Daily : July 3, 2017

India ushers in GST amid historic midnight session of Parliament

GST – transformation of the Indirect Taxation Landscape

Question: Goods and Services Tax (GST) was approved by the Parliament through…
(a) 101st Constitutional Amendment Act
(b) 99th Constitutional Amendment Act
(c) 98th Constitutional Amendment Act
(d) 102nd Constitutional Amendment Act
Ans: (a)

  • Goods and Services Tax (GST), a historic tax reform, has come into effect since 1st July, 2017.
  • A function was organized in the Central Hall of Parliament on the mid-night of 30th June – 1st July, 2017 to commemorate the historic occasion.
  • The occasion was graced by the Hon’ble President, Hon’ble Vice President, Hon’ble Prime Minister, Hon’ble Speaker of Lok Sabha and Hon’ble Union Finance Minister among other dignitaries.
    GST- evolution of the idea:
  • In December 2002, the Kelkar Task Force on indirect taxation suggested a comprehensive Goods and Services Tax (GST) based on the Value Added Tax principle.
  • The proposal to introduce GST was first mooted in the Budget Speech for the financial year 2006-07.
  • Since the proposal involved restructuring and reform of not only indirect taxes levied by the Centre but also the States, the responsibility of preparing a design and a plan of action for the implementation of GST was assigned to the Empowered Committee of State Finance Ministers which had been formed earlier for implementation of the Value Added Tax.
  • The Empowered Committee of State Finance Ministers submitted its final report which became the backbone for drafting the Bill.
  • In 2011, UPA II moved a Constitution Amendment Bill in Lok Sabha. It was referred to Parliamentary committee.
    After the 101st Constitutional Amendment Act:
  • After the assent of the Hon’ble President on 8th September, 2016, the 101st Constitutional Amendment Act, 2016 came into existence. The GST Council was constituted on 15.9.2016.
  • Since its formation in September, 2016 the GST Council has held 18 meetings.
  • The Finance Ministers of all the States or their representative along with State and Central govt. officials have participated in these extensive meetings and formulated the law and procedure to implement this historic tax reform. It was a mammoth task involving 27000+ man hours of intensive work. More than 200 meetings of the officers of the Centre and States took place in different parts of the country to expedite the implementation of GST.
  • While framing GST Acts and Rules, enhanced ‘Ease of doing business’ for the taxpayers was a key consideration and accordingly the roles and responsibilities of the States and Central govt. have been defined.
  • In a short span of time, the GST council has cleared GST laws, GST Rules, Tax rate structure including Compensation Cess, Classification of goods and services into different rate slabs, exemptions, thresholds, structure for tax administration, etc.
  • All the decisions of Council were taken with consensus. While formulating the Acts and Rules, extensive participatory consultations with trade and industry including other significant stakeholders were undertaken. Feedback was also obtained by posting draft Acts and Rules on the websites and inviting comments from the public.
  • On 29th March, 2017, Finance Minister of India tabled four Goods and Services Tax (GST) Bills for consideration and passage in the Lok Sabha namely The Central Goods and Services Tax (CGST) Bill, 2017, The Integrated Goods and Services Tax (IGST) Bill, 2017, The Union Territories Goods and Services Tax (UTGST) Bill, 2017 and the GST (Compensation to States) Bill, 2017.
  • They were passed by the Lok Sabha on 29th March, 2017 and by the Rajya Sabha on 6th April, 2017.
    The final Structure of GST:
  • The threshold limit for exemption from levy of GST is Rs. 20 lakh for the States except for the Special Category, where it is Rs 10 Lakh.
  • A four slab tax rate structure of 5%, 12%, 18% and 28% has been adopted for GST.
  • A cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the GST rate of 28% for payment of compensation to the states.
  • The threshold for availing the Composition scheme is Rs. 75 lakh except for special category States where it is Rs. 50 lakh and they are required to file quarterly returns only. Certain categories of manufacturers, service providers (except restaurants) are out of the Composition Scheme.
  • GST envisages all transactions and processes to be done only through electronic mode, to achieve non-intrusive administration. This will minimise tax payers physical interaction with the tax officials.
  • GST provides for the facility of auto-populated monthly returns and annual return.
  • It also facilitates the taxpayers by prescribing grant of refund within 60 days, and provisional release of 90% refund to exporters within 7 days. Further facilitation measures include interest payment if refund is not sanctioned in time, and refund to be directly credited to bank accounts.
  • Comprehensive transitional provisions for ensuring smooth transition of existing taxpayers to GST regime, credit for available stocks, etc.
  • Other provisions include system of GST Compliance Rating, etc.
  • Anti-profiteering provisions for protection of consumer rights.
    IT backbone of GST : Role of GST Network (GSTN)
  • GSTN has been created as a section 25 private limited company with Strategic Control with the Government, to function as a common Pass-through portal for taxpayers.
  • On this common portal, taxpayers will submit their registration applications, file returns, make tax payments, claim refunds etc.
  • GSTN has been provided with a robust IT platform and it will provide interface to 80 lakh taxpayers and thousands of tax officials.
  • All filings under GST will be done electronically. While GSTN remains a front-end, at the back end, the IT systems of CBEC and different states interface with the GSTN IT network to provide a seamless end to end processing of tax returns for the taxpayers. 64,000 officials have been trained on the GST portal from February till June 2017.
  • The GSTN IT systems have undergone load tests, performance tests, vulnerability tests, security and all other mandatory tests.
  • Enrolment of existing taxpayers of the State tax administrations and the Central Board of Excise and Customs to the GST system commenced on 8thNovember, 2016. More than 66 lakh taxpayers have activated their account at the GST portal.
  • GST Application on Payment has been operationalized. 25 banks have been integrated with the GST Common portal and will be providing e-payment and over the counter payment facilities as well as payment through NeFT/RTGS and credit/debit card.
    GST Outreach Programme
  • The Government has stepped up its outreach programme through various events, workshops, media and television to reach masses.
  • The field units of CBEC have run campaigns using mobile vans to reach the assessees at their door-step to help them with the GST migration and transitional issues. A total of 4700 workshops have been conducted across India.
  • An extensive multi-media campaign through print and electronic media, outdoor hoardings, etc. has been carried out for informing, educating and assisting taxpayers and other stake-holders to enable a smooth transition to GST.
  • The Central Board of Excise & Customs (CBEC) has also been restructured for administration of GST. The reorganisation involved bringing about structural changes and redeployment of human resources.
  • The field formations have been restructured as 21 CGST & CX Zones, 107 CGST & CX Commissionerates, 12 Sub-Commissionerates, 768 CGST & CX Divisions, 3969 CGST & CX Ranges, 48 Audit Commissionerates and 49 Appeal Commissionerates.
  • National Academy of Customs Indirect Taxes and Narcotics (NACIN) have conducted extensive training programs. In the first phase, nearly 52,000 officers were trained during September, 2016 to January, 2017 through a multi-layered training programme across India.
  • A Refresher Training was also conducted on updated Law, Rules and Procedures and a total of 17,213 officials were trained till 23rd June, 2017.
  • Under the Accredited GST Training Programme, 20 institutes have been certified as ‘Approved Training Partners’ to impart ‘quality training at reasonable cost’ to members of trade/industry and other stakeholders.
  • Besides that, training resources such as 500 FAQs on GST have been released in English, Hindi and 10 regional languages.
  • A twitter seva askGST_GOI has been started by the Government as an initiative to answer queries of the Tax Payers on a real time basis.
  • GST is the biggest tax reform since independence. It will pave the way for realization of the goal of One Nation – One Tax – One Market.
  • GST will benefit all the stakeholders namely industry, government and consumer. It will lower the cost of goods and services, give a boost to the economy and make the products and services globally competitive, giving a major boost to ‘Make in India’ initiative.
  • GST will make India a common market with common tax rates & procedures and remove economic barriers. GST is largely technology driven and will reduce the human interface to a great extent.
  • GST is expected to improve ease of doing business in India.


International Day of Co-operatives

International Day of Co-operatives

Question: International days of Co-operatives is celebrated on …
(a) 15th June
(b) 1st July, (1st Saturday in July)
(c) 5th July
(d) 10th July

  • On 1st July, (1st Saturday in July) International Day of Cooperatives was celebrated by Co-operators around the world.
  • Theme of International Day of Cooperatives, 2017 is ‘Co-operatives ensure no-one is left behind’.
  • Based on ethical values and principles, co-operative model open membership access to wealth creation and poverty elimination.
  • Co-operatives work on principle of members’ economic participation: ‘Members contribute equitably to, and democratically control, the capital of their co-operative.’
  • Co-operatives are people-centred, not capital-centred , they do not perpetuate, nor accelerate capital concentration and they distribute wealth in a more fair way.
  • United Nations General Assembly proclaimed the International Day of Cooperatives by the UN by resolution 47/90 of 16 December 1992.
  • International day of Cooperatives is celebrated on 1 July (first Saturday in July).


MoU between Rail Land Development Authority (RLDA) and NBCC

MoU between Rail Land Development Authority (RLDA) and NBCC

Question: According to a recently signed MoU between Rail Land Development Authority and National Building Construction Corporation, how many stations have been chosen for redevelopment?
(a) 7
(b) 8
(c) 9
(d) 10
Ans: (d)

  • On June 30, 2017, Rail Land Development Authority (RLDA), and National Building Construction Corporation (NBCC) signed a memorandum of understanding for implementation of station redevelopment projects for 10 identified stations in partnership with respective Smart Cities.
  • These 10 stations are – Tirupati, Delhi, Sarai Rohilla, Nellore, Madgaon, Lucknow, Gomtinagar, Kota, Thane New and Ernakulam Jn.
  • Rail Land Development Authority (RLDA) is an institution under Ministry of Railways and National Building Construction Corporation (NBCC) is a public sector undertaking of Ministry of Urban Development.
  • RLDA and NBCC shall form a Special Purpose Vehicle in the form of a Joint Venture (JV) Company to execute the station redevelopment project.
  • The JV shall redevelop the stations on a self-financing model. NBCC shall use its expertise in preparing DPR of the Project and business model.
  • RLDA shall extend necessary help to NBCC in arranging all requisite data pertaining to the stations and get the vacant land entrusted from Ministry of Railway as per approved master plan of the station.
  • The JV of NBCC and RLDA shall also enter into city support agreement with the respective Smart City Authorities and local bodies to obtain support relating to development of approach infrastructure and favorable Development Control Norms for the project.


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