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.
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 ith 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.
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.