Model GST Bill, 2016 – Important Points to Know
The fate of the GST bill, and the related flutter and chaos, needs least introduction to any economical experts around the world. It is sensational attempt to touch. It was not tried by anyone else in the past or even in the current times, to come up with some reforms of such colossal magnitude.
Selective leakage of the model draft on Thursday has kindled the controversies further, to add on to the flutters and chaos about the fate of the GST bill, 2016.
Subcommittee II report has leaked the model of the act, selectively, on Thursday. The news is yet to be authenticated though. It is not presented in the government website authoritatively yet. Still, we are trying to analyze some significant areas based upon the model GST, act leak. It has to be progressive, the law which is to be implemented soon.
Securities that are brought under the ambit
Goods definition is not excluding the securities, which is not the case with the current value added tax rules. Supply of securities will totally be subjected to the Goods and supply services tax. Simultaneous existence of the GST and the securities transaction taxation, must be clearly worked out
Employer and the employee relationships
Related persons are including this bond between the staff and the business owner.
Anything other than the goods is coming under services
Unreasonable and broad definition in the GST bill, 2016 for services is unclear.
All the goods that are covered under the legal meteorology are subjected to be taxed under the retailing selling prices/ as per the GST bill, 2016.
All the industries that are thriving under the name of discounts are likely to be affected badly.
Dampening effect will firstly be seen on the ecommerce industry more than anywhere else. The policies deny any method of incentives and schemes. For Computing GST liability, all the discounts would be excluded for computing GST liability.
All the discounts that are offered in the invoices, must be made as deductions only
Supply related incentives cannot come under discounts. So, the same are not eligible for deductions either. It might not be recorded in the invoice. So, clarity in maintaining accounts is essential to avoid any levy of taxes on the same.
Domestic transactions and transfer pricing are complex to figure out.
Even the branch offices and the head offices, transactions are covered by GST bill.
Services that are put forth to the private usage are also deemed under the supplies without consideration.