Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: Central Excise rule to resale the machines to a new company :: VAT Audit :: form 3cd :: empanelment :: due date for vat payment :: articles on VAT and GST in India :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES
General »
 Banks warn share tax hike threatens Paris' post-Brexit appeal
 PMC may decide on property tax rebate for IT firms this week
 I-T Dept is giving out certificates of appreciation. Have you received yours?
 Government works on ironing out benefits refund mechanism for exportersa
  Tax officials are using an IDS provision to question transactions beyond six-year-limit
 Tax-free bonds rally like midcap funds
 Senior citizens do not have to pay advance tax on salary and interest income
 GST: Audit commissioners to get adjudication powers
 Interest on NRE rupee account can be exempt from tax under FEMA
 Impact of GST on Real Estate Sector
 GST regime: Tax payers allowed to take option of third-party interfaces

GST dream one step closer to reality; empowered panel of state FMs & Centre agree on 'place of supply' rules
November, 12th 2014

The government's bid to implement the goods & services tax (GST) as early as possible got a significant boost with the empowered committee of state finance ministers endorsing the so-called 'place of supply' rules that form the backbone of the new regime that will replace a plethora of levies, create a common market and likely give GDP growth a lift of up to two percentage points. The states are also confident GST will be in place by April 1, 2016, six years after it was originally scheduled to take effect.

The place of supply rules decide where goods or services will be taxed, fixing a crucial element of the levy that has gained in importance because of the surge in ecommerce and electronic delivery of services. Meanwhile, the Centre is preparing the ground for a national common market commission that will mesh with GST to create a unified area without interstate barriers to trade. However, both the Centre and the states continue to differ on the threshold for the levy with the first wanting it to be raised to Rs 25 lakh while the latter prefers it at Rs 10 lakh.

The Centre has assured the states that they won't suffer any revenue loss on account of subsuming petroleum product and entry taxes within the ambit of GST, promising to meet an important concern of states that are opposed to these duties being included in the levy that was to have been rolled out in April 2010.

"The empowered committee has given in-principle clearance to place of supply rules... This is a key takeaway from today's meeting," a senior government official, aware of the panel's deliberations on Tuesday, told ET.

Tax experts see finalisation of these rules as key to GST. "Place of supply rules are fundamental in determining the state where a service is provided and state GST or integrated GST is required to be paid," said Bipin Sapra, partner, EY. "These are extremely crucial to the basic structure of GST." Place of supply and consumption will determine the tax-recipient state and consuming state and have implications for their revenue.

"Place of supply rules are very critical for GST to run effectively. This is more so in the context of services as determining the state of consumption would be challenging, particularly where the services are not provided from an identified fixed place, such as telecom and transportation," said Pratik Jain, partner, KPMG in India. Jain pointed out that most of the disputes on value added tax in the European Union centre around place of supply rules.

Prime Minister Narendra Modi has identified GST as one of the most important items on the government's crowded reforms agenda and progress on the talks is being closely monitored.

The government is expected to finalise the draft of the constitutional amendment Bill that will allow the Centre to tax goods at retail level and states to tax services in a few days. Finance Minister Arun Jaitley has already indicated the Centre is in the last stage of finalising the Bill draft, approval of which is an essential step in the process. "If all goes well and the constitutional amendment Bill is carried in Parliament by both Houses, I think the 2016 target date is achievable," said GST Empowered Committee Chairman Abdul Rahim Rather.

The empowered panel did not agree to the Centre's demand for a higher threshold for taxing goods and services.

"In September, the Centre wrote to us suggesting that this decision of the empowered committee should be reviewed. The Centre suggested that the limit should beRs25 lakh. Even if it is not Rs25 lakh, the Rs10 lakh limit should be increased," Rather said, adding that the committee wants to stick to the agreed Rs 10 lakh threshold. However, he said the final call on threshold could be taken by the GST Council proposed to be created in the constitution amendment Bill.

GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax. Though states are reluctant to include entry tax within GST, the Centre is now attempting to persuade them by offering a revenue compensation mechanism. The GST Constitutional Amendment Bill, introduced in the Lok Sabha in 2011, has lapsed and the government has to come up with fresh legislation.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Portal Design Website Design Portal Designing Website Designing Web Design Professional Portal Design Professional Website Design Professional Web Design Portal Design India Website Design India Portal Designing India Website Designing India Web Design India Professional Portal Design India Professional Website Design India Chicago Professional Web Design New York Professional Web Design California Website Design Florida Website Design New Jersey Website Design Britain UK Website Design London Manchester Website Design

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions