Government to appoint designated officer under Treasury to collect Special GST

• Businesses falling under SGST required to register with designated officer 
• New tax will be a composite tax in lieu of all other taxes applicable on 5 specified sectors 
• Aimed at relieving various other authorities from collection duties
• The single tax rate and when it would come into force yet to be announced

Clearing another ambiguity surrounding the proposed Special Goods and Services Tax (SGST) over its collecting authority, the government will appoint  a ‘Designated Officer,’ under the Treasury as it inches closer to the enactment of the new composite tax proposed in the budget last year. 

Accordingly, a new unit will be set up by the Treasury Secretary, which will come under the purview of Deputy Secretary to the Treasury, who appears to be functioning as the designated officer with powers vested with him on administration, collection and accountability of the SGST. 

However what the single rate would be and when the new tax will come into force is yet to be known, as such details are yet to be published in the gazette and passed in parliament. 
The Bill governing the imposition and administration of the SGST was published on January 7. 

SGST was initially proposed in the budget 2021, but again featured as a proposal in the budget for 2022 reflecting the government’s keenness in implementing the new tax in a bid to introduce an online managed composite tax in lieu of the various other taxes and to relieve various government bodies of their task of collecting taxes by appointing a single tax collection authority. 

“The intention of the government is to relieve these bodies which are collecting these various taxes and allow them to do regulation and have one authority to collect the tax,” said Nisthar Sulaiman, Partner Tax at Earnst & Young when the tax was re-proposed in the budget last year. 

Accordingly, the SGST will apply on goods sectors such as liquor, cigarettes, vehicles, including spare parts for assembling, and services sectors such as telecommunication and betting and gaming. The tax will hence replace the relevant tax, duty, levy, cess or other charges in place on these sectors at present under different statutes. 

Hence, businesses engaged in goods and services specified under the proposed SGST will be required to register as a taxable person with the designated officer within 14 days of the Order specifying the rate and the basis of calculation of the new tax, which is yet to be announced. 

Upon registering, the designated officer will issue the taxable entity a certification of registration. 
All manufacturers, importers or service providers of these designated goods or services will have to register themselves with the designated officer or face consequences by way of penalty, which is also specified in the Bill. 

To make it easier for the taxable entity, the payment of the tax is also facilitated via an electronic fund transfer and would be credited to the Consolidated Fund.