ATM withdrawals, loan processing charges and costs of other banking and financial services have gone up as banks, brokers, distributors, mutual fund houses, insurers will now levy GST at 18% instead of the existing Service Tax at 15 percent.
As per the GST code, the head office and branches of banks and asset management companies are taken as separate entities. This means they would have to register in each state they have a presence in, increasing the burden of compliance and reporting, though clarity is still awaited on this issue.
India is one of the fastest growing global economy and in the way to becoming the new global manufacturing hub. While manufacturing activities are on rising, we are also witnessing expansion in foreign trade both imports and exports.
Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed
As per the Model GST Law, GST will subsume Countervailing Duty(CVD) and Special Additional Duty (SAD), however, Basic Customs Duty will continue to do its round in the import bills. BCD has been kept outside the purview of GST and will be charged as per the current law only.
Gift has not been defined in the GST law. In common parlance, gift is made without consideration, is voluntary in nature and is made occasionally. It cannot be demanded as a matter of right by the employee and the employee cannot move a court of law for obtaining a gift.•The government has said gifts of value of up to Rs 50,000 given by an employer to its employee are outside the ambit of GST. Perquisites such as membership of a club or health and fitness centre provided free of charge to all employees by an employer will not be subject to GST if they are part of the employment contract and appropriate GST was paid when these services were procured by the employer.•Additionally, free membership of clubs, health and fitness centres are also outside the GST purview. It is pertinent to point out that the services by an employee to the employer in the course of or in relation to his employment is outside the scope of GST (neither supply of goods or supply of services), the government said in a statement.
A works contract is a mixture of service and transfer of goods. Examples of works contract are construction of a new building, erection, installation of plant and machinery.• Composition scheme is not available to works contractors as it is treated as service under GST. Composition scheme is only available to suppliers of goods. This will be a big blow to the small sub-contractors who cannot opt for composition scheme. They will be forced to register for normal taxation scheme increasing their compliances and costs.
There is palpable concern among taxpayers and businesses over how the new system will work out. Despite the anxiousness, taxpayers across the country have responded very positively to the new interface, with a majority of them having already completed their migration to the new portal.