The basic pillars of Goods & Service Tax (GST) throughout the world comprises of the following :
supply – supply of goods or services.
consideration – any benefit accrued in monetary terms or in any manner having value.
supplier – one who supplies goods or services . It includes his agent.
recipient – one who receives goods or services ,including his agent , and/or the person who is liable to pay for received service or goods.
business – the business should be running.
The aforesaid five factors dominate the GST for its levy, collection and discharge of liability . In other words , the concept of GST as perceived, understood and implemented throughout the world are as below :
there has to be a supply of goods and/or service
there has to be consideration in money or in any other manner, except for import.
there has to be a supplier
there has to be a recipient
these transactions should be in the course or furtherance of business, except for import.
Sine Qua Non of GST
Further, the other fundamental aspects of GST i.e sine qua non of GST are again similar in almost every part of the world with minor variations as below :
“location of supplier, location of recipient, establishment, reverse charge mechanism, continous supply, input tax credit, zero rated supply, composite supply, time of supply, value of supply, market value , etc”
Organisation for Economic Co-operation and Development and GST
Whereas, it is pertinent to note that these pillars and fundamental aspects of GST are very similar in every country following the guidelines issued by Organisation for Economic Co-operation and Development( OECD).
It must be known that Organisation for Economic Co-operation and Development (OECD) has been constituted to promote policies that will improve the economic and social well-being of people around the world.
It is a forum where the governments of 34 democracies with market economies work with each other, alongwith 70 non-member economies to promote economic growth, prosperity, and sustainable development. The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems.
We understand that the framework and fundamental of draft GST in India is in line with guidelines issued by OECD. It must be known that India has associated with OECD in 2015.Whereas, other countries which have implemented GST, including BRICS nations, have followed the OECD framework as well.
Accordingly, OECD has also issued VAT/GST guidelines for business transactions including cross border transactions.
Hence, the process of GST implementation in any organisation is neither too early nor it is premature to start working over it so that it can be implemented in better manner. At the most , it can be said that certain procedures are not defined as final GST Act & GST Rules are yet to come, otherwise the framework of GST will be at par the same what has been reflected in Draft GST Act,2016.
The right time has come when every organisations shall start working on GST as most of teh concepts and procedures of GST are available. AMLEGALS foresee that hardly 5% changes can be there in the finalised GST Act than what is there in draft GST available in the public domain.