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Developments on GST Laws and Rules

Jun 12, 2017

Presidential Assent to the GST Bills

With the assent of the President on 12 April 2017, the following Goods and Services Tax (GST) Bills have become Acts:

  1. The GST (Compensation to States) Act, 2017
  2. The Integrated GST Act, 2017
  3. The Central GST Act, 2017
  4. The Union Territory GST Act, 2017.

These Acts will be enforced from a date to be notified by the government in the future.

Action on State GST Law

The State of Telangana became the first State to introduce and pass the Telangana State Goods and Services Tax Bill, 2017 on 17 April 2017 during the special session of the state Legislative Assembly.

The Taxation Laws Amendment Bill, 2017 (Amendment Bill, 2017) passed by the Lok Sabha

The Amendment Bill, 2017 has been passed by the Lok Sabha which seeks to repeal certain laws and amend certain laws to make them compliant with GST. The significant changes in relation to the key enactments are

The Customs Act, 1962
The scope of the definition of a customs area has been extended to include a warehouse to ensure that an importer will not be liable to pay Integrated GST (IGST) at the time of removal of goods from a customs station to a warehouse.

The Customs Tariff Act, 1975
In order to provide a level playing field for the domestic industry, IGST and GST Compensation Cess has been proposed to be levied on imported products.

The Central Excise Act, 1944 (Excise Act)
Consequent to the proposed repeal of this Act, a new Schedule, namely the Fourth Schedule, has been proposed to be inserted to provide for classification and duty rates for petroleum and tobacco products which have been kept outside the GST ambit, few of which are:

  • Petroleum crude;
  • Motor spirit (Petrol);
  • High-speed diesel;
  • Aviation turbine fuel;
  • Natural gas; and
  • Tobacco and tobacco products.

The abovementioned excisable goods will continue to attract Central Excise Duty even after the proposed repeal of the other Schedules in the Excise Act.

Furthermore, the following enactments have also been amended suitably to accommodate GST changes/would be repealed:

  • The Central Sales tax Act, 1956
  • The Finance Act
  • The Water (Prevention and Control of Water Pollution) Cess Act, 1977
  • The Sugar Cess Act, 1982
  • The Jute Manufacturers Cess Act, 1983.

Release of the draft Electronic Way (E-way) Bill Rules

The CBEC released the draft E-way Bill Rules. The E-Way Bill will be required to be carried along with the goods that are being transported, either physically or mapped to a Radio Frequency Identification Device (RFID) embedded onto the conveyance, as may be prescribed. Some important points in relation to the E-way Bill Rules are:

  1. E-way Bill will have to be issued for all supplies of goods exceeding the value of INR 50,000. For goods valued below INR 50,000, the E-way Bill will be optional.
  2.  The E-way Bill will have to be prepared by the suppliers. In the case of unregistered persons, the transporter or such unregistered person at their option will have to prepare the E-way Bill.
  3. The E-way Bill will have to mandatorily be issued online on the GST website.
  4. The recipient of goods, if he is a registered recipient, will be required to communicate its acceptance or rejection thereof within 72 hours of such information being available on the GST network (GSTN) portal, else it would be deemed to be accepted.
  5. The validity period of the E-way Bill will depend upon the distance involved for the transport of goods.
    Release of the draft Assessment and Audit Rules

The CBEC released the draft Assessment and Audit Rules which provide various forms and procedures in relation to:

  1. Provisional assessment;
  2. Scrutiny of returns;
  3. Best judgment assessment;
  4. Audit; and
  5. Special audit

This article was first published on LinkedIn by Prashant Dedhia

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