Discuss the dual GST model to be introduced in India.
To be blunt, here are some of the features of the dual GST model introduced in India:
1. GST shall have two components one levied by the Centre (referred to as Central GST), and the other levied by the States (referred to as State GST).
2. Central GST and the State GST would be applicable to all transactions of goods and services.
3. Central GST and State GST are to be paid to the accounts of the Centre and the States individually.
4. Central GST and State GST are to be treated individually, therefore taxes paid against the Central GST shall be allowed to be taken as input tax credit (ITC).
5. Cross utilization of ITC between the Central GST and the State GST would not be permitted except in the case of inter-State supply of goods and services.
6. Credit accumulation on account of refund of GST should be avoided by both the Centre and the States except in the cases such as exports, purchase of capital goods, input tax at higher rate than output tax etc.
7. Uniform procedure for collection of both Central GST and State GST would be prescribed in the respective legislation for Central GST and State GST.
8. Composition/Compounding Scheme for the purpose of GST should have an upper ceiling on gross annual turnover and a floor tax rate with respect to gross annual turnover.
9. The taxpayer would need to submit periodical returns, in common format as far as possible, to both the Central GST authority and to the concerned State GST authorities.
10. Each taxpayer would be allotted a PAN-linked taxpayer identification number with a total of 14/15 digits.
11. Cross utilization of ITC between the Central GST and the State GST would not be permitted except in the case of inter-State supply of goods and services.