Levy of, and Exemption From, Tax under Revised Model GST Law

India is a nation of small and medium businesses. The government's effort to formalise the economy has resulted in the introduction of the Goods and Services Tax (GST). The Revised Model GST Law seeks to simplify the taxation structure and make it more transparent. The levy of, and exemption from, tax are two crucial aspects that have been covered under the Revised Model GST Law.

The Revised Model GST Law has defined the term 'supply' comprehensively. As per this definition, any transaction that involves the transfer of goods or services for consideration is deemed to be a supply. The term 'consideration' includes any payment made or to be made, whether in cash or kind. Therefore, every transaction that involves the transfer of goods or services is taxable under the GST regime, subject to certain exemptions.

One of the most significant exemptions is for small businesses with an annual turnover of less than Rs. 20 lakhs. These businesses need not register for GST and are exempted from paying GST. However, businesses with an annual turnover of up to Rs. 75 lakhs can opt for the Composition Scheme. Under this scheme, businesses pay a fixed percentage of their turnover as tax and are exempted from filing detailed returns.

Another exemption is for certain goods and services. The Revised Model GST Law has a comprehensive list of exempted goods and services, which includes essential items like fruits, vegetables, and grains. Services such as healthcare and education are also exempted from GST.

The Revised Model GST Law includes provisions for the levy of GST on certain transactions that were not taxable under the previous tax regime. For example, the transfer of goods from one branch to another within the same company is now deemed to be a supply and is taxable under the GST regime.

There are also provisions for the levy of GST on certain transactions that involve the export of goods or services. However, these transactions are exempted from GST, subject to certain conditions. For example, the export of goods or services must be made within six months from the date of issue of the invoice.

The Revised Model GST Law also includes provisions for the levy of GST on e-commerce transactions. E-commerce operators are now subject to GST, and the tax is to be paid by the operators on behalf of the sellers. However, small sellers with an annual turnover of up to Rs. 20 lakhs are exempted from this provision.

Overall, the Revised Model GST Law seeks to simplify the taxation structure and make it more transparent. The levy of, and exemption from, tax are two crucial aspects that have been covered under the Revised Model GST Law. The exemptions for small businesses and essential goods and services make the GST regime more inclusive and reduce the burden on small and medium businesses.