H’ble
Finance Minister has tabled the CGST Law in Lok Sabha which is due for
discussion today. As per section 9(4) of the Central GST Act it has been
proposed that the purchaser of agricultural produce shall be liable to pay tax
in lines of purchase tax levied in present tax regime. In such a scenario where
a registered company buys agricultural produce from a farmer, GST has to be
paid. Although the rate for GST for produce cultivated out of land has been
proposed at zero, the segments like poultry farming, dairy farming, animal
rearing are likely to be taxed at higher rate. In such a scenario there shall
be compliance involved in case of agriculture. In the law tabled in the
parliament the definition of agriculture has been deleted and it has been
prescribed that agriculture would mean the produce cultivated out of land.
It has also
been proposed that apart from agriculture if a registered person buys any goods
or services from unregistered persons, the receiver shall be liable to deposit
the tax as if it was his own liability. This will virtually bring all the goods
and services under GST because due to disadvantages of unregistered person
every person would prefer to be registered under GST. For example. M/s ABC
Limited buys goods worth Rs. 1 lacs from Mr. Ram who is unregistered. The GST
rate on the said commodity be 18%. In such a scenario GST to the amount of Rs.
18,000/- has to be paid by M/s ABC Limited because of section 9(4). Had section
9(4) would not have been introduced no tax was to be paid on the said
transaction.
In such a
scenario, GST is going to have far reaching impact on common man as well as the
business units.
Keshav R Garg
(B.Com, CA, CS, ISA(ICAI))
Author: Bharat's GST Ready Reckoner
A Handbook on GST
Member: Indirect Tax Committee of CII, PHDCCI, MyGst.MyTax
Foundation
Advisor – Industries Association of Chandigarh
Address: 3328, Sector 27 D, Chandigarh, India - 160 019
Phones: +91-172-461-3328, +91-98880-90008
Mail: keshavgarg@kdai.in
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