The Goods and Service Tax concept was introduced with effect from 01.07.2017 in India. This is a very significant step taken by the Government amalgamating a large number of Central and State indirect taxes into a single tax. The tax on goods and services is integrated. The aim of introduction of GST is to mitigate cascading effect of taxation in a major way and pave the way for a common national market. Originally it was planned to introduce the GST in the year 2006 itself. But it has been delayed due to various reasons.
To enable the Central Government and State Governments for the levy of GST the Constitution was amended vide Constitution (One Hundred and First Amendment) Act, 2016, with effect from 16.09.2016. The amendment Act provides for a levy of GST on supply of all goods or services except for Alcohol for human consumption.
A Goods and Services Tax Council (GSTC) was constituted comprising the Union Finance Minister, the Minister of State (Revenue) and the State Finance Ministers to recommend on the GST rate, exemption and thresholds, taxes to be subsumed and other features. This mechanism would ensure some degree of harmonization on different aspects of GST between the Centre and the States as well as across States. One half of the total number of members of GSTC would form quorum in meetings of GSTC. Decision in GSTC would be taken by a majority of not less than three-fourth of weighted votes cast. Centre and minimum of 20 States would be required for majority because Centre would have one-third weightage of the total votes cast and all the States taken together would have two-third of weightage of the total votes cast. The GST Council has met 23 times and took various decisions on the rate of tax etc.,
For the purpose of administering the tax, the Central Government enacted four acts viz., Central Goods and Services Tax Act, 2017, Union Territory Goods and Services Tax Act, 2017, Integrated Goods and Services Tax Act, 2017 and GST (Compensation to the States) Act, 2017, with effect from 12.04.2017. In addition CGST (Extension to Jammu & Kashmir) Act, 2017 and IGST (Extension to Jammu & Kashmir) Act, 2017 were also enacted so that it would be applicable to Jammu and Kashmir. All States have enacted the respective State Goods and Services Tax Act and also the Union territories. The Central Government also notified Central Goods and Services Tax Rules, 2017 which has met many amendments and also the Integrated Goods and Services Tax Rules, 2017. Similarly the States and Union Territories framed Rules for this purpose.
The Central Government as well as State Governments issued many notifications, circulars, instructions, orders etc., The Central Government issued till date -
76 notifications for Central tax;
47 notifications forCentral tax (Rate);
12 notifications for integrated tax;
50 notifications for integrated tax (Rate);
18 notifications for Union territory tax;
47 notifications for integrated tax (Rate);
1 notification for compensation cess; and
7 notifications for compensation cess (rate).
The Central Government also issued-
28 circulars for CGST;
2 circulars for IGST; and
1 circular for compensation cess;
The Central Government also issued-
11 orders for CGST; and
1 order of UTGST.
The CBEC has prepared itself for meeting the implementation challenges, which are quite formidable. The number of taxpayers has gone up significantly. The existing IT infrastructure of CBEC has been suitably scaled up to handle such large volumes of data. Based on the legal provisions and procedure for GST, the content of work-flow software such as ACES (Automated Central Excise & Service Tax) would require re-engineering. The name of IT project of CBEC under GST is ‘SAKSHAM’ involving a total project value of 2,256 crores.
The existing registered persons under Central excise and service tax Act were transferred to the new regime. The transitional provisions allowed to transfer their CENVAT credit to be utilized in the GST regime. The due dates for filing returns were prescribed by various types of assessees like that of composition scheme supplier, turnover not exceeding 1.5 crores, turnover exceeding 1.5 crores etc.,
To guide taxpayers in relation to GST matters, CBEC has issued a range of frequently asked questions on 12 sectors and other topics related to GST law, procedures, tax rates, specific industry or sector.
The following table will show the number of registrations in GST regime-
Table – 1
Registration under GST regime as on 01.01.2018
No. of transited (migrated) taxpayers
Of which, how many are yet to be migrated
No. of completely migrated taxpayers (1-2)
Total No. of new applications received for registration
No. of applications approved
No. of applications rejected
No. of applications which are still in process
Total No. of taxpayers; new + migrated (3 +5)
No. of taxpayers who have opted for composition scheme
The Act and Rules prescribes various returns to be filed by the assessee. Due to the network glitches the registered persons cannot able to file the respective returns in the due date. The Board extended the due dates whenever necessary and also waived the late fee. The following table shows the details of returns filed as on 01.01.2018-
Table – 2
Details of returns filed under GST regime
No. of 3 (B) returns filed for July, 2017
No of 3(B) returns filed for August, 2017
No of 3(B) returns filed for September, 2017
No of 3(B) returns filed for October, 2017
No of 3(B) returns filed for November, 2017
No. of GSTR 1 returns filed for July, 2017
No. of GSTR 1 returns filed for August, 2017
No. of GSTR 1 returns filed for September, 2017
No. of GSTR 1 returns filed for October, 2017
No. of GSTR 1 returns filed for November, 2017
No. of GSTR 1 returns filed for December, 2017
No. of GSTR 2 returns filed for July, 2017
No. of GSTR 4 return filed for quarter Jul-Sep, 2017
The following are the details of GST collections from July 2017-
July 2017 – 94,063 crores
August 2017 – 90,669 crores;
September 2017 – 92,150 crores;
October 2017 – 83,346 crores;
November 2017 – 80,808 crores;
The Center released compensation cess of 10,806 crores to States for July and August 2017 and 13,695 crores for September and October 2017.
Though, GST has already been implemented from the 1st of July 2017 a number of implementation issues related to IT systems, legal challenges, exports, return filing and reconciliations, passing on transition credit, anti-profiteering in GST etc. are being faced by field formations of States and CBEC. In the current set-up the aim is to ensure that all these challenges / feedback effectively reach the Government and both short term and long term solutions are provided.