Here comes the tax man

It is not often that the Government of the day has the opportunity to modify the entire indirect taxation structure and to toy with the idea of modifying the value chain to the extent of expecting to create a self-regulating  mechanism. India and NDA are at a cusp of such an event. The Goods and Services Tax is expected to be rolled out on July 1st and is expected to radically alter the base of taxation.
Earlier concepts of Manufacture, removal, sale, provision of service etc have been replaced with one concept of Supply.
Excise Duty, Service Tax, VAT have been subsumed and replaced by two levies namely Central GST and State GST. The tax rate for the entire country including Union Territories for a commodity would be the same. For Union Territories the tax will be CGST plus UTGST.  Taxation for Inter state transactions earlier governed by the Central Sales Tax would now be under Integrated GST but though there is a change in nomenclature there is no change in the rate on all occasions. It continues to be CGST plus SGST. This in one stroke irons out the wrinkles of different taxes for same commodity in different States.
Imports will also be considered as Interstate sales and charged IGST.

It also has  created a decision making body i.e. GST council whose Members are Finance Minister of India, Minister for State of Revenue, Finance Ministers of the 29 states and 2 union Territories with Legislature to further this legislation. All but 2 states (Orissa and West Bengal) have agreed to play along mainly convinced by the carrot in the form of assured compensation if Revenue falls short of revenues earned in 2015-16 (base year) at a CAGR of 14 percent. The funds for this shall also be taken from the system in the form of Cess on demerit goods. By keeping a vote share of 33 percent with itself and requiring 75 percent of votes for passing any resolution in the council, the Union enjoys a sort of Veto power on decisions though it alone cannot push through any reform without support of majority of States. This ensures that the major decisions are consensus decisions between States and Centre.
Another sweeping change of this legislation shall be the change in the retention of tax benefits in case of an interstate transaction. Earlier the supplying or manufacturing state retained the tax collected as CST but now the benefit flows to the consuming state guided by the destination based tax concept.
This is another radical departure from existing pattern and is expected to impact the traditionally manufacturing oriented states like Maharashtra and Tamilnadu. This impact will be partially offset by the revenues to State Government for the Services which were hitherto taboo for the State Governments to tax.
The previously high threshold limit of turnover to tax a manufacturer has been bought down to 20 lakh thus increasing the tax base substantially though up to 75 lakh turnover a composition scheme exists for Manufacturers and Traders but not for Service Providers. Composition scheme is available for service providers also in the category of  restaurant/ food & beverage supply.
In the matter of input tax credit, invoice level matching prior to accepting the credit has been introduced which will go a long way in avoiding fraudulent credits and the process of accepting inward supplies by the receiver for accepting input credit will lead to a self-policing mechanism in compliance.
All these have been possible by a constitutional amendment.
While addressing  whether a Government Organisation shall require registration, multiple opinions emerge
The Government including the Central Govt is defined as a person
The person whose turnover exceeds 20 lakh to register
Turnover includes exempt supplies and  exports also.
Government has to recover TDS @1% (CGST & SGST each) for payments on contact value above 2.5 lakh. For this purpose, a Tax Deductors Account Number based registration is required.
To identify the destination for the Inter state sales for passing on the benefit of SGST to the consuming state and for UN bodies, embassies, to claim refund of taxes, a Unique ID Number or UIN is also advised for Government in the FAQ released by CBEC.
Thus the form of registration is yet a point of contention.
Taking a registration in each form shall bind the organization to different compliances in the form of returns and records to be maintained. Hence a balanced call to be taken.
Further being predominantly an end-user, the concept of input credit might not be too relevant for a Govt Organization especially in the absence of taxable output services apart from performing the sovereign functions as per allocation of business rules.
All the above will vary from organization to Organization and on same organization over passage of time.
Though it is opined that there will be a lot of issues in the rollout of the tax regime, the present Government has taken the bull by its horns. Let's hope it would be able to tame it.