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What is the legal backing for GST?

Constitutional Amendment

  • GST was introduced through the 101st Constitutional Amendment Act, 2016
  • Empowered both Parliament and State Legislatures to make GST laws
  • Introduced Article 246A for concurrent taxing powers on goods and services
  • Added Article 279A to establish the GST Council
  • Deleted entry 92C and modified Schedule VII to align with GST

GST Laws and Acts

  • Central Goods and Services Tax Act (CGST) governs intra-state supplies
  • Integrated GST Act (IGST) governs inter-state supplies and imports/exports
  • Union Territory GST Act (UTGST) applies to UTs without legislature
  • State GST Acts (SGST) enacted by individual states for state-level provisions
  • Compensation to States Act compensates states for revenue loss during transition

Rules and Notifications

  • Detailed GST Rules framed under respective Acts (e.g., Registration Rules, Invoice Rules)
  • GST Council issues notifications, circulars, and clarifications periodically
  • CBIC implements CGST and IGST laws through its field formations
  • Taxpayers must follow rules for registration, filing, invoicing, audit, refund, etc.
  • Violations attract penalties and prosecution as per rules

Role of GST Council

  • GST Council is a constitutional body to recommend laws, rates, and exemptions
  • Comprises Union Finance Minister, State Finance Ministers, and Union Ministers of State
  • Decisions taken by three-fourths majority in Council meetings
  • Ensures cooperative federalism and consensus among states
  • Has authority to resolve disputes, set compliance framework, and approve rate changes

Judicial Oversight

  • GST law is subject to judicial review by High Courts and Supreme Court
  • Taxpayers can challenge notifications or penalties in courts
  • Advance Ruling Authority provides legal clarity for taxpayers
  • Legal disputes help shape interpretation of GST law over time
  • GST regime evolves through legislative changes and judicial pronouncements

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