Check your ARN Number Status (GST Registration)


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what is full form of ARN Number?

Application Reference Number ( ARN NUMBER) 

You will receive an ARN Number after Filling your Registration Form on GST Network website gst.gov.in

This ARN Number will be received on your registered Email ID

Format of GST ARN Number :

  • First two digits of your ARN Number is AA albhabets
  • Next two digits of your ARN Number is your State Code
  • Next two digits of your ARN Number is Month.
  • Next two digits of your ARN Number belongs to the Year.
  • Next six digits of your ARN Number is System generated Code
  • Last digits of your ARN Number is for check code.

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what is full form of GSTIN

What is meaning of GSTIN? What is the Full form of GSTIN?

GSTIN is a unique 15 Digits code that has been issued/alloted to taxpayers covered under GST.

Full Form of GSTIN : GOODS AND SERVICES TAX IDENTIFICATION NUMBER

15 Digits GSTIN Number Format detailed : 

  • The First two digits of GSTIN is your State Code.
  • The Next ten digits of GSTIN is PAN Number of the Business entity/proprietor.
  • Thirteenth digit of your GSTIN is based on the number of registrations done by the business entity within a state.
  • Fourteen digit of your GSTIN Number is Z by default.
  • The Last digit of your GSTIN check code.

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Continue Reading : Beginners Guide to GST India

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Know Your State Code under GST

Sr. No.State NameState Code For GST/ First Two digits of GSTIN
1Andaman and Nicobar Islands35
2Andhra Pradesh28
3Andhra Pradesh (New)37
4Arunachal Pradesh12
5Assam18
6Bihar10
7Chandigarh4
8Chattisgarh22
9Dadra and Nagar Haveli26
10Daman and Diu25
11Delhi7
12Goa30
13Gujarat24
14Haryana6
15Himachal Pradesh2
16Jammu and Kashmir1
17Jharkhand20
18Karnataka29
19Kerala32
20Lakshadweep Islands31
21Madhya Pradesh23
22Maharashtra27
23Manipur14
24Meghalaya17
25Mizoram15
26Nagaland13
27Odisha21
28Pondicherry34
29Punjab3
30Rajasthan8
31Sikkim11
32Tamil Nadu33
33Telangana36
34Tripura16
35Uttar Pradesh9
36Uttarakhand5
37West Bengal19

The first 2 digits of the GSTIN is the State code, next 10 digits are the PAN of the legal entity, the next two digits are for entity code, and the last digit is check sum number. Know about GST India : Click Here

items of gst with rates    GST 0% Rate Category Items List  

items of gst with rates    GST 5% Rate Category Items List 

items of gst with rates    GST 12% Rate Category Items List

items of gst with rates    GST 18% Rate Category Items List 

items of gst with rates    GST 28% Rate Category Items List 

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No Levy of GST (All Items List) HSN Code & GST Tariff of free items

Complete list of Items of Goods on which no Levy of GST (Nil GST Rate). Schedule of Goods items on which applicability of GST is NIL. HSN Code (Harmonized System of Nomenclature) list of items on which GST rate is NIL. GST Tariff of India of Tax Free Items : 

 

S.NO.Heading            HSN (Four digit)IGSTCGSTSGSTCompensation cess
1All goods other than live horses ,Live asses,mules and hinnies01010%0%0%0%
2Live bovine animals01020%0%0%0%
3Live swine01030%0%0%0%
4Live sheep and goats01040%0%0%0%
5Live poultry, that is to say, fowls of the species gallus domesticus, ducks, geese, turkeys and guinea fowls 01050%0%0%0%
6Other live animals01060%0%0%0%
7Meat of bovine animals, fresh and chilled 02010%0%0%0%
8Meat of swine,fresh or chilled other than frozen02030%0%0%0%
9Meat of sheep or goats,fresh or chilled02040%0%0%0%
10Meat of horses ,asses,mules or hinnies,fresh or chilled02050%0%0%0%
11Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies, fresh or chilled02060%0%0%0%
12Meat and edible offal,of the poultry of heading 0105,fresh or chilled02070%0%0%0%
13Other meat and edible meat offal,fresh or chilled02080%0%0%0%
14Pig fat ,free of lean meat,and poultry fat,nnot rendered or otherwise extracted ,fresh,chilled02090%0%0%0%
15Live fish03010%0%0%0%
16Fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0304 03020%0%0%0%
17Fish fillets and other fish meat (whether or not minced), fresh or chilled03040%0%0%0%
18Crustaceans, whether in shell or not, live, fresh or chilled ;crustaceans,in shell ,cooked by streaming or by boiling in water,chilled03060%0%0%0%
19Molluscs,whether in shell or not,live ,fresh ,chilled;aquatic invertebrates other than crustaceans and molluscs,live,fresh ,chilled03070%0%0%0%
20Aquatic invertebrates other than crustaceans and molluscs,live,fresh or chilled03080%0%0%0%
21Milk and cream, not concentrated nor containing added sugar or other sweetening matter excluding ultra high temperature milk04010%0%0%0%
22Curd,Lassi,Butter milk04030%0%0%0%
23Chena or paneer and curd04060%0%0%0%
24Birds' eggs, in shell, fresh, preserved or cooked 04070%0%0%0%
25Natural honey,other than put up in unit container and bearing a registered brand name04090%0%0%0%
26Human hair, unworked, whether or not washed or scoured; waste of human hair 05010%0%0%0%
27Semen including frozen semen05110%0%0%0%
28Bulbs, tubers, tuberous roots, corms, crowns and rhizomes, dormant, in growth or in flower; chicory plants and roots other than roots of heading 1212 06010%0%0%0%
29Other live plants (including their roots), cuttings and slips; mushroom spawn 06020%0%0%0%
30Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared 06030%0%0%0%
31Foliage, branches and other parts of plants, without flowers or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared 06040%0%0%0%
32Potatoes, fresh or chilled 07010%0%0%0%
33Tomatoes,fresh or chilled07020%0%0%0%
34Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled 07030%0%0%0%
35Cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled 07040%0%0%0%
36Lettuce(Lactucasativa) and chicory(Cichorium spp), fresh or chilled 07050%0%0%0%
37Carrots, turnips, salad beetroot, salsify, celeriac, radishes and similar edible roots, fresh or chilled 07060%0%0%0%
38Cucumbers and gherkins,fresh or chilled07070%0%0%0%
39Leguminous vegetables, shelled or unshelled, fresh or chilled 07080%0%0%0%
40Other vegetables, fresh or chilled 07090%0%0%0%
41Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared 07120%0%0%0%
42Dried leguminous vegetables, shelled, whether or not skinned or split 07130%0%0%0%
43Manioc ,arrowroot,salep,jerusalem artichokes,sweet potatoes and similar roots and tubers with high starch or inulin cintent,fresh or chilled;sago pith07140%0%0%0%
44Coconuts,fresh or dried,whether or not shelled or peeled08010%0%0%0%
45Other nuts,fresh such as Almonds,Hazelnuts or filberts,walnuts,chestnuts Pistachios,Macadamia nuts,Kola nuts Areca nuts08020%0%0%0%
46Bananas, including plantains, fresh or dried 08030%0%0%0%
47Dates, figs, pineapples, avocados, guavas, mangoes, and mangosteens, fresh 08040%0%0%0%
48Citrus fruit, fresh 08050%0%0%0%
49Grapes, fresh 08060%0%0%0%
50Melons (including watermelons) and papaws (papayas), fresh 08070%0%0%0%
51Apples, pears and quinces, fresh 08080%0%0%0%
52Apricots, cherries, peaches (including nectarines), plums and soles, fresh 08090%0%0%0%
53Other fruit, fresh 08100%0%0%0%
54Peel of citrus fruit or melons,fresh08140%0%0%0%
55Coffee beans,not roasted09010%0%0%0%
56Unprocessed green leaves of tea09020%0%0%0%
57Fresh ginger and fresh turmeric other than in processed form09100%0%0%0%
58Wheat and Meslin10010%0%0%0%
59Rye10020%0%0%0%
60Barley10030%0%0%0%
61Oats10040%0%0%0%
62Maize (Corn)10050%0%0%0%
63Rice10060%0%0%0%
64Grain sorghum10070%0%0%0%
65Buckwheat, millet and canary seeds; other cereals 10080%0%0%0%
66Flour,Aata ,maida ,besan (other than bearing a registered brand name)11010%0%0%0%
67Wheat or meslin flour11010%0%0%0%
68Cereal flours other than that of wheat or meslin11020%0%0%0%
69Cereal groats, meal and pellets other than bearing a registered brand name11030%0%0%0%
70Flour,of potatoes11050%0%0%0%
71Flour,of the dried leguminous vegetables of heading 0713(pulses),of sago or of roots or tubers of heading 0714 or of the products of chapter8 i.e.of tamarind ,of singoda,mango flour,etc.11060%0%0%0%
72All goods of seed quality-Soya beans, whether or not broken 12010%0%0%0%
73Ground nuts, roasted or otherwise cooked,whether or not shelled or broken12020%0%0%0%
74All goods of seed quality -Linseed, whether or not broken 12040%0%0%0%
75All goods of seed quality -Rape or colza seeds, whether or not broken 12050%0%0%0%
76Sunflower seeds, whether or not broken 12060%0%0%0%
77All goods of seeds quality-Other oil seeds and oleaginous fruits, whether or not broken 12070%0%0%0%
78Seeds, fruit and spores, of a kind used for sowing 12090%0%0%0%
79Hop cones,fresh12100%0%0%0%
80Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled12110%0%0%0%
81Locust beans, seaweeds and other algae, sugar beet and sugarcane, fresh or chilled12120%0%0%0%
82Cereal straw and husks,unprepared ,whether or not chopped,ground,pressed or in the form of pellets12130%0%0%0%
83Swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches and similar forage products, whether or not in the form of pellets 12140%0%0%0%
84Lac and shellac13010%0%0%0%
85****14030%0%0%0%
86Betel leaves14040%0%0%0%
87Cane jaggery(gur)17010%0%0%0%
88Puffed rice,commonly known as Muri,flattened or beaten rice,commonly known as Chira,Parched rice,commonly known as khoi,parched paddy or rice coated with sugar or gur,commonly knnown as Murki19040%0%0%0%
89Bread(brannded or otherwise), except when served for consumption19050%0%0%0%
90Pappad,by whatever name it is known ,except when served for consumption19050%0%0%0%
91Prasadam supplied by religious places21060%0%0%0%
92Water (other than aerated ,mineral ,purified ,distilled ,medicinal ,ionic ,battery ,de-mineralized and water sold in sealed container and Non alcoholic Toddy,Neera 22010%0%0%0%
93Tender coconut water and bearing a registered brand name22020%0%0%0%
94Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants 23020%0%0%0%
95Oil-cake and other solid residues whether or not ground or in the form of pellets, resulting from the extraction of soyabean oil 23040%0%0%0%
96Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of ground-nut oil 23050%0%0%0%
97Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of vegetable fats or oils, other than those of heading 2304 or 2305 23060%0%0%0%
98Preparations of a kind used in animal feeding23090%0%0%0%
99Common salt including iodized and other fortified salts,sendha namak(rock salt),kala namak25010%0%0%0%
100Human blood and its components30020%0%0%0%
101All type of contraceptives30060%0%0%0%
102Animal or vegetable fertilisers, whether or not mixed together or chemically treated; fertilisers produced by the mixing or chemical treatment of animal or vegetable products 31010%0%0%0%
103 -Organic manure ,other than put up in unit containers and bearing a brand name31010%0%0%0%
104Kumkum ,Bindi,Sindur,Alta33040%0%0%0%
105Condoms and contraceptives40140%0%0%0%
106Firewood or fuel wood44010%0%0%0%
107Wood charcoal (including shell or nut charcoal), whether or not agglomerated 44020%0%0%0%
108Government, Postal items, like envelope, Post card etc., sold by Government, rupee notes when sold to the Reserve Bank of India & Cheques, lose or in book form[4802,4817]48020%0%0%0%
109Printed books, including Braille books49010%0%0%0%
110Newspapers, journals and periodicals, whether or not illustrated or containing advertising material 49020%0%0%0%
111Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed 49050%0%0%0%
112Earthern pot and clay lamps69120%0%0%0%
113Bangles (except those made from precious metals)70180%0%0%0%
114Hand tools, the following: spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry 82010%0%0%0%
115Agricultural implements manually operated or animal driven82010%0%0%0%
116PARTS OF GOODS OF HEADING 8801 88030%0%0%0%
117Hearing aids90210%0%0%0%
118Slate pencils [9609] and chalk sticks.96090%0%0%0%
119Slates96100%0%0%0%

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Goods and Service Tax Law – Implications on Works contract and Job work

Implications on Works contract and Job work

 

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122nd Constitutional Amendment Bill, 2014

122nd Constitutional Amendment Bill, 2014

Bill No 192-C OF 2014

THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) BILL, 2014

A

BILL

Further to amend the Constitution of India

Be it enacted by parliament in the sixty-sixth year of the Republic of India as follows:-

  1. (1) This act may be called the constitution (one hundredth amendment) Act, 2015.
    (2) It shall come into force on such date as the Central Government may by notification in the Official Gazette, appoint , and different dates may be appoint for different provisions of this act and any reference in any such provision to the commencement of this Act shall be constructed as a reference to the commencement of that provision.
  2. After article 246 of the constitution, the following article shall be inserted , namely:-
    “246A.
    1. Notwithstanding anything contained in article 246 and 254, Parliament and subject to clause (2), the legislature of every state, have power to make laws with respect to goods and service tax imposed by the union or by such state.
    2. Parliament has exclusive power to make laws with respect goods and service tax where the supply of goods, or of services, or both takes place in the course of interstate or commerce.
    Explanation – The provision of this article, shall in respect of goods and services tax referred to clause (5) of article 279A, take effect from the date recommended by the Goods and Service Tax Council.”
    3. In article 248 of the Constitution, in clause (1) , for the word “Parliament “ the figures and letter “ Subject to article 246A ,Parliament “ shall be substituted .
    4. In the article 249 of the Constitution, in clause (1) after the word “with respect to “, the word and figure “goods and services tax provided under article 246A or “shall be inserted.
    5. In the article 250 of the Constitution, in clause (1) after the word “with respect to “, the word and figure “goods and services tax provided under article 246A or “shall be inserted.
    6. In article 268 of the constitution, in clause (1), the word “and such duties of exercise on medicinal and toilet preparation “shall be omitted.
    7. Article 268A of the constitution, as inserted by section 2 of the constitution (Eighty –eight Amendment) Act, 2003 shall be omitted.
    8. In article 269 of the constitution, in clause (1), after the word “consignment of goods”. The words, figure and letter ‘expected as provided in article 269 A” shall be inserted.
    9. After article 269 of the constitution , the following article shall be inserted namely –
    “269A (1) Goods and services tax on supplies in the course of interstate 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.
    Explanation —- For the purpose of this clause,, supply of goods and services or both in the course of import into the territory of India shall be deemed to be supply of goods , or of service, or both in the course of Inter –state trade or commerce.
    (2) Parliament may, by law, formulate the principle for determining the place of supply, and when a supply of goods or of services, or both takes place in the place in the course of interstate trade or commerce.”
    10. In article 270 of the Constitution :-
    i. in clause (1) for the words , figure and letter “article 268,268A, and 269 “’,the word , figure and letter “article 268,268A, and 269 A” shall be inserted ;
    ii. after clause (1) , the following clause shall be inserted , namely—
    “(IA) the goods and service tax levied and called by the Government of India, except the tax apportioned with the States under clause (i) of the article 269A,shall also be distributed between the Union and the States in the manner provided in clause (2).”
    11. In article 271 of the constitution, after the word “in those articles “, the words and figure and letter “except the goods and services tax under article 246A,”shall be inserted.
    12. After article 279 of the constitution, the following article shall be inserted , namely:—-
    “279A.
    (1) the President shall, within sixty days from the date of commencement of the constitution (One Hundredth Amendment )Act,2015, by order , constitute a council to be called the goods and services Tax Council .
    (2) the goods and services tax Council shall consist of the following members , namely—-
    (a) the Union Finance Minister _______________ chairperson
    (b) the union minister of state in charge of revenue or finance ________________member
    (c) The minister in charge of finance or taxation or any other minister nominated by each state Government ______________________________ members.
    (3) The Members of the goods and service tax council referred to sub clause © of clause (2) shall, as soon as may be , choose one amongst themselves to be the Vice –chairperson of the council for such period as they may decide.
    (4) the goods and service tax council shall make recommendations to the union and the state on ———–
    (a) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax
    (b) the goods and services that may be subjected to, or exempted from the goods and services tax;
    (c) model Goods and Services Tax Laws, principles of levy, apportionment of Integrated Goods and Services Tax and the principles that govern the place of supply;
    (d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax;
    (e) the rates including floor rates with bands of goods and services tax;
    (f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;
    (g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and .
    (h) any other matter relating to the goods and services tax, as the Council may decide.
    (5) The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.
    (6) While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market. for goods and services .
    (7) One half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings.
    (8) The Goods and Services Tax Council shall determine the procedure in the performance of its functions.
    (9) Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, In accordance with the following principles, namely:—-
    (a) the vote of the Central Government shall have a weightage of one- third of the total votes cast, and
    (b) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting.
    (10) No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of-
    (a) any vacancy In, or any defect In, the constitution of the Council; or
    (b) any defect in the appointment of a person as a Member of the Council; or (c) any procedural Irregularity of the Council not affecting the merits of the case.
    (11) The Goods and Services Tax Council may decide about the modalities to 15 resolve disputes arising out of its recommendations.”
    13. In article 286 of the Constitution ,———–
    i. in clause (1)——–
    A. for the words “the sale or purchase of goods where such sale or purchase takes place”, the words “the supply of goods or of services or both, 20 where such supply takes place” shall be substituted;
    B. in sub-clause (b), for the word “goods”, at both the places where it occurs the words “goods or services or both” shall be substituted;
    ii. in clause (2), for the words “sale or purchase of goods takes place”, the words “supply of goods or of services or both” shall be substitute
    iii. clause (3) shall be omitted.
    14. ln article 366 of the Constitution,-
    i. after clause (12) ,the following clause shall be inserted , namely:—-
    ‘(12A)” goods and service tax “means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption;
    ii. in clause (26) , the following clauses shall be inserted , namely:-
    ‘(26A) “Services “means anything other than goods;
    (26B) “State with reference to article 246A, 268, 269, 269A and 279A include a Union territory with Legislature:
    15. In article 368 of the Constitution, in clause (2), in the proviso, in clause (a)for the words and figures “article 162 or article 241 “, the words, figures and letter “article I 62, article 241 or article 279A “ shall be substituted.
    16. In the Sixth Schedule to the Constitution, in paragraph 8, in sub-paragraph (3),—–
    (i) in clause (c), the word “and “ occurring at the end shall be omitted;
    (ii) in clause (d), the word “and “ shall be inserted at the end ;
    (iii) after clause (d), the following “and “ shall be inserted ,namely:-
    “(e) taxes on entertainment and amusements .”.
    17. In the Seventh Schedule to the Constitution —–
    (a) in List I— Union List—
    i. For entry 84,the following entry shall be substituted , namely:—
    “84. Duties of excise on the following goods manufactured or produced in India, Namely –
    (a) petroleum crude
    (b) high speed diesel ;
    (c) motor spirit (commonly known as petrol);
    (d) natural gas ;
    (e) aviation turbine fuel :and
    (f) tobacco and tobacco products “;
    ii. entries 92 and 92C shall be omitted ;
    (b) in list II-State List—
    i. entry 52 shall be omitted;
    ii. for entry 54, the following entry shall be substituted, namely:-
    “54. Taxes on the sale of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption, but not including sale in the course of inter-State trade or commerce or sale in the course of international trade or commerce of such goods.
    iii. entry 55 shall be omitted;
    iv. for entry 62, the following entry shall be substituted, namely:-
    “62. Taxes on entertainments and amusements to the extent levied and collected by a Panchayat or a Municipality or a Regional Councilor a District Council.” 18. (1) An additional tax on supply of goods, not exceeding one per cent, in the course of inter-State trade or commerce shall, notwithstanding anything contained in clause (1) of article 269A, be levied and collected by the Government of India for a period of two years or such other period as the Goods and Services Tax Council may recommend, and such tax shall be assigned to the States in the manner provided in sub-section (2).
    (2) The net proceeds of additional tax on supply of goods in any financial year, except ‘the proceeds attributable to the Union territories, shall not form part of the Consolidated
    Fund of India and be deemed to have been assigned to the States from where the supply originates . (3) The Government of India may, by where it consider necessary in the public interest, exempt such goods from the levy of tax under sub –section (I).
    (4) Parliament may , by law, formula the principles for determining the place of origin from where supply of goods take place in the course of inter- state trade or commerce.
    (5) For purpose of this section,” state “shall have the meaning assigned to it in clause (26B) of article 366 of the Constitution. 19. Parliament may, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for such period which may extend to five years.
    20. Notwithstanding anything in this Act, any provision of any law relating to tax on goods or services or on both in force in any State immediately before the commencement of this Act, which is inconsistent with the provisions of the Constitution as amended by this Act shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until expiration of one year from such commencement, whichever is earlier
    21. (1) If any difficulty arises in giving effect to the provisions of the Constitution as amended by this Act (including any difficulty in relation to the transition from the provisions of the Constitution as they stood immediately before the date of assent of the President to this Act to the provisions. of the Constitution as amended by this Act), the President may, by order, make such provisions, including any adaptation or modification of any provision of the Constitution as amended by this Act or law, as appear to the President to be necessary or expedient for the purpose of removing the difficulty:
    Provided that no such order shall be made after the expiry of three years from the date of such assent.
    (2) Every order made under sub-section (1) shall, as soon as may be after it is made, 20 be laid before each House of Parliament.

 

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GST Implementation – Government’s Perspective

After the enactment of Constitutional (101st Amendment ) Act, 2016, the hope for advent of Goods and Service Tax (“GST”) in India is no distant dream.  GST Council has also been notified on September 15, 2016 and thus, the policy formulators have taken their positions as part of this Think-tank and shall be responsible for taking the biggest fiscal decisions of the Country.   The initial decisions would include formulation of Model GST law, rates as shall be applicable to different goods / services, determination of exemption to goods and / or services, Rules and processes etc.

Having said the same, this main body requires a lot of homework by each of its constituents.  Since the body has become a single place for determining almost everything in relation to taxing supply of goods and services in the Country, each of its constituent would now have to understand the impact of every decision of the GST Council on its own subjects, impact on its treasury from such decisions, its relationships with its fellow states and also the movement of business into and out of its states.  All these decision would change the way Governments have till now visualized their indirect policy and the way they shall be doing the same in the new era.  Also, the focus of demands of the industry might also shift from state specific requests to request to GST Council.   At this stage it is pertinent to mention that while the focus of each state should be meet its local interest, however, for the success of GST in India, the aim should be national interest.

Thus, to achieve the above objective, every stakeholder, including government of all states, Central Government and Union territories with legislature would be required to formulate certain bodies and undertake certain works, some of which are proposed in this article:

Restructuring their administration cadre:  GST enactment would not be a big change only for tax payer but also the tax administration.  The way taxes were imposed and collected would see a drastic shift and thus, the restructuring of tax administration at all levels is inevitable.  The jurisdictions and subjects shall change, thus requiring the entire administration cadre to be restructured.  The change becomes more difficult when we speak about a country like India having varied demographic and cultural profiles.

Forming their own internal think tanks:  Though every government would be part of the larger think tank – the GST Council, to support their representation in the GST Council they would require a team of experts and administrators who can present their requirement to the representative and also are capable of assessing the impact of policy decisions proposed or taken in such GST Council.  The experts would come from different walks of trade including representatives of trade bodies/ associations, Accounting professionals, representatives of consumer bodies, economists, Information technology experts etc.

Reworking their tax administration system:  Increasing tax base is always the focus of every government as it denotes both prosperity amongst citizens and more revenue for government.  The manner of increasing tax base would altogether change in the new regime and the government would be required to learn new manner of administering their subjects – through electronic systems.  The new regime would be dependent on robust IT systems and also a team of techno-administrators who could analyse the huge data as shall be supplied by the taxpayers through electronic interface of GST Network (GSTN).  The IT infrastructure, interface with tax payers and analysis interface with departmental officers shall determine the fate of ease with which collections would be maximized in a proper manner by the respective governments.

Training for the new era:  Even though the entire infrastructure and interface be placed, desired results cannot be achieved unless the entire team of officers who shall administer the tax payer in the coming times are trained in a proper and systematic manner so that when the data of the tax payers is put before them, the same can be

Approachable approach: Apart from a lenient view, the addressal of the problems of the taxpayer be handled through a matured system of online and call centres wherein a taxpayer without being asked to disclose his identification can share his problem and can get an answer and sooner we may find a compliant tax base with lesser tax shortfalls.  The model need to be replicated in physical mode in form of help-desks at the government offices to address problems of small tax payers as well who are not much acquainted with technology.

Government should also ensure that GST provisions are made available in form of small booklets and mobile app in regional languages. Even important decisions impacting common tax payers should also be communicated in regional language to ensure effective communication with all stakeholders.

A soft approach:  The initial phase of the implementation shall have teething problem for both tax payer and administration.  While the focus on part of government shall be to properly capture its tax base as well as their transactions, the trouble is no less for taxpayer as he also shall be facing a lot issues in terms of understanding the new law, upgrading his IT infrastructure to meet the requisites of compliance, training his team etc.  These changes may result in errors and omissions on part of the subjects.  Though intentional evasions can never be ruled out but it is also to be believed that most of the taxpayers are not evaders and thus, an initial moratorium be allowed to all at-least for six months where when pointed out, and when tax and interest is paid by the tax payer, penalty proceedings should not be initiated against them.

Check on rise in commodity pricing: A basic fear which has grasped the minds of the citizens before the advent of GST is the rise in prices of basic commodities.  Thus, it becomes imperative on part of both Central and State governments to ensure check on commodity prices, particularly food items and medicines and if need be to take counter measures like maintaining stock and ensuring their availability through mass distribution mechanism.

To conclude:

Though each stakeholder might have hundreds of idea to make this proposed legislature better, however, the need of the hour is to provide ideas to make it a success.  Though each of the stakeholders is important, however, being the biggest stakeholder, government need to play the most important part to support all its subjects during this most challenging transformation of Indian Indirect taxation.

 

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Has Centre has Lost its Power to Levy Excise – May be Not

The recent enactment of all sections of Constitutional (101st Amendment) Act, 2016 has triggered a lot of debate all across. Many experts have opined that amongst other Section 19 post its enactment has taken away the power of Centre to levy and Collect Excise Duty.  However, this debate is also to be seen in the following perspective.  To appreciate the argument, we need to see Section 19 of the Amendment Act which reads as under:

“19. Notwithstanding anything in this Act, any provision of any law relating to tax on goods or services or on both in force in any State immediately before the commencement of this Act, which is inconsistent with the provisions of the Constitution as amended by this Act shall continue to be inforce until amended or repealed by a competent Legislature or other competent authority or until expiration of one year from such commencement, whichever is earlier. “

The explanation offered to interpret the above Section to say that Center can no longer Levy Excise stands on the understanding when we read the phrase “any provision of any law relating to tax on goods or services or on both in force in any State” as “any provision of any law relating to tax on goods or services or on both in force enacted by any State“. 

Thus, this stands on the explanation that a law which is enacted by a state legislature can only be in force in the state. Thus, the experts view this as giving protection to state laws like VAT etc but not Excise which is not enforced in states. In other words, Laws enacted by parliament is in force in India and not states per se. Thus, whether “in the state” can be equated with “enacted by any state” is the whole debate. 

In my opinion, it is to be appreciated that the extent section of any Central taxation law usually provides for its application to the ‘whole of India’. for eg. Excise Act, 1944 provides as under:

“(1) This Act may be called the Central Excise Act, 1944.(2) It extends to the whole of India”

Similarly, Service Tax (Finance Act, 1994) provides as under:

64. (1) This Chapter extends to the whole of India except the State of Jammu and Kashmir.”

Now to appreciate what is India we need to refer to our Constitution which provides as follows:

“1. Name and territory of the Union.—(1) India, that is Bharat, shall be a Union of States.

(2) The States and the territories thereof shall be as specified in the First Schedule.

(3) The territory of India shall comprise— (a) the territories of the States; (b) the Union territories specified in the First Schedule; and (c) such other territories as may be acquired.”

Thus, India per se does not have any existence of its own. Its existence depends upon the States of which it is a union. Thus, any thing enforced in India is enforced in its states. Thus, when Section 19 provides for a saving clause for all laws applicable in all states, to my mind, it provides a protection to all laws enacted by Centre as well as such laws are in force in States only. Trust we get suitable explanation from officials in time to save all taxpayers from this interpretation which taken either ways can be of great damage.

 

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GST Knowledge Series 1 – What to Tax?

Everyone is eager to hear the onset of Goods and Service Tax (“GST”) in India.  The proposed GST likely to be introduced by 2017, would replace a number of indirect taxes levied by the Centre and State governments on goods and services.  It intends to replace the numerous laws as are prevailing on supply of goods and services and introduce a single taxing mechanism.  122nd Constitution Amendment Bill defines “goods and services tax” as to mean any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption.  Thus, it is important to understand the thre most crucial terms of this new law – supply, goods and services.  We shall now examine each of the said word in detail hereinunder.

  1. Goods

Article 366(12) of Constitution defines goods to include all materials, commodities, and articles.  The definition however, is a more restrictive one in Sale of Goods Act.   Section 2(7) of Sale of Goods Act defines goods as to mean every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.  Moveable property has further been defined as property of every description, except immovable property.  It is also pertinent to note that the definition of goods is of wide connotation since it is based on an inclusive definition.  The word “include” provides a wide connotation to the definition. [Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology, (2002) 5 SCC 111].  Thus, the ambit of term goods is wide enough to include all corporeal and incorporeal property held in oneself other than immovable goods.  Characteristics of movable goods has been defined as things which are capable of abstraction, consumption and use.  Things which can be transmitted, transferred, delivered, stored, possessed etc. are goods as much as a movable property.  Such observations have been made by the Apex Court in the case of Commissioner of Sales Tax, Madhya Pradesh, Indore vs. Madhya Pradesh Electricity Board, Jabalpur reported in (1969) 1 SCC 200 and TCS v State of Andhra Pradesh. Things like Copyright, Gas, water, electricity, DEPB scraps, Information technology software etc have been held as goods in various judgments by Hon’ble courts.

 

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