GST Tip – 287

Notification No. 13/2017-Central Tax (Rate) provides the list of services on which reverse charge is applicable. The list of services are, Supply of Services by a goods transport agency (GTA), services by advocates, Services supplied by an arbitral tribunal to a business entity, Services provided by way of sponsorship to any body corporate
or partnership firm, specified services provided by Services supplied by the Central
Government, State Government, Union territory or local authority, services of a director, insurance agents, recovery agents of banks or financial institutions, etc, for detailed list view the Notification Rate 13 2017

 

No shortage of Essential Drugs post introduction of GST, smooth supplies being maintained: Shri Mansukh L. Mandaviya

Minister of State for Road Transport & Highways, Shipping and Chemicals & Fertilizers, Shri Mansukh L. Mandaviya, in a written reply to a question in Rajya Sabha today, informed that as per the information received from the All Indian Origin Chemists & Distributors Limited (AIOCD), there is no shortage of essential drugs and smooth supplies are being maintained.

Shri Mandaviya informed the House that a facility for reporting shortage of medicines, if any, by the public has been provided by the National Pharmaceutical Pricing Authority (NPPA) through helpline number 1800111255, Pharma Jan Samadhan, Whatsapp Mobile Number (9695736333) and twitter handle (https://twitter.com/nppa_india).

The Minister stated that NPPA had earlier received a number of complaints from individuals through Whatsapp in the first week of July about non-availability of some formulations. These complaints of non-availability of a particular drug do not appear to be due to introduction of GST. However, in all these cases, the concerned companies have been instructed to coordinate with the complainants and ensure supply of medicine to the complainants.

Shri Mandaviya informed that NPPA has recently revised the ceiling price of scheduled formulations on account of implementation of GST and have reduced the ceiling prices to the extent the excise duty component was included in the ceiling prices.

Further, the Minister stated that the Government has taken steps to allay the fear of retailers and wholesalers about getting tax refund in time, in case of expired goods. Return of expired goods would be governed by the provisions of Section 34 of the Central Goods and Services Act, 2017.

Shri Mandaviya informed that a manufacturer may issue a credit note within the time specified in sub-section (2) of Section 34, subject to the condition that the person returning the expired medicines reduces his inputs tax credit. Subsequently, at the time when the expired goods are destroyed, the manufacturer has to reverse his input tax credit on account of the goods being destroyed. Further, where the goods are returned after the time limit specified in Section 34(2), the registered person returning the goods shall issue a tax invoice as it will be a supply within the meaning of the said Act.

The Minister also stated that to allay the fear of stakeholders on implementation of GST, NPPA has conducted various meetings with Pharmaceutical Associations/Federations etc including Wholesalers and Retailers Associations and the issues raised by the stakeholders have been appropriately addressed.

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VM

(Release ID :169241)
(Release ID :169241)

GST Tip – 286

Notification No. 14/2017-Central Tax (Rate), activities or transactions undertaken by the Central Government or State Government or any local authority in which they are engaged as public authority, shall be treated neither as a supply of goods nor a supply of service, namely:- “Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution.”

GST Tip – 285

Notification No. 15/2017-Central Tax (Rate), refund of un utilized input tax credit is allowed in case of sub-item (b) of item 5 of Schedule II of the Central Goods and Services Tax Act. It refers to “(b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly,
except where the entire consideration has been received after issuance of completion
certificate, where required, by the competent authority or after its first occupation,
whichever is earlier.”

Benefits of the reduced rates/tax rebate to the consumers post GST

The GST Council comprising the representatives of Central and State Government recommended the GST rates for goods and services, interalia taking into account the pre-GST indirect taxes incidence on goods and service. The GST rates on goods have since been notified. With the GST rates so notified the tax incidence on items like food grain, milk, egg, sugar, vegetable edible oils, spices in GST regime is lower than the tax incidence in the pre-GST regime.

GST tax rates have been fixed with the objective of maintaining revenue-neutrality in the post-GST regime.

Section 171 of the Central Goods and Services Act, 2017 provides for Anti-Profiteering measure according to which any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices and the Central Government is in the process of constituting an Authority to examine the same. Many business entities have reduced the prices of their goods and services in view of lower GST rates under the GST regime. They have been publishing these revised rates in leading newspapers from time to time for consumer benefit.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Lok Sabha today.

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DSM/SBS/KA
(Release ID :169198)

Features of GST

Goods and Services Tax (GST) is intended to bring transparency and accountability in business transactions along with the ease of doing business and rationalization in tax rates and will not pave the way for financialization of the country.

The foremost benefit of GST is to remove hurdles in inter-State transactions resulting in the setting up of a common market. This make ‘one nation, one tax and one market’ true in the country.Further, in case of inter-State supply, only integrated tax is to be levied while in intra-State supplies, central tax and State tax or Union territory tax is to be levied. Thus, the plethora of taxes being levied by the Centre and the States in the erstwhile regime has been replaced by simpler and more efficient taxation system.

GST will promote business and development by making the taxation structure easy and by eliminating the numerous taxes. The GST laws have been framed in such a manner that a multitude of taxes have been replaced by one tax. The details of the taxes subsumed under GST are as under.

(A) Taxes related to Centre:

i. Central Excise duty
ii. Duties of Excise (Medicinal and Toilet Preparations)
iii. Additional Duties of Excise (Goods of Special Importance)
iv. Additional Duties of Excise (Textiles and Textile Products)
v. Additional Duties of Customs (commonly known as CVD)
vi. Special Additional Duty of Customs (SAD)
vii. Service Tax
viii. Central Surcharges and Cesses so far as they relate to supply of goods or services.
(B) Taxes related to State 

i. State VAT
ii. Central Sales Tax
iii. Luxury Tax
iv. Octroi and Entry Tax (all forms)
v. Entertainment and Amusement Tax (except when levied by the local bodies)
vi. Taxes on advertisements
vii. Purchase Tax
viii. Taxes on lotteries, betting and gambling
ix. State Surcharges and Cesses so far as they relate to supply of goods or services.
GST will improve productivity and easiness of business as the entire nation has been converted into a single market by removal of hurdles to inter-State trade. Further, uniform tax rates along with reduction in the cascading effect of taxation and increased input tax credit utilization in GST would immensely benefit the nation. There is automation of all major business processes viz., registration, payment of tax, return filing, etc.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Lok Sabha today.

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DSM/SBS/KA
(Release ID :169201)

Printing of Post-GST Rates on Old Stock

On account of implementation of GST there may be instances where the retail sale price printed on a pre-packaged commodity is required to be changed. The Department has issued an order according to which, manufacturers/ packers/ importers of pre-packaged commodities are allowed to declare the revised retail sale price (MRP), by way of stamping or putting sticker or online printing, as the case may be, on the unsold stock manufactured/ packed/ imported prior to 1st July, 2017, if any, in addition to the existing retail sale price (MRP), for three months i.e. upto 30th September, 2017. Use of un-exhausted packaging material/ wrapper has also been allowed upto 30th September, 2017 after making the necessary corrections.

Further, vide this advisory, it has been informed that for reducing the Retail Sale Price (MRP), a sticker with the revised lower MRP (inclusive of all taxes) may be affixed and the same shall not cover the MRP declaration made by the manufacturer or the packer, as the case may be, on the label of the package.

Therefore, declaration of the revised retail sale price (MRP) on the pre-packaged commodities, by way of stamping or putting sticker or online printing, as the case may be, has already been allowed where on account of implementation of GST, the retail sale price of a pre-packaged commodity is required to be changed/ revised.

This information was given by Shri C. R. Chaudhary, the Minister of State for Consumer Affairs, Food and Public Distribution, in a written reply to a question in Rajya Sabha, today.

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AK
(Release ID :169222)

Sale of bottled water on same rate Post GST

On account of implementation of GST there may be instances where the retail sale price of a pre-packaged commodity is required to be changed. Department of Consumer Affairs has therefore issued an advisory on the matter.

Further, vide this advisory it has been informed inter alia, that for reducing the Retail Sale Price (MRP), a sticker with the revised lower MRP (inclusive of all taxes) may be affixed and the same shall not cover the MRP declaration made by the manufacturer or the packer or importer, as the case may be, on the label of the package, which includes the packed water bottles also.

The said information has already been disseminated to all the Controllers of Legal Metrology of all States/ UTs for immediate necessary action.

Further, Section 171 of the GST Act provides that:

(1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.

(2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.

This information was given by Shri C. R. Chaudhary, the Minister of State for Consumer Affairs, Food and Public Distribution, in a written reply to a question in Rajya Sabha, today.

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AK
(Release ID :169227)

Notification No. 17/2017 – Central Tax

Notification No. 17/2017 – Central Tax – New Delhi, the 27th July, 2017

GST Tip – 284

As per Notification No. 11/2017-Central Tax (Rate), Central Tax is to be levied at Nil rate for Support services to agriculture, hunting, forestry, fishing, mining and utilities which are falling under HSN / SAC 9986. For details of services falling under 9986 refer to https://indiagstdotin.wordpress.com/2017/07/28/support-services-to-agriculture-hunting-forestry-fishing-mining-and-utilities/