Goods and Services Tax – Rules and rates

By Ranjeet Mahtani and Sweta Rajan

GST Rules

While various industry associations and the Opposition in the Government continues to campaign for introducing GST on September 1, 2017 to ensure GST preparedness, the Central Government and associated formation is keen to have and is pulling out all the stops to usher in the GST regime on July 1, 2017. 

On April 19, 2017, the Government released draft rules on (i) Accounts and Records, (ii) Advance Ruling, and (iii) Appeals and Revision. The draft rules are available on the CBEC website, and public comments on the said rules have been invited by April 27, 2017. In the week before, the draft rules on (i) Assessment and audit and (ii) E-way bills were released for comments. 

A key aspect that has uniformly been introduced in all the rules released this week is the electronic maintenance and submission of records and documents. Under the present indirect tax laws, filings and submissions are made physically (other than tax returns and in some cases payments), whereas in terms of the draft rules, under GST, assessees have the option to submits documents, such as replies and appeals electronically as well, with a requirement for subsequent submission in hard copy form. 

SGST Bill passed in Telangana

The GST Council has urged all States to approve the SGST Bills by the end of May, 2017. In the special session of the State Legislative Assembly on April 16, 2017, Telangana became the first State to pass the SGST Bill 2017. Various State Legislative Assemblies (including Rajasthan, Chhattisgarh and Bihar) have scheduled discussions of the SGST Bills in the last week of April, 2017. Reportedly, a special assembly session is expected to be held by the Jharkhand Legislative Assembly on April 27, 2017 for the passage of the SGST Bill. In Maharashtra and Goa, special sessions are likely to be convened very soon. 

GST Rates

The fitment committee (a panel within the GST Council constituted to discuss tax slabs) met on April 18 and 19, 2017 to identify services that would fall under the two slab rates of 12% and 18%, being discussed for levy of the GST on services. The fitment committee is scheduled to discuss the classification of goods across the five rate-slabs (i.e. 0%, 5%, 12%, 18% and 28%) in its next meeting scheduled on May, 18 and 19, 2017. There are indications that the Central Government is working towards a single rate for each product group to avoid complexity. For example, all types of footwear could attract the same rate.