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State Finance Ministers approved model GST bill

Update On :17 June 2016

State Finance Ministers approved model GST bill

The model Goods and Services Tax (GST) law has been approved at the Empowered Committee of state finance ministers meeting in which all purchases made online will attract a uniform GST. This is passed with the aim to bring ecommerce companies under purview and it will likely to take effect from April 2017. The tax, in lieu of local levies, will be imposed at the first point of financial transaction. This clears the air on applicability of GST in e-commerce in cases where goods were being sold in one state but was being bought in another state.

E-commerce companies have to currently deal with a complex tax framework involving VAT, central sales tax (CST), excise, and service taxes. The model GST law will unify the myriad indirect taxes and has 162 clauses and four schedules. It has also suggested a jail terms of up to five years and fine for violation of the provisions of the statute. The states will draft their own State GST based on the draft model law with minor variations, incorporating state-specific exemptions. It prescribes a threshold of Rs. 9 lakh annual turnover for applicability of the new levy and INR 4 lakh for businesses in North Eastern states including Sikkim. GST would be payable on the transaction value, being the price actually paid or payable and said to include all expenses in relation to sale such as packing and commission.

Revenue Secretary Hasmukh Adhia tweeted that the committee request all stakeholders to give their suggestions/ comments to secretariat of Empowered Committee of FMs and or to finance ministry. Government is hoping to get the Constitution Amendment Bill passed by Parliament in the upcoming Monsoon Session. It plans to roll out GST from April 1, 2017 that will subsume excise, service tax and all local levies. After the meeting of Empowered Committee on the long awaited indirect tax reform, Finance Minister Arun Jaitley said that virtually all states have supported the idea of GST except Tamil Nadu which has some reservations.

News Source From : http://gadgets.ndtv.com/internet/news/all-online-purchases-will-attract-goods-and-services-tax-says-model-law-849345

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