Free GST Updates 10th Mar!

Dear Friends,

There are no updates from yesterday with respect to GST. But lets have some interesting understanding/facts about the Model GST Law:

  1. Definition of Agriculturist
    1. Earlier last year, in Model GST law the definition of agriculturist was vague and somewhat incomplete. Now the definition per se has been revised to include an individual or HUF undertaking cultivation of land by own labour, or labour of the family or by servants paid wages in cash or kind or by hired labours under personal supervision or supervision by any family member.
    2. This definition is much more broader then the earlier one.
    3. This would result in exemption of agriculture income from GST for most of the agriculturists and also a sigh of relief for them.
    4. As per the definition of agriculture in the Model GST Law, we can also assume that the processed goods would be attracted to GST tax although at lower rates and only the raw agri products would be exempted from the GST ambit.

2. Composition Scheme under GST :

  1. As per the revised GST Model Law, upto Rs 20 lakhs turnover (of goods and or services) no GST will be applicable, between Rs 20 lakhs and Rs 50 lakhs turnover (of goods and or services), Composite Scheme will be applicable to assesses, where GST to be paid at the rate of 2.5 per cent for manufacturers and at the rate 1 per cent for traders.
  2. Definition of Turnover for availing composition scheme isvery arguable as there are certain points in it which makes it less attractive like:
    1. If there is inter state sales then composition scheme is not available
    2. Turnover includes exempt sales as well
    3. Also if the composition scheme is availed by one unit of the assessee, then the whole entities registered under single Pan in India would be covered under composition scheme
    4. There is a server penalty clause (Equal to the amount of tax collected), in case the officer finds that the assessee who presumed to be covered under composition scheme but in actual was actually not covered under the scheme.
    5. Looking at the above points, composition scheme appears to be a draconian clause.

That’s it for today, stay tuned for interesting updates on GST. Stay  updated by subscribing us for free!!

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