15 things you should know about Model GST Law

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15 things you should know about Model GST Law
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• On June 14, 2016 the Finance Ministry has
  released the 'Model GST Law'. It outlines the
  structure of the GST regime. Further, the draft
  of 'Integrated GST Bill, 2016' is also released
  along with such Model GST laws. It also provides
  the framework for levy and collection of CGST and
  SGST. "CGST" is the tax levied under the Central
  Goods and Services Tax Bill, 2016. "IGST" is the
  tax levied under the Integrated Goods and
  Services Tax Bill, 2016.
• Key takeaways from Model GST law are given
  hereunder
• 1) Threshold limit for registration
• The dealer is required to take registration under
  this law if his aggregate turnover in a financial
  year exceeds Rs.9 lakhs. However, dealers
  conducting business in any North Eastern State
  are required to take registration if their
  turnover exceeds Rs.4 lakhs.
• 2) Place of registration
• The dealer has to take registration in the State
  from where taxable goods or services are supplied.

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• 3) Migration of existing taxpayers to GST
• Every person already registered under extant law
  will be issued a certificate of registration on a
  provisional basis. This certificate shall be
  valid for period of 6 months. Such person will
  have to furnish the requisite information within
  6 months and on furnishing of such information,
  final registration certificate shall be granted
  by the Central/State Government.
• 4) GST compliance rating score
• Every taxable person shall be assigned a GST
  compliance rating score based on his record of
  compliance with the provisions of this Act. The
  GST compliance rating score shall be updated at
  periodic intervals and intimated to the taxable
  person and also placed in the public domain.
• 5) Levy of Tax
• The person registered under this law is liable to
  pay tax if his aggregate turnover in a financial
  year exceeds Rs 10 lakhs. However, a dealer
  conducting business in any of the North Eastern
  is required to pay tax if his aggregate turnover
  exceeds Rs. 5 lakhs.
• A negative list has also been prescribed for
  transactions and activities of Government and
  Local Authorities which shall be exempt from GST
  levy, like activities of issuance of passport,
  visa, driving license, birth certificate or death
  certificate, etc.

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• 6) Taxable Event
• The taxable event under GST regime will be supply
  of goods or services. Supply includes all forms
  of supply of goods and/or services such as sale,
  transfer, barter, exchange, license, rental,
  lease or disposal made or agreed to be made for a
  consideration. It also includes importation of
  service, whether or not for a consideration.
• 7) Point of taxation
• CGST/SGST shall be payable at the earliest of the
  following dates, namely
•   (i) Date on which the goods are removed for
  supply to the recipient (in case of movable
  goods).
•  (ii) Date on which the goods are made available
  to the recipient (in case of immovable goods).
• (iii) Date of issuing invoice by supplier or
• (iv) Date of receipt of payment by supplier or
•  (v) Date on which recipient shows the receipt of
  the goods in his books of account.
• 8) TCS on online sales of goods or service
• Every E-commerce operator engaged in facilitating
  the supply of any goods and/or services (like
  Amazon, Flipkart, etc.) shall collect tax at
  source at the time of credit or at the time of
  payment whichever is earlier.

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• 9) Valuation Rules
• Such Rules shall apply to the supply of goods
  and/or services under the IGST/CGST/SGST Bill.
  Some of the methods prescribed for valuation are
  given hereunder
• a) Transaction Value As per this method the
  value of goods and/or services shall be the
  transaction value.
•   b) Transaction value of goods or services of
  like kind Where value of supply cannot be
  determined under previous method i.e. point a,
  the value shall be determined on the basis of
  transaction value of goods and/or services of
  like kind and quality supplied at or about the
  same time to customers.
•   c) Computed Value Method Where value cannot be
  determined under previous method i.e., point b,
  it shall be based on computed value which shall
  include cost of production, manufacture or
  processing of the goods or, the cost of the
  provision of services, the charges, if any, for
  design and brand and amount towards profit and
  general expenses.
•   d) Residual Method Where the value cannot be
  determined under the computed value method, the
  value shall be determined using reasonable means
  consistent with the principles and general
  provisions of these Rules.

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