Goods And Service Tax India

The road map to GST in India envisages the reduction in CST rate from 4% to 0% by 1st April 2010 and accordingly, the CST rate should have been reduced to 2% from 1st April 2008. However, the Cental Government has not issued any notification reducing the rate so far.

Therefore, till the notification is issued, the rate of CST will continue to be 3%.

It appears that the question of compensation of the loss to the State Governments on account of the reduction has not been resolved yet and the notification will be issued on after an agreement is reached between the Central and State Governments in this regard.

Strange, but true.

The Commercial Tax Authorities have been contending that discount received should be treated as turnover and that the dealer should pay tax thereon.

I am unable to find any provision in the Act or the Rules that supports the contention of the authorities.

Sec 2(xliv) defines “sale price” as the consideration received less any discount allowed.

Explanation III(ii) to Sec 2(lii) says that any discount allowed shall not be included in the turnover where such discount is shown separately in the invoice.

Kerala introduced VAT from 1 April 2005. The assessments under the KGST Act were for 4 to 5 years in arrears in case of majority of assessees. The Finance Minister and the Commercial Taxes Department realised that completion of pending assessments under the KGST Act was affecting the proper administration of VAT. They then came out out with a novel scheme - Adalats to clear pending cases. Teams of 4 assessing officers were created to sit together and complete the assessments. Decisions were taken by the team on the spot and the assessee was informed the balance amount of tax due and a challan was issued. As soon as the assessee made the payment, assessment orders signed by all the members of the team was issued.
Today, 20th Nov 2007, a Mega Adalat was conducted for the Ernakulam Dist at Town Hall in Ernakulam. It is said that more than 3000 cases are likely to be cleared. The Finance Minister was at the venue personally to ensure that proper arrangements were made.
I record my appreciation of the arrangements made at the venue. The reception area was well manned and each person was issued a numbered token and directed to the booth were the assessing officers were available. Inside the hall, cubicles were arranged on the sides for the various circles and excellent arrangements were made for seating of the visitors. The Adalat was conducted in a very professional manner and the entire process completed in 15 to 20 minutes. The officers of the Department appear to have worked really hard to have all the paper work done in time. I must also commend the Department for ensuring the welfare of the officers by proving good food and other amenities.
Good work. And a big thank you from the assessees for hassle free completion of the assessments.

The Kerala Finance Act, 2007 has finally been enacted with a number of changes from the proposals in the Kerala Finance Bill, 2007.

The Third Schedule has been amended to replace the list of IT Products taxed @ 4%. A major change is the new HSN Code of printers. Earlier Printers were under HSN Code 8471 and multi-function devices comprising copier, printer, scanner and fax were also classified under this Code and were taxed @ 4%. The Kerala Government had maintained that this was not correct as photocopiers were taxed @ 12.50%. However, as these devices were classified under HSN Code 8471, they were liable to be taxed @ 4% and not 12.50%.