Customer Care No.

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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
Customer
The dealerCare
hasNo.
to 91-11take registration in the State from where

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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
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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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