According to the approved bills, a state-wise single registration will be introduced for a taxpayer for filing returns, paying taxes and to fulfil other compliance requirements. Most of the compliance requirements would be fulfilled online. A taxpayer has to file one single return state-wise to report all his supplies, whether made within or outside the state or exported out of the country and pay applicable taxes on them.
A business entity with an annual turnover of up to Rs 20 lakh would not be required to take registration in the GST regime, unless it voluntarily chooses to do so to be a part of the input tax credit (ITC) chain. The annual turnover threshold in the Special Category States for not taking registration is Rs 10 lakh. A business entity with turnover up to Rs 50 lakh can avail the benefit of a composition scheme under which it has to pay a much lower rate of tax and has to fulfil very minimal compliance requirements.
In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the law. The ITC entitlement arising out of taxes paid under the Central law can be cross-utilised for payment of taxes under the laws of the states or Union territories.
In the services sector, the existing mechanism of Input Service Distributor (ISD) under the service tax law has been retained to allow the flow of ITC in respect of input services within a legal entity. To prevent lock-in of capital of exporters, a provision has been made to refund, within 7 days of filing the application for refund by an exporter, 90 per cent of the claimed amount on a provisional basis.
In order to ensure a single administrative interface for taxpayers, a provision has been made to authorise officers of the tax administrations of the Centre and the states to exercise the powers conferred under all acts.
Detailed transitional provisions have also been provided to ensure migration of existing taxpayers and seamless transfer of unutilised ITC in the GST regime. An anti-profiteering provision has been incorporated in the bills to ensure that the reduction of tax incidence is passed on to the consumers. Commissioner has been empowered to allow payment of taxes in instalments to mitigate any financial hardship being suffered by a taxpayer.
The State GST (SGST) Bill and the Union territory GST (UTGST) Bill, which would be almost a replica of the CGST Act, would be taken-up for approval after their legal vetting in the next meeting scheduled on March 16. (KD)
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