Revised Draft Model GST Law (26th Nov’16) & Current Scenario

WHAT THE CURRENT SCENARIO IS, WITH REGARDS TO ROLL OUT OF GST??

The rollout of GST is likely to go beyond 1st Apr’17 due to the following issues:

a. Draft GST law is still being discussed in the GST council b. 6th meet of GST council on 11th Dec’16 discussed CGST and SGST Law only till Sec. 99

c. Discussion between Center and States over administration of GST is still in progress d. State wants exclusive administration of all assesses having turnover < ₹ 1.5 crores

e. Unlikely to table GST Law in Parliament during Winter Session

Ministry of Finance Press Release on 14th Dec’16, asserts All is Well & Govt. still targeting 1st Apr’17

REVISED DRAFT MODEL GST LAW (26th Nov’16) Based on suggestions from Professionals, Trade & Industry: Key revisions are:

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Aggregate Turnover shall not include non-taxable turnover – Sec. 2(6) Capital Goods are goods capitalized in books of accounts and used in course of or furtherance of business – Sec.2(19) Composite Supply are bundled supply of multiple goods / services (GST rate of principal supply) – Sec.2(27) Input Goods or Services used or intended to be used in course of or furtherance of business (outward supply) – Sec.2(52,53) Works Contract shall be used only in relation to Immovable Property (moveable properties) – Sec.2(110)

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Inputs Held in Stocks (but no tax invoice) – Non-manufacturers now allowed credit at prescribed rates (Sec.169) Inputs Held in Stocks (exempted turnover) – Credit allowed to be c/f & set-off against non-exempted turnover (Sec.170) Goods-In-Transit specific provision included enabling credit with conditions, was missing earlier (Sec.171) Sales Returns from registered person eligible for refund of duties paid on removal, only if within 6 months (Sec.174)

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Import / Export Transactions specific provisions included in IGST Law related to time & place of supply Supply includes import of services only if for consideration Transaction Value revised to exclude free of cost supplies, royalties / license fees, reimbursable expenditure, discounts & subsidy received from Central and State Government etc. Anti-Profiteering Measure included to ensure benefits of reduced tax or increased credit are passed to end customers Time of Supply simplified to the effect that tax liability arises on earlier of date of issue of invoice or receipt of payment Supplies to Special Economic Zone (SEZ) will be treated as ‘Zero Rated Supplies’ under revised GST law Job Worker provision modified to allow transfer of inputs with intimation and under prescribed conditions (section 55) E-Commerce Operator to collect TCS at 1% (Intra state sales) and 2% (Inter-state sales)

Above revisions indicate Govt.’s attempts to bring clarity in law

With system driven compliance and clear law, Govt. is moving in right direction

Now, all entities need to get prepared for GST implementation – Impact, Transition and Migration to GST regime

WHAT ARE THE STEPS REQUIRED FROM BUISNESSES??

a. Understand the basic concepts and complications under the Revised Draft Model GST law b. Align internal and / or external competent resources for whole GST implementation plan – Impact

Assessment & Study, Transition & Implementation Strategies, Support for smooth transition to GST c. Analysis of business impact through stimulation of GST (Positive, Negative or Neutral) d. Comprehend the transition strategy for reconciliations, final returns, claims, documentation etc.) e. Identify changes required in Accounting & Reporting for compliances f. Customize / configure / implement changes in ERP systems to ensure GST compliant

For any further clarification or queries kindly mail at gsthelpdesk@rama.co.in

Next GST meeting scheduled on 22nd & 23rd

Dec’16 to discuss the remaining sec. of CGST,

SGST & IGST law & Dual Control

…GST IS NOT FAR EVEN IF

DELAYED RATHER TIME FOR BETTER

READYNESS…