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CONFERENCE ON GST Distance to GST – Has the Budget 2012 shortened it? Rohan CONFERENCE ON GST Distance to GST – Has the Budget 2012 shortened it? Rohan Shah Economic Laws Practice 02 nd June 2012

Background to the introduction of the Negative List Background to the introduction of the Negative List

Current Tax Cost in India Interstate purchase (CST) Local purchase VAT – 5%/12. 5% Current Tax Cost in India Interstate purchase (CST) Local purchase VAT – 5%/12. 5% Imports Customs Duty Basic – 10% CVD – 12% Ed. Cess – 3% Octroi – 0. 5 to 5% Local purchase VAT – 5%/12. 5% Retailer Dealer Factory Intra-State Ex. Duty – 12% Edu. Cess – 3% VAT– 5%/12. 5% Service Provider Serv. Tax – 12. 36% Stock transfer (No tax) Toll Manufacturer Inter-State Ex. Duty – 12% Edu. Cess – 3% CST – 2% VAT rate may range from 12. 5 -15% depending on the State Goods Transporter Serv. Tax-12. 36% Other Service Provider Serv. Tax – 12. 36% Central Levy Other Service Provider Serv. Tax – 12. 36% State Levy -Credit not fungible between State and Centre; resulting in a cascading impact of taxes - Cumulative burden of Indirect Taxes in India – 28% to 44% (approx. )

Current Taxes and Credits Addnl. duty of Customs Excise duty Service tax VAT (State Current Taxes and Credits Addnl. duty of Customs Excise duty Service tax VAT (State Sales tax) Central Sales tax Entry tax Octroi Excise duty Service tax VAT (State Sales tax) No Credit 4

Constitutional Framework. . . l Taxes levied by Central Government and State Government(s) l Constitutional Framework. . . l Taxes levied by Central Government and State Government(s) l Authority to levy a tax is derived from the Constitution of India n Which allocates power to levy various taxes between the Centre and State n Article 265 of the Constitution which states that "No tax shall be levied or collected except by the authority of law” l Article 246 of the Indian Constitution, distributes legislative powers including taxation, between the Parliament of India and the State Legislature l Schedule VII enumerates use of three lists; n List - I Where the parliament is competent to make laws n List - II Where only the state legislature can make laws n List - III Where both the Parliament and the State Legislature can make laws upon concurrently 5

. . . Constitutional Framework Union List • Income Tax State List • Taxes . . . Constitutional Framework Union List • Income Tax State List • Taxes on lands and • Custom Duty • Excise Duty • Corporation Tax • Service tax • Central Sales Tax • • Stamp duty in respect • of bills of exchange, cheques, promissory notes, etc • • buildings Excise duty on alcoholic liquor etc Entry tax Sales Tax Tolls Luxury Tax Stamp duty in respect of documents other than those specified in the provisions of List I Concurrent List • Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty The constant blurring of taxing jurisdiction between the Centre and the States has necessitated multiple Constitutional challenges 6

Constitutional Amendment Bill Introduction of Article 246 A in the Constitution: “Parliament and the Constitutional Amendment Bill Introduction of Article 246 A in the Constitution: “Parliament and the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by that State respectively. Provided that Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. ”

Duality of charge – pre negative list l Goods Vs. Services n n Lines Duality of charge – pre negative list l Goods Vs. Services n n Lines between the taxation of Goods & Services is constantly blurring Duality of Charge Sr. No. Activity Customs duty Central / State Excise duty Service tax VAT / CST 1. Intellectual Property Services 2. Import of Designs, Technical Know etc. . 3. Works Contract 4. Construction Services 5. Manufacture of Products liable to State Excise 8

Other pain points in the current system l Discrimination between manufacturers, service providers and Other pain points in the current system l Discrimination between manufacturers, service providers and traders n Non-uniform application of exemptions, credit provisions, etc. l Cascading impact of taxes n Multiple causes of irrecoverable tax costs l Accumulation of credits n Non-transferability – lack of fungibility n Inverted duty structures l Rate structure - no uniformity n no clear basis on which effective rates determined n Non availability of credits l Basis of levy of Service Tax was uncertain and variable Rendition / performance n Consumption / use n Receipt n

GST regarded as panacea to address all pain points GST regarded as panacea to address all pain points

Rationale for negative list Rationale for negative list

Rationale for Negative List… l First Concept Paper for Public Debate (August 2011) n Rationale for Negative List… l First Concept Paper for Public Debate (August 2011) n “There advantages in moving towards negative list at an earlier time in order to gain useful experience in its implementation and minimize the impact of the mammoth changes that GST may usher” l Revised Concept Paper on Taxation of Services based on Negative List (November 2011) n “Introduction of Negative List at an earlier stage will pave the way for the smooth transition to the GST, and significantly ease the challenges arising out of implementing the GST. ”

…Rationale for Negative List l FM’s speech (2012): “At the end of June this …Rationale for Negative List l FM’s speech (2012): “At the end of June this year, this tax will attain adulthood by completing 18 years. It is therefore time to shift gears and accelerate ahead. However, service tax needs to confront two important challenges to sustain the journey. These are: The share of services in taxes remains far below its potential. There is a need to widen the tax base and strengthen its enforcement; Service Tax law is complex and sometimes avoidably different from Central Excise. We need to bring the two as close as possible in the light of our eventual goal of transition to GST. ”

Negative list Negative list

Enactment of Finance Act, 2012 l. Provisions in Finance Bill enacted as Finance Act, Enactment of Finance Act, 2012 l. Provisions in Finance Bill enacted as Finance Act, 2012 on May 28, 2012 l. Negative list provisions to come into force from a date to be notified l. The Legislative scheme for the levy of Service Tax stands overhauled

Approach – Selective Vs Negative List Selective Approach – Negative List – all selected Approach – Selective Vs Negative List Selective Approach – Negative List – all selected services are taxable

Service Tax net widened 17 17 Service Tax net widened 17 17

Potential Revenue Impact Total Service Sector (approx. 57% of GDP) (A) 40% remains in Potential Revenue Impact Total Service Sector (approx. 57% of GDP) (A) 40% remains in the tax net 60% covered under the negative list, exemptions 40% attributable to the Informal sector (under threshold limit) 60% remains taxable (20 -25% of A) l Effective percentage of entire service sector that is covered under the tax net = 20 -25% (First Concept Paper) l Estimated net revenue gain consequent to changes in the Union Budget 2012 -13, relating to Indirect Taxes, estimated at Rs. 45, 940 crore (Budget Speech 2012 -13) n Service tax changes – Rs. 18, 660 crore additional revenue

Change in provisions – Finance Act Current Provisions under Finance Act Following provisions will Change in provisions – Finance Act Current Provisions under Finance Act Following provisions will cease to exist from a date to be notified Following provisions will come into force from a date to be notified Section 65 - Definitions Section 65 B - Definition Section 66 – Charging Section 66 B – Charging Section 66 C – Place of Provision Section 66 D – Negative List Section 66 E – Declared Services Section 65 A - Classification Section 66 F - Classification Section 67 A – Rate and Value Section 68 – Payment of Service tax Section 66 A – Charging Section in case of import of services Section 66 C – Place of Provision

Charging Section l Old charging provision (Section l New charging provision (Section 66) 66 Charging Section l Old charging provision (Section l New charging provision (Section 66) 66 B) “There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent. of the value of taxable services referred to in subclauses [ ] of clause (105) of section 65 and collected in such manner as may be prescribed. ” “There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent. on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed. ”

‘Service’… Means Includes But shall not include - Any activity Carrie d out by ‘Service’… Means Includes But shall not include - Any activity Carrie d out by a perso n for anoth er For consi derati on -Includes a declared service 1. Right to use immovable property 2. Construction of a complex, building, civil structure or a part thereof; including a complex or building intended for sale to a buyer, wholly or partly except where consideration is received prior completion 3. Temporary transfer or permitting the use or enjoyment of any intellectual property right 4. Information technology software services 5. Obligation to refrain from an act, or to tolerate an act or a situation, or to do an act 6. Service in relation to lease or hire of goods and hire purchase transactions 7. Execution of Works Contracts 8. Service portion in the serving of foods or other article of human consumption -any activity that constitutes merely a transfer in title of goods or immovable property by way of sale, gift or in any other manner; -such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29 A) of Article 366 of the Constitution; - a transaction in money or actionable claim; - any service provided by an employee to an employer in the course of or in relation to his employment; - fees taken in any Court or a tribunal established under any law for the time being in force - by a Constitutional authority under the Indian Constitution or a member of an Indian Legislature or a local selfgovernment in that capacity

Definition of ‘Service’ – other jurisdictions Country Definition of service Canada l Service means Definition of ‘Service’ – other jurisdictions Country Definition of service Canada l Service means anything other than (Section 123(1) of n Property, the Excise Tax Act) n Money, and n Anything that is supplied to an employer by a person who is or agrees to become an employee of the employer in the course of or in relation to the office or employment of that person. ” New Zealand (Section 2 of the GST Act) l Services has been defined to mean “Anything which is not goods Singapore (Section 10 of the GST Act ) l ‘Supply of services’ means “anything which is not a supply of or money” goods but is done for a consideration (including, if so done, the granting, assignment or surrender of any right)” United Kingdom l ‘Supply of services’ is defined as “anything which is not a supply of goods but is done for a consideration (including, if so done, the (Section 5 of the granting, assignment or surrender of any right) is a supply of Value Added Tax services. ” Act, 1994 )

Negative List of Services. . . Sr. No. Description of services which are not Negative List of Services. . . Sr. No. Description of services which are not liable to Service Tax 1. Services by Government or a local authority (excluding certain specified services) 2. Services by the Reserve Bank of India 3. Services by a foreign diplomatic mission located in India 4. Services relating to agriculture (only certain specified services covered) 5. Trading of goods 6. Any process amounting to manufacture or production of goods. “Process amounting to manufacture or production of goods" has been defined to as a process on which duties of excise are leviable under section 3 of the CE Act, 1944 or any process amounting to manufacture of alcoholic liquors for human consumption on which duties of excise are leviable under any State Act 7. Selling of space or time slots for advertisements other than advertisements broadcast by radio or television. ‘Advertisement’ has been specifically defined. 8. Service by way of access to a road or a bridge on payment of toll charges

. . . Negative List of Services. . . Sr. No. Description of services . . . Negative List of Services. . . Sr. No. Description of services which are not liable to Service Tax 9. Betting, gambling or lottery. The term ‘betting or gambling’ has been specifically defined. 10. Admission to entertainment events or access to amusement facilities. 11. Transmission or distribution of electricity by an electricity transmission or distribution utility. The term ‘electricity transmission or distribution utility’ has been specifically defined. 12. Services by way of pre-school education, higher secondary school education, education as a part of a curriculum for obtaining a qualification recognised by any law and vocational education course. 13. Services by way of renting of residential dwelling for use as residence. The term ‘renting’ has been specifically defined. 14. Services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount or inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign exchange or amongst banks and such dealers

. . . Negative List of Services Sr. No. Description of services which are . . . Negative List of Services Sr. No. Description of services which are not liable to Service Tax 15. Service of transportation of passengers, with or without accompanied belongings, by a stage carriage; railways in a class other than first class or an air-conditioned coach; metro, monorail or tramway; inland waterways; public transport, other than predominantly for tourism purpose, in a vessel of less than fifteen tonne net; and metered cabs, radio taxis or auto rickshaws 16. Services by way of transportation of goods by road, by an aircraft or a vessel from a place outside India to the first customs, or by inland waterways (subject to certain exceptions) 17. Funeral, burial, crematorium or mortuary services including transportation of the deceased.

Exempted Services. . . Sr. No. Description of service in respect of which exemption Exempted Services. . . Sr. No. Description of service in respect of which exemption from payment of Service Tax is granted 1. Services provided to the United Nations or a specified international organization 2. Health care services by a clinical establishment, an authorised medical practitioner… 3. Services by a veterinary clinic in relation to health care of animals or birds 4. Services by an entity registered under Section 12 AA of the IT Act ie charitable activities. 5. Services of- (a) renting of precincts of a religious place meant for general public; or (b) conduct of any religious ceremony. Services provided to any person other than a business entity by (a) an individual as an advocate; or (b) a person represented on and as arbitral tribunals. 6. 7. Services of technical testing or analysis of newly developed drugs, including vaccines and herbal remedies, on human participants by a clinical research organization. . . 8. Services by way of training or coaching in recreational activities relating to arts, culture or sports.

. . . Exempted Services. . . Sr. No. 9. Description of service in . . . Exempted Services. . . Sr. No. 9. Description of service in respect of which exemption from payment of Service Tax is granted Services provided(a) to an educational institution by way of catering under any centrally assisted mid – day meals scheme sponsored by Government; (b) to or by an institution in relation to educational services, where the educational services are exempt from the levy of Service Tax, by way of transportation of students or staff (c) to or by an institution in relation to educational services, where the educational services are exempted from the levy of service tax, by way of services in relation to admission to such education. 10. Services provided to a recognised sports body by(a) an individual as a player, referee, umpire, coach or manager for participation in a tournament or championship organized by a recognized sports body; (b) another recognised sports body; Services by way of sponsorship of tournaments or championships organised, (a) by a national sports federation, or its affiliated federations… (b) by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic Committee of India, Special Olympics Bharat; (c) by Central Civil Services Cultural and Sports Board; (d) as part of national games, by Indian Olympic Association; or (e) under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme; 11.

. . . Exempted Services. . . Sr. No. 12. 13. Description of service . . . Exempted Services. . . Sr. No. 12. 13. Description of service in respect of which exemption from payment of Service Tax is granted Services provided to the Government or local authority by way of erection, construction, maintenance, repair, alteration, renovation or restoration of (a) a civil structure. . meant predominantly for a non-industrial or non-commercial use; (b) a historical monument, archaeological site or remains of national importance. . . (c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; (d) canal, dam or other irrigation works; (e) pipeline, conduit or plant for (i) drinking water supply (ii) water treatment (iii)sewerage treatment or disposal; or (f) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Finance Act; Services provided by way of erection, construction, maintenance, repair, alteration, renovation or restoration of, (a) road, bridge, tunnel, or terminal for road transportation for use by general public; (b) building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public; (c) pollution control or effluent treatment plant, except located as a part of a factory; or (d) electric crematorium;

. . . Exempted Services. . . Sr. No. 14 15. 16 17. Description . . . Exempted Services. . . Sr. No. 14 15. 16 17. Description of service in respect of which exemption from payment of Service Tax is granted Services by way of erection or construction of original works pertaining to, (a) airport, port or railways; (b) single residential unit otherwise as a part of a residential complex; (c) low- cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India; (d) post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes; or (e) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages; Temporary transfer or permitting the use or enjoyment of a copyright covered under clause (a) or (b) of sub-section (1) of section 13 of the Indian Copyright Act, 1957 (14 of 1957), relating to original literary, dramatic, musical, artistic works or cinematograph films; Services by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, excluding services provided by such artist as a brand ambassador Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India.

. . . Exempted Services. . . Sr. No. 18. 19. 20. 21. 22. . . . Exempted Services. . . Sr. No. 18. 19. 20. 21. 22. Description of service in respect of which exemption from payment of Service Tax is granted Services by way of renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purposes, having declared tariff of a room below rupees one thousand per day or equivalent; Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year and which has a license to serve alcoholic beverages; Services by way of transportation by rail or a vessel from one port in India to another of the 9 specified varieties of goods. Services provided by a goods transport agency by way of transportation of fruits, vegetables, eggs, milk, food grains or pulses, or where gross amount charged on a consignment transported in a single goods carriage does not exceed Rs. 1, 500; or where gross amount charged for transportation of all such goods for a single consignee in the goods carriage does not exceed Rs. 750 Renting of motor vehicles to State transport undertaking meant to carry more than twelve passengers and to a goods transport agency, a means of transportation of goods.

. . . Exempted Services. . . Sr. No. 23. 24. 25. 26. 27. . . . Exempted Services. . . Sr. No. 23. 24. 25. 26. 27. Description of service in respect of which exemption from payment of Service Tax is granted Transport of passengers by • air embarking or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Baghdogra located in West Bengal; or • a contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire Services by way of motor vehicle parking to general public excluding leasing of space to an entity for providing such parking facility Services provided to the Government or a local authority by way of (a) repair of a ship, boat or vessel; (b) effluents and sewerage treatment; (c) waste collection or disposal; (d) storage, treatment or testing of water for drinking purposes; or (e) transport of water by pipeline or conduit for drinking purposes Services of general insurance business provided under specified schemes Services provided by an incubatee up to total business turnover of Rs. 50 lakh in an FY, subject to the following conditions: (a) total business turnover had not exceeded Rs. 50 lakh in the preceding FY and (b) 3 years has not lapsed from the date of entering into agreement as an incubatee

. . . Exempted Services. . . Sr. No. 28. 29. Description of service . . . Exempted Services. . . Sr. No. 28. 29. Description of service in respect of which exemption from payment of Service Tax is granted Service by an unincorporated body or an entity registered as a society to own members by way of reimbursement of charges or share of contribution (a) as a trade union; (b) for the provision of exempt services by the entity to third persons; or (c) up to an amount of Rs. 5000 per month per member for sourcing of goods or services from a third person for common use of its members in a housing society or residential complex Services by the following persons in respective capacities (a) a sub-broker or an authorised person to a stock broker; (b) an authorised person to a member of a commodity exchange; (c) a mutual fund agent or distributor to mutual fund or asset management company for distribution or marketing of mutual fund; (d) a selling or marketing agent of lottery tickets to a distributer or a selling agent; (e) a selling agent or a distributer of SIM cards or recharge coupon vouchers; or (f) a business facilitator or a business correspondent to a banking company or an insurance company in a rural area;

. . . Exempted Services Sr. Description of service in respect of which exemption . . . Exempted Services Sr. Description of service in respect of which exemption from payment of Service Tax No. is granted 30. Carrying out an intermediate production process as job work in relation to specified goods 31. Services by an organiser to any person in respect of a business exhibition held outside India 32. Services by way of making telephone calls from: (a) departmentally run public telephones; (b) guaranteed public telephones operating only for local calls; or (c) free telephone at airport and hospitals where no bills are being issued 33. Services by way of slaughtering of bovine animals 34. Services received from a service provider located in a non- taxable territory by: (a) the Government, a local authority or an individual in relation to any purpose other than industry, business or commerce; or (b) an entity registered under section 12 AA of the Income tax Act, 1961 (43 of 1961) for the purposes of providing charitable activities.

Principles of classification l Concept of ‘composite service’ under Section 65 A has been Principles of classification l Concept of ‘composite service’ under Section 65 A has been replaced by ‘bundled service’ Reference to a service shall not include reference to a service used in providing such main service n For services capable of differential treatment for any reason based on its description, the most specific description to be preferred over a more general description n In case of a bundled service, i. e. when provision of one service is combined with element(s) of other service(s), taxability is to be determined as under: n If various elements of such service are naturally bundled in the ordinary course of business, it shall be treated as provision of the single service which gives such bundle its essential character v If various elements of such service are not naturally bundled in the ordinary course of business, it shall be treated as provision of the single service which results in the highest liability of Service Tax v What is naturally bundled will be the subject matter of interpretation

Duality of taxes post negative list l Renting of immovable property service n Stamp Duality of taxes post negative list l Renting of immovable property service n Stamp duty vis-à-vis Service Tax l Supply of software n VAT and Service tax l Works Contract / Construction services n Differing schemes of abatements under VAT Laws and Service Tax law n Original Works, Contract value = Rs. 100/n Service Tax @12. 36% on Rs. 40/- (abatement of 60%) n VAT @ 14. 5% on Rs. 75/- (abatement of 25% under VAT Laws) n Effective value of contract subjected to Indirect Taxes is Rs. 115/- as against an actual realization of Rs. 100/n Taxing impact further aggravated for other than Original Works on account of the Service tax abatement being only 40%, therefore effective value of contract subject to Indirect Taxes is Rs. 135/n Credits of Excise Duty paid on goods not available on account of conditions of the abatement scheme

Transactions newly liable? l Non-compete fees l Financial transactions for consideration – derivatives, hedges Transactions newly liable? l Non-compete fees l Financial transactions for consideration – derivatives, hedges l Sale of business (slump sale transactions) l License fees / Assignment fees l Revenue share arrangements with agencies like AAI, NHAI, MMRDA l Directors fees to non-executive directors Ever evolving tax footprint…

Dichotomy between tax footprint and credit footprint l While the tax footprint has risen Dichotomy between tax footprint and credit footprint l While the tax footprint has risen exponentially the credit footprint is narrow and remains fragmented in silos The scope of the term ‘input service’ was narrowed in 2011, to eliminate services availed for businesses and restricted to only for providing taxable output service, and / or used in or in relation to manufacture n Flexibility for distribution of credit has been restricted for Input Service Distributors n No concept of First Stage Dealer to pass through Service Tax credits n l The net impact is that the cascading of taxes will rise and the sunk costs in unutilisable credits will escalate l The potential approaches to addressing this problem could be Enlarge the scope of input services n Grant refund of unutilisable credit n Offer fungible reflective credits – unutilised CENVAT credit can be made available fungibly as VAT credit n

Goods and Service Tax (GST) Goods and Service Tax (GST)

Key taxes subsumed CST TO BE PHASED OUT Service Tax CVD Excise Duty on Key taxes subsumed CST TO BE PHASED OUT Service Tax CVD Excise Duty on M&TP SAD Addnl. Excise Duties Central Excise Duty Taxes on lotteries, betting, gambling Surcharges Central Cesses Luxury Tax Cesses and surcharges on goods and services Entry Tax (not Octroi) Dual GST Entertainment Tax (except levied by local bodies) State VAT/Sales Tax

Likely GST Model Import GST Servic e Tax Entry Tax/Octroi Centra l Excise Central Likely GST Model Import GST Servic e Tax Entry Tax/Octroi Centra l Excise Central Sales Tax Other State levies Value Added Tax . Central GST . IGST State GST

Milestones & Signals of GST Issue 2011 2012 Emerging Position Expanded scope of ST Milestones & Signals of GST Issue 2011 2012 Emerging Position Expanded scope of ST Negative list introduced Automatic refunds New scheme notified Place of supply rules Introduced for Public debate Time of supply rules (POT Rules) Notified in 2011, Amendments to remove teething difficulties IT Infrastructure / Administrative structure GST Network to be operational from August 2012 / Single forms notified for CED and ST Draft legislations (Centre & States) No Draft legislations Political will Many States forming a consensus 41

Milestones & Signals of GST Issue 2011 2012 Emerging Position Transition date To be Milestones & Signals of GST Issue 2011 2012 Emerging Position Transition date To be decided post discussion with States Constitutional amendments Introduced in the Lok Sabha, referred to Standing Committee Draft legislation Bill to be introduced Alignment of CED and ST rates with proposed CGST rate Rate of CED & CE increased to 12% expected rate of CGST is 8% to 10% Reduction in number of CED exemptions Reduction in number of exemptions from CED CST No reduction in CST rate CST compensation Centre has refused to grant CST compensation 42

The greater the time gap between the introduction of negative list and the introduction The greater the time gap between the introduction of negative list and the introduction of GST, the greater the burden for industry and consumers The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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