The Major Changes Proposed In November 2016 Draft GST Law Model
1) *Exclusion Of Securities*- Government has now specifically excluded securities from the definition of goods under Section 2(49) and services under Section 2(92) of the revised GST law. As a result, securities will not attract any tax under GST law. This will be welcomed by the industry and market participants as the government has made it clear that it does not intend to include stock market transactions in the indirect tax net.
2) *Supplies To Special Economic Zones Not taxable under GST*- Supplies made to SEZ units will now be treated as zero-rated supplies under the revised GST law i.e., such supplies will now attract nil rate of tax under GST. Further, in case GST is levied by a person supplying goods or services to SEZ units, then the SEZ units shall be eligible to claim refund of the same from the Government.
3) *Temporary Application Of Business Assets Or Services To A Private Or Non-Business Use*- Under the earlier Model GST law, the use of such business assets or services for private or personal use was included in Schedule I: Supply without consideration, meaning such transactions was expected to attract GST.
This concern has been addressed in the revised GST law wherein the said Schedule has been revised to remove such transactions from the ambit of supply. This means that such perquisites enjoyed by employees will not attract GST, irrespective of whether they are used for business purposes or personal consumption.
4) *Place of Supply Extends Beyond National Borders* – Revised GST law has introduced new provisions for supplies that are made where location of supplier is different from the location of service recipient. The new place of supply provisions introduced for services are almost similar to the Place of Provision of Service (POPS) rules present under the current service tax law.
5) *Anti Profiteering* – Anti-profiteering clause has been introduced in the revised GST law which casts the responsibility of every company to pass on the benefit of GST to its end consumers.
6) *Principal Agent Relationship A Taxing Relationship* – Under the revised GST law, supplies made by principal to agent and vice versa shall be covered under the ambit of supply. This means that all kinds of supplies made between principals and agents would attract GST, irrespective of the fact whether the same is for a consideration or not. Thus supplies made in every state will be taxed under GST, which may lead to additional costs to company. On the other hand, the recipient of such supplies will be eligible for IGST (inter-state) credit, which he may use to set-off his output IGST, CGST and SGST liability.

Above Write up is shared by CA Alok Jain (NIRC Member). He can be reached atEmail:-alokjaindel@gmail.com and Mob:- 9899259011