Free GST Updates – 13th Feb 2017

Dear Professionals,
Today, there is no much update on GST, but then we will take an opportunity to have an open forum regarding below issues which will help us understand the intricacies of GST:

  1. 4-Tier Rates
    1. The Government plans to introduce 4 Tier rates under GST which would comprise of 12% & 18% as standard rates whereas 5% and 28% as demerit rates. It is expected that the litigations would go up with respect to classification of Goods in case there is a huge deviation between existing rates and proposed rates.
  2. Introduction of Cess:
    1. GST is supposed to subsume most of the existing Indirect taxes and bring in One India One Tax structure. But it seems that the Government is planning to introduce 1% Cess on some goods and services to compensate the loss with State Government would incur for the first 5 years.
    2. If cess is introduced, then it would be a setback to the industry and would not stand valid with One India One Tax campaign which government is doing
    3. Also even though the Cess is introduced, it must be allowed to be set-off against the input Taxes paid in order to remove cascading of taxes, if it is not done then this clause would result in increase in burden among the industry
  3. The Confederation of All India Traders (CAIT) states that there must not be any special exemptions provided to any E-Commerce operators and all the companies must be treated at par on the GST applicability. Also then Association made a point to not allow the E-Commerce companies to sale goods on ‘Payment on receipt’ basis as this would be a non compliance in the proposed GST regime

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