals, Asia Pacific at GFMS TRsaid, "The relief given to jewelers will be useful tillGST is implemented as after that Rs10 lakh will be abenchmark limit and whole tax mechanism willchange." About yesterday's announcement, he said"SSI eligibility limit from Rs 12 crores to Rs 15 croresand Rs 6 crore to Rs 10 crore in a financial year andRs 85 lakh for the month of March, 2016 from theearlier 50 lakh is an important change while rest areclarifications that jewellery industry was anywayexpecting."

But traders are happy even as they wait for officialcirculars for the announcement.

"While the government has accepted most of oursuggestions, which is a good sign with regards toaddressing concerns of jewelers, we are now waitingfor relating notifications to be issued and circularfrom Central Board of Excise and Customs to givethe announcement a legal form. The measures,however, will boost the trade as the industry waseagerly awaiting the clarifications on the levy ofexcise duty," said G V Shreedhar, Chairman of theAll India Gems & Jewellery Trade Federation.

He however said: "The requirement of submittingPAN number for jewellery buying above Rs 2,00,000is incentivising off the books trade and promotingblack economy. There is a need to bring thejewellery business in organised sector. We requestour government to continue their support to theindustry by also raising the PAN card limit to atleastRs 5 lakh".

From January onwards, for jewellery buyingsubmitting PAN number for jewellery buying aboveRs 5 lakh has been made mandatory. Customerswants to avoid submitting that because they fearmisuse of that number as same number can be usedfor other buyers without their knowledge and evenPAN numbers are stolen for making forged bills byjewellers.





This has given rise of black economy and smugglinghas increased, which was also incentivised by 10 percent customs duty.

Country's 25 per cent jewelers are in organisedsector where chances of black economy are muchlower and they constitute 80 per cent of business.However, PAN card requirement is again shiftingtrade to unorganised sector.

http://www.business-standard.com/article/markets/excise-relief-to-jewellers-to-end-with-implementation-of-gst-116071400681_1.html

8. Naidu urges Azad to push GST bill inMonsoon session

Union Minister M Venkaiah Naidu today urgedLeader of Opposition in Rajya Sabha Ghulam NabiAzad to back the crucial GST bill in the Monsoonsession of Parliament starting July 18.

Sources said, in a telephonic conversation withAzad, the Information and Broadcasting Minister,who earlier held the charge of Parliamentary Affairs,sought Congress support for the passage of the GSTbill.

The government has also proposed holding talkswith opposition Congress to iron out differences onthe issue. A meeting of top Congress leaders likeAzad and Anand Sharma with Finance MinisterArun Jaitley on the issue is likely to be held in a dayor two.

The Constitution amendment bill for roll-out of GSTis pending in Rajya Sabha for a long time and thegovernment is keen to see its passage. The Goodsand Services Tax seeks to bring a uniform taxstructure subsuming a number of imposts and thegovernment claims that it will help add 1 to 2 percent to the countrys GDP.

Top Congress leaders had yesterday deliberted onthe strategy for the session with party presidentSonia Gandhi at her residence where GST was alsodiscussed.

Congress has been pressing for a GST cap of 18 percent as part of the Constitutional Amendment billwith which the government is not in agreement.

Insiders say the demand has become a stickingpoint, but Congress may relent and agree to a cap inthe statute and not as part of the Constitution bill.

http://indiatoday.intoday.in/story/naidu-urges-azad-to-push-gst-bill-in-monsoon-session/1/714847.html

9. GST may see another roadblock over SCverdict on Arunachal Pradesh

The Narendra Modi government’s push for theGoods and Services Tax (GST) bill could see anotherroadblock in the upcoming monsoon session ofParliament with the Congress getting set to attackthe Centre on the Supreme Court verdict to restorethe ousted Congress government in ArunachalPradesh.The apex court on Wednesday directed therestoration of ousted chief minister of ArunachalPradesh Nabam Tuki as it quashed the decision ofGovernor Jyoti Prasad Rajkhowa advancing theassembly session in December 2015.The monsoon session of parliament will begin onJuly 18.Senior Congress leader Kapil Sibal on Wednesdaysaid that the government will have to answer everyquestion pertaining to the political crisis in ArunchalPradesh in the Parliament.Sibal said this in reply to the question whether theissue of political crisis in Arunachal Pradesh will beraised in the coming monsoon session.The winter session of parliament saw a tusslebetween the opposition and the government on theGST, which continued till the last budget session.The GST bill has not been passed yet.Ahead of the monsoon session, the government hasreached out to the Congress for passage of the GSTBill in the Rajya Sabha.Finance Minister Arun Jaitley on Tuesday spoke toLeader of Opposition in Rajya Sabha Ghulam NabiAzad and deputy leader of the Congress in theHouse Anand Sharma and also invited them for ameeting on GST.Earlier, new Parliamentary affairs minister AnanthKumar had a telephonic conversation with Leaderof the Opposition in the Rajya Sabha Ghulam NabiAzad and Anand Sharma.The GST, considered as one of the most significanttax reforms, is being stalled in the Rajya Sabhabecause of stiff opposition by the Congress.Congress has been keen on capping GST rate at 18percent, deletion of the provision which allowsimposition of one percent tax by additional levy andan independent dispute resolution mechanism.Meanwhile, the government is also banking on thechanging party arithmetic in the Rajya Sabha toenact the law.Earlier in June, after a meeting of EmpoweredCommittee of State Finance Ministers on GST in







Kolkata, Arun Jaitley announced that every statehad either supported or accepted the proposed GST,except Tamil Nadu, which expressed its reservationsand offered suggestions.

http://www.hindustantimes.com/india-news/gst-may-see-another-roadblock-over-sc-verdict-on-arunachal-pradesh/story-Kr7xeAAmBabs10Z6cKJURK.html

10. New-look Session; All Eyes on Whether GSTGets Nod

The monsoon session of parliament is in many waysan almost new-look session.

First, it has a new team from the government , mostcarefully chosen either with an eye on UP polls, ormore importantly, to get key bills like GST Bill. Italso comes with some humiliation for the BJPhaving lost face in Arunachal this week andUttarakhand earlier .

It also comes in the backdrop of ongoing turmoil inKashmir and the brazen defiance by Pakistan . Allthis means it may not be a fair weather monsoonsession for the government.

Sources say however the Prime Minister is keen towalk the extra mile to ensure he sends out themessage that the growth agenda of the governmentis intact.

The bad press and corporate unhappiness over theRaghuram Rajan incident has worried the PM thatthis message may be lost. Sources say the PM hasmade it clear to his team that come what may, nomatter how much extra mile it may have to walk,the passage of GST is crucial.

The Congress is caught in a bind. It wants to bedifficult, wishing to pay back the government forattacks on the Gandhis over the Vadra land issue,Agusta and National Herald. Yet, after claiming thatthe GST was their brainchild. the Congress cannotbe seen as resisting for long

Sources also say some kind of a trade-off has beenarrived at. There is a possibility that the governmentwould go a little soft on the Congress on issues likeAgusta till the GST is cleared .

This session is likely to be influenced by two factors. One, of course, the upcoming crucial Uttar Pradeshelections which also decided the new team of PM

Modi. But it's also the one in which parties likeTMC, JDU, BSP and SP will run the House.

Th last session didn't end too badly with severalbills being passed. But this time all eyes would be onwhether the GST finally gets the nod.

http://huntnews.in/p/detail/4166403567710130?xlang=en&uc_param_str=dnfrpfbivesscpgimibtbmntnijblauputoggdnw&pos=1468776000032&channel=headline&chncat=category_english

11. PM Narendra Modi: Thank all for stand onKashmir, now need to pass GST Bill

Reaching out to the Opposition on the eve of themonsoon session of Parliament starting Monday,Prime Minister Narendra Modi sought itscooperation in ensuring the passage of the Goodsand Services Tax (GST) Bill and commended allparties for speaking in “one voice” on Kashmirwhich has been rocked by protests over the killingof Hizbul Mujahideen commander Burhan Wani.

At an all-party meeting Sunday, Modi welcomedremarks by Ghulam Nabi Azad, Leader ofOpposition in Rajya Sabha, who said no issue wasmore topical today than that of Kashmir. Agreeingwith calls for a discussion on the Kashmir situation,the Prime Minister said: “Various parties have givenstatements on Kashmir events which benefited thecountry. This has sent a right message and I thankall the parties for the same.”

Noting that important Bills including the GST willbe taken up during the session, Modi expressed thehope that there will be meaningful discussions andoutcomes.

“GST is of national importance. Issue is not whichgovernment gets credit. Important Bills, includingGST, will be taken up in the monsoon session and Ihope there will be meaningful discussions andoutcomes. All of us represent both the people andparties and let us keep national interests aboveeverything else,” he said.

Azad later told reporters: “We have not taken anydecision that we have to stop a Bill. We will supporton merit. We will support any Bill which is insupport of people, progress and growth.”

Congress chief whip in Lok Sabha JyotiradityaScindia said: “We want a concrete draft proposalfrom the government on GST. If we know how they









plan to address the three contentious issues, we canrevert.”

The government and Congress may resume theirdiscussions on the Bill on Tuesday. “We haveassured all parties that there will be open-mindedness and we are ready to discuss all issues,”Azad said.

The Prime Minister’s appeal on GST came close onthe heels of talks between senior ministers andparliamentary leaders of the Congress.

CPM leader Sitaram Yechury said the GST Bill couldnot be a bilateral issue between the Congress andBJP. He said it should be discussed at an all-partymeeting before being brought back to the RajyaSabha. Finance Minister Arun Jaitley assured himthis would be done. Yechury’s stand was endorsedby SP representative Naresh Agrawal and seniorBSP leader Satish Mishra.

Sudip Bandyopadhyay of Trinamool Congressreiterated his party’s long-standing support for theGST Bill which is a manifesto commitment of theparty. BJD leader Bhartruhari Mahtab alsosupported the GST Bill.

Parliamentary Affairs Minister Ananth Kumar toldreporters after the meeting that the Government willtalk to all parties to evolve a consensus on the GSTBill. “Our legislative business, including GST, is apriority. We want to see we pass the GST Bill withconsensus. We are going to take every party onboard”.

Ananth Kumar said the government has lined up 16Bills for passage in the session. Other than GST,these include Enforcement of Security Interest andRecovery of Debts Laws and MiscellaneousProvisions (Amendment) Bill, Indian Trusts(Amendment) Bill, Whistleblowers Protection(Amendment) Bill and Child Labour (Prohibitionand Regulation) Amendment Bill.

On the situation in Kashmir, Azad, a former chiefminister of the state, drew the attention of leaders tothe role of the national media. Chat shows featuringreligious fundamentalists and exaggeratedportrayals of the ground situation, he said, werefanning flames in the Valley.

Azad was backed by Sanjay Raut of Shiv Sena whosaid every party was concerned about thedevelopments in Kashmir. He demanded a

discussion in both Houses and suggested thatanybody who wishes to speak on the issue shouldbe allowed to do so. NCP leader Tariq Anwar toosought a discussion on the Kashmir situation.

Azad, meanwhile, accused the government of“tricks” to destabilise Opposition-ruled states andmade light of Modi’s talk of cooperation betweenthe Centre and states by pointing out that even a BJPally like Akali Dal had attacked it for“undermining” states.

Given the developments in Arunachal Pradeshwhere it managed to avert a trust-vote debacle bychanging its CM, the Congress was also vocal on theissue of federalism and what Azad called the “trustdeficit” of states because of the “indifferent attitude”of the Centre.

The Trinamool Congress too wanted a discussion onfederalism and the BJD and NCP said Parliamentneeds to discuss the role of Governors. BSP’s SatishMishra said roles of both Governors and Speakersshould be discussed.

Leader of Opposition in Lok Sabha MallikarjunKharge urged the government to have the same“give-and-take” attitude with the Opposition inrunning the Lower House.

http://indianexpress.com/article/india/india-news-india/thank-all-for-stand-on-kashmir-now-need-to-pass-gst-bill-pm-modi-2920394/

12. GST Bill: The sticky points and what ispossible

All hopes are pinned on this monsoon session ofParliament for the passage of the much-delayedGoods and Services Tax (GST) law with thegovernment and Congress trying to find a middleground.

ET looks at the sticking points and what is possible.

1 per cent Tax on interstate movement of goodsProposed to compensate manufacturing states suchas Tamil Nadu for potential loss of revenue.

Congress DemandRightly demanded tax be dropped as it will createdistortions.





Government Stand Willing to let go; ready tocompensate manufacturing states which wanted thistax.

Dispute settlement mechanismThe proposed structure provides that the Centre andstates settle dispute through the GST council. Thevoting structure ensures no side has undue powers.

Congress demand Independent dispute: settlementmechanism.

Government standGST council should decide it; most states are also infavour.

GST RATEThis is the most contentious issue.

Congress demandPut a cap on the tax rate in the Constitution itself.

Government standGovernment rightly not elenting on this; it willmake the law rigid and difficult to change quickly.Government may be open to keeping it in the GSTlaw.

POSSIBLE TIE-BREAKERSAgree to GST rate in constitutionThe limit is set in Constitution but so high that it ismeaningless and gives government flexibility Forinstance, a rate of 25 per cent.

Put the rate in GST lawThis should satisfy Congress as change in GST ratewill still not be easy.

Changes in rate will need to be approved by theGST council.

Rate would also have to be changed in the state GSTlaws as well.Prescribe a bandAgree to a band of rate of GST that can be changedthrough notification with an appropriate ceiling.

This is the best case scenario.

http://economictimes.indiatimes.com/news/economy/policy/gst-bill-the-sticky-points-and-what-is-possible/articleshow/53256618.cms

13. BJD makes stand clear, will support GSTBill with riders

Bhubaneswar: The BJD on Sunday said it wouldsupport the crucial Goods and Services Tax (GST)legislation with certain changes in the monsoonsession of Parliament starting Monday.Briefing the media about the party's stand after anall-party meeting convened by the Centre to arriveat consensus on GST, BJD parliamentary partyleader in Lok Sabha Bhartruhari Mahtab said theBJD has already made its stand clear on the GSTlegislation."As there are provisions for the manufacturingstates like Tamil Nadu, Gujarat and Maharashtra tolevy 1% additional tax (beyond the tax provisions ofGST), we demand that the mineral-bearing states beallowed to levy the additional tax," Mahtab said.Earlier, chief minister and BJD president NaveenPatnaik had said on Sunday that his party wouldback the Goods and Services Tax (GST) legislationdespite its difference with the Centre over a numberof issues.The GST is a significant step in terms of tax reformsin India since independence, said an expert. Theproposed law would amalgamate a large number ofcentral and state taxes into a single tax.The ruling dispensation in Odisha also accused theCentre of reducing assistance and changing sharingpattern of a number of centrally-sponsored schemes."Odisha is a backward state and slashing of fundswould have a great impact on implementation ofwelfare measures. So, we demand a special fund forsuch states," said Mahtab.The BJD will raise other issues in both the houses ofParliament. They are construction of barrages in theupper catchment area of the Mahanadi byChhattisgarh and Polararam (now Indira Sagardam) by Andhra Pradesh.The party accused the Centre of playing politicsover the Mahanadi as Chhattisgarh is a BJP-ruledstate.The BJD would also protest against the Centre'sdecision to accord national status to Polavaramproject that is feared to inundate a large portion ofland and habitations in tribal-dominated Malkangiridistrict.The Centre is not taking a clear stand on Polavaramdespite Odisha's opposition to the project. Eventhough two cases related to Polavaram are pendingin the Supreme Court, the Andhra Pradeshgovernment is executing the project unilaterally,Mahtab added.





On Saturday, Naveen raised both the issues at theinter-state council meeting in New Delhi. The meetwas chaired by Prime Minister Narendra Modi.

http://timesofindia.indiatimes.com/city/bhubaneswar/BJD-makes-stand-clear-will-support-GST-Bill-with-riders/articleshow/53257568.cms

14. Monsoon Session: Opposition may spareGST bill, not Arunachal and Uttarakhandissue

The monsoon session, it seems, is not going to be aneasy ride for the Modi government as oppositionwould be seeking accountability on several issuesincluding Centre's role in removing electedgovernments in Arunachal Pradesh andUttarakhand, Kashmir violence, communal tensionin Kairana, price rise, agrarian distress and inepthandling of foreign policy including embarrassmentover nuclear suppliers group (NSG).

At an all-party meeting called by new parliamentaryaffairs minister Ananth Kumar on the eve of thesession on Sunday, the Prime Minister reached outto the opposition parties urging them to keepnational interests above any other considerations,while the latter ticked off the government for nottaking them into confidence.

While the Prime Minister could take solace in seeingincreasing possibility of Goods and Services Tax(GST) bill getting cleared because of Congress'diminished strength in the Rajya Sabha, Congressindicated that it would not give in without somefight. Apart from GST bill, the government haslisted around a dozen bills for passage during thissession.

Making an appeal for the passage of GST bill in themeet, attended by 45 leaders from 30 parties andsenior cabinet ministers Rajnath Singh and ArunJaitley, Modi said, "The issue is not whichgovernment gets credit. Important bills, includingGST will be taken up in the monsoon session and Ihope for meaningful discussions and outcomes."

In an effort to break the jinx in the parliament, LokSabha speaker Sumitra Mahajan also had a meetingfollowed by dinner with members of oppositionparties in which she asked them to sort thornyissues through a healthy discussion.

Playing down the talks between his party and thegovernment to break the deadlock over GST bill,Congress leader Jyotiraditya Scindia said, "We can

give a response only after we receive a written draftfrom the government."

However, Scindia rejected charges that his partywas blocking the bill, adding GST was a "baby givenbirth" by his party.

Getting its governments reinstalled first inUttarakhand and now in Arunachal Pradesh, arejuvenated Congress is trying to muster support ofother opposition parties on contentious issues tocorner the Central government before UP electionsthat are due next year. At the same time, Congressdoes not want to give a negative message of tryingto block every other legislation.

CPM general secretary Sitaram Yechury andSamajwadi Party leader Naresh Agarwal accusedthe BJP and Congress of indulging in "match-fixing"on the GST issue, and asked the government tofollow the parliamentary spirit of AB Vajpayeedispensation and consult all parties. Jaitley onFriday had met Congress leaders Ghulam NabiAzad and Anand Sharma in Azad's office inside theParliament to discuss the bill.

Taking a snipe at the PM over his call forcooperative federalism at the Inter-State Councilmeeting, Azad accused the government of using its"power" to engineer "defections" to topple Congressgovernments in two states and how the SupremeCourt nullified it.

Speaking about the "abuse" of governor's post, Azadreferred to UP governor Ram Naik's reportedjustification of arms training given to Bajrang Dalcadre.

"If government starts giving training to suchorganisations, then you can understand... whereterrorism originates," Azad said.

At the meeting, several opposition leadershighlighted the situation in Kashmir and howcommunication, including media has been shut andinept handling costing lives in police action.

Playing down differences with the opposition,Ananth Kumar said, "The meeting was very fruitful.All the parties desired smooth functioning ofParliament and assured of their cooperation.Congress too assured support to legislativeproposals based on merits."

The government has lined up 16 bills for passage inthe session and would discuss growing incidents of





terror attacks in different parts of the world andtheir implications on the country, foreign policy,floods in states like Madhya Pradesh andUttarakhand, said Kumar.

http://www.dnaindia.com/india/report-monsoon-session-opposition-may-spare-gst-bill-corner-govt-on-other-issues-2235522

15. GST may address dual taxation impact onmedia sector: Deloitte

NEW DELHI: Introduction of the much-awaitedGoods and Services Tax (GST) is likely to addressthe issue of cascading and dual taxation impact onIndian media and entertainment industry, a sunrisesector, says a report.

India is globally the fifth largest media andentertainment market, said a Deloitte report titled'Media and entertainment industry - India taxlandscape'.The "biggest ask of the industry" is the introductionof GST regime, which "now seems is not far fromreality", with the introduction of Model GST law,being made available to public by the Ministry ofFinance in June, it said.

It said there are many transactions where the inputtaxes paid are not available as credit and areregarded as tax cost. Likewise, many transactionsattract dual tax levies, because of the peculiarfederal structure of indirect taxes in India.

"GST, to be implemented possibly, may address thisissue of cascading and dual taxation impact," it said.

The government is keen to pass the GST bill in theupcoming Monsoon Session of Parliament. Theconstitution amendment bill for introduction of GSTis stuck in Rajya Sabha because the main oppositionparty Congress is demanding some key changes inthe proposed legislation.

On Friday Finance Minister Arun Jaitley held ameeting with senior Congress leaders to iron out thedifferences on the bill ahead of the session startingMonday. Another round of meeting between thetwo sides is expected soon.

The Deloitte report further said Indian media andentertainment industry is a sunrise sector, with arapid growth curve.

In 2015, the industry grew at 11.76 per cent with amarket size of $19 billion. Overall, the industry isexpected to grow at at CAGR of 13.98 per cent till2018. The report said by 2025, the industry isexpected to attain a market size of $100 billion.

As per the report, key challenges faced by theindustry from a tax perspective include aspects likeimproving the effective tax rate, managing tax risks,implications for cross-border transactions, cash-blockage on account of high withholding tax rate,and multiplicity of indirect taxes.

GST, touted as the biggest tax reform in India, willsubsume most of the indirect taxes.

Base erosion and profit shifting, place of effectivemanagement and income computation anddisclosure standards "pose new challenges" forplayers in the Media and entertainment industry,the report added.

http://economictimes.indiatimes.com/industry/media/entertainment/media/gst-may-address-dual-taxation-impact-on-media-sector-deloitte/articleshow/53248600.cms

16. GST Bill: Will respond after seeing draft oflegislation, says P Chidambaram

Former Union Finance Minister P Chidambaramtoday said the Congress party would respond onGST Bill after seeing the draft of the legislation.Chidambaram said the Union Finance MinisterArun Jaitely has promised to come up with“concrete proposals”. He said that Congress leadersGhulam Nabi Azad and Anand Sharma have heldtalks with the FM regarding the bill.Chidambaram, however, refused to share details ofthe talks.“GN Azad and Anand Sharma have held talks withthe FM, FM has promised to come back with someconcrete proposals,” ANI tweeted Chidambaram assaying.“Let us see the draft which they bring, and we willrespond,” Chidambaram added.Earlier in the day, Congress leader Rajeev Shuklahad said the government should agree tosuggestions made by the Opposition and removeadditional taxes for ensuring passage of the GSTBill.Shukla said the Congress is in favour of GST Bill,but only with certain amendments.“We want to get it passed since this is our bill. Weare the architects of the bill,” Shukla was quoted assaying by ANI.








http://www.financialexpress.com/india-news/gst-bill-will-respond-seeing-draft-legislation-says-p-chidambaram/320247/

17. BSP to support GST with some proposals

The Bahujan Samaj Party (BSP) today assured tosupport the crucial Goods and Services (GST) Bill inthe Monsoon Session of Parliament but with somesuggestions.

"Our party will give some suggestions when this billwill come up. Our party will support the bill withsome suggestions," BSP supremo Maywati told themedia here.

Prime Minister Narendra Modi earlier today askedall political parties to work cohesively and put forththeir arguments in a constructive manner.

He expressed confidence over the consensus builtacross all parties and hoped that everyone wouldtake the apt decision to ensure that India develops ata rapid pace.

Stating that the nation is set to celebrate its 70thIndependence Day this year, the Prime Ministerasked all parties to work unitedly keeping the samein mind.

The Monsoon session of Parliament began earlier inthe day. A total of 25 bills, including the crucial GSTBill, are expected to come up for consideration andpassage during the session.

The session will have 20 working days and willconclude on the 12th of next month.

The government yesterday called an all-partymeeting at the Parliament House to seek the supportof Opposition parties in the passage of pendinglegislations during the session.

During the meeting, Prime Minister Narendra Modiurged the political parties to keep nationalinterestsabove any other consideration.

He sought their support in the passage of the GSTBill, saying it was of national importance. He said itis immaterial which government takes credit forrolling out the GST.

The Prime Minister said all political parties arerepresentative of the people and, therefore, nationalissues should be kept above everything else.

http://www.business-standard.com/article/news-ani/bsp-to-support-gst-with-some-proposals-116071800356_1.html

18. Will fulfill nation's expectations withpassage of GST: Govt.

Eyeing upon the support of the Opposition in theMonsoon Session of Parliament, the Centre todayexpressed hope that the expectations of the nationwould be fulfilled with the passage of the crucialGoods and Services Tax (GST) Bill this time.

"We have said it many a times that the governmentis ready to discuss any issue. We are expecting wewill be able to pass the GST Bill and fulfill theexpectation of the people of the nation," Minister ofState in Prime Minister's Office Jitendra Singh toldthe media here.

Prime Minister Narendra Modi earlier today askedall political parties to work cohesively and put forththeir arguments in a constructive manner.

"In order to spur development and to take thenation forward, the discussions should be ofconstructive nature so that the nation develops at arapid pace. For this, everyone should work togetherin the Parliament to guide the nation," he told themedia outside the Parliament here.

Prime Minister Modi expressed confidence over theconsensus built across all parties and hoped thateveryone would take the apt decision to ensure thatIndia develops at a rapid pace.

Stating that the nation is set to celebrate its 70thIndependence Day this year, the Prime Ministerasked all parties to work unitedly keeping the samein mind.

The Monsoon session of Parliament began earlier inthe day. A total of 25 bills, including the crucial GSTBill, are expected to come up for consideration andpassage during the session.

The session will have 20 working days and willconclude on the 12th of next month.








The government yesterday called an all-partymeeting at the Parliament House to seek the supportof Opposition parties in the passage of pendinglegislations during the session.

During the meeting, Prime Minister Narendra Modiurged the political parties to keep nationalinterestsabove any other consideration.

He sought their support in the passage of the GSTBill, saying it was of national importance. He said itis immaterial which government takes credit forrolling out the GST.

The Prime Minister said all political parties arerepresentative of the people and, therefore, nationalissues should be kept above everything else.

http://www.business-standard.com/article/news-ani/will-fulfill-nation-s-expectations-with-passage-of-gst-govt-116071800250_1.html

19. Congress, not BJP, may now profit fromGST

If the Bill is passed now, it’s going to be taxing timesahead for the ruling party leading up to the 2019general elections.

Never has a nation been more excited at theprospect of getting taxed.

To be fair, the Goods and Services Tax (GST) is not anew tariff. The Narendra Modi government plans toreplace a commerce-stifling tangle of taxes with asingle, nationwide sales levy, a move that expertshave termed an epochal lowering of businessbarriers.

Union finance minister Arun Jaitley has hailed it asthe biggest reform in India since independence,claiming that it could add up to two percentagepoints to the growth of the economy. But he needsthe backing of the Congress to secure the two-thirdsmajority needed to pass a key and enablingconstitutional amendment in the Rajya Sabha.

The Opposition party, the original author of the GSTBill, has used every trick in the book to stall theinevitable. But with Parliament’s monsoon sessionbeginning on Monday (July 18), perhaps it’s time forit to stop trying to steal the BJP’s thunder and givein.

This is because if the Bill is passed now, it’s going tobe taxing times ahead for the ruling party leadingup to the 2019 general elections. And that means theCongress could go laughing all the way to thepolling booths.

The GST is globally known as a consumption-basedtax, but the finance minister has agreed to allowstates to impose a one per cent additional levy onthe cross-border transport of goods. This proposal isanathema to the Congress.

It has also asked for capping the tax at 18 per centand setting up an independent mechanism toresolve disputes on revenue-sharing between states.

Recent Assembly elections have helped boostsupport for the GST – either by adding strength tothe ruling NDA or to regional parties that supportthe measure. While the Modi government hasreached out to the Congress for its backing, it willalso try to isolate the party in Parliament to get itsway.

The principal Opposition party attempted tointroduce the GST when it was in office in thedecade to 2014, but was stonewalled by the BJP. Itnow sees an opportunity to avenge itself andundermine the economic reform programme of theNDA government, which was elected on a business-friendly ticket.

The battle has already led to several compromiseson the Bill, leading some analysts to say India couldend up being saddled with a poorly designed tax.

Now the earliest the GST can be implemented isApril 1, 2017. And the passage of the Bill will onlybe the beginning of the struggle, not the end. Thecosts of adjustment will be considerable, at least inthe short-to-medium term.

If and when the amendment is cleared in the UpperHouse, it needs to be ratified by more than half ofIndia’s states. Then Parliament must pass anotherBill to implement the tax. Finally, a newly-formedGST council would decide the overall rate, whichwould vary for different goods.

The tax structure that would emerge from thenegotiations would be far from ideal. So the GSTreform should be seen as a process rather than anevent. Once the basic features are implemented, itwould be necessary to improve the structure andoperational aspects over time.





No one knows what the eventual GST figure will be.Unless designed with as few exemptions as possible,the “revenue-neutral” rate – the level needed toensure that government receipts don’t decline afterthe new tax regime is introduced – could besignificantly higher than what many businesses paynow. That could damage both business sentimentand overall demand, which is already struggling.

Small business owners are almost certain to passsome of the burden to consumers.

In addition, services are currently taxed in India at15 per cent. If the final GST rate is higher, then that’slikely to boost inflation as well. And there’s nothingmuch that anyone can do but wait for the initialeffects to subside.

A finance ministry panel, headed by chief economicadviser Arvind Subramanian, said in December 2015that given the unavoidable “teething troubles” thatwill afflict GST implementation, it would beadvisable to keep rates lower lest it should increasetaxpayer displeasure, reduce compliance andincrease disaffection.

http://www.dailyo.in/politics/gst-bill-bjp-narendra-modi-arun-jaitley-congress-rajya-sabha/story/1/11811.html

20. GST hopes brighten, govt plans 5-hr debatein RS

The prospects of the GST bill seem to have furtherbrightened with government and Congress set toengage in further consultations over the longpending tax reform and the parliamentary affairsministry planning a five-hour debate in Rajya Sabha.However the date is not set yet.

After the government expressed hope for aconsensus and narrowing of differences withCongress, PM Narendra Modi on Monday told theBJP parliamentary party executive that effortsshould be made to reach out to other parties as well.The agreement to have a debate and the demand ofregional parties to be consulted itself seemed tosuggest progress, considering that the differenceslooked irreconcilable not long ago.

The PM's remarks came after Samajwadi Partyleader Naresh Agarwal complained that the bill wasbecoming a bilateral affair between BJP andCongress and warned that his party could stall the

legislation. CPM leader Sitaram Yechury has alsocalled for more consultations over the legislation.

The decision to plan a five-hour debate is seen as asign that an understanding on Congress's demandthat a tax rate of 18 per cent be "ring fenced" couldbe in the offing, with the government agreeing to itin the central GST law which will be enacted afterParliament and state legislatures approve theconstitution amendment bill pending in RajyaSabha.

The Centre is considering discussions withindividual parties rather than an all-party meetingas it looks to address Congress's demand for a"guarantee" that the tax rate will be capped at 18 percent. Congress has indicated it wants thegovernment to thrash out the issue with theprincipal opposition party before talking to otheroutfits. "Ours are the main objections and they haveto be addressed," a senior leader said. The two sideshave so far discussed proposals to reconcileCongress's demands for a tax cap of 18 per cent,abolition of 1 per cent surcharge and creation of adispute redressal mechanism other than theproposed GST council.

BJP leaders like finance minister Arun Jaitley haveheld several rounds of formal and informaldiscussions with Congress leaders and theexchanges are now focussing on resolving the nitty-gritties of the legislation. There seems to be concernin Congress that an all-party meeting might serve tohighlight its isolation on the issue and dilute itscapacity to insist on certain provisions.

Talking to reporters, Congress member AnandSharma said, "There has to be a tax cap. We cannotleave it to executive arbitrage. So we said it to bering fenced." He added that 1 per cent surchargewas not acceptable.

http://timesofindia.indiatimes.com/india/GST-hopes-brighten-govt-plans-5-hr-debate-in-RS/articleshow/53274512.cms







21. Here Is How Goods & Services Tax (GST)Will Benefit Indian Economy

GST stands for “Goods and Services Tax”, and is acomprehensive indirect tax levy on manufacture,sale and consumption of goods as well as services atthe national level. The main benefit of the GST is tofacilitate a uniform tax levied on goods and servicesacross the country. Currently, the indirect taxsystem in India has overlapping taxes levied by theCentre and the State separately. Taxes such as exciseduty, service, central sales tax, VAT ( value addedtax), entry tax or octroi will all be subsumed by theGST under a single umbrella.

GST is one of the biggest indirect tax reform & willlead to economic integration of India. However itrequires a constitutional amendment, whichrequires a bill to passed in both houses ofParliament. The GST constitutional amendment billwas passed in the Lok Sabha in May 2015. However,it has been held up in the Rajya Sabha due toobjections being raised by the Opposition. ThisMonsoon session of Parliament might succeed inpassing the GST Bill.

GST rollout will help faster and cheaper movementof goods across the country with a uniform taxationstructure. The logistic sector is primarily dividedinto four segments — transportation, warehousing,freight forwarding and value-added logistics. Thetransportation contributes the lion’s chunk of 60percent of the logistic pie, followed by warehousingcompromising industrial and agricultural storage at24.5 percent. Packaging and other related businessesconstitutes the rest of the segment.

1. Logistics industry is projected to grow at acompounded annual growth rate of 15-20 percentbetween 2015-16 and 2019-20 that will get a furtherboost if GST is rolled out from this year, which cantrim costs by 20 percent, says Care Ratings report.

2. Cost can also come down drastically as a one-nation-one- tax GST structure can massively reducethe long and winding queues at border check-pointsand other entry points within and between thestates.

3. Another reason for lower logistics cost is thatoperators will be able to rationalize and restructuretheir warehouses and other logistical infrastructure.

4. Due to trade barriers such as the entry tax, localbody tax, Octroi and other hurdles, trucks idle for

30-40 percent of the day, leading to huge man-hourand fuel losses, says the report.

5. Since GST will be levied on goods transportationand full credit will be available on interstatetransactions, logistic cost is expected to come downby 1.5-2 percent of sales due to warehouseoptimization and the resultant lower inventory cost.

6. According to the report, the higher growth of thelogistic industry will be driven by e-commerce, GSTrollout, government focus on local manufacturing,the new national integrated logistic policy, and 100percent FDI in warehouses, food storage facilitiesetc.http://www.thebuzzdiary.com/news/here-is-how-goods-services-tax-gst-will-benefit-indian-economy/

22. Will GST be Levied on Securities Such asShares?

With ‘securities’ being included in the definition of‘goods’ under section 2(48) of the draft model Goodsand Services Tax Act, 2016 (GST), industry circles,especially stock markets, brokers, banks and mutualfunds, are confused about whether GST would belevied on securities transactions.

If one looks at the history of indirect tax legislationin India, securities being essentially investments,activity of sale and purchase therein has never beensubjected to any service tax and value added tax(VAT). Even the definition of ‘goods’ currentlyunder various state VAT legislations excludessecurities and is accordingly not subjected to anysales tax. Further, even the current service tax lawincludes securities in the definition of ‘goods’ butthe same is with the intention of excluding it fromservice tax, as trading in goods is outside the ambitof service tax. So does it mean that the intention ofthe Government has suddenly changed and it hasdecided to levy GST on transaction in securities?

Firstly, GST is fundamentally a destination based‘consumption’ tax whereas securities are‘investments’. Imposing a value added tax onsomething which merely represents investmentswould go against the principle of GST. What can besubjected to GST, in our view, are services such asbrokerage, commissions, bank charges, etc whichinevitably accompany transactions in securities andnot the securities themselves. Such services are inthe service tax net already and the industry shoulddefinitely not mind if the same continues in the GST

http://www.thebuzzdiary.com/news/here-is-how-goods-services-tax-gst-will-benefit-indian-economy/

http://www.thebuzzdiary.com/news/here-is-how-goods-services-tax-gst-will-benefit-indian-economy/


regime with the added advantage of a liberal creditscenario.

Further, on the one hand the definition of goodsincludes ‘securities’ and on the other, it excludesmoney and actionable claims. It is not incorrect tosay that many forms of ‘securities’ can also partakethe character of actionable claims and transaction inmoney such as instruments representing beneficialinterest in movable property, unsecured debts,promissory notes, etc. Hence, it can be argued thatthere is a conflict in the understanding and thoughtthat has gone into drafting the definition of goods.This is also evidenced by the fact that the definitionof goods in the current Service tax law and the draftGST Act are almost identical in nature.

Subjecting securities to GST would also lead tovarious absurd scenarios where in sale of securitiesto Foreign Institutional Investors (FIIs) based out ofIndia would most likely qualify as export (subject toreceipt in convertible foreign exchange) and be zerorated, where as domestic sale of the same securitiescould be subject to GST. Surely, the governmentdoes not desire a scenario which incentivises allinvestments in India to be routed through foreignshores, sounding a death knell for domesticinvestments.

From the above, what best can explain the inclusionof securities in the definition of goods is that underthe draft GST law, certain activities are specificallydeclared as ‘services’ which possess the attributes ofboth goods and services to remove ambiguity andincluding securities within the definition of ‘goods’is probably a mechanism through which thegovernment would either exempt or exclude thesame from the ambit GST either through rules ornotifications to be framed in the future or throughthe final Act itself. In any case, it would be too muchto read into the mere definition of goods and drawfar fetched conclusions at this stage.

Another important aspect to be noted is thetreatment of reversal of Cenvat credits pertaining totrading of goods in the current credit regime. UnderRule 6 of Cenvat Credit Rules, 2004 which providesfor reversal of credits, ‘securities’ and goods otherthan securities have been accorded separatetreatment. It should be noted that the ‘value’ oftrading for goods other than securities has beendefined as difference between the sale price and thecost of goods sold or ten percent of the cost of goodssold, whichever is more. Whereas, the ‘value’ fortrading of securities has been defined as difference

between the sale price and the purchase price of thesecurities traded or one percent of the purchaseprice of the securities traded, whichever is more.This shows that even the current service tax lawrecognises the difference in the nature of securities,and goods other than securities. Both have beenaccorded significantly different treatment as far asreversal of credits are concerned.

Last but not the least, under most international GSTlaws whether it be in Australia, Cananda orSingapore, sale and purchase of securities such asshares and bonds have been exempted from the levyof GST. Though, GST in India is expected to deviatesomewhat from the GST laws currently in forceinternationally, the broad principles including thetaxability of transaction in securities would mostlikely be in line with practices in other GSTjurisdictions.

In a nutshell, while the said topic is the talk of thetown, we do not expect any nasty surprises from theGovernment in an area such as securities which haslong experienced a settled and stable indirect taxregime. Representation to resolve this issue / getclarification can surely be done with the Ministry ofFinance by the concerned associations. It would beinteresting to watch the developments in this space.

http://www.bloombergquint.com/opinion/2016/07/19/securities-what-should-be-their-treatment-under-the-draft-model-gst-law

23. GST Bill: Odd numbers

The Centre is keen on passing the Goods andServices Bill in the current session of Parliament.The Bill, officially known as The Constitution (122ndAmendment) (GST) Bill, 2014, requires amendingthe Constitution to bring a goods and service taxthat will subsume all indirect taxes.

Constitution Amendment Bills can be passed only ifat least two-thirds of the House votes in favour ofthe Bill. Both Houses need to pass the Bill separatelyin this manner and a joint session is not allowed.Then the Bill should be ratified by at least half of theStates.

The Narendra Modi-led government is the first onesince 1984 to enjoy a single-party simple majority inLok Sabha. The BJP has 282 MPs, well above thehalf-way mark of 273. However, even with allies, itsstrength in the Lower House is 336, short of the two-third majority mark of 409.





The Bill cleared the Lok Sabha with the support ofregional parties such as the Trinamool Congress.

But the government is up against a big hurdle in the245-member Rajya Sabha. In the recently-concludedRajya Sabha elections for seven States, the BJPmanaged 11 out of 27 seats. This took BJP's strengthin the Upper House to 54. Other constituents of theNDA collectively hold 18 seats taking the alliancenumber to 72. The two-third mark is 164.

The Rajya Sabha has 10 nominated members, ofwhom seven were nominated this year. Out of fourindependents, media baron Subhash Chandra, andindustrialists Rajeev Chandrashekar and ParimalNathwani won with the BJP's support. Assumingthat these 10 MPs vote for the government, thesupport of 82 members is still needed.

The JD(U), RJD, INLD and JD(S), which haveconsidered a merger to bring back the parent JanataParivar, together hold 15 seats. The JD(U) and RJD,the ruling combine in Bihar, account for 13 of thoseseats. It may be noted that friends-turned-foesNitish Kumar and Lalu Prasad turned friends onceagain during the Bihar Assembly elections to defeatBJP in the State. However, bringing some respite tothe BJP, Bihar Chief Minister Nitish Kumar hasannounced that his party's 10 MPs will support theBill in Rajya Sabha.

Perhaps for the first time, 77 members in the RajyaSabha are not aligned to the principal nationalparties, BJP and Congress. The SP (19), AIADMK(13), Trinamool Congress (13), BJD (8) and TRS (3)are all ruling parties in their respective States. TheSP and BSP (6) have pledged their support. TheSharad Pawar-led NCP has five members, and JMMand YSRC have one each. The government hopesthese parties will give issue-based support. Whilethe BJD has sought some changes to the Bill, theAIADMK has outright rejected it.

The Left parties, which have nine members, havealready announced that they will oppose the Bill.

The Congress, which didn't have enough numbersto hold the post of Leader of Opposition, is thesingle largest party in Rajya Sabha with 60members. Its UPA constituents -- DMK, MuslimLeague and KC(M) -- hold six seats.

If the BJP manages to convince Congress, then it getsthe required number. Though the idea of GST wasfloated by Atal Bihari Vajpayee, it was P.

Chidambaram, the UPA-1 Finance Minister, whoannounced that GST would be rolled out in 2010. AnEmpowered Committee of State Finance Ministerswas constituted during UPA regime and the Bill, incurrent form, is based on this EmpoweredCommittee's report. But Congress is opposing theBill in the current form and has three demands.

The BJP is willing to do away with the one-per-centadditional levy on inter-State tax but is unwilling toaccept Congress' other two demands: constitutionalcap on the rate of GST up to the maximum of 18 percent, and an independent dispute resolutionauthority.

Another reason: BJP is the ruling party in nine out of31 States. While Congress is the ruling party inseven States and coalition partner in two.Together,they can pass the Bill in their respective States,which will enable quicker implementation of theBill.

http://www.thehindu.com/news/national/gst-bill-the-number-game-in-rajya-sabha/article8875109.ece

24. Rahul Gandhi vs RSS: What does it meanfor GST Bill?

Is the Congress really under pressure after theSupreme Court rapped Rahul Gandhi on theknuckles and asked him to either apologise or face atrial for defaming the RSS?

Many argue that this is the best thing that couldhave happened to Gandhi, for it will now mean thatthe Muslims of India will now flock to Gandhi andthe Congress, believing he and the party are theonly organisations that can stand between them andthe Sangh affiliates like Bajrang Dal and the VishvaHindu Parishad.

Cynical as it may sound this could be one of thereasons why Gandhi refused to apologise inNovember last year when the court offered him away out. The case was originally registered inBhiwandi in Maharashtra and Gandhi travelled allthe way to be present at the hearing of the courtalthough he was not required to. All this suggests heis not backing off and is ready to be imprisoned forhis views.

The factual position — what the Sangh had to dowith the plot to assassinate the Mahatma — has littleor nothing to do with the political use to which it isbeing put. Gandhi can do one of two things — say




he did not say what the RSS says it heard him say;or that he did say what he said and it was notdefamatory.

Those are legal positions. Either way, the messagewill go down that he is the only person who is readyto take on the RSS head on.

The Parliamentary dynamic and implications of thisare different. On Goods and Services Tax (GST)issue, there is no doubt the Congress is isolated andis likely to become more so as Finance MinisterArun Jaitley heads out to Telangana and AndhraPradesh on Friday to solicit the support of theTelangana Rashtra Samiti (TRS), which is neithersupporting BJP nor Congress; and ChandrababuNaidu’s Telugu Desam Party, which requires littlepersuasion since it is an alliance partner of theNational Democratic Alliance government.

The current strength of the Rajya Sabha is 243. Itneeds two thirds present and voting to pass aConstitution amendment bill. This works out to 162.

The naysayers in the Rajya Sabha on GST are two —AIADMK with 13 and Congress with 60.

Where does that leave the Rajya Sabha? 74 areagainst the bill. The rest are for it (barring tacticalobjections raised by parties such as Samajwadi Partywhich says don’t take us for granted, but has notreally raised substantive issues against GST). Thisfigure works out to 169. 162 are needed for clearpassage.

Nobody is saying it is easy: a lot of persuasion,placating and cajoling needs to be done. And thegovernment would like to take the Congress onboard.

What does Congress want?

There is a lot of noise, but cutting through all that,its basic demand is cap on the rate of tax becauseindirect taxes hurt the poor the most if they areraised at will.

The government says the GST Council is there totake care of that. The Congress says, if in the future,many states are ruled by one party, it canconceivably have its way in the GST Council; whereone state has one vote, regardless of its weight in theeconomy or its contribution to it.

As a compromise, the party says: don’t include thecap in the constitutional amendment bill. It isenough if it is in the bill that spells out GST (and thiscan be amended by simple majority).

The government says if that is done now, the billwill have to be sent back to the Lok Sabha, whichwill take time.

So far, it does not look as if the Congress is going tobe taken on board by the government which figuresit can pass the GST bill and at the same time, makethe Congress look irrelevant to the whole GSTnarrative. That’s two birds with one stone!

http://www.business-standard.com/article/politics/rahul-gandhi-vs-rss-what-does-it-mean-for-gst-bill-116072000168_1.html

25. GST to unify indirect taxes regime: report

The Goods and Services Tax (GST) is potentially agame-changing indirect tax reform. Apart fromsimplifying the current indirect tax structure, GSTshould help create ‘One’ India by eliminatinggeographical fragmentation, according to a reportby Nomura. Political consensus now seems to bechanging in favour of GST and it is likely to becomea reality soon.

While short-term macroeconomic implications ofGST would be mixed, longer-term implementationshould lift the growth and enable greater generalgovernment fiscal consolidation, said the report,India Goods and Services Tax: Making “One” India.

GST will be generally positive for consumption-related sectors like auto, consumer durables andfast-moving consumer goods (FMCG). Logisticsshould benefit from the removal of inefficiencies ininter-state taxation and check posts. The servicessector, however, would be impacted negatively dueto the higher tax burden.

The GST is a destination-based indirect tax on goodsand services levied on the value added at everystage, from manufacturing to consumption. Itinvolves a continuous chain of input credit set-offbenefits starting from the producers, through theservice provider and up to the retailer level.

Macroeconomic impact

From a macroeconomic perspective, the short-termimpact of GST could be mixed but the long-term





impact will be clearly positive. It may have negativeimpact on GDP growth in the short term, as highertaxes on services (60% of GDP) would hurtconsumption of discretionary services; and firms areunlikely to immediately pass on impact of lowertaxes on goods to consumers, thus limiting the boostto consumption of goods.

However, productivity gains are expected in thelonger term from a simplified, more efficient taxsystem and the removal of interstate tax barriers.

The introduction of the GST should simplify andunify the indirect tax regime in the country, which iscurrently riddled with complexity owing to multiplestate and central taxes, a multitude of exemptionsand incomplete input credit across different taxesand between goods and services.

http://www.livemint.com/Home-Page/bSwic8LdN2RfzdNzuvBXHJ/GST-to-unify-indirect-taxes-regime-report.html

26. GST to help track evasion of CVD

With the rollout of the proposed goods and servicestax (GST), the Customs department will be able todo enhanced scrutinisation of under-invoicing ofimports that is done to evade additional duty ofcustoms or the countervailing duty (CVD). Majordiscounts on prices of imported goods offered by e-commerce companies will come under the scannerof the tax authorities as they would qualify forundervaluation at the time of payment of customsduty, a senior CBEC official said.

Under the GST, tax authorities will be able to trackthe retail value of imported goods through the ITframework of Goods and Services Tax Network(GSTN). The Central Board of Excise and Customs(CBEC) will be able to track discrepancy betweenthe prices of imported goods and their sale prices.

The CVD is presently not integrated with the saleprice and importers usually indulge in under-invoicing to evade tax. Under the GST, theauthorities will be able to trace the transactions withthe traders availing input tax credits at every level.

“The customs department has an integrated onlinesystem with a database on bills of entry and theinvoices. Integration of this system with GSTN willhelp in checking tax evasion,” another CBEC officialsaid.

There will be a system of self-policing, the officialsaid. For example, an importer having declared theMRP of an imported good as Rs 100, won’t be ableto sell it at for more than Rs 100. “If an importer hasunder-declared the price at the time of import andsold it at a higher price, this can be tracked,” theofficial said.

The GSTN will get integrated with the customsonline software, which at present fails to show anyovervaluation at retail level. A CVD is imposed onimports that may impact domestic producersbecause of the cheap pricing of imports.

http://indianexpress.com/article/business/business-others/gst-to-help-track-evasion-of-cvd-2924677/

27. GST Bill: Furore amongst taxpayers; here’swhy

Like it typically happens while introducing a taxlegislation—packaged as a ‘tax reform’ that has thepotential to change the way business is done—GSThas been popularised both by this government aswell as the previous regime by dubbing it ‘taxreform of the country’, an ‘instrument of ease ofdoing business’ and ‘a single factor which canincrease GDP growth rate by 0.5% per annum’.While the last claim will be tested with time, it isclear that the first two will be difficult to achieve,especially if what has been cooked up by thedrafting teams of the Centre and states is allowed toremain as it is.

While Parliament is preparing for the grandmonsoon wedding between the Centre and statesvia a Constitutional Amendment in this session, thedraft GST Bill has created a furore amongsttaxpayers. A cursory look at the provisions indicatesthat what has come out is one of the toughest taxlegislations, even worse than the Customs Act, 1962.Though the legislation has a provision for self-assessment, it has been literally reduced to a farce,as there will be scrutiny of returns, assessment ofnon-filers, assessment of non-registered persons andsummary assessment in special cases. Then therewill be audit, special audit, inspection andverification by a computer system of mismatch oftransactions, if any, relating to input and outputsupplies. Apart from this, there are normalprovisions relating to search, seizure and arrestoffences and penalties, and prosecution ofcognizable and non-cognizable offences. The worstis that the ‘burden of proof’ of input credit has beenshifted to the assessee, showing that nervous







authorities have plugged the loophole of instantdata capturing by information technology. Distrustin the assessee has been shown by introducingSection 121, which pertains to ‘Test Purchases ofGoods and Services’ by using decoy customers.

The scope of ‘Advance Ruling Authorities’, thoughwidened, has been made litigation-prone byproviding for an appeal. But the whole exercise maybecome redundant as a difference of opinionbetween two members of the Advance RulingAppellate Authority will nullify the decision.

Many definitions are superfluous and ‘businessvertical’ has been defined with reference toAccounting Standard 17 of the ICAI. Not only aresuch standards in a state of flux, there is nocomplete reference of volume or year by which suchaccounting standards shall be known. There is areference in various provisions relating to ‘GenerallyAccepted Accounting Principles’, on which evenchartered accountants can differ and the assesseewill have to approach a chartered accountant timeand again. Such accounting principles could havebeen easily listed in the ‘Schedule’.

The Act stipulates taxing of a casual taxable personfor all business-related transactions and the netresult is that even when an old and obsolete asset issold, one may require paying of taxes throughtemporary registration. For this, there is not evenany exemption limit available. By the spirit of law,even raddi sold by government departments,business entities and professionals will incur taxpayment. Similarly, when both supply of goods andservices are going to be taxed, the purpose ofdefining ‘works contract’ is defeated and will createconfusion.

As it often happens within two arms of the samegovernment, while income tax allows notionalincome to be worked out without maintainingdetailed accounts to have ease of business and lesscompliance cost for small businesses for an amountup to R2 crore, the composition levy not requiringdetailed accounts under GST is confined up to R50lakh limit, thus requiring detailed accountingthereafter. There is an automatic condition that anyexplanation added in any provision within one yearwill have retrospective effect from the date ofprovision. The concept of ‘Pure Agent’, with its 11-odd conditions and which had attracted lot oflegislation before the concept of taxing grossreceipts was struck down by the Delhi High Court

in Intercontinental Consultants, has been broughtback.

A registered person even for a non-taxable servicehas to issue prescribed bill of supply, leading tounnecessary documentation. Unjust enrichmentprovision will henceforth cover even interest.Compliance rating for every registered unit has beenintroduced, though no accountability for non-compliance of officer(s) has been fixed. For everylitigation, even though done by the department, theassessee is required to keep the accounts till finality.Hopefully, this will mean more space available ingovernment departments and only files with theassessee. The period of limitation has beeneffectively increased up to six years. Two stages ofappeals have been provided with 10% mandatorydeposit at each stage. Recovery provisions havebeen made so elaborate they can lead to duplicity.

Recovery can be made through lien, attachment,recovery from the successors, distrain of propertyand through certificate action of the collector andeven through the magistrate by attachment of anymoveable or immovable property of offender.Through a non obstante clause in Section 57, taxdues have been made first charge in the property,even though similar laws exist for EPFO, banks, etc.This will lead to a situation of, inter se, litigationbetween various departments. A closed factory maybe sealed by five different departments with eachfighting as to who will have primacy under its ownnon obstante clause. There are many such tediousprovisions to make life difficult for the assessee. Itwill be, therefore, in the fitness of things that theGST draft is put to detailed scrutiny before it isnotified. Any haste in this regard is bound to becounterproductive.

http://www.financialexpress.com/fe-columnist/gst-bill-furore-amongst-taxpayers-heres-why/322519/

28. Can proposed GST be called Indirect tax?

PROPOSED model for GST appears to have beendrafted by taking provisions from different legalprovisions which already exist in various statutesthat exist for collection of indirect taxes of differentcategories. It also appears that while adopting theprovisions of earlier law, the disliked ones haveinvariably been taken and included. Whole countryis looking forward to a GST regime which wouldmake compliance simpler, reduce litigation andavoid disputes so that tax payment is not felt aburden. But if the model GST law comes into force




as it is, this hope will remain a dream. Again itappears a good policy and a good taxation systemwill end up creating problems because of our policymaking and implementation history.

An indirect tax (such as sales tax, value added tax(VAT), or goods and services tax (GST)) is a taxcollected by an intermediary (such as amanufacturer/traders/service providers) from theperson who bears the ultimate economic burden ofthe tax (such as the consumer). The intermediarylater files a tax return and forwards the tax proceedsto government with the return. In this sense, theterm indirect tax is contrasted with a direct tax ,which is collected directly by government from thepersons (legal or natural) on whom it is imposed.The Model law proposed does not treat the taxpayers as intermediaries since tax payment has norelationship to the collection of tax by theintermediary. While in the case of manufacture, theduty was on the activity of manufacture, collectionwas postponed to the stage of removal. In factExcise duty is a British legacy. An alien governmentwas not bothered about the convenience or thecorrectness of the method of collection of tax or themethod of collection vis a vis nature of tax andtherefore had introduced a system where duty hadto be paid before the goods left the factory andgovernment posted officers in each manufacturer'spremises. While presence of an officer andassessment and payment of tax before removal areno longer in the statute book, the law still requiresExcise duty to be paid without any relation to thefact as to whether tax has been collected or not andwhether the transaction is of such a nature that noconsideration was to be received (e.g. removal toone's own premises for further manufacture orprocess etc.). When several governments, partieshave joined together and have agreed to come outwith a new law, it presents a golden opportunity tosimplify the law.

Time has come to propose a law for the honest taxpayer and not to envisage all kinds of situationswhere evasion is possible and try to plug the same.When the law is complicated, it requires elaborateprocedures and processes to enforce the same.Mistakes in following the procedures to the lettercannot be and in any case are not ignored. The realevaders of tax escape since tax administration isbusy enforcing and ensuring that the proceduresand processes are followed. Some of the proposalswhich can be considered to be against the basicfeatures of indirect tax, namely it is borne by theultimate consumer and collected by the

intermediary and paid to the government arediscussed below.

1. The law enumerates instances where supplywithout consideration can be taxed. This provisionshould have no place in the case of indirect taxes. Itis felt that any supply of goods/services should betaxable only when it is supplied for consideration asper the definition given in the proposed statute. Ifthis is done, no doubt interstate stock transfers andsupply of goods for job work and supply forcharitable purposes and manufacture for personaluse and by the government for the use ofgovernment will go out of tax liability. In the case ofstock transfer and job work, the liability will not goaway but gets postponed. Therefore taxable personsmay pay tax on their own in their own interest andit should not make much of a difference on whatvalue he pays tax since ultimately it will be taken ascredit while making further supply ofgoods/services. In the same manner, there is noneed for a related person concept, since in thesupply chain, at one stage or the othergoods/services have to be supplied to unrelatedpersons and at that stage tax liability falls on theconsumers which is basically the intention of GST.As regards job work, the manufacturer has toaccount for the inputs and show that they have beenused for trading or production of output goods orservice.

2. For determination of tax liability, the model lawhas elaborate provisions to determine the time ofsupply and determination of value. If it is proposedthat the supplier should collect the tax and pay tothe government and then it is provided that valuewould include all types of considerations which canbe monetised it will make the process simpler andany amount received by a supplier of goods orservice in relation to that transaction, he has tocollect the tax and pay it to government. This willreduce enormous amounts of dispute that arise inimplementation. It will also make the supplier anintermediary who collects the tax and pays to thegovernment.

3. In India supplier of goods and services is alwayshandicapped because if the purchaser does not pay,the legal remedy consumes enormous time andeffort and even if a decree is ordered by the court,recovery is virtually impossible. What is needed tobe remembered is the fact that if the tax rate isassumed to be 25%, the stake of a taxable person is80% of the cum tax consideration and his stake isfour times the stake of the government. Payment of


tax after collecting consideration would at least savehim from losing the tax paid to the government inthe event of default by the receiver of supplies. Itwill be a truly indirect tax since supplier need notpay tax till he collects consideration. When we takethe rate of tax into account it would be a substantialrelief that the government can provide. This shouldact as a great incentive to businessmen to pay taxeshonestly.

4. Experience of the tax payers in the past and theobservations of the Tribunals on the quality ofinvestigations and adjudication proceedings wouldshow that a large number of cases arise because ofinterpretation of law but more often than not areconsidered as offences resulting in demands gettingconfirmed for 5 years (More in case of service tax).Evasion cases where investigation is thoroughinvariably land before the Settlement Commission.The fact that success rate of appeals filed by the taxpayers is more than 80% and by the department isaround 20% would support the view that taxdepartments have not been fair. In such a situationproviding for pre deposit of 10% of tax, interest andpenalty in situations where the tax payer would nothave collected the tax itself would be totally againstthe basic philosophy behind collection of indirecttaxes. Further, the law provides for normal period oflimitation of 3 years and nine months for passingadjudication orders. This will result in furtherreduction of time available for a taxable person topresent his case in defence since minimum time maybe left by the officers between show cause noticeand the order. This would result in more violation ofprinciples of natural justice and more litigation. Thisalso means that if a tax payer makes a mistake incollecting the tax, he has to pay tax and interest bothof which would not have been collected by him andpenalty on top. On the other hand if he has paid taxin excess without collecting the same, he is entitledto refund only for a period of two years withoutinterest till the date of filing refund claim. We haveto keep it in mind that most of the refunds now arisebecause of accumulated cenvat credit in the hands ofexporters. Therefore, it may be appropriate toprovide that as soon as it is found by the officers ofthe department at the time of visit/audit or scrutinyof return that a taxpayer has not paid tax which wasliable to be paid or has taken the credit not eligible,he should be advised that he should start collectingthe tax and pay the same or not take the credit infuture pending investigation as to whether he hadcommitted an offence in not paying or not. If there isno offence committed, there would be no liability forthe past at all. This would be in line with the basicphilosophy of indirect taxes.

http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=27567

29. All Cargo Logistics sees efficiency gainsafter passage of GST

COO Prakash Tulsiani says it will reduce waitingtime of transporters, cut documentation and costs

India Inc is keenly awaiting the passage of the GSTBill as it will reduce the cascading effect of aplethora of taxes, create a unified market, softeninflation and boost economic growth.

Speaking to Bloomberg TV India, AllCargo LogisticsExecutive Director and Chief Operating OfficerPrakash Tulsiani says the GST regime will reducewaiting time of transporters, cut documentation, cutcosts and improve efficiency.

While most companies now work on the basis ofwhat is most tax effective for them, after GSTrollout, they will work on the basis of what is moreimportant for them from the logistics point of viewand what meets the clients’ demand, he said.Excerpts:

What is your view on the GST Bill and the overallexpectations of its passage?

We hope the GST Bill will be passed and it will beimplemented soon after. Today, without GST, goodstransported from one State to another are treated ascrossing one country to another. There is a lot ofwaiting time involved. There is lot of documentationinvolved and it takes lots of logistics to get thegoods transferred from one State to another.

With GST, we will have one country, which will alsobe one market. There will be no boundaries of Statesaffecting us and the goods can be transported veryquickly and easily.

So today, while most of the companies work on thebasis of what is most tax effective for them,tomorrow they will work on the basis of what ismore important for them from the logistics point ofview and what meets the clients’ demand.

So, definitely this will be a big change in the way thecompanies approach the market and theircustomers. Then, obviously, there will be a hugedemand for logistics companies.




What is the current tax burden? After theimplementation of GST, by what extent do youexpect the tax burden to come down?

We don’t know by what percentage points the taxburden will come down. There will be a reduction incost because there will be less waiting required atthe boundaries of States. There will be higher assetutilisation, higher turnaround and efficiencies in thesystem. So those efficiencies will definitely bepassed on to end consumers.

The companies will look at what is more importantfor them to reach their customers — where wouldthey like to set up their warehouses or distributionnetworks. And for that there will be huge networks.

What is happening today is that depending on eachState, companies are having smaller networks orwarehouses. Once the GST is in, then we will havelarger warehouses, larger logistics need; contractlogistics will come in and distribution networks willbe set up on the basis of that. And that will meancompanies with pan-India presence such asAllCargo Logistics. Companies with themanagement bandwidth and the strength to bring inefficiencies and take cost out, will be required.

AllCargo has prepared itself to meet this highdemand, which will come in. And that is the reasonwe merged with CCI Logistics. Our new name isAvashya CCI. We have taken steps towardsinvestment in logistics parks in the NCR.

http://www.thehindubusinessline.com/companies/allcargo-logistics-sees-efficiency-gains-after-passage-of-gst/article8871612.ece

30. Nitish backs centre on GST, pressuremounts on Cong

NEW DELHI: Bihar chief minister, JD(U)'s NitishKumar, on Tuesday came out in support of theGoods and Services Tax (GST), intensifying thepressure on his coalition partner Congress toreconsider its opposition to the landmark reformmeasure or at least finesse its stand.

The GST bill+ came up for discussion in Kumar'smeeting with finance minister Arun Jaitley onTuesday and the leaders appear to have reachedcommon ground even as the government hopes thatthe legislation will be passed in the current sessionof Parliament.

"We have always supported the GST. We supportedit during the UPA and support it now. This is in theinterest of the country and states. Our party fullysupports it," Kumar told the media after themeeting.

The Bihar CM announced his support for GST+ afterhis meeting with Jaitley, joining the ranks of othernon-NDA parties Trianmool Congress, Biju JanataDal and Samajwadi Party which have come out inthe open to support the reforms measure. Duringthe meeting, Kumar is understood to have soughtrelease of funds under the backward region grantand financial support for a student card the stategovernment is planning.

The CM's support for the legislation is important forthe NDA, which has launched yet another round ofdiscussions with CMs and regional parties in a bidto ensure the bill's passage in Rajya Sabha, where itlacks majority. Most regional parties have agreed tosupport the bill, but a fresh outreach is underwayeven as the government's negotiations withCongress — the main opponent to the legislation inits current form — seem delicately poised.

The government is considering options to meet theCongress' demand that a tax rate of 18 per cent be"ring-fenced" if it cannot be made part of theconstitutional amendment required for the taxreform. Opinion in Congress is still divided but thefinal call will be that of party vice-president RahulGandhi who has indicated that the rate is the realsticking point.

Kumar's support will be significant as it can beexpected to shore up sentiments in non-NDA, non-UPA parties like SP, BJD, Trinamool Congress andeven AIADMK that continue to have somereservations on the bill.

http://timesofindia.indiatimes.com/india/Nitish-backs-centre-on-GST-pressure-mounts-on-Cong/articleshow/53292725.cms








31. Government counts on regional parties forGST numbers

As government garnered support from regionalparties on the Goods and Services Tax (GST) bill, theCongress appeared to be open to negotiating on itskey demand for an 18 per cent cap.

The indication, that the Congress was open tobargaining to find a middle path, came on a daywhen Bihar chief minister Nitish Kumar reiteratedthat the JD-U supported GST and opposed the 18per cent cap being included in the ConstitutionAmendment Bill. Nitish, who met finance ministerArun Jaitley in his Parliament House office onTuesday evening, was of the view that the capshould be left to the GST Council.

At a meeting of the BJP parliamentary party in themorning, Jaitley had said that the government wastrying to evolve consensus on GST. He said whileone round of meetings had been held withCongress, another would be held with regionalparties. He asked the MPs to ensure their presencefor two crucial bills– GST and CompensatoryAfforestation Fund Management and PlanningAuthority (CAMPA) amendment.

The Congress, which was awaiting concreteresponses from the government on its threedemands, is mulling over the option of includingtheir demand for 18 per cent cap in the subsequentbills related to GST and not the ConstitutionAmendment Bill, according to party sources. Afterthe Constitution Amendment Bill is passed, thereare three more legislations– Central GST (CGST),State GST (SGST) and Integrated GST (IGST) - whichneed to be passed.

Congress leader Anand Sharma met Jaitley briefly.The party, however, said it had no information ofany second round of meeting between its leadersand government. "The Congress wants to see theGST in principle to be enforced, a strong GST billwith strong enough provisions. We hope that thegovernment given its mandate will showmagnanimity in allowing a different set of opinionsand allow that platform to be created so that all ofus can come together and ensure that GST getspassed," Congress spokesperson Gaurav Gogoi said.

Meanwhile, on the Congress's other two demands–abolishing one per cent surcharge and a stronggrievance redressal system for Centre-state

disputes– the government could soften, sourcessaid.

The government has exuded confidence that itwould be able to evolve consensus on the bill, forwhich parties have agreed to allocate five hours inRajya Sabha. Prime Minister Narendra Modi hadsaid that NDA should reach out to all parties,including small ones.

Jaitley will try to reach out to the three-member TRSduring his trip to Telangana over the weekend, andwill meet chief minister K Chandrasekhar Rao.

Meanwhile, the government is also all set to vote forCAMPA, another bill on which the Congress isseeking several amendments. Jaitley told the BJPMPs that the bill, once passed, would ensure

Rs42,000 crore for afforestation. If the governmentmanages to pass the bill without Congress support,it would be a signal to the main opposition partythat it could do the same with GST. However, GSTbeing a Constitution Amendment Bill, thegovernment would prefer to get all parties on board.

Though the BJP's numbers in Rajya Sabha have goneup marginally, it is still in a minority at 53 against 60MPs of the Congress.

http://www.dnaindia.com/india/report-government-counts-on-regional-parties-for-gst-numbers-2236260

32. Countdown to showdown on GST begins

New Delhi: The countdown to the possible passageof the constitutional amendment bill to roll out thegoods and services tax (GST) has begun well for theNational Democratic Alliance (NDA) government,with Bihar chief minister Nitish Kumar coming outin its support. Kumar’s support came a day after thebusiness advisory committee (BAC) allotted fivehours for the Rajya Sabha to discuss the bill.Meanwhile, the NDA has reached out afresh to theCongress to forge a consensus.

“The passage of GST is in the interest of the country.We support GST and have favoured it since thebeginning,” Kumar told reporters in Delhi onTuesday. Earlier in the day, Kumar met with financeminister Arun Jaitley.

Significantly, Kumar’s party, the Janata Dal(United), or the JD(U), was previously reluctant to




support the legislation, aimed at dismantling inter-state barriers to trade.

Senior ministers in the government and members ofthe NDA say that the delay in presenting the bill inRajya Sabha is because there’s no clear messageemerging from the Congress.

“The government is talking to two sets of Congressleaders. One group is reasonable and has agreed topass the bill at the earliest, while the second group isnot keen,” said a senior leader of the NDA whoasked not to be identified.

Although the NDA has not made it clear when itwants to present the bill in the Rajya Sabha duringthe monsoon session, it has begun consultationswith both alliance partners and opposition parties.

Senior leaders of the NDA met to reaffirm theirsupport for the bill, and during the parliamentaryparty meeting of the Bharatiya Janata Party (BJP) onTuesday, party leaders expressed hope that the billwould be passed.

The NDA believes that with the support of 72Members of Parliament (MPs) belonging to non-Congress parties and 15 nominated andindependent MPs, the NDA, with its own 72 MPs,has a good chance of reaching 163, the two-thirdsmark required to pass the Constitution amendmentto the GST bill in the 245-member Rajya Sabha.

To reach that number, though, it will need supportfrom at least some members of parties that havehitherto opposed the deal.

“The government has reached out to our party andit is a part of the ongoing talks. Unless we hear fromthe government as to what they are going to doabout our concerns, it is difficult to respond on whatthe outcome of the talks will be,” a senior Congressleader and member of Rajya Sabha said on conditionof anonymity.

The Congress is scheduled to hold a meeting of itsparliamentary party on Wednesday and is likely todiscuss the legislation. Officially, it is still hedgingits bets.

“This bill will bring sweeping changes in thetaxation structure, the manner in which indirecttaxes are levied, which include excise, service tax,and also the sales tax or VAT (value-added tax). Weneed to have clarity about the levies of these taxes,”

Anand Sharma, deputy leader of Congress in RajyaSabha, said at a press conference on Monday.

Although the NDA is in a minority in the upperHouse, it has managed to split the opposition bywinning support for the GST from regional partiessuch as the Samajwadi Party, which has 19 MPs,Bahujan Samaj Party (6), JD(U) (10), NationalistCongress Party (5) and Rashtriya Janata Dal (3).

The government already has the support of 12 MPsof the Trinamool Congress and eight of the BijuJanata Dal.

The only large political party which is still opposedto the idea of GST is the All India Anna DravidaMunnetra Kazhagam. The Left parties have said thatthey will move amendments to the proposed bill toraise their concerns.

Political analysts say that dialogue is a positivedevelopment, given the recent acrimony.

“The dialogue process has started and it is a positivestep. It will not only reduce the chances of a futileParliament session but it will also help governmentchange the notion that it is not talking to oppositionparties. It is a good move by the government topush its reform agenda to pass important bills,” saidA.K. Verma, a Kanpur-based political analyst andpolitical science professor at Christ Church College.

http://www.livemint.com/Politics/r2SGdAuczpK3oZuEi7OPAP/Countdown-to-showdown-on-GST-begins.html

33. GST is a Big Reform but Beware ItsImplementation

A poorly implemented GST could be politicallycounter-productive. Which is why we should nottreat it as a panacea, but as an instrument that mayhave to be refined in the coming years.

After many false starts, political consensus seems tobe building in favour of the constitutionalamendments required to facilitate the Goods andServices Tax (GST), described by the financeminister as the biggest tax reform sinceindependence. It is no doubt an important reformbut to think of it as one silver bullet which willrescue the economy is also not warranted. It may beinstructive to go into the pros and cons of the GSTreform.




In recent weeks Prime Minister Narendra Modi haspassionately positioned the GST as an important“pro-poor reform” which will help India’s poorerstates like UP, Bihar and Orissa. This is the first timeModi has made such a strong personal pitch for theGST reform. Over the past two years it was mostlyfinance minister Arun Jaitley who campaigned forGST. Evidently there had been some self-doubtsamong the Sangh Parivar thinkers over the realbenefits accruing from the GST which would replacea plethora of cascading taxes in the states and theCentre. With Modi advocating for GST so strongly,it appears all constituents of the Parivar are onboard now.

There is no doubt that a single tax replacing allforms of regressive local taxes at the state andcentral level will make India a truly common marketand, at once, remove the huge inefficiencies onewitnesses in the form of the long queues of truckersat the border between states. A fragmented marketmade it easier and cheaper for the southern states toimport certain agri-commodities from East Asiancountries by sea rather than get it from India’snorthern states by road which would amount tocrossing several borders, requiring payment ofvarious local taxes at each stage. A plethora of statelevel taxes added to the costs of local manufactures,making them uncompetitive in the export market.

Now GST will subsume all these taxes in a singlerate which will be refunded to exporters, makingthem more competitive globally. Because of theseefficiencies, it is estimated that GDP growth willincrease by up to 2 percentage points, that theinflation rate will go down as overall tax ratedeclines and that government revenues will increaseas large parts of the black economy becomeincentivised to become part of a simplified GSTvalue chain. For instance a single GST will make itvery difficult for a non-GST paying or black moneygenerating business entity to supply a component toa GST-paying business as the value chain istransparently captured by the back bone ITinfrastructure.

Trial by fire

So theoretically there is no doubt that GST vastlyincreases transparency and minimises rent seekingby the mammoth indirect tax bureaucracy at theCentre and States. However, the real test of GST liesin the way it is implemented. There is enoughevidence collated by global economic researchbodies which suggests that countries which

implemented a somewhat flawed GST ended withlittle or no benefit in terms of higher economicgrowth and lower inflation. In fact the inflation ratewent up in the medium term as a lot of new servicesand goods, hitherto untaxed, began to be taxed, thushurting the consumers.

In India’s case, for instance, just imagine if astandard GST rate of 18% is imposed on all mannerof services such as education, health, constructioncontracts, restaurants and a host of online services toconsumers, the cost of living would go up asservices form a strong component of the ConsumerPrice Index. Besides, India is a hub for smallerbusiness to business online software serviceproviders. They will all come under the new GSTtax regime, increasing the cost of business in theservice sector. However, it may lower the costs inthe manufacturing sector where existing taxes arealready very high. So there will be winners andlosers and theoretically winners should outstriplosers. However, if not implemented properly therecould be more losers than winners. This would bedisastrous.

One visible flaw in the current GST framework isthat two major revenue generating sectors are keptout of the tax net – liquor and petroleum. Petroleumsector generates over 40% of the current indirecttaxes at the Centre and states. Liquor is also a majorsource of excise revenues for the states. Incidentally,the liquor industry is also a major source ofgenerating black money as a lot of it is sold withoutpayment of excise duties.

Both these sectors are kept out to give the politiciansflexibility in generating higher tax revenues whenneeded by increasing oil taxes and to avail of blackmoney for elections by enabling sale of liquoroutside the excise net. The late Ponty Chadda hadenjoyed a monopoly of liquor vends in UP becausehe generated cash for major political entities.

These compromises could lead to a flawed GST. Itwould also not be pro-poor as Modi likes to describeit. For instance, just imagine if a GST were in placetoday with petrol and diesel prices as high as theyare – nearly twice the price paid by consumers inBangladesh or Pakistan. How is it pro-poor if a richman driving an SUV in South Mumbai or SouthDelhi pays the same price for diesel as a poor farmerin Bihar or Orissa. A high indirect tax is inherentlyregressive as it charges the poor the same rate as itdoes the rich. A low GST rate can still be justified onthe ground that it is more affordable for the poor.


But keeping such a huge sector, as petroleum , outof GST and treating it as a cash cow to generaterevenues hurts the poor the most. Ask any of themillions of taxi drivers from UP and Bihar eking outa living in Mumbai, Delhi and Kolkatta as to howhigh petrol and diesel prices are hurting theirincomes and you will know exactly what I amtalking about.

So a flawed GST can be politically counter-productive. Many economists who favour the GSTalso admit there is a political risk involved in whichtechnocrats are unable to come up with solidproductions; as many countries which haveimplemented some form of GST got mixed resultswith several macroeconomic variables such inflationgoing up in the initial years.

The government’s Chief Economic Adviser ArvindSubramanian and Revenue Secretary HasmukhAdhia have jointly written an article on the GST inThe Hindu where they admit no country in recenthistory has really implemented the perfect GST. Sothe initial framework may necessarily have flawsand each economy refines it as per its ownexperience. Subramanian and Adhia authors alsowrite how some countries take years to refine theirGST model. This is an honest admission that theGST we are implementing could be flawed andmajor correctives may have to be taken in future. Itwould, therefore, be a mistake to treat GST as apanacea for all the ills confronting our economy.

http://thewire.in/52934/gst-is-a-big-reform-but-beware-its-implementation/

34. Reduce stamp duty for affordable housing:Naidu

NEW DELHI: Union Minister M Venkaiah Naiduhas said that the Urban Development ministryrequests states to reduce stamp duty for affordablehousing.

He added that the ministry has written to statesgovernment to reduce the stamp duty as it is addingto the burden with a new Real Estate Regulation Billwhere the rules are almost ready and will beannounced soon.

Naidu was inaugurating a national summit on‘Finance for Housing for All,’ organised by TheAssociated Chambers of Commerce and Industry ofIndia (ASSOCHAM) in New Delhi. He furtherpointed out that the slum clearance is one of

important aspect which is yet to pick up in thecountry and area of concern as lots of people arecoming from rural to urban area and living in slums.

“The government is continuously engaging itselfwith different parties not only with Congress partybut possibly each and every party. At the end of theday, we want to get GST passage throughconsensus. The biggest beneficiaries of the GST willbe states. The signals I am getting from all sides ispositive. I hope the GST Bill will be passed duringthis session itself,” Naidu said.

Hoping that the real estate sector will pick up prettysoon, the minister interest subsidy will be extendedeven to private sector players provided if they selectbeneficiaries through the state agencies.

The World Bank and ADB are also showing interestin this affordable segment of the housing and willsure it will pick up in coming future, he revealed.

http://www.newindianexpress.com/business/news/Reduce-stamp-duty-for-affordable-housing-Naidu/2016/07/21/article3539765.ece

35. One India, one market

Hype and hyperbole are temptations to whichgovernment officials, in particular, must notsuccumb. Yet, it is difficult not to view the Goodsand Services Tax (GST) Bill as a game-changingreform for the country; and, when it happens, itwould be curmudgeonly not to acknowledge itspassage as a major, historic achievement. Why isGST important? What can be said about its design?How does it compare with similar tax reform inother countries? Consider each question in turn.

Benefits in the offing

Three major benefits will flow from the GST. First,as the Prime Minister outlined in an interview, theGST will increase the resources available for povertyalleviation and development. This will happenindirectly as the tax base becomes more buoyantand as the overall resources of the Central and Stategovernments increase. But it will also happendirectly because the resources of the poorest States— for example, Uttar Pradesh, Bihar, and MadhyaPradesh — who happen to be large consumers willincrease substantially.

Second, the GST will facilitate ‘Make in India’ bymaking one India. The current tax structure







unmakes India, by fragmenting Indian marketsalong State lines. These distortions are caused bythree features of the current system: the CentralSales Tax (CST) on inter-State sales of goods;numerous intra-State taxes; and the extensive natureof countervailing duty exemptions that favoursimports over domestic production. In one fellswoop, the GST would rectify all these distortions:the CST would be eliminated; most of the othertaxes would be subsumed into the GST; and becausethe GST would be applied on imports, the negativeprotection favouring imports and disfavouringdomestic manufacturing would be eliminated.

Arvind Subramanian & Hasmukh Adhia

Third, the GST would improve — even substantially— tax governance in two ways. The first relates tothe self-policing incentive inherent to a valued-added tax. To claim input tax credit, each dealer hasan incentive to request documentation from thedealer behind him in the value-added/tax chain.Provided the chain is not broken through wide-ranging exemptions, especially on intermediategoods, this self-policing feature can work verypowerfully in the GST. The second relates to thedual monitoring structure of the GST — one by theStates and one by the Centre. Critics and taxpayershave viewed the dual structure with some anxiety,fearing two sources of interface with the taxdepartment and hence two potential sources ofharassment. But dual monitoring should also beviewed as creating desirable tax competition andcooperation between State and Central authorities.Even if one set of tax authorities overlooks and/orfails to detect evasion, there is the possibility thatthe other overseeing authority may not.

Other benefits such as the boost to investment havebeen documented in the Report on the RevenueNeutral Rate that was submitted in December lastyear. Of course, these benefits will only flowthrough a well-designed GST. The GST should aimat tax rates that protect revenue, simplifyadministration, encourage compliance, avoidadding to inflationary pressures, and keep India inthe range of countries with reasonable levels ofindirect taxes.

The fewest flaws at inception

The report also urged that the GST becomprehensive in its coverage, that exemptionsfrom the GST be limited to a few commodities thatcatered to clear social benefits, and that most

commodities be taxed at the standard rate. There isno free lunch here. There is no escaping the fact thatthe more the exemptions/exclusions, the higher willbe the standard rate which could affect poorerconsumers.

Some have levelled the charge that the design of theGST is flawed. But the “flawed GST” charge fails toappreciate how reforms actually occur. In nocountry is the GST — even today after many yearsof implementation — perfect, and was thereforequite flawed at inception. In complex systems,change is introduced, learning from implementationtakes place, leading to further and better change.That is what happened with the implementation ofthe value-added tax by the States and that is whatwill happen with the GST. It is far better to start andallow the process of endogenous change to unfoldover time than to wait Godot-like for the best timeand the best design before it is introduced.

That said, we must also be realistic about the timeframe for assessing the GST. The GST is fiendishly,mind-bogglingly complex to administer. Suchcomplexity and lags in GST implementation requirethat any evaluation of the GST — and anyconsequential decisions — should not beundertaken over short horizons (say months) butover longer periods, say one-two years.

In understanding GST systems around the world,we have been struck by how ambitious and howunder-flawed the Indian GST is. GST-type taxes inlarge federal systems are either overly centralised,depriving the sub-federal levels of fiscal autonomy(Australia, Germany, and Austria); or where there isa dual structure, they are either administeredindependently — creating too many differences intax bases and rates that weaken compliance andmake inter-State transactions difficult to tax (Brazil,Russia and Argentina) — or administered with amodicum of coordination which minimises thesedisadvantages (Canada and India today) but doesnot do away with them.

The Indian GST will be a leap forward in creating amuch cleaner dual VAT which would minimise thedisadvantages of completely independent andcompletely centralised systems. A common base andcommon rates (across goods and services) and verysimilar rates (across States and between Centre andStates) will facilitate administration and improvecompliance while also rendering manageable thecollection of taxes on inter-State sales. At the sametime, the exceptions — in the form of permissible


additional excise taxes on special goods (petroleumand tobacco for the Centre, petroleum and alcoholfor the States) — will provide the requisite fiscalautonomy to the States. Indeed, even if they arebrought within the scope of the GST, the States willretain autonomy in being able to levy top-up taxeson these goods.

To have achieved this, in a large and complexfederal system of multiparty democracy, with aCentre, 29 States and 2 Union Territories of widelydivergent interests via a constitutional amendmentrequiring broad political consensus, affectingpotentially 7.5 million tax entities, and marshallingthe latest technology to use and improve taximplementation capability, is perhapsbreathtakingly unprecedented in modern global taxhistory.

Sometimes, we are insufficiently appreciative ofhow much the country has achieved in coming tothis point with the GST. As the Prime Ministersuggested, credit should go to all stakeholders at theCentre and the States for having worked towardsthe GST. The time is ripe to collectively seize thishistoric opportunity; not just because the GST willdecisively alter the Indian economy for the betterbut also because the GST symbolises Indian politicsand democracy at its cooperative, consensual best.

Hasmukh Adhia and Arvind Subramanian are,respectively, Revenue Secretary and Chief EconomicAdviser to the Government of India.

http://www.thehindu.com/opinion/lead/gst-bill-arvind-subramanian-hasmukh-adhia-on-its-importance/article8866693.ece

36. After passing GST Bill, remove the seriousflaws in it

Despite all the acrimony between political parties,prime minister Narendra Modihas done well to tryand break the ice—recall his invitation to SoniaGandhi and Manmohan Singh on GST—as well as tolobby non-Congress parties. As a result, Parliamenthas got a lot more productive—of the eight Billspassed in the Winter Session, seven were in theRajya Sabha where the NDA lacks a majority and atotal of 17 Bills were passed in the Budget Sessionincluding important ones like the real estate,bankruptcy and Aadhaar Bills. Indeed, by gettingmore non-Congress Opposition parties to back theGST Bill, even the Congress party is talking in amore conciliatory tone for fear of being isolated.

In all probability, therefore, around this time nextweek, India will have a GST ConstitutionalAmendment Bill passed by Parliament—it will thenhave to be passed by requisite number of stateassemblies. Given finance minister, Arun Jaitley,had already indicated the 1% additional tax on inter-state supplies provision could be dropped, that willgo. While this was one of the Congress’ threeinviolable rules, the other two—which made littlesense—will be given the go-by. These includeputting an 18% cap on the revenue-neutral-rate(RNR) in the Constitutional Amendment Bill and anindependent dispute resolution mechanism outsidethe GST Council while also diluting the Centre’sveto powers in the Council. While the RNRnaturally gets higher as more items are kept outsidethe GST, the rates also depend upon whatproportion of goods are charged the merit rate—ifthe RNR is 20% and half the goods and services aretaxed at the merit rate of 12.5%, the non-merit goodswill have to be taxed at 27.5%.With the Bill almost a certainty now, thegovernment must work on fixing the serious flawsin the Bill which can make it one of the moredraconian laws, apart from the most onerous—ironic, since one of GST’s USPs was that it wouldmake life simpler for taxpayers. One such provision,not there in any other law, is to not give input taxcredits to firms in case their suppliers have not paidtheir GST taxes—while that takes the burden of notcapturing all suppliers away from the GST network,proving everyone before them in the chain has paidtheir full taxes promises to be a logistical nightmarefor firms. The taxman has also been given a lot ofpowers to value inter-branch transactions which canbe a big bone of contention in the future and need tobe circumscribed quite tightly if the experience oflarge transfer pricing orders in the past is anythingto go by—the circumstances in which the powers ofinspection, audit and special audit can be used, andthe checks on abuse, need to be spelled out carefullyin the model GST law.While service sector firms typically pay a singlenational service tax, under the GST, they will haveto register in 29 different states—apart from thisbeing onerous, valuing inter-branch transfers ofgoods and services will then become a nightmare.There are several such examples that can be given,indeed have been given to the government byvarious chambers of commerce and tax experts—ifGST is to be a success, the model law needs toaddress them at the earliest, including thecomposition scheme that prevents harassment ofSMEs since the GST threshold kicks in at an annualturnover of just R10 lakh today versus the R1.5 crorefloor for excise duties.





http://www.financialexpress.com/fe-columnist/after-passing-gst-bill-remove-the-serious-flaws-in-it/321100/

37. 'GST will bring competitive taxation'

Top Accounting firm BDO's executives say priceswill stabiliseMultinational companies doing business in or withIndia are eagerly awaiting the introduction of theGoods and Services Tax (GST), which assures costefficiency for companies. This was reiterated byglobal leaders of BDO International, the fifth largestnetwork of accounting, tax and advisory firms in theworld, which recently held its Asia-Pacific regionalpartners' conference in Mumbai. Based onexperience in other countries, they add that onceGST is in place, it also promotes taxcompetitiveness, resulting in streamlining of directtax rates (including individual income tax), whichfurther propels the economy.But while they want a GST regime, BDO's clientsacross the world are adopting a wait and watchapproach as regards the equalisation levy(popularly dubbed as Google tax), which wasrecently introduced on digital ad revenue for B2Btransactions.John Wonfor, global head of tax at BDOInternational, said, "On the possible introduction ofGST, the reaction of our global clients is that it is afantastic thing because it is a very complex taxsystem right now in India where they are dealingwith lots of indirect taxes at the state level andfederal (centre) level."

The fact that taxes can be recovered on their inputsis seen as an added advantage as it results in costreduction, so they are very pleased with thisdevelopment, he added.Wonfor admitted that when GST is introduced,there is a temporary inflation. "But what generallyhappens is that after a period of time, market forcestake over. If someone has raised their prices tocapitalise on the introduction of GST, theircompetitors are going to drive the prices back towhere they should be," said Wonfor. In this context,Martin Van Roekel, CEO, BDO International,pointed out a risk, "If there is no proper marketeconomy , where you have a number ofmonopolists, there is a much bigger risk that priceswill go up." But India could be immune to this risk,given its large and diverse market place, they felt.Both the global leaders said that GST could also leadto a competitive income tax (I-T) regime for India.Europe has in place a value-added tax (VAT)regime, which like GST results in tax being paidonly on the component of `value addition'.

Van Roekel said, "If I look at Europe, where VATwas introduced much earlier, in general it led to adecrease in personal I-T rates in almost all countries,after the concept worked well." Wonfor opined thatGST in India could prove to be a significant revenuegenerator for the government, thus putting pressureon it to be more competitive and lower bothcorporate and personal I-T rates.Given that Van Roekel had just returned from a tripto China, a comparison between the two markets forprofessional firms was inevitable. "India hasrelatively few large players.Compared to the size ofthe economy (if we exclude their outsourcingoperations), these firms are still relatively small.Atthe same time, India has thousands of smaller firms,many of which are family dominated. The scale ofoperations in China is much larger. BDOInternational has 10,000 partners and employees inits Chinese affiliated firm, and ranks No. 3 amongprofessional firms. " The fee income of the memberfirms in the BDO network (of firms across 150countries) was $7.3 billion in 2015. On the localfront, for BDO India, which has been a member ofthe international network for a little over threeyears, the growth has more than tripled.Reforms onthe tax and accounting front, together with auditrotation, require mid-tier firms to scale up theiroperations. Thus, the India member firm, whichcurrently has over 25 partners and 650 employees,aims to add around 20 more partners and take thehead count of employees to a thousand during theyear. BDO India currently clocks revenues upwardof $10 million and is projecting ambitious futuregrowth. It also aims to strengthen its advisoryservices unit.

http://timesofindia.indiatimes.com/city/mumbai/GST-will-bring-competitive-taxation/articleshow/53280268.cms

38. Tea to be costlier after GST

Tea drinkers may have to shell out 6-8 per cent morefor the same cup of brew, once the goods andservices tax (GST), which would end the regime ofmultiple indirect taxes and bring them under onerate, is introduced.

Under the current regime, tea trade, which isclassified as plantation industry, is exempted fromvarious taxes and only pays the state value addedtax (VAT) at 5-6 per cent, apart from mandatedcentral taxes like road cess, educational cess, etc.However, a minimum levy of 12 per cent GST willincrease the cost, which will ultimately be passed onto consumers.







“This is likely to increase the effective retail pricesby a minimum of 6-8 per cent,” said NirmalKhurana, chairman of the finance committee at theIndian Tea Association (ITA).

Also, teas sold through auction in Assam and WestBengal (which accounts for over 70 per cent of totalsale) is currently subject to a lower VAT rate of 0.5to 1 per cent to encourage right pricing and coverauction cost. Under the proposed GST structure,these states may not have the flexibility to fix adifferent rate for auction, which will not only inflatethe prices but may also make tea auctions lessattractive.

The Tea Board of India, on the other hand, isstriving to draw in more participation at theauctions by introducing e-auction.

Further, the industry enjoys service tax exemptionand no central sales tax is levied for inter-statetransfers, if there is no sale.

However, under the integrated GST model, one percent tax on such transfers would result in the pricesof tea surging every time the produce is harvestedfrom the gardens, brought to processing factories indifferent states and sent to warehouses across India.

About 95 per cent of tea is produced in just fourstates (Assam, West Bengal, Tamil Nadu andKerala) and then sent to seven auction centres indifferent states, post which it is consumed acrossIndia.Assam houses most of the gardens and accounts forover 50 per cent of total produce, but tea from thestate is consumed across India.

“Every time we need to shift the tea from a gardento a warehouse or an auction centre in another state,a one per cent inter-state transfer tax is going to belevied. This is despite the fact that it is not a sale buta mere transfer. The same applies for packeteerswho buy from one auction centre and then ship it tosome place else,” Khurana added.

Concerned with these issues, the Tea Association ofIndia (TAI) has already submitted a petition to AmitMitra, chairman of the Empowered Committee ofState Finance Ministers on GST, to consider leavingtea out of its ambit.

“Under the proposed GST, tea, a plantation crop,should be treated as an agricultural produce and beexempted from the scope of GST,” the letter read.TAI too is thinking of writing to Mitra to keep the

GST rate between 5-6 per cent (prevalent VAT rate)and do away with the one per cent inter-state tax.

http://www.rediff.com/business/report/tea-to-be-costlier-after-gst/20160719.htm

39. Internal differences in BJP delayingpassage of GST bill: Congress

NEW DELHI: The Congress on Monday blamed"internal differences" within BJP for the non-passageof GST Bill and said it is insisting on an 18 per centcap on the proposed indirect tax regime to ward offthe inflationary effects the reform measure couldhave on the poor of the country.Congress leader Jairam Ramesh said the party'sprotest over the passage of a private member's billgranting special status to Andhra Pradesh was notaimed at "scuttling" the GST Bill."It is not intended to scuttle the GST bill because thegovernment is so confident about the GST bill. Whyis it reluctant to bring the GST bill."They talk big about GST bill, but when it comes tothe crunch, they are unwilling to take the final step,"he told reporters.Ramesh said he has been saying that the GST Billhas not come to the Rajya Sabha not becauseCongress is opposing it but due to large sectionswithin the BJP which are deeply uncertain about thelegislation and its inflationary consequences."That is the real reason why the GST Bill has notcome, apart from the fact that the Prime Ministerhimself was opposed to the GST bill when he waschief minister of Gujarat," he said."I say this with full sense of authority andresponsibility and there is internal differences ofopinion within the BJP," he added.Ramesh said he has come to know that if GST isbrought before the Uttar Pradesh elections, then itwill have problems on account of inflation."They keep saying and have put the blame on theCongress instead," he said.

Asked why Congress had not thought aboutinflationary effect of GST before, he said, "Thereason why the Congress party has suggested andinsisted stubbornly on 18 per cent cap is because ifthe GST rate becomes anything over 22-23 pc, ascurrently it is, it is bound to be inflationary.""In order to contain inflation, in order to ensure thatthe burden of taxation does not fall on the poor, wehave suggested the 18 per cent cap. The GSTCouncil, the group of state finance ministers, whichis meeting tomorrow, they were talking last year on




a GST rate of 25 per cent. That is why we insisted onan 18 per cent cap," he said.The government has been engaging with theopposition parties, including the Congress, forpassage of the GST bill which is hanging for a longtime now.Congress has put forth three issues, including aconstitutional cap of 18 per cent on GST, ascondition for the party's support for the legislation.

http://timesofindia.indiatimes.com/india/Internal-differences-in-BJP-delaying-passage-of-GST-bill-Congress/articleshow/53386622.cms

40. ‘GST has to be flexible to embrace newbusinesses’

The Parliament’s Monsoon Session started withhope that legislative reforms will get an impetus.Over a dozen bills have been listed by thegovernment for this session, but the GST Bill will bethe key priority. At the all-party meet on Sunday,Prime Minister Narendra Modi reached out to theOpposition for a consensus on the crucial reformswhile the Congress has said it will support the billbased solely on merit. Speaking to Bloomberg TVIndia, Biocon Chairman and Managing DirectorKiran Mazumdar Shaw says we need to come upwith a flexible Bill that gives us an opportunity toquickly adjust to new businesses and economicopportunities, such as e-commerce, that India isembracing.

What are your expectations on GST?

I think all political parties have really tried all themanoeuvring they could to stall the GST Bill. Whenyou talk about passing bills on merit, I think theGST Bill is certainly one such bill, which needs to bepassed on the basis of its merits in terms of boostingeconomic growth.

I think the GST Bill has to be passed in some shapeor form to start with. It does not have to be theperfect bill. We should not trap ourselves intomaking aspects of the GST Bill, which areconstitutional amendments. We should leave itwithin the GST Bill because we are entering a verydifferent kind of economy, which needs flexibility. Ithink the GST Bill will also have to be looked at interms of e-commerce.

We need to look at the new kind of economicopportunities that India has. And if we start craftingyour GST Bill based on traditional industry, I thinkwe will be making a big mistake. So I personally

believe that we do not have to come out with theperfect bill as understood by the regulators today.We need to come up with a flexible bill that gives usan opportunity to quickly adjust to new businessesand economic opportunities that India is adjustingto.

Is it prudent to fix a cap on GST rates?

I think it is not required as a clause at all. I do notagree with the Congress on insisting on the 18 percent cap on GST. I think the GST Bill is a far-reaching one. It should avoid too manyConstitutional amendments. What we really need tofocus on are various aspects of the bill in terms of,do we really need to have a list of excluded items orjust prioritise on the merit list; and then look at theimpact on the other areas of products or servicesthat come under GST. I am not very happy on theextra 1 per cent tax on manufacturing because it iscounter-productive.

http://www.thehindubusinessline.com/economy/gst-has-to-be-flexible-to-embrace-new-businesses/article8866579.ece

41. GST: Bihar govt to oppose dual tax onsmall farmers

Patna: Bihar finance minister Abdul Bari Siddiqui onMonday said the state government does not favour"dual taxation" of the Centre and state on smalltraders with an annual turnover of Rs 1.5 crore. "Wewill put our view forward at the meeting of theempowered committee of states' finance ministers tobe held in Delhi on Tuesday to discuss mattersrelated to the proposed Goods and Services Tax(GST) regime in the country," Siddiqui said.

"Small traders with an annual turnover of Rs 1.5crore constitute 70% of tax payers in a consumerstate like Bihar. They should be freed from dualtaxation of the Centre and the respective stategovernments," Siddiqui said, adding only the stategovernment should be let free to extract taxes fromthem.Since the government depends on this segment oftraders to net its revenue returns, the imposition ofthe uniform and common GST regime would eitherdeprive the state government of its revenueresources, or would make the traders concernedsubject to "dual taxation" of both the Centre and thestate government, as the state governments do notwant to let go their sources of tax returns toaugment their resource base.








Siddiqui said the GST regime would be new to thecountry, and its functioning would require"developing a sophisticated device" whoseprocurement and application would be anadditional burden on the small traders."This device is not in use in the country. It has to bedeveloped," Siddiqui said, adding that the Centreshould finance its procurement and application.Otherwise, the JD (U) and RJD are not opposed tothe GST, as it would benefit Bihar, since it is aconsumer state.

He said the matter was discussed in details at thetwo-day meeting of the empowered committee ofthe states' finance ministers held in Kolkata. Therespective states, including Bihar, favoured that thesegment of small traders with an annual turnover ofRs 1.5 crore should not be subject to "dual taxation."

West Bengal finance minister Amit Mitra, who is thechairman of the empowered committee, hasapprised Union finance minister Arun Jaitley of theconcern of the state governments on this matter,Siddiqui said, adding that as the reports indicated,Jaitley has "appreciated" their concerns, including ofBihar.

In fact, Jaitley has asked Mitra to present finalpicture on it by Tuesday for incorporation in theConstitution Amendment Bill on the GST that has tobe tabled in the Rajya Sabha for passage.

http://timesofindia.indiatimes.com/city/patna/GST-Bihar-govt-to-oppose-dual-tax-on-small-farmers/articleshow/53384258.cms

42. GST Bill: Congress objections ‘purelypolitical’, should reconsider stand, saysIndia Inc

Ahead of the crucial meeting of EmpoweredCommittee of State Finance Ministers with financeminister Arun Jaitley on Tuesday that may bring outsome clarity on government’s strategy on Goodsand Services Tax (GST) Bill and whether it will pushthe Bill without addressing the three concerns of theCongress party, India Inc on Monday said that theissues being raised by Congress are purely politicaland that they should reconsider their stand in thebroader national interest.While Congress (the single-largest party in the RajyaSabha) had made three demands — to abolish theproposed 1 per cent additional entry tax to benefitthe manufacturing states; set up an independentGST dispute settlement authority chaired by a judge

and 18 per cent cap on the GST rate to be specifiedin the Constitution, the government has indicatedthat it is willing to consider the first two demands.Naushad Forbes, president, Confederation of IndianIndustry (CII), said that the industry wants GST tobecome a reality and it is fine with the Bill in bothforms — with or without 18 per cent cap on the GSTrate being specified in the Constitution.“I think the objections raised by Congress are purelypolitical as the government has shown its intent toagree on two of their demands … The only issue isthe point relating to putting a cap on 18 per cent taxrate either by incorporating it in Constitution orthrough some via medium in the Bill so that it canbe amended by Parliament. I still think that ifCongress wants the Bill to be passed, things can stillbe worked out and a solution can be arrived at. Theyshould not hold it for political reasons,” said Forbes.Voicing similar views, RC Bhargava, chairman,Maruti Suzuki India, said that Congress must lookat the larger national interest as it is not a politicalbut a national issue. He went ahead to say that ifCongress wants it can put the cap on GST rate inConstitution at a later date.“I can’t understand why the whole nation shouldnot get the benefit of GST just because of thisargument on imposing a constitutional cap on 18per cent tax rate … It can always be put inConstitution by the Congress at a later date whenthey have the numbers to do so but don’t hold it upnow as it is something that will benefit the entirenation,” said Bhargava.He also pointed out that in most of the countriesthere is no such cap on GST rate specified in theConstitution and hence Congress should reconsiderthis demand especially when the government islooking to agree on their other two demands.Last week, The Indian Express reported that a largenumber of regional parties barring J Jayalalithaa’sAIADMK and Mayawati’s BSP, adding up to 82members in Rajya Sabha, fully support thegovernment’s GST legislation. A look into the viewsof almost all parties with more than two members inRajya Sabha showed that along with the BJP’s 53MPs, those who support the Bill account for over 55per cent of the currently 243-member strong UpperHouse — two seats are vacant.

http://indianexpress.com/article/business/economy/congress-objections-on-gst-purely-political-should-reconsider-stand-india-inc-2935460/








43. Consensus On Tax Reform GST AppearsTo Crumble, Congress Furious

NEW DELHI:

HIGHLIGHTSCongress and government had made progress onGST differencesGST is national sales tax seen as landmark reformCongress says government witch-hunts Gandhis butexpects GST supportThe Goods and Services Tax or GST Bill is in

trouble yet again. A day before Finance MinisterArun Jaitley meets his counterparts from states todiscuss amendments, parliament was abuzz that thethaw between the government and the Congressafter a nine-month frost is almost over.

The Congress attacked the government forattempting consensus on GST and attacking theparty's top leaders at the same time. "Cooperation inthe house for the interest of the country we aredoing. But politically they are taking revenge," saidsenior Congress leader Mallikarjun Kharge.

The party is threatening to withdraw the flexibility itdisplayed recently - agreeing with the governmentto allocate five hours to discuss and pass the bill. Itwas a step forward, though no date was fixed.

But then the Enforcement Directorate, whichhandles financial crimes, launched an investigationagainst former Haryana Chief Minister andCongress leader BS Hooda, in a case in whichCongress chief Sonia Gandhi and her son Rahulalready face trial.

Both have denied misusing Congress funds in thecase filed by the BJP's Subramanian Swamy toacquire property worth hundreds of crores ownedby a defunct party newspaper, the National Heraldand its publishing company.

In Rajya Sabha, the Congress disrupted proceedingsover a private member's bill for providing a specialstatus to Andhra Pradesh. The development createddoubts in parliament among parties supportingGST.

A senior JD(U) said, "What was the need to lodge anFIR at this time? This could have happened twoweeks later. It has been done intentionally at thedirections of the Prime Minister's Office."

"It seems the government is not interested in GSTand is creating impediments," said TathagataSatpathy of the Biju Janata Dal.

Anil Desai of the Shiv Sena, a member of the NDAgovernment, echoed the sentiment. "The Congresswas coming around. Things were improving. Timeduration for discussion was fixed. Why is theconsensus exercise being subverted now?"

Praful Patel of the NCP, which has batted for thebill, claimed there was a link between the bill andthe case against Mr Hooda and Congress leaders.

The Congress says the government might be makingcorrect statements about the GST but it doesn't wantthe bill now. Claiming there was "serious differencesin the government" over the GST, party leaderJairam Ramesh said the government is worried thatit may trigger inflation.

BJP leaders admit that if GST rolls out by next year,it may have a twin impact. "One, the high rate ofGST and the larger tax base it may engage couldtrigger price rise during the crucial UP and Gujaratpolls," a senior BJP leader said.

There are also apprehensions that the BJP's loyalvotebank of traders may revolt as GST may bringgreater accountability among those who don't paytaxes.

A senior NDA leader, however, said if the bill ispassed with Congress help, "the BJP may lose thepoll plank that the Congress is obstructing pro-reform measures."

With 60 members, the Congress is the single largestparty in the 245-member Rajya Sabha. With thesupport of allies and a few regional parties opposingthe bill, it reckons the government cannot musterthe two-thirds majority needed to enact the GST.

While the government denies the oppositioncharges, none of its leaders are ready to explain onrecord why each time the climate on the GST bill isimproving, either government agencies make amove against the Gandhis, or the BJP sharpens itsattack on the Congress' first family.

http://www.ndtv.com/india-news/consensus-on-tax-reform-gst-appears-to-crumble-congress-furious-1436015




44. GST in limbo, but Centre works to includefuels

NEW DELHI: The government is looking at ways tobring petroleum products under the ambit of theproposed goods and services tax (GST) with theconsent of states, oil minister Dharmendra Pradhantold the Lok Sabha on Monday even as passage ofthe bill remains uncertain."Petroleum products will be brought under the GST,but I don't know when. Since we have a federalstructure, we have to get the consent of states. Weare exploring various ways," he said duringquestion hour. Petroleum products have been keptout of the purview of GST but an in-principledecision has been taken to bring them under theproposed uniform tax regime.GST would entail uniform tax rate on petro-products, if they are brought under the new tax, andeliminate wide variation in fuel prices. But sincestates make healthy earnings from sale of petroleumproducts by heavily taxing them, many haveopposed bringing fuels and lubricants under theGST.The petroleum sector contributed more than Rs 1.6lakh crore to state exchequers in 2015-16. Pradhansaid except Tamil Nadu, Mizoram and a few UnionTerritories, most states had increased taxes onpetroleum products and it was difficult to bring auniform tax rate across the country. The ministeralso announced that the government would launchdirect subsidy transfer for kerosene consumers onsimilar lines as LPG."Seventy-five per cent of the profits to be incurredthrough the DBT in kerosene would be distributedamong the states," Pradhan said, adding that planswere afoot to make Haryana a kerosene-free stateafter ridding Delhi and a few other UnionTerritories of the fuel.http://timesofindia.indiatimes.com/india/GST-in-limbo-but-Centre-works-to-include-fuels/articleshow/53388404.cms

45. GST and its wrinkles

The roll-out of the goods and services tax (GST) isthe most important indirect tax reform sinceindependence. It is a big deal and goes to the heartof centre-state relations. It is a potential game-changer in the realm of what Prime MinisterNarendra Modi has called “cooperative federalism”.It’s a grand bargain between the 29 states of Indiaand the centre. The states give up their right toimpose sales tax (and other sundry taxes), and thecentre gives up its right to impose excise and

services tax. In exchange, they each get a share ofthe unified GST.

Collection will be buoyant since the new system hasinterlocking incentives that will increase taxcompliance. Inter-state commerce will be free offriction of entry taxes and the deadweight burden ofcentral sales tax. Smaller producers can now reachand sell to all India customers, not constrained bythe intra-state sales tax system. Companies don’tneed to dodge taxes by showing movements acrossstate lines as intra-company depot transfers. Therewill be efficiency gains due to the removal of thecascading impact of multiple taxes.

GST is certainly a landmark reform, but it is not themagic bullet that cures all pending economicreforms. For example, tax reform is only onecomponent of the larger agenda for improvingIndia’s ease of doing business ranking. Moreimportantly, the roll-out of a nationwide GST alsoraises some concerns, which have to beacknowledged, and hopefully resolved in duecourse of time. Here are five important issuesrevolving around GST.

1. Federalism: Does GST enhance federalism? If welook at large country peers, the US does not have acentralized GST. In fact, many states in the US havethe power to impose income tax in addition to state-level sales tax. In the European Union (EU), eachmember-state (country) has retained fiscalautonomy. The Maastricht Treaty only forcedmembers to remain within the limit of fiscal deficitof 3% of gross domestic product (GDP). Even thisceiling was breached early on by EU’s two biggestmembers, France and Germany. After the sovereigndebt crisis starting with Greece, and after Brexit, allbets are off. The fiscal rebellion may spread. Chinadoes have a national GST, but spending andresource raising autonomy given to provinces(states) is immense. Indeed, the governors’performance is purely linked to capex and GDPgrowth, and they enjoy de facto fiscal autonomy. Incomparison to the US, EU or China, the GST in Indiawill greatly curtail the fiscal autonomy of states. It isunlikely that we will have income tax powersbestowed on state governments.

2. Progressivity: The GST is an indirect tax. The poorbear a disproportionate burden of indirect taxes.India has a very low direct tax-to-GDP ratio. Theratio of direct to indirect taxes in India is 35:65. Thisis exactly the obverse of most of the developedworld. Income tax rates have steadily reduced,whereas service tax rates have gone up from 5% in





the mid-1990s to 15% now. Swachh Bharat andKrishi Kalyan cesses are recent examples of newindirect taxes. Less than 5% Indians file income taxreturns, but almost all Indians pay indirect tax inone form or another. A starting GST rate of 18% (asper current discussion) will hurt the poor more thanthe rich. Early discussion was around a GST rate of12% or 13%, which has now drifted to 18%. At 20%or higher, we might as well not have a GST.

3. Legislative cap on GST: Excise duties on petroland diesel were raised almost a dozen times in thepast one-and-a-half years. These are indirect taxes.Did we pause to wonder, how is it that the exciseduty hikes did not require parliamentary approval?That’s because the frequent tax hikes were executiveaction, empowered by emergency “war powers act”.If GST can be tweaked upward just by the executive,it will become more and more regressive, worseningincome inequality. Hence a legislative cap (via thebill, not necessarily in the Constitution) is needed toprevent future misuse. Bear in mind that taxbuoyancy (and elasticity) of a tweak from 18% to19% is much higher, and hence easier than wideningthe direct tax net. We need to curb this temptation toincrease taxes through a legislative restraint, i.e. acap on the GST rate.

4. Council governance: GST disputes will bethrashed out in the GST council. Small and largestates will have equal voting powers. Is this fair?Large producing states like Maharashtra alreadyfear losses in excess of Rs.14,000 crore in the firstyear itself. It is asking for larger reimbursement.Other voting states may “gang up” againstMaharashtra and veto such a proposal. What if alarger state wants to impose a higher “sin tax” orgive a bigger subsidy at the lower end of the GSTslab, since they can afford it? Will the currentgovernance framework provide such a leeway?5. Tax disputes: The power of the sales taxcommissioner at the state level enables speedyresolution of disputes. But the excise frameworkuses the process of appeals and tribunals, involvinginterminable delays. This distinction is called the“revision” versus “review” approach. Will the GSTlean the excise way, or sales tax way? Will we soonhave a mountain of disputes and long judicialdelays?

Hopefully each of these wrinkles can bestraightened out, once the GST gets going. But theeconomic benefits of the GST should not blind us toits imperfections.

http://www.livemint.com/Opinion/mPmVJNLjUra2ZVXasKEu2N/GST-and-its-wrinkles.html

46. States reject GST rate proposed by ArvindSubramanian panel

New Delhi: The goods and services tax (GST),whenever it comes into force, could end up beinghigher than 18%, with state governments rejectingthe rate proposed by a panel led by chief economicadviser Arvind Subramanian.

At the same time, the states reiterated theircommitment to protecting the interests of the peopleby reducing the tax burden while safeguarding theirown revenues, at a meeting of the empoweredcommittee of state finance ministers in New Delhion Tuesday.

GST, which will subsume a range of existing levies,is aimed at dismantling inter-state barriers to tradein goods and services, effectively leading to thecreation of a common market in India.

The bill, which has been cleared by the Lok Sabha, isdue to be introduced in the current monsoon sessionin the Rajya Sabha, where the ruling NationalDemocratic Alliance (NDA) lacks a majority.

There were some points of agreement between thecentre and the states at Tuesday’s meeting, but a fullconsensus proved elusive.

Union finance minister Arun Jaitley assured statesthat the wordings in the constitution amendmentbill will be reworded to reflect the centre’s promiseto compensate them in full for any loss of revenue inthe first five years after GST takes effect.

States are also on board on dropping a proposedadditional 1% tax on supply of goods; this will alsobe a part of the bill.

States also unanimously opposed capping of taxrates in the constitution amendment bill, isolatingthe Congress which has insisted on this.

Consensus on dual control, however, is still pendingwith the states demanding that traders with revenueof less thanRs.1.5 crore should be exclusively undertheir control.

“The wording (for tax rate under GST) has beenworked out. The incidence of tax on the commonman has to be significantly reduced. At the sametime, there need to be safeguards for protecting the




revenue of the states,” said Amit Mitra, West Bengalfinance minister, who is also the head of theempowered committee of state finance ministers.

A consensus over the revenue-neutral rate (RNR), orthe tax rate at which there will be no revenue loss tothe states under a GST regime, proved elusive. Thestates expressed concern over the wide divergencein the RNR proposed by the government panel ledby Subramanian and the report commissioned bystates and submitted by New Delhi-based think tankNational Institute of Public Finance and Policy(NIPFP).

The standard rates proposed by the Subramanianpanel are below 18%, while those proposed byNIPFP are above 26%.

ALSO READ | GST and its wrinkles

“All states were of the view that the tax rates putforward by the chief economic adviser are notacceptable. There was no consensus on what shouldbe the rate. It can be 18% or above that. That was theconsensus,” said Kerala finance minister ThomasIsaac, adding that the states prefer to keep rates onitems of mass consumption low. “We know that theeffective rate on consumer products today is about30%. It will be considerably brought down. At whatlevel, we will decide later,” he said.

“The general consensus has been to drop thisconcept of RNR rate. We will ensure a rate andstructure which will reduce the effective tax burdenon the common man and also that this rate andstructure will protect the existing revenues of theUnion and the states,” he added.

The tax rates under GST will be decided by the GSTcouncil, comprising the Union finance minister andstate finance ministers, which will be formed oncethe constitution amendment bill is passed by theRajya Sabha.

The states also reiterated their rigid stance on dualcontrol of small traders, keen to protect themselvesagainst a potential backlash from these traders whoform a majority of the taxpayer base.

“Small traders with revenue of upto Rs.1.5 croreshould not suffer from dual control of state andcentre. States have been administering them andwill continue to administer them. It was an absoluteconsensus among state finance ministers and hasbeen conveyed to the Union finance minister. It hasto be resolved for GST to happen,” said Mitra.

“Traders with revenue of above Rs.1.5 crore can beadministered by both the centre and the states,” hesaid, effectively dismissing the centre’s proposal ofevolving a mechanism where both the states and thecentre could administer small traders.

Bipin Sapra, tax partner at EY, said the entire goodsand services industry is looking for single control.

“The small-scale industry does not have thewherewithal to handle two level of scrutiny. So asingle control for traders having a revenue belowRs.1.5 crore is welcome,” he said, adding that a lowtax rate is crucial for GST’s success.

http://www.livemint.com/Politics/e1x83F5GsvWQUcOgiW6kRM/States-reject-GST-rate-proposed-by-Arvind-Subramaninan-panel.html

47. Hope floats again for GST bill: Centre andstates agree on fixing rate

India on Tuesday took a big step towards rolling outthe landmark goods and services tax (GST), with theCentre and states agreeing on broad principles to fixthe tax rate.The consensus could see the bill’s passage in theRajya Sabha as early as next week, dramaticallyaltering India’s indirect tax structure by replacing astring of central and local levies such as excise, valueadded tax and octroi into a single unified tax andstitch together a common national market.Finance minister Arun Jaitley met state financeministers on Tuesday as the government stepped upefforts to iron out differences on the proposed GSTthat has remained stuck in Parliament for want ofpolitical consensus.The meeting discussed the changes that Congresshas sought, including the demand for capping theGST rate at 18% in the Constitution Amendment Billitself.“As you know that no tax rates are provided in theConstitution. It was discussed and the conclusionreached that Union finance minister willcommunicate to other parties,” said West Bengalfinance minister Amit Mitra, who is the chairman ofthe empowered committee of state finance ministerson GST.“He will explain it to them that it can’t come in (the)Constitutional Amendment (bill) but it can come inGST Bill or GST Act.”The supplementary legislation — the GST Act --may specify a cap within which the rates shouldideally be maintained. It is an enabling legislationthat is necessary for rolling out the new tax system.





According to the bill, passed in the Lok Sabha inMay 2015, the rates were to be decided by a GSTcouncil headed by the central finance minister withstate finance ministers as members.The Centre has been arguing that a cap on the GSTrate in the Constitution Amendment Bill wouldmake the system rigid. The Constitution will have tobe amended with a two-thirds majority each timethe rates needed to be changed in the future.The Congress increasingly found itself isolated asregional parties supported early passage of the Bill.Last week, the party had softened its stance frominsisting on a cap in the 122nd ConstitutionAmendment Bill to “legal ring-fencing” of the GSTrates.“This is one step forward. Finally the governmentseems to have accepted our demand for a cap. Therewill be more negotiations,” said Congress leaderJairam Ramesh.There was also broad agreement on the principlethat the ordinary businessman and the common taxman will benefit from introduction of GST by way oflower tax rates while the states will not face any lossof revenue.“The principle of the GST rate has been decided. Therate should provide relief to common man while notresulting in loss of revenue to states,” Mitra toldreporters.The “broad consensus put together is satisfactory toall political parties and all states,” he said adding“fool proof” wording for compensation to states hasbeen worked out.In the Bill, the Centre had proposed 100%compensation for first three years, 75% and 50% forthe next two years. However, the Select Committeeof the Rajya Sabha has recommended 100%compensation for probable loss of revenue for fiveyears.Mitra said that small businesses with turnover up toRs 1.5 crore in a year would remain within thestates’ control, while larger businesses will comeunder dual control of states and the centre.Lack of political consensus has kept the landmarkConstitution amendment bill stuck in the RajyaSabha where the ruling the National DemocraticAlliance (NDA) is in a minority.Both Houses of Parliament and at least half of thestate assemblies will have to ratify it before it finallybecomes a law.It has missed several roll-out deadlines includingthe last one of April 1, 2016.

http://www.hindustantimes.com/india-news/centre-states-agree-on-gst-rate-stage-set-for-bill-s-introduction-in-rs/story-HawkqDI8QYQoOqE5LUcNnK.html

48. GST Bill: Uncertainty continues as statesdon’t agree on rate

GST Bill: The crucial revenue neutral rate (RNR) oftaxation as well as capping of the GST rate in the Billdid not find favour with many states during ameeting of the Empowered Committee of StateFinance Ministers.

A panel of state finance ministers on Tuesday failedto reach a consensus that would enable thegovernment to get the Constitutional AmendmentBill for Goods and Services Tax (GST) passed inRajya Sabha.The crucial revenue neutral rate (RNR) of taxation aswell as capping of the GST rate in the Bill did notfind favour with many states during a meeting ofthe Empowered Committee of State FinanceMinisters. An RNR of 15-15.5 per cent and astandard GST rate of 17-18 per cent wasrecommended by a committee headed by ChiefEconomic Advisor Arvind Subramanian.“All states were of the view that the tax rates putforward by the Chief Economic Advisor are notacceptable. There was no consensus on what the rateshould be. It can be 18 per cent or above that. Thatwas the consensus,” Kerala Finance MinisterThomas Isaac told reporters after the meeting.Isaac said that the rate should not hurt the commonman and must remain beneficial for the revenue ofstates. “The general consensus was to drop thisconcept of RNR rate. We will ensure a rate andstructure, which will reduce the effective tax burdenon the common man…. also, this rate and structurewill protect the existing revenues of the Union andthe states,” he said.“On the question of a rate, it was very importantthat a wording be worked out which essentiallymeans that the incidence of tax on the common manhas to be significantly reduced, at the same time,safeguarding the existing level of trends of revenueof the union and states,” said West Bengal FinanceMinister Amit Mitra, who is the committeechairman.On the matter of capping the GST rate, a keydemand of the Congress Party, Mitra said there was“consensus to keep the GST rate out of theConstitutional Amendment Bill”.“As you know, no tax rates are provided in theConstitution. It was discussed and a conclusionreached that the Union Finance Minister willcommunicate to other parties. He will explain it tothem that it can’t come in a Constitutionalamendment but in the GST Bill or GST Act,” Mitrasaid.





Congress-ruled states, however, stuck to their standof putting a cap on the rate in the Constitutionalamendment. Karnataka Minister H C Mahadevappasaid, “GST taxation should be specifically brought inthe Constitutional Amendment Bill so that taxpayersare told what the rates would be.”The states, however, reached a broad consensusduring the meeting on the other contentious issuesof dual control and a dispute-resolution mechanism.“There was always a standing issue on the questionof dual control. The unanimous decision of statefinance ministers conveyed to the Union FinanceMinister was that Rs 1.5 crore and below will beunder state (control)… states will be the only entitiesthat will look after the small business of states.Above Rs 1.5 crore, a smooth consistentmethodology has been worked out for both Centreand state to work together shoulder to shoulderwith regard to revenue generation,” Mitra said.The states also agreed on dispute resolution to bedone by the GST Council, as opposed to theCongress demand of an independent mechanism.On compensation to states, Mitra said, “I am happyto say that the wording, which would guarantee fiveyears of compensation, was worked out. I cannot gointo details of the wording. I can only give you thespirit of it that states are satisfied by the wording inthe Constitutional amendment by which they will beguaranteed five years of compensation if there isany loss of revenue. This was a very bigdevelopment. The appropriate wording… wasclearly defined today,” he said.Mitra also said that the states agreed to remove fromthe Constitutional amendment the proposed 1 percent additional levy to be levied for inter-state tradeof goods and aimed at helping manufacturing states.The Constitutional Amendment Bill for GST isawaiting passage in the Upper House of Parliament,where the government does not have a majority.The Bill is expected to be tabled in the ongoingMonsoon Session. After passage in the Rajya Sabha,it needs to be ratified by 50 per cent of states.In Tuesday’s meeting, Union Finance Minister ArunJaitley is said to have appealed to all state financeministers to ensure the passage of the GST Bill inRajya Sabha, said an official who attended themeeting. The official added that the FinanceMinister assured states that all their concerns will betaken care of after the passage of the Bill.Touted as the country’s biggest indirect tax reform,the GST will subsume most Central and state leviesincluding excise duty, service tax, value added taxand central sales tax, and could add as much as 2percentage points to India’s gross domestic product.

http://indianexpress.com/article/business/economy/gst-bill-arun-jaitley-state-finance-ministers-meet-monsoon-session-2937816/

49. GST Bill: Support it Rahul Gandhi, andshow who is the boss in the Congress

There are two key takeaways from Tuesday’smeeting between union finance minister ArunJaitley and state finance ministers on the Goods andServices Tax (GST) — the surprise U-turn by the leftparties and more evidence that the Congress is nowisolated in the anti-GST camp. A meaningfulsupport from most states, including the left-ruledKerala, is evident for the Bill.Kerala’s finance minister, Thomas Isaac, has said thestate is fine to go ahead with the constitutionalamendment after the Centre assured compensationfor losses in the initial years. The Left had issueswith the Bill earlier. Second, most states agree thatthere shouldn’t be a constitutional cap of the GSTrate, may be with the exception of Karnataka. But,except that no states seem to insist this demand andare ready to settle if the rate is specified in the GSTBill but outside the constitution.

As far as the issue of dual control is concerned, thereis a broad agreement. The dual control will apply toonly companies with turn over Rs 1.5 crore. So is onthe issue of removing 1 percent interstate levy anddispute resolution mechanism. The point here is theCongress party is largely isolated in the anti-GSTbrigade, especially on the issue of crucialconstitutional amendment with its demand forinclusion of the rate in the cap.With the BJP conceding on two of its three demandsby the Congress party, it is time for Rahul Gandhi,congress vice-president, to bring in those 15 minutesto pass the Bill that will realise the biggest taxreform in the country. In an interaction withmanagement students at the Narsee Monjee Instituteof Management Studies in Mumbai in January thisyear, Gandhi had replied to a question on GSTsaying, "It will take 15 minutes" for the GST to bepassed if the Congress’ demands are accepted. Withthe BJP agreeing to two of the three demands andgiven the rethinking within the Congress on the lackof feasibility on the third (constitutional capping),it's time the Congress camp gave in.Let’s not make the mistake of thinking GST is thefinal word on reforms and a panacea for all theproblems in the Indian economy. The Bill only takescare of the indirect tax reforms part and lot of workis left in other areas to make the country amanufacturing hub, mainly availability ofinfrastructure and land. But unless there is certainty





for investor that India is progressing from its currentconvoluted indirect tax regime, this will continue tobe a big turn off for foreigners.“Move to a GST regime will be beneficial for theeconomy on multiple counts, even though there arelikely to be growth, inflation and fiscal implications.The government also faces a fine-balancing act, as itworks to reach a consensus with the stategovernments and opposition parties, whilst alsoensuring higher taxes don’t impinge on growth/incomes. Either way, it is crucial to get the GST billoff the ground,” said Radhika Rao, economists atSingapore based DBS bank.The Congress is playing a losing game on the issueof constitutional cap for GST rate. If the GST rate isincluded in the constitution, every time if the rateneeds to changed, it will have to go through bothhouses of Parliament and state assemblies. It makesno sense hence for the Congress party to politicisethe issue beyond this point, especially when moststates and parties believe otherwise.A solution, as Ajit Ranade and Praveen Chakravartyexplain in this Economic Times blog is to introducethe provision to put a ceiling for GST rate in the Billnot in the Constitution. “Once such a ceiling isspecified in the Bill, the GST rates can be changed atwill by the GST Council through an executivenotification process rather than through aParliament process in adherence to that ceiling,”they said. The Congress should settle for such aprovision rather than insisting for a constitutionalcap.If the constitutional amendment doesn’t happen inthis session, it is doubtful whether the governmentcan keep the promise of April 2017 roll-out. Thedeadline is already delayed by one year and anyfurther delay will send a wrong signal to the foreigninvestors. There is no better time to bring in thislandmark tax reform when the country is markingthe 25th year of 1991 economic reforms. It’s time forRahul Gandhi to show who is the boss in the partyand get on with his magic 15 minutes.

http://www.firstpost.com/politics/gst-bill-support-it-rahul-gandhi-and-show-who-is-the-boss-in-the-party-2917850.html

50. Cabinet approves amendments to GSTConstitution bill

NEW DELHI: The Cabinet today approved theamendments to the Goods and ServicesConstitutional Act.

The GST bill, intends to convert 29 states into asingle market through a new indirect tax regime.

Among the amendments approved include theabolishment of 1 per cent additional tax levy whichwas demanded by the Opposition parties led by theCongress.

It also approved the compensation for states for fiveyears instead of the earlier 'up to' five years asproposed in the draft GST bill.

The Constitutional Bill will include that disputeresolution will be handled by the GST council.

The Cabinet also dropped a 1 per centmanufacturing tax.

The empowered council of state finance ministers ina meeting with the finance minister Arun Jaitley onTuesday had agreed to not including the GST rate inthe Constitution.

The amendments approved will now isolate theCongress which has been demanding the inclusionof the GST rate in the Constitution.

According to Nomura, the expected timeline for thepassage of GST is by August 12 and there is a 60 percent probability for this, a PTI report said.

"We believe a constitutional amendment that allowsfor a goods and services tax (GST) is more likelythan not to be passed during the ongoing MonsoonSession of parliament (July 18-August 12)," Nomurawas quoted by PTI.

The GST was supposed to be implemented fromApril 1, 2016 but strong opposition from Congressled to the delay.

The Bill has already been passed by the lower houseof Parliament and awaits the passage from theUpper House. It requires two-third vote to getpassed from both the houses.

http://economictimes.indiatimes.com/news/economy/policy/cabinet-approves-amendments-to-gst-constitution-bill/articleshow/53419573.cms









51. How GST deal was clinched

The empowered committee of the finance ministersof states on Tuesday, July 26, reached an agreementthat the revenue-neutral rate would not be specifiedin the Goods and Services Tax Constitutionamendment Bill, raising hopes that it would bepassed by the Rajya Sabha next week.

Also, according to a source, once the Bill is passed,"there will be a significant reduction of taxes on thecommon man which will be reflected in a tax rateand structure that protects the existing levels andtrends of revenue between the Centre and the state."

No finance minister, including those of states ruledby the chief Opposition party the Congress, insistedon a cap on the rate of taxation and agreed that thiscould be revisited later.

Armed with this consensus, Union Finance MinisterArun Jaitley is likely to tell the Congress that thefinance ministers of states, where it is in power, areon board on the Constitutional amendment Bill.

Jaitley made no bones about the fact that he wasextremely keen to get the Bill passed and showed agreat flexibility in creating consensus, a state financeminister, who did not want to be named, toldBusiness Standard.

Top sources in the Congress said they were nothappy with the development, but would not holdup the Bill.

Neither Gujarat nor Maharashtra nor Tamil Nadu --all three states that had raised objections to one orother aspect of the Bill -- demurred on theformulation.

To cement this consensus, Jaitley met with otherpolitical parties on GST on Wednesday, July 28.

He met the Nationalist Congress Party's Praful Pateland is likely to meet the Left parties on Thursday.

Government strategists said talks with the Congresswould continue.They said the GST Constitution amendment wouldnot be possible without key states such as Congress-ruled Karnataka, Himachal Pradesh andUttarakhand, since the amendment has to be ratifiedby at least half, that is 15, of the state legislatures.

'I am doing this in good faith. You have to believeme,' was Jaitley's heartfelt and fervent appeal to hiscounterparts from the states.

There was an initial flutter at the meeting because ofa letter received by West Bengal Finance MinisterAmit Mitra from the revenue secretary that theminutes of the 25 June meeting at Kolkata -- thatMitra had recorded -- were inaccurate.

This issue related to the states getting exclusiverights to levy GST on businesses with a turnover ofRs 1.5 crore (Rs 15 million) or less.

The revenue secretary wrote to Mitra that the Unionfinance ministry did not agree on this.

However, this problem was sorted out with thecommittee accepting and passing the minutes.

Finance ministers of states pointed out that traderswould have to face harassment by the centralgovernment because the CBEC did not have thebandwidth to levy and collect the taxes. When thisissue was raised in Kolkata, Jaitley had said: 'Thiscan be done.'

When the Union finance ministry raised the issue,he told the state ministers: 'This is small matter.What I really want is a sense of what the states arefeeling.'

That set the tone for the rest of the meeting on whichthere was some quibbling over language andwording, especially relating to 'full compensation,'but all finance ministers were finally on board.

At the empowered committee meeting, Jaitley said:'I request all of you to use your good offices andconvince all political parties to pass this Bill.' Again,the Congress did not contest this.

Elsewhere in Parliament, too, this spirit of consensuswas evident.

The government and the Congress reached arapprochement in the Rajya Sabha, afterintervention by Chairman Hamid Ansari.

The Rajya Sabha transacted business normally aftertwo days of disruptions by Congress members.

The House also took up the compensatoryafforestation Bill, and it is likely to be passed onThursday.


THE CENTRE-STATES DIALOGUE

Answering the concerns of the states, FinanceMinister Arun Jaitley managed to bring almost all ofthem on board, clearing the decks for the GST:

States: What about tax levied on businesses belowRs 1.5 crore?

Centre: This is a small matter... You can have it.

States: We want 'full compensation'. In the Bill, 'maybe shared', should be replaced with 'shall be shared.'

Centre: The words may vary, but the Bill willencapsulate the sense.

States: Revenue neutral rate should be significantlyreduced.

Centre: Chief Economic Adviser ArvindSubramanian and Haseeb Drabu (Jammu & Kashmirfinance minister) will draw up the phraseology.

Final formulation: 'There will be a significantreduction in taxation on the common man, which isreflected in a tax rate and structure that protects theexisting levels and trends of the revenue of thestates and the Centre.'

States: How about signing memoranda ofunderstanding with every states on the rate, andwhether it should be floating or a band?

Centre: We can talk about that.

http://www.rediff.com/business/report/how-the-gst-deal-was-clinched/20160728.htm

52. GST is also about trucks moving freely

The generally accepted belief is that roll out of GSTwould lead to elimination of delays and long queuesat checkposts at state borders. It would also lead tothe simplification of the documentation required fortransporting goods across India. These areimportant objectives given that India hasnotoriously high average waiting time andstoppages for trucks transporting goods.According to a recent report published by TransportCorporation of India (TCI) and IIM-K, such delaysimpose transaction costs of around $21 billionannually on India’s businesses. In addition, itincreases average transit times and makes supplychains inefficient.

Enabling seamless movement of goods across Indiais, in fact, is considered to be one of the mostimportant aspects of GST-related reforms. It wouldlead to much-needed logistical efficiency in India’snational supply chains. This would require detailedrule-making as well as IT-based systemic solutionsacceptable to all stake-holders, especially the Stateadministrations.

Unlike the political and tax law related debate overGST, rules for transport related documentation andadministrative procedures for checking andinspection of trucks have received relatively scantattention.

Single national declaration

At present, State governments maintain a plethoraof forms (many but not all online) for both theconsignee/consignor of goods and the transporterto file for recording the movement of goods in andout of their jurisdiction. Existing procedures alsorequire transporter to carry hard-copies of invoiceand forms along with them.

This system can easily be replaced by designingsingle national online documents for the consignee,consignor and transporter. The national documentfor consignee-consignor will require submission ofthe same information that is currently captured in astandard invoice.

For every transaction, consignee-consignor will haveto also provide a corresponding invoice numberreference from his books of accounts.

This would comply with the legal requirement ofthe GST model law that transport can only happenafter invoicing of goods. Provisions for special typesof transactions (for example, imports, repair andreturn or stock-transfers) or special types of goods(for example, exhibition goods or documents) needto be made. The online system would generate aunique transaction ID for every transaction.

The transporter would create an online electronicwaybill (e-waybill) by simply quoting thetransaction IDs generated by consignee-consignorand adding the registration number of the vehiclethat would be transporting the shipments quoted inthe e-waybill.

Each e-waybill will be assigned a unique ID, and allthe transporter would need to have with him is thisnumber, which he would quote to any official en-




route who wishes to establish the bona-fides ofgoods being carried.

The GST Network or GSTN should be able toprovide this IT architecture, with adequate servercapacity. Not only will this make the documentationsimple and transparent, it would do away with theneed for the government to chase paper-trails (ofinvoice copies and multiple documents) when itrequires to do due diligence and post audits.

Eliminating check-posts

In a truly integrated India, with one national GST,checkposts at State borders need to be completelyeliminated. In order to ensure compliance with taxlaws, the government can put in place a system ofrandomised checks by mobile flying squads.

However, there is concern that such mobile flyingsquads can become a source of harassment fortransporters due to over-zealous or unscrupulousofficers. Officers have been given substantivepowers under the draft GST law for stoppage andseizure of vehicles which can be potentially abused.

Thus, a comprehensive system of checks andbalances needs to build it. The following specificsuggestions for the administration of such mobilecheck-posts can be considered:

All stoppages made by mobile squads would needto be logged in to the system online with specificreason for stoppage. In order to facilitate this, codesfor all the reasons a vehicle is stopped should becreated;

Any stop made for a) greater than 15 minutes, b) forasking for any other information other thancontained in e-declaration, or c) actual physicalverification of goods, would have to be logged in asan exception, with reason why such exception wasmade;

Any physical verification of actual shipments wouldbe done under digital camera surveillance, therecording of which would kept in a database for 24hrs, with the option of downloading of recording forthe registered transporter and consignee whosevehicle/shipment was stopped;

Physical verification of shipment, when undertaken,should be done in a location not further than fivekilometres from the place where truck was actuallyintercepted;

Number of stops on specific routes and instances ofactual non-compliance found by such stops to bemaintained in database;

Annual report, reporting stoppage data, sorted bydifferent sections of route, to be published based onthe database maintained by the government.

Finally, a system of registered transporters shouldbe encouraged. Transporters with a goodcompliance record could be provided a higher levelof facilitation and enable authorities to develop abetter risk management system targeting lesscompliant players for higher number of checks.

Without such comprehensive IT backeddocumentation, procedural, and administrativereforms, and adequate checks and balances, thebenefits of GST would be incomplete, as would thedream of seamless movement of goods and efficientsupply-chains in India.

http://www.thehindubusinessline.com/opinion/gst-is-also-about-trucks-moving-freely/article8902444.ece

53. Circular No. 196/06/2016-ST dated 27-07-2016

To see the news please click the below link

http://www.cbec.gov.in/resources//htdocs-servicetax/st-circulars/st-circulars-2016/st-circ-196-2016.pdf


54. GST bill pending in Rajya Sabha requiresamendment: P Chidambaram

NEW DELHI: Former Finance Minister andCongress leader P Chidambaram on Thursday saidthe GST bill pending in the Rajya Sabha is "flawed"and required amendment.The Union Cabinet yesterday approvedamendments to the GST bill, dropping the 1 per centmanufacturing tax and also incorporating wordsthat guarantees compensation to states for first fiveyears."We support the GST, we are the original proponentof the GST idea. The bill (pending in Rajya Sabha) isflawed and therefore we say the bill requiresamendment. Opposing a bill which is badlydrafted," he said, adding that he does not know









what amendments were cleared by Cabinetyesterday.By doing away with the 1 per cent inter-state taxover and above the GST rate, the government hasmet one of the three key demands over whichOpposition Congress has been blocking the Bill inthe Upper House.The other demands of including GST rate in thestatute and a Supreme Court judge-headed disputeresolution body has not been accepted."I don't know what the present position is. TheCongress party has authorised Mr. Ghulam NabiAzad and Mr. Anand Sharma to talk to the FinanceMinister. Only when they report back to thecongress party, will I know what the position is,"Chidambaram told NDTV.He said Opposing a bill which is badly drafted orwhich is flawed does not mean that Congress isopposing the reform.

"On the contrary asking for a more perfect bill, I amnot saying that a completely perfect bill is possible,is in fact supporting reform. Passing a flawed bill isanti reform," Chidambaram said.According to sources, Finance Minister Arun Jaitleyand Chief Economic Adviser Arvind Subramaniantoday held several rounds of talks with leaders ofCongress and other parties including the SamajwadiParty, JD(U) and CPI(M) to build a consensus on theGST Constitutional Amendment Bill. The bill, afterincorporating the changes cleared by Cabinetyesterday, is likely to be table in the Rajya Sabhanext week.

http://timesofindia.indiatimes.com/business/india-business/GST-bill-pending-in-Rajya-Sabha-requires-amendment-P-Chidambaram/articleshow/53439755.cms

55. Streamline tax disbursal under GSTregime: States tell Centre

NEW DELHI, JULY 28:The States have asked Finance Minister Arun Jaitleyto ensure that tax they collect and the inter-Statetransactions under the proposed GST regime doesnot find its way into the Consolidated Fund of India,from where disbursal to States might becomedifficult.

At a crucial meeting with Jaitley and his team ofofficials on Tuesday, the Empowered Committee ofState Finance Ministers had pressed for amechanism that would obviate the need to dip intothe Consolidated Fund of India, or lead to Centre-State disputes, sources told BusinessLine.

West Bengal Finance Minister and Chairman of theEmpowered Committee, Amit Mitra, on July 11wrote to Jaitley stating that seamless transfer ofState GST and Integrated GST cannot happen unlesssuitable amendment is made in Constitution. Atpresent, all revenues of centre and states form partof Consolidated Fund of India and StateConsolidated Funds and it can be withdrawn onlythrough legislative approval.

The Union Finance Minister could respond to itwhen the Constitution Amendment Bill, along withthe recently approved amendments, comes up fordiscussion in Rajya Sabha

“We all know it is not easy to withdraw once moneygoes to Consolidated Fund of India…so theConstitution needs to be suitably amended,” said aState Finance Minister.

“We want an assurance of a clear demarcation offunds,” said another State Finance Minister.

However, experts have rebuffed the fears, but saythey may have risen from issues of compensation onCentral Sales Tax between the Centre and States.“The concern is unfounded as IGST funds will go tothe clearing house for transmission to respectivestates,” said Mahesh Purohit, Director, Foundationfor Public Economics and Policy Research.

As regards concerns on GST being inflationary innature, Amit Mitra told BusinessLine it was raisedat the State Finance Ministers meeting and that iswhy it was decided that the tax rates will be decidedbased on two principles – it should not adverselyimpact the consumers and should protect therevenues of the state.

A government official said “any new regime isbound to have inflationary impact initially but thegovernment is well aware of the implications and isalready preparing grounds to avoid it. This is anargument which even Congress is putting across.”

Besides, the proposed GST Council is expected toresolve many such issues including the tax rates.Clarity on what will happen to the various cessesthat are being currently levied is expected only oncethe GST law is in place.

http://www.thehindubusinessline.com/economy/streamline-tax-disbursal-under-gst-regime-states-tell-centre/article8912418.ece









56. GST in RS next week, govt's fingerscrossed

Parliamentary Affairs Minister Ananth Kumar said:"We will take up the Bill when confident that aconsensus exists"

The government on Friday listed the Goods andServices Tax (GST) Constitution amendment Bill fordiscussion and passage in the Rajya Sabha for theweek starting Monday.

Asked about the prospects of its passage, FinanceMinister Arun Jaitley said: “I am keeping my fingerscrossed.” Sources speculated the Bill might be takenup on Tuesday. However, government strategistsrefused to confirm this. Parliamentary AffairsMinister Ananth Kumarsaid: “We will take up theBill when confident that a consensus exists.”

Senior government strategists were unwilling to saymore than that, lest any comments might vitiate thehard-fought consensus, which the governmenthopes will last enough days for the much awaitedBill to sail through the Upper House of parliament.On any more outreach to the Congress and otherpolitical parties, a senior minister said all thenegotiations and consultations had been concluded.

On the contentious subject of whether the Centre orstate governments will have the authority to assessentities with turnover below Rs 1.5 crore, a source inthe government said he didn’t favour duplication.He said a solution would be worked out when theGST Bills would be taken up.

In the afternoon, Minister of State for ParliamentaryAffairs Mukhtar Abbas Naqvi, while making astatement about the Rajya Sabha business for theweek starting August 1, said the 122nd ConstitutionAmendment Bill, 2014, that is GST, will be taken upfor consideration and passage. Last week, the RajyaSabha Business Advisory Committee had allocatedfive hours for discussion and passage of GST.

On Wednesday, the Cabinet had cleared changes inthe legislation, dropping the controversial one percent manufacturing tax and providing a guaranteeto compensate states for any revenue loss in the firstfive years of roll-out of the ambitious indirect taxregime.

According to sources, Congress Vice-PresidentRahul Gandhi has expressed his support for the Bill,

terming it “constructive and positive”, afterscrapping of the one per cent levy.

The government is keen to get the Bill approvedduring the Monsoon Session. The session ends onAugust 12, with 10 more sittings. The Bill waspassed by the Lok Sabha in May 2015 and thenvetted by a Rajya Sabha Select Committee. TheCabinet cleared the amended Bill last week, and itwill have to go back to the Lok Sabha for passageonce the Rajya Sabha approves it.

A Constitution amendment Bill needs to be passedby a minimum of two thirds of not less than half ofthe strength of the House.

In recent past, Jaitley has reached out to Oppositionleaders, including those of the Congress, regionalparties and Left parties.

The Enforcement of Security Interest and Recoveryof Debts Laws and Miscellaneous Provisions(Amendment) Bill, 2016, is slated to be taken up bythe Lok Sabha on Monday.

The Bill aims to amend four laws — Securitisationand Reconstruction of Financial Assets andEnforcement of Security Interest Act, 2002 (Sarfaesi),Recovery of Debts due to Banks and FinancialInstitutions Act, 1993 (RDDBFI), Indian Stamp Act,1899 and Depositories Act, 1996.

http://www.business-standard.com/article/economy-policy/gst-in-rs-next-week-govt-s-fingers-crossed-116072901166_1.html

57. Cabinet drops 1% additional tax from GSTBill

Provides guarantee to compensate states for anyrevenue loss in the first five years of rollout of theproposed indirect tax regime

The Cabinet today cleared changes in theGSTConstitutional Amendment Bill, dropping 1 percentmanufacturing tax and providing guarantee tocompensate states for any revenue loss in the firstfive years of rollout of the proposed indirect taxregime.The Cabinet, headed by Prime Minister NarendraModi, decided to include in the ConstitutionalAmendment Bill that any dispute between statesand the Centre will be adjudicated by the GSTCouncil, which will have representation from boththe Centre and states.





With states on board and the Cabinet approving theamendments, the government is hopeful of passageof the long-pending Goods and Services Tax (GST)Bill in the ongoing monsoon session of Parliament,which ends on August 12.

The GST Bill, with the changes approved by theCabinet, could come up in the Rajya Sabha as earlyas this week, but certainly by next week.

The changes approved by the Cabinet are to theConstitutional Amendment Bill that was approvedby theLok Sabha in August last year. Once the RajyaSabha approves the legislation, the amended Billwill have to go back to the Lok Sabha again forapproval.

"The amendments to the GST ConstitutionalAmendment Bill have been cleared," a top officialsaid after the meeting of the Union Cabinet chairedby Modi.

The amendments were taken up by the Cabinet afterFinance Minister Arun Jaitley's assurance to statefinance ministers to include in the Bill themechanism of compensating states for all the loss ofrevenue for five years.

The Bill, in its present form, provides that the Centrewill give 100 per cent compensation to states for firstthree years, 75 per cent and 50 per cent for the nexttwo years.

However, the Select Committee of the Rajya Sabhahad in its report recommended 100 per centcompensation for probable loss of revenue for fiveyears.

As per the amendments, the Centre will nowconstitutionally guarantee states any loss of revenuefrom the GST subsuming all indirect taxes,including VAT, in the first five years ofintroduction.

By doing away with the 1 per cent inter-state taxover and above the GST rate, the government hasmet one of the three key demands over whichOpposition Congress has been blocking the Bill inthe Upper House.

The other demands of including GST rate in thestatute and a Supreme Court judge-headed disputeresolution body has not been accepted. It remains tobe seen if meeting of its demands halfway willpersuade the Congress to support the legislation.

There is a talk of mentioning the GST rate in one ofthe two supporting legislations that need to bepassed after the Constitution is amended, a movethat may pacify the Congress.

The government plans to roll out GST by April 1,2017, and is working overtime to build consensus toget the Bill passed in the ongoing session.

With the Congress demand of getting GST ratecapped in the Bill delaying its passage, the Centreyesterday built a broad consensus with the statesthat the rate should not be mentioned in theConstitution and instead could figure in GST law.

It was also assured that the tax rate in the newregime, which is to be decided by the GST Council,will be less than what it is at present.

"The amendments will pave the way for politicalconsensus and early passage of the Bill in themonsoon session," EY National Leader (indirect tax)Harishanker Subramaniam said.

In the new regime, there will be one Central GST orC-GST and State GST or S-GST. States levy sales taxor VAT on goods sold within their jurisdiction andget a Central Sales Tax (CST) on sales made outsidetheir territories.

This CST will no longer be available in the newregime and a 1 per cent additional tax was proposedto make up for that.

GST being a constitutional amendment requires tobe passed by Parliament with two-thirds majorityand after that, 50 per cent of state assemblies willhave to pass the legislation.

Thereafter, the Lok Sabha and the Rajya Sabha willhave to pass the central GST Bill and the states haveto pass their own GST Bills.

After the legislative procedure gets over, the GSTCouncil, which will be the decision-making body onall issues, including rates of the new tax, will comeinto play.The Council will be chaired by Union FinanceMinister, but Centre's voting share will be one-thirdand all decisions of the council would be taken by 75per cent majority.

Terming compensation guarantee as a very bigdevelopment, Chairman of the EmpoweredCommittee of State Finance Ministers Amit Mitra


had yesterday said appropriate wordings oncompensation would give confidence to the statesregarding the Centre's intention.

"I cannot go into details of the wordings, I can onlygive you spirit of it. States are satisfied that in theconstitutional amendment, the wording (will beprovided) by which states will be guaranteed fiveyears of compensation if there is any loss ofrevenue," Mitra said.

The GST Bill, which intends to convert 29 states intoa single market through a new indirect tax regime,was earlier planned to be introduced from April 1this year, but the deadline was missed as thelegislation to roll it out remains in limbo in theOpposition-dominated Rajya Sabha.

http://www.business-standard.com/article/pti-stories/cabinet-drops-1-additional-tax-from-gst-bill-116072701402_1.html

58. India Inc waits for timely rollout of GST

Says 'giant' step in reforms will go a long way inreviving the manufacturing sector

With the revised Bill for a national goods andservices tax (GST) set to be introduced in the RajyaSabha, company chief executives say the "giant"reform step will go a long way in reviving themanufacturing sector, suffering from low capacityand lack of demand.

"A giant step in reforms awaits India, the biggestsince liberalisation and the boldest, considering itsstate-level challenges. GST is a gateway to economicdevelopment through superior tax administration,lower interstate trade barriers and overall ease ofdoing business. The nation is poised to reap thedividends of growth that would arise out of thislandmark legislation. The Modi government's mostprogressive reform initiative by far," said HarshGoenka, chairman of RPG Enterprises.

Also Read: Tell States How Their FinanacialInterests Will Be Protected: Sitaram Yechury

They would like the rollout by April 1 next year(start of the new financial year).

"This is likely to benefit sectors like FMCG (fast-moving consumer goods), automobiles, cement,light electricals, multiplexes, retail and logistics.However, commercial vehicles, print media,cigarette and jewellery companies would be

adversely impacted," said a Motilal Oswal FinancialServices analyst.

The logistics sector will also benefit from removal ofinefficiencies in interstate taxation and atcheckposts. The services sector might see a negativeimpact from a higher tax under GST, compared to 15per cent at present, says global bank HSBC.

The real value of GST would be seen in taxgovernance, where a system plagued by a plethoraof discretionary and ad-hoc taxes would movetoward a rule-based, transparent and stable regime.This would ensure 'neutrality' across players,products or services, locations or business cycles,say analysts.

Manufacturing companies have faced four years ofslowdown. A report by CMIE says privatecompanies announced 2,856 new projects worth Rs11.33 lakh crore, between financial years 2014 and2016 but of this, only a third is underimplementation. This was mainly due to low-capacity utilisation, low demand and high interestrates.http://www.business-standard.com/article/economy-

policy/india-inc-waits-for-timely-rollout-of-gst-116072801164_1.html

59. Logistics stocks rally as govt paves way forGST bill clearance

Shares of companies in the logistics sector gainedground on Thursday on hope that the governmentwill be able to secure clearance for a revised goodsand services tax (GST) Bill in the Rajya Sabha nextweek.

Snowman Logistics, GATI, Allcargo Logistics, VRLLogistics, Patel Integrated and TransportCorporation of India are some stocks in this segmentthat rallied, by 3.8-7.2 per cent. In comparison, thebenchmark S&P BSE Sensex and Nifty50 indicesended the day at 28,209 and 8,666, up around 0.6 percent each.

According to reports, the empowered committee ofthe finance ministers of states on Tuesday agreedthat the revenue-neutral rate (RNR) would not bespecified in the GST Constitution amendment Bill,raising hopes that it would be passed by the RajyaSabha next week.








While the short-term macro economic implicationsof GST should be mixed, longer-termimplementation should lift growth and enablegreater government fiscal consolidation, analystssay.

“GST will be clearly positive, as gains from a moreefficient tax system, greater price competitiveness(reduced costs) and the removal of interstate taxbarriers should boost growth via higher exports andinvestments, structurally lower inflation, and raisegovernment (central + state) tax revenues,” say RaviAdukia and Saion Mukherjee of Nomura in a recentreport.

Indranil Pan, chief economist at IDFC Bank alsosuggests that the GST will eliminate multiple leviesand state boundaries which should lower cost ofdoing business. Moreover, the current inefficientsupply chain due to higher logistics costs will seedramatic improvement in turnaround times andalso lead to lower transportation costs, he says.

From sector perspectives, analysts at Nomurasuggest that the GST will be generally positive forconsumption-related sectors (auto, consumerdurables, FMCG etc.).

“Logistics should benefit from the removal ofinefficiencies in interstate taxation and check posts.The services sector, however, should be impactednegatively due to the higher tax burden,” theNomura report says.

Though most analysts expect the benefits ofimplementation of the GST bill to accrue over thelong-term, they remain cautious on the relatedstocks in this space given the run-up in mostcounters over the past few weeks.

“Logistic stocks will once again run up on thedevelopment. Most stocks in this space are over-priced and the Bill, even if it is passed, is not likelyto bring profits immediately to these companies. Weadvise caution,” said G Chokkalingam, managingdirector, Equinomics Research & Advisory.

http://www.business-standard.com/article/markets/logistics-stocks-rally-as-govt-paves-way-for-gst-bill-clearance-116072800187_1.html

60. Rajya Sabha to take up GST bill next week

NEW DELHI: Government on Friday listed themuch-awaited GST bill for consideration andpassage in Rajya Sabha's agenda for the next week.

Minister of state for parliamentary affairs MukhtarAbbas Naqvi, while making a statement regardinggovernment business for the week starting August 1in the Upper House, said the Constitution (122ndAmendement) Bill, 2014 will be taken up forconsideration and passage.

On July 27, the Cabinet had cleared changes in thelegislation, dropping the controversial one per centmanufacturing tax and providing guarantee tocompensate states for any revenue loss in the firstfive years of rollout of the ambitious indirect taxregime.

The government is keen to get the GST Billapproved during the Monsoon Session ofParliament ending on August 12.

The bill was passed by the Lok Sabha in May 2015and vetted by the Rajya Sabha Select Committee.

However, the measure got stuck in the Upper Housewhere the government does not have majority of itsown, as the main opposition Congress soughtcertain changes in it.Government is making efforts to hammer out aconsensus on the bill and reaching out to oppositionparties. Congress has described the exercise as"constructive and positive".

Once the Rajya Sabha clears the legislation, theamended legislation would be returned to the LokSabha for its approval.

The GST legislation, which intends to convert 29states into a single market through a new indirecttax regime, was earlier planned to be introducedfrom April 1 this year, but the deadline was missedas the legislation to roll it out remained in limbo inthe Opposition-dominated Rajya Sabha.

http://timesofindia.indiatimes.com/india/Rajya-Sabha-to-take-up-GST-bill-next-week/articleshow/53447465.cms








61. Government considering industrysuggestions for ideal GST Bill: CBEC official Readmore at:http://economictimes.indiatimes.com/articleshow/53431147.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

NEW DELHI: The government is carefullyconsidering the suggestions made by the trade andindustry on the Goods and Services Tax (GST) Bill, atop CBEC official said here on Thursday.

"We have been receiving a large number ofrepresentations from trade and industry. This is avery healthy exercise and all these suggestions andviews will go into making an ideal GST," MahenderSingh, Director General (GST), Central Board ofExcise and Customs (CBEC), said.

He was speaking at a national conference on draftGST law organised by Associated Chambers ofCommerce and Industry of India (Assocham).

"It (suggestions on GST) is considered, discussedand various aspects are taken into consideration andonce the final decision is taken then that will beincorporated in the final GST law," Mahender Singhsaid.

He said some sections of the trade and industryhave apprehensions that their views may not betaken into consideration.

It is understandable, he said, for people to have suchapprehensions in a large country with a widevariety of trade practices.

"Being part of the exercise in the CBEC, I can assureyou each and every representation received fromtrade and industry is discussed and deliberatedupon," Mahender Singh said.

He said the model GST law was put in publicdomain on June 14, 2016 after taking intoconsideration the doubts, apprehensions andsuggestions of the state governments as well as thetrade and industry.

"Even after that, a large number of representationsand suggestions have been pouring in which that, alarge number of representations and suggestionshave been pouring in which is a very very healthysign.

http://economictimes.indiatimes.com/news/economy/policy/government-considering-industry-suggestions-for-ideal-gst-bill-cbec-official/articleshow/53431147.cms

62. Why some economists think GST is over-hyped: It won't help you or me

While the big political brouhaha over the Goods andServices Tax (GST) continues, several experts oneconomy feel the proposed tax is low on substanceand massive on hype.On Wednesday, the government inched closer toclinching a deal by clearing changes in the GSTConstitutional Amendment Bill, dropping 1 percentmanufacturing tax and providing guarantee tocompensate states for any revenue loss in the firstfive years. While it would like to call the GST ahistoric leap, the ultimate game changer in theeconomy, this section of economic experts believesthat the so-called biggest tax reform in India is onlybig talk.And, they have their reasons to believe so.Arun Kumar, former Sukhamoy Chakravarty ChairProfessor at the Centre for Economic Studies andPlanning, Jawaharlal Nehru University, raises themost pertinent question on top of everybody’s mindtoday. He asks, “Will consumers benefit due tolower prices?”Kumar says that this is just one of the manyquestions that should be asked if GST isimplemented. He says that the argument about a fallin prices is wrong.“Undoubtedly, there would be simplification in thetax regime faced by businesses but not as much as isbeing made out. There will be three taxes — CGSTcollected by the Centre, SGST collected by the statesand an IGST on inter-state movements collected bythe Centre. Further, under pressure from the states,alcohol, tobacco and petro goods are likely to be leftout of the purview of GST. So are electricity and realestate being left out of the GST net and will haveseparate taxes resulting in some cascading effect.Services did not have to pay sales tax earlier but willnow have to pay the SGST to the states so theirprices will rise. For instance, telephone calls,insurance, transportation, restaurants, etc. willbecome dearer. A common tax rate will imply thatall basic and essential goods prices will rise, andeven if some final goods prices fall, the rate ofinflation will go up,” he points out.According to Kumar, a common rate for all statesundermines fiscal federalism; because differentstates have different requirements.“The real problems with the introduction of GST inIndia have not been addressed. The unorganisedsector in India employs 93 percent of the workforce.





The small and tiny units producing and sellinglocally would lose from a unified market which willbenefit large-scale producers. This will aggravateunder-employment, distress in the farm sector andadversely impact the poorer states. No wonder, GSTis being strongly backed by large businesses —foreign and Indian. Just because VAT exists in morethan a hundred nations is no reason that it woulduniformly benefit all in India,” adds Kumar, formerSukhamoy Chakravarty Chair Professor at theCentre for Economic Studies and Planning,Jawaharlal Nehru University.Jayati Ghosh, professor of Economics at JawaharlalNehru University concurs.“GST is a massively over-hyped phenomenon. It hasbeen touted that GST will have massive impetus oninvestment and growth, but in fact the effect will bemarginal. It’s a convenient excuse that as GST is notthere, growth isn’t taking place.”As far as creating a national market is concerned,with a uniform single tax regime across the country,Ghosh criticised it saying over-centralisation hadnever benefitted India.“Same is in the case of GST. It’ll be a cosmeticreform to show the world that India is doingreforms. In the last two years, investment has failedto pick up. We’ve witnessed massive rise in non-performing assets in public sector banks,” addsGhosh.Former RSS-BJP ideologue, KN Govindacharyaconsiders the hype in GST issue more due to itspolitical overtone.“Right now GST has been over-hyped as it hasbecome a political issue. Congress wants to stall thebill, simply because the BJP wants it to getimplemented. The basic objective of GST issimplification of tax structure and a unified taxation.But, it needs to be seen whether that objective isbeing fulfilled or not,” he says.Govindacharya too underscores the apprehensions acommon taxpayer has in mind regarding theproposed indirect tax regime. “First, will new taxeswould be added in future, once GST is in place? If,the maximum cap is 20 percent, people don’t wantany other tax to be added to it. Second, at presentthe total tax comes to 33 percent, whereas GST talksabout 18-20 percent tax rate. What will happen toother taxes and duties like Octroi, Excise duty,Customs duty, etc? Third, prices of commoditiesand services will go up. Fourth, role of taxdepartment and its officials — will they continue tohound taxpayers?” he asks.“The government has to come up clear on theseissues. In the last one year, no consensus could bereached as a majoritarian approach was adoptedand there had been no coordination and cooperation

between the Centre and various stakeholders,” addsGovindacharya.Former agriculture minister in the Atal BehariVajpayee government, Sompal is relativelyoptimistic about the GST regime.Stating GST as the biggest tax reform sinceIndependence, Sompal opines that anythingpoliticised, is over-hyped; and so is with GST.“Now, the NDA government says GST needs to beimplemented in national interest, but it’s the sameBJP-ruled states like Gujarat, Madhya Pradesh, etcwho strongly opposed GST in the past, when theUPA government mooted it in 2009. Whatever hypewe see, is due to politicisation. However, there’s nohype in the economics of GST. Its advantages aremore than its disadvantages.”According to Sompal, who was a member of the12th Finance Commission, while there are severaladvantages in this tax reform like doing away withmultiplicity of tax, uniformity, single rate that willusher into a single market, all transactions under asingle umbrella, etc, there are disadvantages as wellthat needs to be addressed before implementation.“The common man has serious concerns like atpresent service tax is charged at 12 percent, butwhen GST will be in place, it’ll be at 18 percent. Thiswill make some of the services costlier. Moreover,the two issues raised by the Congress — oneregarding uniformity (1 percent differentialtaxation) and second, to get GST rate capped in theBill, are important. The government wants thatinstead of mentioning the rate in the Constitution, itshould be mentioned in GST law. Here, theapprehension of consumer lies because in the longterm, the rate of taxation will be on the whims andfancies of tax administrator and the government.What if it’s changed? The government has to ensureits commitment,” adds Sompal.However, a good news is that the Cabinet onWednesday cleared changes in the GSTConstitutional Amendment Bill, dropping 1 percentmanufacturing tax and providing guarantee tocompensate states for any revenue loss in the firstfive years of rollout of the proposed indirect taxregime. By doing away with the 1 percent inter-statetax over and above the GST rate, the governmenthas met one of the three key demands over whichOpposition Congress has been blocking the Bill inthe Upper House.

http://www.firstpost.com/politics/why-some-economists-think-gst-is-over-hyped-it-wont-help-you-or-me-2920016.html





63. GST Bill: Good job Cabinet, it's only amatter of time now

A day after the meeting of the EmpoweredCommittee of State Finance Ministers raised itsconcerns about the GST Bill, the Cabinet cleared thechanges in the Constitutional Amendment Bill inline with the demands made by the panel, clearingthe way for the much-needed tax reform to bepassed in the current Parliament session.The move by the Cabinet, chaired by prime ministerNarendra Modi, is commendable for the swift actiontaken and shows the seriousness of the NDAgovernment in taking up the reform process,according to experts.On Wednesday, the Cabinet approved the droppingof the 1 percent additional manufacturing tax andalso provided guarantee to compensate states forany revenue loss in the first five years of the rolloutof the proposed indirect tax regime.“It is indeed commendable that the Cabinet hastaken up the GST matter within a day of the meetingof the Empowered Committee of state financeministers. This depicts the resolve and commitmentof the Government to move ahead on GST," MSMani, Senior Director – Indirect Tax, DeloitteHaskins & Sells LLP, said in a statement."The decision to do away with the 1% tax proposedearlier to compensate the manufacturing states willremove a major aberration in the GST value chain.Further, the statement that the states would becompensated for revenue losses for five years wouldgo a long way in addressing their concerns on a verycrucial aspect of the GST process,” he added.Apart from the Congress party, the 1 percentadditional tax has been a bone of contention evenfor the industry, which termed it a "bombshell" thatwould defeat the whole purpose of PM Modi's petMake in India scheme. The levy was introduced toplacate manufacturing states such as Gujarat andTamil Nadu, which would lose revenue on accountof the GST.Pratik Jain, partner at KPMG had told BusinessStandard that the 1 percent additional tax willcompromise the efficiency of the supply chain.As far as compensation for state governments isconcerned, the state finance ministers on Tuesdayhad said that wording in the Bill needs to bechanged to bring about clarity."You will be happy to know that unanimously awording was proposed which is clear that five yearsand that it will be implemented, a very niceconstitutional amendment wording was proposedby the empowered committee which I proposed onthe behalf of all the finance ministers. I believe thatmuch of it will be accepted," West Bengal finance

minister Amit Mitra, who heads the empoweredpanel, had told the CNBC-TV18 in aninterview.The Cabinet-approved Bill now provides that theCentre will give 100 percent compensation to statesfor first three years, 75 percent and 50 percent forthe next two years.With the Centre accepting the changes, the NDAgovernment has indeed made a giant step forwardto bring on board all the state governments.Harishanker Subramaniam, national leader, indirecttax, Ernst and Young, said the Cabinet approval is a"very welcome" step."The cabinet's clearance of crucial amendments inthe Constitution Amendment Bill in response toEmpowered Committee discussions like removal of1% origin tax, and 5 years compensation to States isindeed very welcome and will pave the way forpolitical consensus and early passage of bill in themonsoon session," he said in a statement.According to a PTI report, with states on board andthe Cabinet approving the amendments, thegovernment is hopeful of passage of the long-pending Goods and Services Tax (GST) Bill in theongoing monsoon session of Parliament, which endson August 12.Congress demandsHowever, for the Congress there are still two moredemands that have not been completely met. Thesedemands are including the GST rate in the statuteand setting up a Supreme Court judge-headeddispute resolution body. These demands have notbeen accepted.However, the Constitutional Amendment Bill willinclude a clause on the dispute resolutionmechanism. As per the clause, any dispute betweenstates and the Centre will be adjudicated by the GSTCouncil, which will have representation from boththe Centre and states. An NDTV report says thegovernment has agreed to give states more power inthe independent body.As far as including GST rate in the Constitution isconcerned, there is a talk of mentioning the rate inone of the two supporting legislations that need tobe passed after the Constitution is amended.These two changes will only meet the Congressdemands halfway. It remains to be seen whether itwill indeed placate the party leaders, who are nowcornered on the issue with most coming on boardwith the Centre.The Bill, with the changes, is expected to be takenup in the Rajya Sabha as early as this week, butcertainly by next week. Once the Rajya Sabhaapproves the legislation, the amended Bill will haveto go back to the Lok Sabha again for approval.


http://www.firstpost.com/politics/gst-bill-why-swift-cabinet-approval-to-changes-is-a-commendable-job-by-nda-2919834.html

64. Final GST rate may be as low as 15%

After the main Opposition Congress's demand forcapping the goods and services tax (GST) at 18%and including it in the Constitution Amendment Billwas brushed aside in the finance ministers' meetingon Tuesday, the question being asked by many is:Which way would the standard rate of the unifiedindirect tax now go?

Most economists believe that even with no cap theGST rate may remain around 18% and could evenfall below it if the existing low tax rates of someitems are raised and a few excluded products areincluded.

Satya Poddar, tax partner – policy advisory group,EY, said the standard rate could go down to as lowas 15% if it was applied on a comprehensive basis.

"In my view, the standard rate could be as low as15%. Today, gold and silver is taxed at 1-2%. If theyare taxed at the same rate as food, clothing andbeverages at 12% then the upper rate need not bemore than 13-14% but if you cannot do that then itmay well become 15-16%," he said.

The Arvind Subramanian report on GST, broughtout in December last year, has recommended arevenue-neutral rate (RNR) of 15-15.5%, with astandard rate of 17-18%.

The report has split the rate into three slabs withessential goods taxed at 12%, demerit items likeluxury cars, aerated beverages, pan masala andtobacco products at 40% and the rest at a standardrate of 17-18%. It has proposed all services to betaxed at the standard rate of 17-18%.

Amit Kumar Sarkar, partner and leader – indirecttax, Grant Thornton, expects the GST rate to be 17-18%.

He said there were enough "checks and balances" inthe democratic system to keep the rate fromspiralling too high.

"If there is a very high tax structure, the ruling partywill lose in the next election. The public will notspare it. There are already checks and balances in ademocratic system so you don't need to have caps inthe Constitution," said Sarkar.

According to him, raising the tax rate of gold andsilver "statistically" made sense but it would not be"practical".

"To charge a higher rate of tax on gold willimmediately aggrieve traders, jewellers and couldlead to smuggling in the domestic market. Anymove to charge a higher rate could provecounterproductive. So while statistically it makessense, practically it makes no sense in the context inwhich an Indian typically buys gold," he said.

Poddar said the standard rate would also depend onthe exemption threshold for dealer and inclusion ofproducts such as biscuits, tea and coffee on whichthere is no excise duty today. According to him,fully taxing health and education services could alsofurther push down the rate.

He was also categorical that whatever rate isimposed by the states and the Centre should becleared in Parliament and not done through anexecutive order.

"There is should be no cap but whatever the tax rateis to be imposed should be explicitly voted upon byParliament. The reason Parliament has to debate andapprove a tax law is because they (the government)are imposing a burden on taxpayers and it amountsto confiscation of their personal property and theamount of money taken away from them(taxpayers) depends not only upon the law but therate at which it is applicable," he cautioned.

http://www.dnaindia.com/money/report-gst-rate-may-be-as-low-as-15-2238707

65. GST: Lessons from countries that haveimplemented the Goods and Services Tax

As the proponents work towards building a bettertax world, the fate of Goods & Services Tax (‘GST’)in India is still hanging on a political seesaw –though the fizz around its implementation hascapably sustained for some years now. While Indiais still to see its share of development aroundimplementation of GST, one should be wary oflessons learnt in countries that have implemented asimilar tax regime.All around the world, GST has the same concept. Insome countries, VAT is the substitute for GST, butconceptually it is a destination based tax onconsumption of goods and services. But perhaps themost contentious issue that still needs to be resolved







among the different governance in the world is theGST rate. Some are still struggling to rationalize anadopted rate structure.Similar to Indian context, it is only Canada that hasthe concept of dual GST. While there was strongrebel at the time of introduction of GST by the thenpolitical division in Canada, however, GSTsustained despite the opposition. Even for thesubsistence, the Government of Canada has beenpragmatic and worked towards reducing the GSTrate a couple of times post implementation. Whilesome others have had to increase the rates very soonafter introduction.

The aforesaid is highly relevant in the India contextwhere once revenue neutral rate was discussed at27% and now realistically being talked about at 16-18%. It is imperative that a reasonable rate structureis adopted to ensure the success of GST.Another aspect encountered and accepted by mostof the GST countries lies in the statistic that GST willbe inflationary, especially if the effective tax rate ishigher than what prevailed before. For instance,Singapore saw a spike in inflation in 1994 when itintroduced the GST. That makes it all the moreimportant for administrators to keep tabs on howprices move after imposition of the tax. Malaysia, toan extent, was able to mitigate this risk as pricecontrol on account of the GST was administered bythe Ministry of Domestic Trade and ConsumerAffairs.Also read: How GST would change the way Indiadoes businessAnother key refresh from Malaysia learning is thatbusinesses need to start early with theimplementation process to be GST-ready. TheMalaysian Government received strong resentmenteven after providing 1.5 years for GST preparedness.Given the complex GST model proposed in Indiaand the need for a businesses to undergo atransformation to adapt to the GST regime, it wouldbe quite challenging for the Indian government totackle the ask of requiring businesses to implementGST in less than 9 months, with 1 April 2017 as thepotential GoLive date.One constructive learning that did come handy inthe GST preparation in Malaysia was the release ofsector specific guidance paper(s) on tax treatmentconcerning each business sector. It aided inaddressing the “to be tax practice” associated with aparticular business segment. Indian legislativebodies could look into similar publications toeffectuate the implementation of GST in a smoothway.As GST is a tax on transactions, which for mostbusiness organisations is voluminous, the processes

and changes required for GST compliance need tobe automated and encapsulated in the IT system. Itis learnt that many big businesses have either failedor struggled to achieve IT transformation for havingnot planned or started early. It would be a mistaketo assume that IT software with GST capability fromother countries may be adopted wholesale in India,due to peculiarities embedded in the proposedIndian dual GST model.Additionally, the India GST regime places the smalland medium enterprises (SMEs) on the same footingas large-scale industries by keeping the exemptionthreshold very competitive (proposed at ` 1 million)without any tax differentiation. This poses dauntingtask ahead for SMEs to be ready to invest, read andchange in the same way as any large-scale player,without appreciating the limited resources availablewith them. Some post-implementation truths fromthe GST in Malaysia includes wide-spread unrestand anti-GST street protests by small & mediumbusinesses in Kuala Lumpur for few months afterimplementation even with a simpler systemicrequirements and much higher level of exemptionthreshold.From the lessons learnt, there is no denying thatacceptance of GST by general public, businesses andfirms would not be an easy task, with advanceplanning and extending adequate time to industry,continued dialogues between businesses andadministrators, engaging with industry on theimplementation planning, a reasonable tax-rate,timely release of the legislative documents, hasproven to aid in smooth GST implementation inmany countries. Of course, GST is proven to be anefficient tax collection system despite teethingproblems in the initial implementation period.

http://www.financialexpress.com/economy/gst-lessons-from-countries-that-have-implemented-the-goods-and-services-tax/331289/

66. GST Bill: Will the first step be taken nextweek?

Based on what happened at finance minister ArunJaitley’s meeting with state finance ministers onTuesday, it would appear there is a very goodchance the Constitutional Amendment Bill for GSTwill sail through in the Rajya Sabha next week.Though some media reports suggest a problem withthe state finance ministers rejecting the revenueneutral rate (RNR) suggested by chief economicadvisor Arvind Subramanian, this misses the pointas FE has reported on page 1 today. Given the largedifference between the RNR recommended bySubramanian and the actual rate of taxation being





faced by consumers today, the state financeministers were not convinced that the RNR wouldbe high enough to ensure they did not suffer anyserious loss of revenue in the long run—the Centrewill compensate them for five years, but what afterthat? In the event, what the finance ministers havesuggested is a two-point principle—the rateshouldn’t be so high as to hurt the common manand it mustn’t be so low as to hurt their revenuebuoyancy—which needs to be accepted, and oncethis is done, the actual rate can be adjusted by theGST Council.That seems a fair enough suggestion, though it hasto be pointed out that the reason why theSubramanian RNR is much lower than whatconsumers pay today is precisely because heassumes a higher tax compliance, and thereforebuoyancy, once the system is in place—once theGST network is capturing all transactions madealong the value-chain, this will ensure that a largenumber of players who either do not pay orunderpay their taxes will have no option but to paythe full value. That, of course, is the theoreticalunder-pinning, the state finance ministers fear thereality may not match up to it. That is why, as thegovernment has been pointing out, putting in a capon the RNR into the Constitutional Amendment Billis a bad idea. Leaving the exact rate-setting to theGST Council is a much better idea since this allows amore democratic system of fixing the ratesdepending upon the particular economiccircumstances. Of course, changing the rates everyyear is not an option that should be tried since agood tax system needs to have stable andpredictable rates. The good thing about having afive-year window in which the Centre will fullycompensate the states for potential losses is that thisgives enough time in which a final tax rate/bandcan be fixed.Though GST is a game-changer, it has to be kept inmind that realising the gains is going to take severalyears. The biggest gain, from a lower tax rate, canonly come about when the system captures alltransactions—that, in turn, needs all goods andservices to be under the ambit of the GST. It is onlywhen the GST network is working well andcapturing all transactions that states can afford tostop checking goods at their borders—the stoppingof trucks carrying goods at various inter-stateborders is the most obvious sign that India is not aseamless market today, which is what the GSThopes to fix. Doing all of this will take time, buthopefully the first big step will be taken next week.

http://www.financialexpress.com/fe-columnist/gst-bill-will-the-first-step-be-taken-next-week/331101/

67. GST not to apply to J&K in current shape,state FM

State govt will come out with a separate proposal onhow to participate in GST framework

Jammu & Kashmir Finance Minister Hasib Drabutoday set the record straight on GST, saying theempowered committee has agreed that the proposedgoods and services tax will not be extended to thestate in the current form.

The state government will come out with a separateproposal on how to participate in the GSTframework without compromising its constitutionalposition on taxing services.

Drabu, according to an official release, made thesesubmissions at a meeting of the EmpoweredCommittee (EC) of State Finance Ministers in thenational capital on July 26.

"I made the case before the EC that J&K's specialtaxation powers have to be protected while rollingout GST," Drabu said, adding that J&K is the onlystate in the country with powers to tax services.

The committee, he added, has agreed with thestate's contention and asked it to come up withseparate proposal.

Union Finance Minister Arun Jaitley, who was alsopresent at the meeting, is believed to have made itclear that it is for the state government to decide themanner and method of GST applicability whilesafeguarding its own taxation powers.

The GST Bill, currently stuck in the Rajya Sabhabecause of resistance by main Opposition Congress,is likely to be taken up for discussion next week.

Drabu is of the view that there are some othercontentious issues in the existing GST Bill that needto be addressed before extending the new taxregime to J&K.

Elaborating, he said that once the new tax takes off,the GST Council becomes more powerful than statelegislatures, which is a matter of concern for the J&Kgovernment and needs to be sorted out, given thestate's special status.

He also referred to the challenge of continuingexemptions for the industry in the new set-up.




"The state government is giving various taxexemptions to the industry. In the GST regime, allsuch exemptions have been done away with," hesaid and added that the challenge before the state isto keep the exemptions without breaking the GSTchain.

"We will have to take care of all these issues beforejoining the GST regime," Drabu clarified.

http://www.business-standard.com/article/pti-stories/gst-regime-not-to-apply-to-j-k-in-current-shape-drabu-116073000736_1.html

68. Parties give thumbs up to GST, but withriders

Naresh Agrawal of the Samajwadi Party hasexpressed his party's concern over the provision ofarrest and income of municipal bodies

With the Central Government likely to introduce theGoods and Services Tax (GST) Bill in the RajyaSabha next Tuesday, most of the political partieshave virtually given their consent to it, though withriders.

Hoping that there will be a discussion on the Billnext week, Minister of State for ParliamentaryAffairs Mukhtar Abbas Naqvi on Saturday said acommon consensus has almost emerged among allpolitical parties for the passage of the Bill.

"We feel that a common consensus has almostemerged for the passage of the GST, which is animportant law for the development and reforms inthe nation, which will be beneficial to both the statesand the country," Naqvi told ANI.

However, with the main opposition the Congressand some other parties seeking certain amendmentsin the Bill before extending their support to the Bill,the BJP leader said, "We have held elaborateddiscussions with all political parties on the issue,which is still on. Besides, Finance Minister ArunJaitley and other senior leaders of the CentralGovernment are holding parleys with them."

"Almost all political parties agree on it, and I hopethat there will be a discussion on it the next week,"he added.

Congress MP Sandeep Dikshit, however, said ifthere emerges a way out, which is in the welfare ofpeople, his party would welcome it.

"It's nice that they are talking. We come to knowfrom television that the government has agreed onthe issue of 1 per cent additional tax and is holdingdiscussions with the Congress on other two issues,"he told ANI.

Backing the introduction of the Bill, Janata Dal(United) chief general secretary and nationalspokesperson K C Tyagi said, "We are in favour ofthe GST Bill. Our chief minister and the party havesupported it and as a member of the selectcommittee, I have also supported it. It is in theeconomic benefit of Bihar."

Naresh Agrawal of the Samajwadi Party hasexpressed his party's concern over the provision ofarrest and income of municipal bodies

"Arun Jaitley should speak to us, as we also havesome doubts and problems regarding the GST. Hehas made provision of arrest under the GST Bill andwhat will happen to the income of municipalbodies? These things should be made clear in theGST Bill," he told ANI, adding that if Jaitleyaddresses those concerns, they will support the GST.

http://www.business-standard.com/article/economy-policy/parties-give-thumbs-up-to-gst-but-with-riders-116073000277_1.html

69. PM Modi holds meeting with topministers to discuss GST

Prime Minister Narendra Modi held a meeting withhis top Cabinet colleagues last evening to firm upthe strategy for the passage of Goods and ServicesTax (GST) bill in the Rajya Sabha.

The bill has been listed for consideration andpassage in the Upper House next week.

The Business Advisory Committee of the RajyaSabha has earmarked five hours discussion for thebill which seeks to introduce a system for uniformtaxation across the country.

The government needs the support of two-thirdmembers of the Upper House to amend theconstitution to turn GST into law.

The Union Cabinet had cleared changes in the Billearlier Wednesday dropping the 1 per centadditional tax on inter-state sales and providingguarantee to compensate states for any revenue lossin the first five years of rollout.








The GST Bill was passed by the Lok Sabha in Maylast year but is stuck in the Rajya Sabha due toresistance from the opposition.http://www.newkerala.com/news/2016/fullnews-98160.html

70. RS Likely To Pass GST Bill This Week

This is the week when the GST Constitutionamendment Bill should be passed by the RajyaSabha. The Congresshas now said it will support theBill. Who will oppose it? Should we anticipate acrisis? If things go the government way, the Bill willcome up in the first half of the week.

Report on AAP MP likely this week

Last week, Aam Aadmi Party (AAP) Member ofParliamentBhagwant Mann filmed a video clip ofhis journey from his residence to Parliament andshared it on social media. In the video, Mann hadfilmed sensitive security areas in Parliament. Forthis, he came under severe criticism from Lok SabhaSpeaker Sumitra Mahajan and other politicalleaders. The Speaker also barred him from attendingParliament until a panel investigating his security-breach video submits its report. The nine-memberpanel is expected to submit its report by Tuesday.This will come up for discussion this week, possiblyon Monday.

Rajnath Singh in PakistanUnion Home Minister Rajnath Singh is in Pakistanto attend a meeting of home ministers of SouthAsian Association for Regional Cooperation (Saarc)countries. He left on Sunday and the substantivediscussions will be held on Monday. Singh isexpected to raise the issue of cross-border terrorism.At the 13th Saarc Summit in Dhaka in November2005, the heads of state decided that home ministerswould meet annually, preceded by a meeting ofhome secretaries, to strengthen cooperation incounter-terrorism. The first meeting of Saarc homeministers was held in Dhaka on May 11, 2006,followed by a meeting in New Delhi in 2007.

The Islamabad meeting comes amid a virtualshutdown of Kashmir after the killing of BurhanWani, a Hizbul Mujahideen militant. Earlier thisweek, in a statement in Parliament, Singh hadsquarely blamed Pakistan for the disturbances inKashmir.

This is the first visit to Pakistan by senior Indianminister after Prime Minister Narendra Modi'sLahore trip in December last year.

Rahul Gandhi attacks Parrikar, RSSThe Congress on Sunday mounted a fierce attack onDefence Minister Manohar Parrikar and RSS overhis jibe at actor Aamir Khan for remarks onintolerance with Congress Vice-President RahulGandhi (pictured) saying "hate is the preserve of thecoward and it never wins." The main oppositionparty also accused BJP and RSS of a "concertedconspiracy" to hound Dalits, minorities, writers,actors and whoever dissents against the Modigovernment and wondered whether Parrikar's job isto protect India from external aggressors likePakistan or threaten fellow countrymen. "RSS &Parrikarji want to teach everyone a lesson. Here's alesson for you: hate is the preserve of the cowardand it never wins," Gandhi said on Twitter. Parrikarhad on Saturday said anyone speaking against thecountry must be "taught a lesson".

Modi has lost mental balance: AAPAfter the arrest of its Narela MLA Sharad Chauhan,12th AAP legislator to be arrested by police, theAAP on Sunday launched a sharp attack on PrimeMinister Narendra Modi asking whether he (PM)has lost his "mental balance" and wondered whetherthe country is "safe" in the hands of a person whoacts with such "vengeance". AAP's Ashish Khetanalleged the PM spends his every waking moment inplotting the 'fixing' of all his political opponents. Hefurther alleged Modi appears to be concerned onlywith political persecution.

Swaraj Abhiyan political party by Oct 2Swaraj Abhiyan leaders Yogendra Yadav andPrashant Bhushan on Sunday announced launchingof a political party by October 2 to provide an"alternative political vehicle" even as they hit out atAAP, saying it has a "supremo" culture. The politicalparty will be launched by October 2 and a six-member committee has been formed for thispurpose, Yadav said

http://www.business-standard.com/article/politics/rs-likely-to-pass-gst-bill-this-week-116080100019_1.html






71. GST dispute resolution system atemporary measure

The contentious dispute resolution mechanismunder the proposed goods and services tax (GST)regime would not be a permanent structure. Atemporary set-up is envisaged to address differencesamong or between states, and with the Centre,sources said.

A committee is also likely to be set up on themodalities of the proposed full compensation tostates for five years, if they earn less revenues underthe GST regime compared to the existing tax system.

The GST Council, whose decisions might lead tothese disputes, will work out a mechanism forredressal of disputes. The Council is yet to be set up.So, the mechanism would be worked out later.

At a recent meeting between Finance Minister ArunJaitley and the empowered committee of statefinance ministers, there was a suggestion to have aretired high court judge to head the proposeddispute resolution mechanism.

However, sources said Jaitley suggested if thedispute was legal, a retired judge could be madehead of the resolution panel but if differences werenot legal in nature, other experts could beconsidered. Sources said states agreed, but thedetails are yet to be worked out.

The Congress party has also come around the ideathat the dispute resolution mechanism will bedecided by the GST Council. However, the partywants a more categorical constitutional provision forthe redressal mechanism. The existing Constitutionamendment Bill on GST says the GST Council maydecide modalities of the redressal mechanism. Theparty had earlier wanted an independent disputeresolution authority .

In a dissent to the Rajya Sabha committee report,Congress member Mani Shankar Aiyar had said:“The principles of natural justice hold that a party toa dispute cannot be a judge in its own cause andleaving disputes to be settled in accordance with thedirectives of the GST Council would be tantamountto allowing all disputes, which would necessarilyinvolve one or more members of the GST Council, asjudges in disputes to which they are party.”

The Bill presented by the United ProgressiveAlliance government had provided for setting up aGoods and Services Tax Dispute SettlementAuthority. However, a standing parliamentarycommittee had observed the Authority would haveoverriding powers over Parliament and statelegislatures, and must be omitted.

The GST Council will comprise Union and statefinance ministers. It would take decisions regardingGST through a three-fourth majority. The Centrewill have one-third voting rights, while the stateswill have two-third.According to the present provisions in theConstitution amendment Bill, the council is alsolikely to recommend about the GST rates but sincethe Congress wants the rates to be capped in theGST Bill, it is yet to be seen whether this provision isfurther amended. The Congress says it does notwant the rates to be changed through a notificationbut by the Finance Act.

Meanwhile, state finance ministers want to knowfrom Jaitley as to the mechanism of compensation -whether it would be paid yearly, half-yearly orquarterly. It was suggested during the empoweredcommittee meeting that a committee be set up towork out that and there should be a whole chapteron this mechanism in the GST Bill or rulesthereunder.

The Centre has already accepted the states’ demandfor full compensation for five years if they incurlosses under the GST regime. The Constitutionamendment Bill, as passed by the Lok Sabha, hadprovided for full compensation for the first threeyears , 75 per cent in the fourth year, and 50 per centin the fifth year.

States wanted the exact mechanism of thecompensation since they had burnt their fingerswhen it came to compensation from the Centre tostates for reducing central sales tax (CST) from fourper cent to two per cent. CST will no longer be thereonce GST is introduced.STORY SO FARConstitution amendment Bill, presented by thenFinance Minister Pranab Mukherjee in Lok Sabha,has a provision of independent Tax DisputeSettlement AuthorityParliament's standing committee objects to it, sayingthe authority would have overriding powers overParliament and state legislatures


Bill, presented by Finance Minister Arun Jaitley inLok Sabha in 2014, says proposed GST council maydecide the modalities to resolve disputes.Congress too waters down its earlier demand ofindependent authority, but wants more categoricalwordings in the Bill for resolving disputes thancontained in the present BillIdea emerged in the recent empowered committeeand Union finance minister meet that disputeresolution mechanism may be set up on a case-to-case basisStates also want exact mechanism for fullcompensation to them by the Centre for five yearsA committee might be set up to address the issue.Also, there could be a whole chapter in the GST Billor rules there under for the mechanism

http://www.business-standard.com/article/economy-policy/gst-dispute-resolution-system-a-temporary-measure-116073100834_1.html

72. PM Modi meets ministers to discuss GSTbill

HIGHLIGHTSPM Modi held a meeting with top ministers todiscuss GST billThe bill has been listed for consideration andpassage in the Upper House next weekThe GST Bill was passed by the Lok Sabha in Maylast year, but is stuck in the Rajya Sabha due toresistance from the opposition. NEW DELHI: PrimeMinister Narendra Modi held a meeting with his topCabinet colleagues last evening to firm up thestrategy for the passage of Goods and Services Tax+(GST) bill in the Rajya Sabha.The bill has been listed for consideration andpassage in the Upper House next week.The Business Advisory Committee of the RajyaSabha has earmarked five hours discussion for thebill which seeks to introduce a system for uniformtaxation + across the country.The government needs the support of two-thirdmembers of the Upper House to amend theconstitution to turn GST+ into law.The Union Cabinet had cleared changes in the Billearlier on Wednesday dropping the 1 per centadditional tax on inter-state sales and providingguarantee to compensate states for any revenue loss

http://timesofindia.indiatimes.com/india/PM-Modi-meets-ministers-to-discuss-GST-Bill/articleshow/53474076.cms

73. GST to be simple with 1% additional taxremoval, say experts

New Delhi: With the government dropping thecontentious 1 percent additional inter-state tax, theproposed national sales tax or the GST standssimplified with aberrations removed, said taxexperts.Ahead of Rajya Sabha considering the biggestindirect tax reform measure since independence, thegovernment has met a key opposition demand ofscrapping 1 percent additional tax on inter-statemovement of goods. It has also agreed tocompensate states for any revenue losses for fiveyears."The tax process/system under GST would standsimplified with the government's decision to doaway with 1 per cent additional tax on interstatesupplies. "...tax would have resulted in a cascadingtax on interstate supplies, resulting in an otherwisenot so pure GST and would have also drivencompanies to consider the same while makingwarehousing/logistics decisions," said MaheshJaising, Partner, BMR & Associates LLP.The Goods and Services Tax (GST) seeks to replace aslew of Centre taxes and levies in 29 states,transforming the nation into a customs union.Analysts believe the GST could boost India'seconomic growth by up to 2 percentage points.Sachin Menon, Partner and Head, Indirect Tax atKPMG, said the changes made in the GST Bill showsthe commitment of the government to introduceGST. "Hope our representatives put the nation first,behave responsibly to pass the GST bill," he said.The Bill is listed for consideration in the UpperHouse this week.PwC Partner (Indirect Tax) Anita Rastogi said theproposed 1 per cent tax was not in line with the keyconcepts of GST, as the levy would have been a costin the entire supply chain at various supplyincidences. "Hence its removal is a welcomedecision".Nitish Sharma, Partner, Nangia & Co said the doingaway with additional tax is favourable step towardsremoving impediment in the credit chain and wouldcertainly simplify the tax process.M S Mani, Senior Director - Indirect Tax, DeloitteHaskins & Sells LLP said the decision to do awaywith the 1per cent tax proposed earlier to compensate themanufacturing states will remove a major aberrationin the GST value chain.Further the statement that states would becompensated for revenue losses for five years would








go a long way in addressing their concerns on a verycrucial aspect of the GST process, he said.On flaws in the GST Bill, Jaising said the industryhas been making representations to do away theband that the states would be able notify GST rates."The draft GST bill does continue to mention aboutthe possibility of GST council enabling 'bands' beingnotifiedBands will result in different GST rates in differentstates, which though expected to be nominal, willimpact a uniform pricing by companies acrosscountry and will thereby dilute the concept of aharmonised single national market," he said.He said the April 1, 2017, deadline for roll out ofGST seems to be "extremely aggressive" given thatthe industry, specifically service sector, still is in theprocess of completely understanding theimplications of GST and needs to undertake a hostof next steps for a meaningful implementation,including on the IT side. However, PwC's Rastogisaid "should Rajya Sabha passes the ConstitutionAmendment Bill in current Monsoon session, thenthe possibility of GST being applicable from April 1,seems to be more realistic".Stating that sales tax/VAT on liquor and petroleumhas been one of the largest contributors to VATrevenue to states, Jaising hoped these productswould be added into the GST net, in the near future."While the non-inclusion of petroleum and liquorappears to be in the best interest of the state'srevenues, thepetroleum/liquor companies may incur GST for thebusiness operations which would be a sunk cost tosuch companies, the burden of which is ultimatelypushed to consumers," he said.

http://www.firstpost.com/business/gst-to-be-simple-with-1-additional-tax-removal-say-experts-2926768.html

74. Grandfathering geographical exemptionsin GST

The government can legally withdraw theexemptions so far as central excise and service taxare concerned With the draft goods and services(GST) law in circulation, there are severalsuggestions and criticisms being offered by analysts,lawyers, business houses and other stakeholders.Here, I am discussing the issue of continuing withthe geographical exemptions in central excise,customs, service tax and income tax, which hadbeen offered to various companies operating fromcertain underdeveloped geographical areas. Whenthe GST comes, it is expected that most of theexemptions on the central excise will go away.

Exemptions for customs and income tax will not beaffected by the GST. So the ...

http://www.business-standard.com/article/opinion/grandfathering-geographical-exemptions-in-gst-116073100835_1.html







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