Model GST law - Feast after a decade long fast

Indian Indirect tax payers have been greeted with a bouquet of complexities from the time immemorial. These taxpayers were in need of a single flower as antidote, which they now see budding in form of Model GST law released by the Union Government. The proposed scheme of GST aims to reduce the existing intricacies in administration of multiple indirect taxes. The much debated beauty and barriers of GST as a unified tax on goods and services has finally come to the rescue of taxpayers in the form of model GST law, framed by the Empowered Committee of State Finance Ministers.

The model law is designed in a manner that it can also be used by the states as blue print for state GST. At the outset, the model law proposes its applicability to whole of India and provides that different dates may be appointed for different provisions of the Act. The draft law appears to be largely premised on the existing state VAT laws and an attempt has been made to reconcile the philosophies of existing Central Excise, VAT and Service tax laws.

Golden chance to declare domestic black money at e􀁹ective tax rate of 31%

The Govt. has given an opportunity to persons who have not paid full taxes on their income of earlier years to come forward and declare the undisclosed income under the ‘Income Declaration Scheme’ (IDS). They are required to pay tax of forty-five per cent of such undisclosed income. The IDS is e ective from June 1, 2016 and will remain open up to September 30, 2016. The declarant is required to pay tax up to November 30, 2016.

However, various queries have been received by CBDT on IDS. Thus, the CBDT had issued three sets of FAQs till date. In the recent tranche of FAQs issued on June 30, 2016 the CBDT has clarified that once the person had declared undisclosed income, no question will be asked from where such income or tax is coming from. This assurance in the lasts FAQs (Question 5) issued by dept. will bring down the e ective tax rate from 45% to 31% on the undisclosed income. Let us understand this scenario with the help of illustration.