Changes in CGST/SGST levy in Model GST Law

Definition for CGST/SGST levy  has been changed in the revised draft of Model GST Law. Erstwhile section 7 of CGST/SGST law has been shifted to section 8 in the revised draft. Some new provisions are inserted into the definition of basic levy. Some new kind of transactions have been included into the scope of levy.

CHAPTER III
LEVY OF, AND EXEMPTION FROM, TAX

8. Levy and Collection of Central/State Goods and Services Tax
(1) There shall be levied a tax called the Central/State Goods and Services Tax (CGST/SGST) on all intra-State supplies of goods and/or services on the value determined under section 15 and at such rates as may be notified by the
Central/State Government in this behalf, but not exceeding fourteen percent, on the recommendation of the Council and collected in such manner as may be prescribed.
(2) The CGST/SGST shall be paid by every taxable person in accordance with the provisions of this Act.
(3) The Central or a State Government may, on the recommendation of the Council, by notification, specify categories of supply of goods and/or services the tax on which is payable on reverse charge basis and the tax thereon shall be paid by the recipient of such goods and/or services and all the provisions of this Act shall apply to such person as if he is the person liable for paying the tax in relation to the supply of such goods and/or services.
(4) The Central or a State Government may, on the recommendation of the Council, by notification, specify categories of services the tax on which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the person liable for paying the tax in relation to the supply of such services:
PROVIDED that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax:
PROVIDED FURTHER that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.

Analysis:

Point number 4  will provide for the levy of CGST/SGST on intra state supply by the  e-commerce operators for specific services which may be notified by the central government or state government. 

Proviso 1 will cover the CGST/SGST levy on the e-commerce operators not having any physical presence in India. In that case any person representing them  in India like there agent etc will be liable for CGST/SGST levy.

Proviso 2 further provide that even if there is no representative of an e-commerce portal in India. They will have to appoint a representative for the purpose of GST.

These changes will cover so many supplies by people sitting outside India. Because in case of services it is hard to trace the location and sometimes even their presence.This provision will cover all those service providers who are working throuch e-commerce portal.

Some changes have been introduced in Schedule V which provide for the liability of registration. Item no. (x) of Schedule V provide that a person who is supplying any goods or services through an E-commerce portal will have t take registration without any threshold limit. But the person supplying the services mentioned in section 8(4) above will not be liable to take registration without any threshold limit.