New Delhi, June 14: Online purchases from e-commerce sites will attract the proposed goods and services tax.

A model GST law, put up by the finance ministry on its website to seek comments from stakeholders, makes it clear that the tax will be levied at the first point of transaction. In other words, the tax will be paid either in the state where the website is hosted or in the state from which the goods are shipped.

The e-commerce companies will be required to file a statement to the tax department providing details of all supplies made through the online platform.

The draft law, which has 162 clauses and four schedules, also concedes one of the Congress party's key demands by setting up a chain of national and state appellate tribunals.

"The central government shall, on the recommendation of the GST council, constitute a National Goods and Services Tax Appellate Tribunal," states the draft law, which has to be passed by the Centre and the states.

"The appellate tribunal shall have one branch for each state, which shall be called the state GST tribunal ... Every state GST tribunal shall consist of as many members - judicial, technical-CGST and technical-SGST - as may be prescribed to exercise the powers and discharge the functions conferred on the appellate tribunal by this act," the draft said.

The order of the tribunals can be challenged before the high courts and the apex court.

The Congress party had pointed out that the NDA's original draft, which provided power to the GST council (in which the Centre has greater voting power) to decide on all differences, was flawed and against the interests of states. However, the fresh draft does not accept the Congress's other demands such as a ceiling on taxes.

"The guidelines may reduce the chances of abuse of discretion provided to the states in implementation of the GST in India," Nitish Sharma, partner (indirect taxation) of Nangia & Co, said.

The model law also provides for an Authority for Advance Ruling to be located in every state.

The law says that every registered taxable person shall himself assess the taxes payable under this act and furnish a return for each tax period. Any tax payer who fails to furnish the details of outward or inward supplies or returns by the due date will be liable to a late fee of Rs 100 for every day, subject to a maximum of Rs 5,000.

Similarly, any registered tax payer who fails to furnish the return by the due date, will be liable to a late fee of Rs 100 for every day, subject to a maximum of 25 per cent of his aggregate turnover. The model law has also suggested jail terms of up to five years for violation of the provisions of the statute.

It prescribes an annual turnover threshold of Rs 10 lakh for the new levy to be applicable and Rs 5 lakh for businesses in north eastern states, including Sikkim.

"The model GST has provided for an elaborate mechanism to use input tax credit, which is crucial for effective implementation of GST," said Mahesh Jaising, partner, BMR & Associates LLP.

India Inc today welcomed the draft. "This is indeed a step forward in implementation of the much awaited GST, and will encourage industry to think that GST may become a reality soon," CII director-general Chandrajit Banerjee said.

"Lot of hard work seems to have been put in for arriving at broader consensus with the states," said Pratik Jain, leader - indirect tax, PwC India.

"The model GST bill will put an end to the never-ending disputes about taxability of works contracts and lease transactions as the bill classifies the same as service, irrespective of whether the transactions involve goods or services," Sachin Menon, partner and head, indirect tax at KPMG in India.