PLACE OF SUPPLY RULES FOR E-COMMERCE UNDER GST ON ANVIL
After Parliament approves the GST Constitution Amendment Bill, model legislations prepared by CBEC will be put up for comments from stakeholders & the three legislation -- Central GST (CGST), State GST (SGST) and integrated GST (IGST) -- will have to be approved by the respective legislatures.
The Revenue Department, as a part of GST introduction, is likely to prepare ’Place of Supply’ rules covering taxation of e-commerce.
As Goods and Service Tax will be destination based levied at point of delivery), these rules will help in determining the location of supply of goods or services (whether the supply is intra-state or inter-state).
The CBEC will be drafting the rules which will take into account sales through E-Commerce and after finalization of draft rules, CBEC will invite comments from industry.
With an estimated $ 5 Billion E-Commerce Market the online shopping in India is expected to expand at a massive rate. Thus the Place of supply rules have a significant role to play facilitating the effective regulation of the taxability of e-commerce transactions.
DUAL GST TO BE ROLLED OUT IN 2016, POINT ORIGIN BASED TAX REMAINS LEVIABLE ON INTER STATE SALE
A CBEC official has said that there will be proposed 1% point origin based additional tax to be levied
on inter-state sale.
India Inc has been opposed to the centres plan to introduce the additional 1% Point origin based tax for it being inconsistent with the destination based dual GST system proposed.
They have also contended that the introduction of 1% Point origin based additional tax effect & could erode margins for industry The centre has been keen on to placate the big manufacturing states like Gujarat &Maharashtra in support of GST implementation in the country.
Mr. S. Madhavan, Co-chairman of FICCIs Task Force on GST, said that the GST rates to be decided in the coming days should be as moderate as possible
CENTRE LIKELY TO AGREE ON FIVE YEARS FULL COMPENSATION
The Government has given indications of accepting the Rajya Sabha Select Panels recommendation on full compensation to states for 5 years after GST being implemented & the panels report is expected to come on Wednesday. The full compensation of 5 years may not pose a problem as the loss is expected to discontinue after 2 years from the implementation of GST.
The Constitution Amendment Bill for the introduction GST prescribes a five-year compensation formula with 100 % for the first three years, 75 % for the 4th year and 50 % for the 5th. However, in line with the recommendations of Select Panel, states are seeking 100% compensation for 5 years
JAV & ASSOCIATES -Chartered Accountants
e-mail: email@example.com; firstname.lastname@example.org;