What is Goods and Services Tax (GST) | GST Filling in New Delhi

1. Where is the power to levy GST derived from?

Article 246A of the Constitution, which was introduced by the Constitution (101st Amendment) Act, 2016 confers concurrent powers to both, Parliament and State Legislatures to make laws with respect to GST i.e. central tax (CGST) and state tax (SGST) or union territory tax (UTGST).

However, clause 2 of Article 246A read with Article 269A provides exclusive power to the Parliament to legislate with respect to inter-State trade or commerce i.e. integrated tax (IGST).

2. What is Goods and Services Tax (GST)?

It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. Only value addition will be taxed and burden of tax is to be borne by the final consumer

3. Which of the existing taxes are proposed to be subsumed under GST?

The GST would replace the following taxes:

Taxes currently levied and collected by the Centre:

Central Excise duty
Duties of Excise (Medicinal and Toilet Preparations)
Additional Duties of Excise (Goods of Special Importance)
Additional Duties of Excise (Textiles and Textile Products)
Additional Duties of Customs (commonly known as CVD)
Special Additional Duty of Customs (SAD)
Service Tax
Central Surcharges and Cesses so far as they relate to supply of goods and services

Taxes currently levied and collected by the State:

State VAT
Central Sales Tax
Luxury Tax
Entry Tax (all forms)
Entertainment and Amusement Tax(exceptwhen levied by the local bodies)
Taxes on advertisements
Purchase Tax Taxes on lotteries, betting and gambling
State Surcharges and Cesses so far as they relate to supply of goods and service

4. What type of GST is proposed to be implemented?

It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the States/ Union territory would be called the State GST (SGST)/ UTGST. Similarly, Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services.

5. Why is Dual GST required?

India is a federal country where both the Centre and the States have been assigned the powersto levy and collect taxes through Constitution of India Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping with the Constitutional requirement of fiscal federalism.

6. What will be status of Tobacco and Tobacco products under the GST regime?

Tobacco and tobacco products would be subject to GST. In addition, the Centre would have the power to levy Central Excise duty on these products

7. Which authority will levy and administer GST?

Centre will levy and administer CGST & IGST while respective states /UTs will levy and administer SGST/ UTGST.

8. What is IGST?

Under the GST regime, an Integrated GST (IGST) would be levied and collected by the Centre on inter-State supply of goods and services. Under Article 269A of the Constitution, the GST on supplies in the course of inter-State trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council.

9. Who is liable to pay GST under the proposed GST regime?

Under the GST regime, tax is payable by the registered taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the turnover threshold of Rs.20 lakhs (Rs. 10 lakhs for NE & Special Category States) except in certain specified cases where the taxable person is liable to pay GST even though he has not crossed the threshold limit. The CGST / SGST is payable on all intra-State supply of goods and/or services and IGST is payable on all inter- State supply of goods and/or services. The CGST /SGST and IGST are payable at the rates specified in the Schedules to the respective Acts

A person should take a Registration, within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as is prescribed under the Registration Rules. A Casual Taxable person and a non-resident taxable person should however apply for registration at least 5 days prior to commencement of business.

11. If a person is operating in different states, with the same PAN number, whether he can operate with a single Registration?

No. Every person who is liable to take a Registration will have to get registered separately for each of the States where he has a business operation and is liable to pay GST in terms of the CGST/SGST Act.

12. Whether Cancellation of Registration Certificate is permissible?

Yes. Any Registration granted under this Act may be cancelled by the Proper Officer, in circumstances mentioned in Section 29 of the CGST/SGST Act. The proper officer may, either on his own motion or on an application filed, in the prescribed manner, by the registered taxable person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed. As per the Registration Rules, an order for cancellation is to be issued within 30 days from the date of receipt of reply to SCN (in cases where the cancellation is proposed to be carried out suo moto by the proper officer) or from the date of receipt of application for cancellation (in case where the taxable person/legal heir applies for such cancellation)

13. Can the proper Officer Cancel the Registration on his own?

Yes, in certain circumstances specified under section 29(2) of the CGST/SGST Act, the proper officer can cancel the registration on his own. Such circumstances include contravention of any of the prescribed provisions of the CGST Act or the rules made there under, not filing return by a composition dealer for three consecutive tax periods or non-furnishing of returns by a regular taxpayer for a continuous period of six months, and not commencing business within six months from the date of voluntary registration. However, before cancelling the registration, the proper officer has to follow the principles of natural justice.

14. What is the difference between casual and Non-Resident taxable persons?

Casual and Non-resident taxable persons are separately defined in the CGST/SGST Act in Sections 2(20) and 2(77) respectively. Some of the differences are outlined below:

Casual Taxable Person

Occasional undertakes transactions involving supply of goods or services in a state or UT where he has no fixed place of business.
Has a PAN Number
Same application form for registration as for normal taxable persons viz GST REG01
Has to undertake transactions in the course or furtherance of business
Has to file normal GSTR-1, GSTR-2 and GSTR-3 returns
Can claim ITC of all inward supplies

Non-resident Taxable Person

Occasional undertakes transactions involving supply of goods or services in a state or UT where he has no fixed place of business. Occasional undertakes transactions involving supply of goods or services but has no fixed place of business residence in India.
Has a PAN Number Do not have a PAN Number; A nonresident person, if having PAN number may take registration as a casual taxable person
Same application form for registration as for normal taxable persons viz GST REG01
Separate application form for registration by non-resident taxable person viz GST REG-9
Business test absent in the definition
Has to file a separate simplified return in the format GSTR-5 Can get ITC only in respect of import of goods and /or services.

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