TIMELINE FOR IMPLEMENTING GST

  • The Hon’ble Finance Minister recently indicated that, while the Government is aiming to implement GST from April 2017, the roll out would have to take place by September 16, 2017 at the latest.
  • In the parallel, a Press Release from the Ministry of Finance carried a statement by the Hon’ble Finance Minister to the effect that the major issues related to GST have been resolved and that GST would be implemented by April 2017

ELP Comments:

  • The deadline of September 16, 2017 to implement GST is on account of Section 19 of the Constitution (One Hundred And First Amendment) Act, 2016, whereby the taxes on goods or services or both would cease to exist latest by one year from the commencement of the Constitution Amendment Act i.e. September 16, 2016
  • The Press Release re-emphasizes the intention to implement GST from April 1, 2017. If this is to be the case, there would be a challenge for the trade & industry to implement GST within such a short time frame 
  • The Centre has formally listed three Bills – the Central Goods and Services Tax Bill, the Integrated GST Bill and GST (Compensation for Loss of Revenue) Bill for passage through Parliament in the upcoming winter session scheduled between November and December 2016

GST SYSTEM PORTAL AND ENROLMENT OF EXISTING ASSESSEES

  • Central Government has launched a new GST system portal to facilitate enrolment of assessees currently registered under Central Excise, Service tax, State specific Value Added Tax (VAT), Entry tax, Luxury tax and Entertainment tax legislations. This portal went live on November 8, 2016 and can be accessed at http://www.gst.gov.in/ 
  • Every assessee enrolled as a tax payer under the aforesaid legislations will receive a provisional ID and password, which will be required at the time of logging in to GST portal for the first time. Subsequently they can choose a unique user identification and password
  • The transition of VAT assessees into GSTN has already started in some States. 
  • Legal name, State name, PAN & reason of liability to obtain registration as registered under the existing tax system shall be carried forward as it is under GST migration and no changes would be allowed (changes are allowed only by way of amendments post appointed date). 
  • One PAN allows one GST registration in a State (to register more than one business vertical within a State, an assessee needs to contact the jurisdictional authority)
  • Final registration certificate will be available within 6 months, post verification of the prescribed documents 
  • Dealers registered under the VAT legislation dealing exclusively in liquor, are not required to enrol themselves under GST system portal

ELP Comments:

  • There is no specific mention regarding enrolment or otherwise for dealers of petroleum products 

FAQs released in this regard clarify that there will be a common registration, common return and common challan for Central GST / State GST

ENROLLMENT DATES

The enrollment window will be open till January 31, 2017 for those who not enrolled within above mention dates.

State: Pondicherry, Sikkim
Start Date: 08.11.2016
End date: 23.11.2016

State: Gujarat, Maharashtra, Goa, Daman and Diu, Dadra Nagar, Haveli, Chhattisgarh
Start Date: 14.11.2016
End date: 29.11.2016

State: Odisha, Jharkhand, Bihar, West Bengal, Madhya Pradesh, Assam, Tripura, Meghalaya, Nagaland, Arunachal Pradesh, Manipur, Mizoram
Start Date: 30.11.2016
End date: 15.12.2016

State: Uttar Pradesh, Jammu and Kashmir, Delhi, Chandigarh, Haryana, Punjab, Uttarakhand, Himachal Pradesh, Rajasthan
Start Date: 16.12.2016
End date: 31.12.2016

State: Kerala, Tamil Nadu, Karnataka, Telangana, Andhra Pradesh
Start Date: 01.01.2017
End date: 15.01.2017

Service Tax Registrants
Start Date: 01.01.2017
End date: 31.01.2017

Delta All Registrants (All Groups)
Start Date: 01.02.2017
End date: 20.03.2017

ELP Comments:

Value Added tax authorities in some states like Goa, Pondicherry, Gujarat and Chhattisgarh have been issuing directions for collection of the provisional identification and password for use in completing online pre-registration under GST. Similar directives are awaited from the other State tax authorities

RATE STRUCTURE AND DUAL CONTROL UNDER THE GST REGIME

  • The GST Council has decided on a four tier GST tax structure (i.e. 5%, 12%, 18% and 28%). Additionally, a cess would be levied on certain luxury and demerit goods like luxury cars, tobacco, aerated drinks etc. [in addition to 28%] in order to raise funds to compensate states for the revenue losses
  • Essential items including food are likely to be taxed at zero rate. Most mass consumption products would attract 5% GST rate. Standard rate of GST would be 12% / 18% wherein most of the products are proposed to be covered
  • The last GST council meeting (on November 4, 2016) was adjourned as the consensus on the issue of administrative control could not be achieved. Two options were discussed with respect to administrative control viz; horizontal [i.e. States would be given single control of all assessees with an annual turnover of up to INR 1.5 crores, beyond which there would be cross-empowerment of Centre and State officials] and vertical [i.e. both the Centre and the States will get a fixed number of assessees] division

  • The issue of administrative control would be decided in the next meeting on November 24 and 25, 2016

ELP Comments:

The finalization of rate structure is a major step towards implementation of GST. However, the industry keenly awaits the classification of products / services into various rates structure. Considering the multiple rate structure, classification disputes are likely to increase

Disclaimer: The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned herein. For any queries and questions please write to [email protected].