Major changes in proposed gst bill in lok sabha

CA Amrita Chattopadhyay (Audit & Assurance) (13029 Points)

30 March 2017  


1. Non - applicablility of GST law in the State of Jammu & Kashmir 

2. Change in the scope of Taxable event i.,e supply

Employer and Employee were covered in the definition of related person. Thus any supply of Goods or service by his employer to his employees even if that supply is free of cost would have been covered under the scope of GST. Now the bill provides that such gifts not exceeding Rs.50,000 by an employer to an employee shall not be treated as supply for the purpose of GST.

3. Removal of uncertainity relating to chargeability of GST on supply of immovable property

With regard to sale of land and sale of building, the Government has removed the uncertainity by providing that sale of land and sale of building except the sale of under construction building will neither be treated as supply of goods not a supply of services. Thus GST can't be levied in those supplies.

4. Non chargeability of GST on actionable claims

In schedule III of newly introduced bill, actionable claim, other than lottery, betting and gambling will neither be treated as a supply of goods not a supply of services. Thus GST can't be levied in that case.

5. Fixing the upper cap of GST rate at 20% in case of CGST law, and 40% in case of IGST law.

6. Payment of GST by receipient under Reverse Charge in case of supply of taxable goods or services or both by a unregistered supplier to a registered person. Liability to pay GST in such cases will be on the recipient of such goods or services.

7.With respect to the composition scheme, 1% of composition rate will be applicable in case of a manufacturer instead of earlier 2.5%. further 0.5% will be applicable to trader instead of 1%. Further, it will be applicable to restaurant sector with composition rate of 2.5%.

8. A registered person whose aggregate turnover in the preceeding financial year did not exceed may opt to pay under composition scheme.

9. Change in the provision for determining the liability to pay tax in case of Services (Time of supply of services)

10. Change in Actual payment condition for Non-reversal of Credits, earlier only the services was included for the reversal of credit if amount is not received within 90 days. The time has been extended to 180 days and the supply of goods has also been included.

11. Earlier the credit of rent a cab, life insurance, and health insurance were fully denied except where the Govt. notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force. Now the credit would be allowed to make making an outward taxable supply of same category.