NEXT STEPS GOODS AND SERVICES TAX: THE ROADMAP TO GST
Revenue Secretary’s presentation on next steps required about GST after passage of Constitution Amendnent Bill
- Establishment of Legal Framework
• Preparation of IT infrastructure
• Change Management:
- Training of Officials and Staff
- Outreach and Consultation with trade and industry
- Target date of GST Roll Out: 1st April 2017
ESTABLISHMENT OF LEGAL FRAMEWORK
- Passage of the Constitution Amendment Bill from Parliament: First week of August 2016
- Ratification by 50% States
- Presidential Assent of Constitution Amendment and notification in official Gazette
- Cabinet Approval for Formation of GST Council
- Recommendation of Model GST laws by GST Council
- Cabinet Approval for the CGST and IGST laws by Centre and for SGST laws by ALL states
- Passage of CGST and IGST laws in the Centre and passage of SGST laws in ALL states: Winter Session 2016
- Notification of GST Rules
PREPARATION OF IT INFRASTRUCTURE
- Goods and Services Tax Network (GSTN):
Not-for-profit, non Government Company set up by Centre and States to provide shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders.
- Frontend Processes: Common modules for registration, returns and payments being developed by GSTN.
- Backend Processes: Modules for backend processes of tax authorities such as processing registration/returns, assessments, audit, appeals, etc.
- Development of GST Frontend and Backend for 17 States by GSTN: End December 2016
- CBEC’s Backend systems: End November 2016
- Backend systems of 14 States: End November 2016
- Backend systems of Pr. CCA, Banks, RBI & State accounting authorities: End November 2016
- Testing and integration of GST Frontend and backend of all stakeholders: Jan – March 2017
CHANGE MANAGEMENT
- 60,000 officials of Centre and State Governments to be trained on GST laws and IT framework: till lowest level assessing officer in States and Centre
- Training on GST Laws:
- Phase I: Source Trainer’s workshop (25 officers) – Completed.
- Phase II: Master Trainer Sessions (350 officers) – Till Mid August 2016
- Phase III: Trainer Sessions (1000 officers)– Till October 2016
- Phase IV: Last leg training sessions (60,000 officers): End December 2016
- Training on GST IT systems: To be held in similar pyramidal structure by GSTN: December 2016 – March 2017
- Outreach and sensitisation for trade and industry:
- Stakeholder consultation and outreach workshops to be organised across the country – have already started with Hyderabad and Jaipur
- To be completed by March 2017
REGISTRATION
- Existing dealers :
- No fresh registration needed for existing dealers. Existing VAT/Service tax/Central Excise dealer data to be migrated to GST system.
- New dealers :
- Single application to be filed online for registration under Goods & Services Tax (GST).
- The registration number will be PAN based and will serve the purpose for Centre and State.
- Each dealer to be given unique id GSTIN
- Registration to be granted within 3 days.
- Post registration verification in risk based cases only.
RETURNS
- Common return would serve the purpose of both Centre and State Government.
- Most average tax payers would be using only four forms for filing their returns. These are return for supplies, return for purchases, monthly returns and annual return.
- Small taxpayers: Small taxpayers who have opted composition scheme shall have to file return on quarterly basis.
- Filing of returns shall be completely online.
- All taxes can also be paid online.
MAJOR CHALLENGES
- Calculation of Revenue Base of Centre and States, along with compensation requirements of Centre
- GST Rates structure
- List of Exemptions
- Forming of consensus on Model GST Bill
- Threshold limits
- Compounding limits
- Cross Empowerment to mitigate ill-effects of Dual Control