Levy and Collection of GST – Section 9 Under CGST Act 2017 and IGST Act 2017
The Goods and Services Tax (GST) is a destination-based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and the burden of tax is to be borne by the final consumer Levy and Collection of GST is done as per the provisions under the CGST Act 2017 and IGST Act 2017 in case of intra-state supply and inter-state supply respectively.
In case of intra-state supply, GST is levied as per CGST (Central Goods and Services Tax) Act, 2017, and in case of inter-state supply, GST is levied as per IGST (Integrated Goods and Services Tax) Act, 2017. CGST is levied on all the supplies of goods or services or both supplied within the state, except on the supply of alcoholic liquor for human consumption at such a rate as notified by the Central Government on the recommendation of GST Council.
The Central Goods and Services Tax (CGST) is to be paid on a reverse charge basis by the recipient on notified goods/ services or both and on the taxable supply of goods/ services to registered suppliers from the unregistered supplier.
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The Integrated Goods and Services Tax (IGST) is levied on all supplies of goods or services or both supplied from one state to another, except on the supply of alcoholic liquor for human consumption at such a rate as notified by the Central Government on the recommendation of GST Council. IGST is to be paid on a reverse charge basis by the recipient on notified goods/ services and on taxable inter-state supply of goods/ services to registered suppliers from the unregistered suppliers. The provisions under section 5 of the IGST Act are similar to Section 9 of CGST Act except that the word CGST has been substituted by IGST under IGST Act, under IGST Act, a tax called integrated tax is to be levied on all interstate supplies and on goods imported into India and maximum rate under section 5(1) of the IGST Act is 40%.
The central tax on the supply of petroleum crude, high-speed diesel, and natural gas and aviation turbine fuel shall be levied with effect from a date notified by the Government on the recommendations of the Council. Tax is also payable on intra-State supplies by the electronic commerce operator on notified services. Electronic commerce means the supply of goods or services or both, over a digital or electronic network. The consumers buy such goods/services through portals such as Flipkart, Uber, make my-trip, etc. Products as well as services are supplied by some other person to the consumer; on their electronic portal. The price/consideration for the product/service is collected by the ECO from the consumer and passed on to the actual supplier after the deduction of commission by the ECO. The Goods and Services Tax (GST) aims to make India a unified national market and remove the economic barriers to form an integrated economy in the national level. GST subsumes most of the Central and States indirect taxes into a single tax and helps in mitigation of ill effects of cascading. GST has widened the tax base and improved the taxpayer.
The new finance minister Arun Jaitley introduced the GST Bill in the Lok Sabha, where the BJP had a majority. In February 2015, Jaitley set another deadline of 1 April 2017 to implement GST. GST is a single comprehensive integrated indirect tax levied at multiple stage of production & distribution of goods & services in which taxes paid on inputs are allowed as set-off against taxes payable on output. Atal Bihari Vajpayee and his government was actual father of the GST as the government first conceptualized in 2000 to have uniform tax for one commodity across the nation. GST was first implemented by France in 1954, and after that approximately 160 countries have adopted this tax system in some form or another.
The Government may specify taxes on various categories of services supplied within the state of which shall be paid by the electronic commerce operator. However, in the absence of physical presence of an electronic commerce operator (ECO), any person representing such electronic commerce operator (ECO) for any purpose in the taxable territory shall be liable to pay tax. If the ECO is located in taxable territory, person liable to pay tax is the ECO, if the ECO does not have a physical presence in the taxable territory, person is liable to pay tax to person representing the ECO and if the ECO has neither the physical presence nor any representative in the taxable territory, person liable to pay tax is the person appointed by the ECO for the purpose of paying the tax where Taxes to be included and excluded from the list of GST.
Taxes to be subsumed in central GST include excise duty, additional excise duty, service tax, additional CVD, SAD customs, CST, central surcharges and cesses. Taxes to be subsumed in state GST include VAT, octroi and entry tax, purchase tax, luxury tax, tax on lottery, betting and gambling, state cess and surcharges and state entertainment tax.
Taxes not to be included in central GST include excise duty on tobacco and petroleum products and taxes not to be included in state GST include excise duty on liquor, VAT on petroleum products, VAT on alcoholic liquor for human consumption and local body entertainment tax.
The Goods and Services Tax (GST) came into effect from 1 July 2017 through the implementation of the Amendment of the Constitution of India by the Indian government. The GST replaced the existing multiple taxes levied by the central and state governments. Though the session of both the houses of parliament convened at the Central Hall of the Parliament was attended by high-profile guests from the business and the entertainment industry including Ratan Tata, it was boycotted by the opposition due to the predicted problems that it was bound to lead for the middle and lower class Indians. GST was boycotted by the opposition due to the predicted problems that it was bound to lead for the middle- and lower-class Indians. GST rates have been modified multiple times. India adopted a dual GST model, meaning that taxation is administered by both the Union and state governments. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central Government. For intra-state transactions and imported goods or services, Central Government and State GST (SGST) is levied by the State governments. An e-Way Bill is a paperless, technology solution and critical anti-evasion tool for shipping goods. GST eliminates the cascading effect of tax, provides higher threshold for registration and composition scheme for small businesses, improved efficiency of logistics and enables defined treatment for E-commerce operators. GST integrated different taxes such as Central Excise, Service Tax, Sales Tax, Luxury Tax, Special Additional Duty of Customs, etc. into one consolidated tax. GST boost tax revenues reduce the tax outflow in the hands of the consumers and make exports competitive. Sub-section 1 of section 9 of the GST Act, 2017 that for all intra state supplies of taxable goods or services or both there shall be levied a tax called “Central Goods & Service Tax (CGST)” on the value as determined under Section 9 of the said act related to provisions for Levy and Collection of GST.
It has been clarified that supply of alcoholic liquor for human consumption is kept out of the purview of the same.
Sub-section 2 states that the CGST on crude oil, high speed diesel, aviation turbine, motor spirit (petrol), shall be levied with effect from the date as may be notified by the Government on the recommendations of Council.
Sub-section 3, sates that Government may by notification, specify categories of supply of goods or services or both, where the tax shall be paid on reverse charge basis by the recipient of such goods or services or both. It clarifies that all the provisions of this Act, shall apply to the recipient as if he is the person liable for paying the tax.
In sub-section 4, it has been further clarified that the supply of goods or services or both by unregistered person to a registered person, tax in this case shall be paid on the reverse charge basis, i.e. tax is to be paid by the recipient of such taxable goods or services or both, as if he is the person liable to pay tax.
Sub-section 5 deals with the intra-state supply of specific services through electronic commerce operator. It states that if the above stated services are supplied through the electronic commerce operator, then the electronic commerce operator shall be liable for paying tax.
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