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Structure of GST in India and its Governing Laws-GST India Guide
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Structure of GST in India and its Governing Laws 2017-04-06T10:48:11+00:00

Structure of GST in India and its Governing Laws

GST shall be dual levy in India with both Centre and State government levying respective GST parallelly on all intra state supplies.  Thus, on every intra state supply, Central GST and respect State GST shall apply.  In case of inter state supplies, the right to impose tax has been reserved by the Centre.  The understanding can be shown as under:

structure-of-gst-in-india

Laws governing GST in India

The following laws shall be enacted for levy and collection of GST by Centre and States in India:

Name of Tax to be leviedGoverning ActGoverned byNumber of Acts in IndiaGoverns
Central GSTCentral GST ActCentral GovernmentOneLevy of Centre’s portion of GST in case of intra state Supply
(Name of State) GST e.g. Delhi GST, Haryana GST etc(Name of State) GST Act e.g. Delhi GST Act, Haryana GST Act, Maharashtra GST Act etcRespective State GovernmentsOne for each state (State includes UT with legislature)Levy of State’s portion of GST in case of intra state Supply
31 Acts
Integrated GSTIntegrated GST ActCentral GovernmentOneLevy of GST in case of inter state Supply

Each of the above acts governs certain part of the transaction and together govern the levy and collection of GST in India.  Though the Acts are different, their respective scope is abundantly clear.  The levy of different acts is explained by way of the following diagram:

laws-governing-gst-in-india

Scheme of Model Central GST Law

Central GST Act comprise of XXV Chapters which consist 162 Section and 4 Schedules.  The broad scheme of the Act is as follows:

ChapterSectionsTopics
I01-03Short title, Definition and meaning and scope of Supply
II04-06Administration structure
III07-11Levy and Exemption from GST
IV12-15Point of Taxation, Change in rate and Value of Supply
V16-18Input Tax Credit
VI19-22Registration, Amendment and cancellation
VII23-24Tax invoice, Debit and credit Notes
VIII25-34Returns
IX35-37Payment of Tax, Interest and TDS
IXA37ATransfer of Input Tax Credit
X38-41Refunds
XI42-43Accounts and Records
XII44-48Assessments
XIII49-50Audit
XIV51-59Demand and Recovery including period of Limitation
XV60-65Inspection, Summons, Search, Seizure, Arrest
XVI66-72Offences and Penalties
XVII73-78Prosecution and Compounding of offences
XVIII79-83Appeals
XIX94-105Advance Ruling
XX-Settlement of Cases
XXI106-107Presumption as to Documents
XXII108-115Liability in case of transfer, amalgamation, liquidation etc
XXIII116-139Miscellaneous Provisions
XXIV140Repeals and Savings
XXV141-162ETransistional Provisions

Apart from the above law, there would be different other set of Rules and documents to assist a tax payer.  Currently, the following Rules/ documents are in public domain:

  • Report of the Joint Committee on Business Processes for GST on Refund Process
  • Report of the Joint Committee on Business Processes for GST on Registration
  • Report of the Joint Committee on Business Processes for GST Payment Process
  • Report of the Joint Committee on Business Processes on Returns

Scheme of Model State GST Law

Model State GST Law is similar to Central GST law and contains XXV Chapters which consist 162 Section and 4 Schedules.  The broad scheme of the Act is almost same and is as follows:

ChapterSectionsTopics
I01-03Short title, Definition and meaning and scope of Supply
II04-06Administration structure
III07-11Levy and Exemption from GST
IV12-15Point of Taxation, Change in rate and Value of Supply
V16-18Input Tax Credit
VI19-22Registration, Amendment and cancellation
VII23-24Tax invoice, Debit and credit Notes
VIII25-34Returns
IX35-37Payment of Tax, Interest and TDS
IXA37ATransfer of Input Tax Credit
X38-41Refunds
XI42-43Accounts and Records
XII44-48Assessments
XIII49-50Audit
XIV51-59Demand and Recovery including period of Limitation
XV60-65Inspection, Summons, Search, Seizure, Arrest
XVI66-72Offences and Penalties
XVII73-78Prosecution and Compounding of offences
XVIII79-93Appeals
XIX94-105Advance Ruling
XX-Settlement of Cases
XXI106-107Presumption as to Documents
XXII108-115Liability in case of transfer, amalgamation, liquidation etc
XXIII116-139Miscellaneous Provisions
XXIV140Repeals and Savings
XXV141-162ETransistional Provisions

Difference between Central and State GST laws

Though almost all sections are same, the following Sections are differently worded between the proposed Central GST Act and State GST Act:

Section 4 – The administration provisions as provided for Centre is different from that of the State.  While the administration of The proposed Central Goods And Services Tax Act, 2016 is proposed to be headed by CBEC (proposed to be renamed as CBIT – Central Board of Indirect Taxes), administration of proposed State Goods And Services Tax Act, 2016  is provoposed to be entrusted with Commissioner.

Section 35 –  This Section provides difference in application of available Central GST and State GST towards their respective output liabilities or output IGST.

Section 79-93 – Sections relating to Appeal are different in principle between The proposed Central Goods And Services Tax Act, 2016 and proposed State Goods And Services Tax Act, 2016.  The proposed Central Goods And Services Tax Act, 2016 provides for appeal before Commissioner (Appeals) where as proposed State Goods And Services Tax Act, 2016  provides for revision of order of lower authority by Commissioner.  Accordingly, proposed Central Goods And Services Tax Act, 2016 does not have  Sections 84 to Section 93 which are specific to proposed State Goods And Services Tax Act, 2016 .

Other than above, with minor corresponding changes in terms of their applicable taxes, both the Acts are same.

Scheme of Model Integrated GST Law

The proposed Integrated Goods And Services Tax Act, 2016 consists of 11 Chapters comprising of 33 Sections.  The broad scheme of the Act is as follows:

ChapterSectionsTopics
I01-02Short title and Definition
II03Principle for determining Supply of Goods and/or services in the Course of Inter state Trade or Commerce
III04Levy and Collection of IGST
IV05-06Provision for determination of Place of Supply of Goods and/ or Services
V07Payment of Tax, interest, penalty and other amounts
VI08-09Input tax Credit
VII10Apportionment of Tax and settlement of fund between Centre and States
VIII11-26Settlement of Cases
IX27-30Miscellaneous provisions relating to application of provision of proposed Central Goods And Services Tax Act, 2016 to The proposed Integrated Goods And Services Tax Act, 2016, Power to make rules etc.
X31Transitional Provisions
XI32-33Administration

 

 

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