GST Act And Rules

The Goods & Services Tax Council is a constitutional body setup to govern the various aspects of GST. As per Article 279A of the amended Constitution, The GST Council, which will be a Collective Platform of the Center and the States, shall be comprised of the following members:

• The Union Finance Minister - Chairperson
• The Union Minister of State in charge of Revenue or Finance - Member
• The Minister in charge of Finance or Taxation or any other Minister nominated by each State Government – Members

The primary objective of the Goods and Services Tax Council is to make recommendations to the Union and the States on the following matter:

• Taxes, cesses and surcharges imposed by the Union, the States and municipal authorities that could be taxed under GST
• Goods and services that may be subject to, or excluded from GST 
• Model Goods and Services Tax Rules, principles of levy, allocation of goods and services Tax imposed on supplies in the process of inter-state trade and commerce according to Article 269A and principles regulating the place of supply
• The threshold of turnover at which products and services can be excluded from GST
• Rates including floor rates for products bands under the GST
• Any special fee or rate for a defined time to collect extra capital during any natural disaster or disaster
• Specific laws affecting the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand
• Any other issue relating to taxation on goods and services, as may be determined by the Council
• The Goods and Services Tax Council shall also recommend the date on which the goods and services tax is imposed on crude oil, high-speed diesel, motor spirit (commonly referred to as petrol), natural gas and aircraft turbine fuel
• The Goods and Services Tax Council shall create a process to resolve any dispute—
• between the Government of India and one or more States
• Between the Government of India and any State or States on one side and one or more other States on the other
• About two or more Nations, based on, or adopted by, the Council's recommendations

GST Act of 2016

GST was primarily established under the 101st Constitution Amendment Act of 2016. GST is further governed by CGST, SGST & IGST.

GST shall subsume various existing taxes across the country and introduce a single taxation system that will allow businesses to conduct business across the country by paying uniform taxes.

There shall be 3 types of taxes under the GST; CGST, SGST and the IGST

CGST – Central GST is levied by the Central Government 

SGST – State GST is levied by the State Government

IGST – Integrated GST is levied for Inter-state supply of goods and services

CGST Act of 2017

This Act was approved by the President on 12th of April, 2017. It allows for the levying and collection of taxes on the intra-State provision of goods or services, or both by the Central Government, and on matters relevant thereto or incidental thereto.

• It extends to the whole of India except the State of Jammu and Kashmir. 
• CGST shall be applied on all forms of supply, viz., all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal agreed to by two parties.
• It also includes import of services agreed to by two parties
• Maximum tax levy of 20%, based on the item that is being supplied

Composition levy

1. Notwithstanding anything to the contrary contained in this Act but subject to the provisions of subsections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but not exceeding, -

(a)  one per cent. of the turnover in State or turnover in Union territory in case of a manufacturer,

(b) two and a half per cent. of the turnover in State or turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and

(c) half per cent. of the turnover in State or turnover in Union territory in case of other suppliers,

subject to such conditions and restrictions as may be prescribed:

Provided that the Government may, by notification, increase the said limit of fifty lakh rupees to a higher amount, not exceeding one crore rupees, as may be recommended by the Council.

2. The registered person shall be eligible to opt under sub-section (1), if, 

(a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II;

(b) he is not engaged in making any supply of goods which are not eligible to be taxed under this Act;

(c)  he is not engaged in making any inter-State outward supplies of goods;

(d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and

(e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council:

Provided that where more than one registered person is having the same Permanent Account Number (issued under the Income-tax Act, 1961), the registered person shall not be eligible to opt for the scheme under sub-section (1) unless all such registered persons opt to pay tax under that sub-section.

3. The option availed of by a registered person under sub-section (1) shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1).

4. A taxable person to whom the provisions of sub-section (1) apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.

5. If the proper officer has reasons to believe that a taxable person has paid tax under sub-section (1) despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax and penalty.

The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section.

SGST Act of 2017

The GST Act allows the States to frame their own laws regarding GST.  An Act to make a provision for levy and collection of tax on intra-State supply of goods or services or both.

SGSTs usually comprise various chapters with various provisions for tax sharing.

SGST Act deals with the following sections

Chapter I - Preliminary

Chapter II - Administration

Chapter III - Levy And Collection Of Tax

Chapter IV - Time And Value Of Supply

Chapter V - Input Tax Credit

Chapter VI - Registration

Chapter VII - Tax Invoice, Credit And Debit Notes

Chapter VIII - Accounts And Records

Chapter IX - Returns

Chapter X - Payment Of Tax

Chapter XI - Refunds

Chapter XII - Assessment

Chapter XIII - Audit

Chapter XIV - Inspection, Search, Seizure And Arrest

Chapter XV - Demands And Recovery

Chapter XVI - Liability To Pay In Certain Cases

Chapter XVII - Advance Ruling

Chapter XVIII - Appeals And Revision

Chapter XIX - Offences And Penalties

Chapter XX - Transitional Provisions

Chapter XXI – Miscellaneous

IGST

Under GST, IGST is a tax imposed on all supplies of goods and/or services between States and will be regulated by the IGST Act. In both cases of import into India and export from India, IGST will refer to any supply of goods and/or services.

Under IGST, exports would have been zero-rated. The tax would be levied by the federal and state governments.

In addition to the Goods and Services Tax Act 2017, as stated above, it is also important to understand the following Acts which have been laid out in the GST Act. Out of these 18 Acts, 4 are specifically related to GST and another 14 are not directly related to GST, but few of the words used in those Acts have been integrated into the GST Act.

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