goods & service tax

GST

A PRESENTATION ONGOODS & SERVICE TAX

WHAT IS GST?

GST is a value added tax, levied at all points in the supply chain with credit allowed for any tax paid on inputs acquired for use in making the supply. It would apply to both goods and services in a comprehensive manner with exemptions restricted to a minimum. The introduction of GST would be a significant step in the reform of indirect taxation in India.

Services

GOODS & SERVICES

GST APPLICABILITY

GST

GOODS SERVICES

Taxable goods & services are not distinguished from one another and are taxed at a single rate in a supply chain till the goods or services reach the consumer.

CLASSIFICATION

GST

CENTRALGST

STATEGST

INTERSTATEGST

CENTRAL GST (CGST)

•Central GST shall be levied by the Centre on all the goods &

services (other than the exempted ones)

• Cross utilisation of ITC between the

CGST & SGST shall not be allowed, except in case of

IGST

STATE GST (SGST)

• State GST shall be levied by the states

on all goods & services,

independent of the Centre.

• Centre has assured all the states to pay

compensation, equivalent to any losses suffered by them, during the

first 3 years.

INTERSTATE GST

DELHI

YAMUNAEXPRESSWAY

A new model is developed under proposed GST to monitor the interstate trade of Goods & Services, and this is called IGST. A point to be noted is that it will not replace the existing CST.IGST is not in addition to CGST & SGST, but is only for monitoring interstate transactions.

AGRA

Dealer of the selling state will collect IGST from the purchaser on interstate transaction & the rate of IGST will be the combined rate of SGST & CGST. Say if the rate of SGST is 12% & CGST is 14%, then the rate of IGST will be 26%.

WORLD SCENARIO

CANADA (5%)

AUSTRALIA (10%)

CHINA (17%)

NEW ZEALAND (15%)

FRANCE (20%)

GERMANY (19%)

SWEDEN (25%)

JAPAN (8%)

SINGAPORE (7%)

INDIA(???)

PROPOSEDFEATURES

TAXES SUBSUMED WITHIN GST

EXCISE

SERVICE TAX

CVD,SAD

STATE VAT

OTHERSTATETAXES

GST

Threshold limit for

Registration

& Payment

A person is required to take registration if his aggregate turnover in a financial year exceeds INR 9 Lakhs. However, tax liability shall arise only once the aggregate turnover in a financial year exceeds INR 10 Lakhs.

10 L

9 L

For North Eastern States, the prescribed limits are INR 4 Lakhs & INR 5

Lakhs respectively

NOTE

INPUT TAX CREDITCGST

SGST

CROSS UTILIZATION

CROSS UTILIZATION

INPUT TAX CREDITCGST

SGSTThis Is Not

Allowed

“WARN!NG”

AS PER THE PROPOSED GST REGIME, THE INPUT

OF CENTRAL GST CAN BE UTILISED ONLY FOR

PAYMENT OF CGST & THE INPUT OF STATE GST CAN

BE UTILISED ONLY FOR PAYMENT OF SGST.

CROSS UTILIZATION OF INPUT OF CGT IN PAYMENT

OF SGST AND VICE-A-VERSA,

WILL NOT BE ALLOWED.

IMPORT

S

• Dual GST should be levied on Imports along with the facility of credit for the tax paid.

EXPORT

S

• Exports must be zero rated i.e. there should be no tax element in the price of goods exported.

In addition to the IGST, in respect of supply of goods, an additional tax of up to 1% has been proposed to be levied by the Centre. The revenue from this tax is to be assigned to the origin

states. This tax is proposed to be levied for initial 2 years or such longer period as recommended by the GST Council.

ADDITIONAL 1% TAX

TAXES NOT TO BE INCLUDED

TAXES NOT TO BE INCLUDED

Purchase Tax

Octroi Duty

Tax On Alcoholic Beverages

Tax On Petroleum Products

Tax On Tobacco Items

POINT OF

TAXATION

CGST/SGST SHALL BE PAYABLE AT THE EARLIEST OF THE FOLLOWING DATES:

DATE ON WHICH THE GOODS ARE REMOVED FOR SUPPLY TO THE RECIPIENT(MOVABLE GOODS); OR

DATE ON WHICHTHE GOODS ARE MADE AVAILABLE TO THE RECIPIENT(IMMOVABLE GOODS); OR

DATE OF ISSUING INVOICE BY SUPPLIER; OR

DATE OF RECEIPT OF PAYMENT BY SUPPLIER; OR

DATE ON WHICH RECIPIENT SHOWS THE RECEIPT OF THE GOODS IN HIS BOOKS OF ACCOUNTS.

DRAWBACKS OF THE CURRENT

SYSTEM

Hidden tax on exports

No state tax on imports

High transaction costs

Confusion and Mistrust

Complex and lacking in stability

Narrow base

Filing Returns/Forms

RETURNS

1.MONTHLY RETURN 2.RETURN FOR

COMPOSITION

SCHEME

3.TDS

RETURN

5.ANNUAL RETURN6.FINAL RETURN

4.FIRST RETURN

EVERY REGISTERED PERSON SHALL HAVE TO FILE A MONTHLY RETURN FOR SUPPLIES OF GOODS AND/ OR

SERVICES WITHIN 20 DAYS AFTER THE END OF SUCH MONTH. 1.

Title text

EVERY DEALER WHO IS REQUIRED TO DEDUCT TAX AT SOURCE SHALL FILE A RETURN WITHIN 10 DAYS AT THE

END OF THE MONTH IN WHICH DEDUCTION IS MADE.3.Title text

EVERY REGISTERED PERSON SHALL HAVE TO FILE A AN ANNUAL RETURN FOR EVERY YEAR ON OR BEFORE 31ST DEC. FOLLOWING THE END OF FINANCIAL YEAR.5.

DEALERS UNDER COMPOSITION SCHEME SHALL HAVE TO

FILE A RETURN FOR EACH QUARTER OR PART THEREOF, WITHIN 18 DAYS AFTER THE END OF SUCH QUARTER.

2.

REGISTERED PERSON PAYING CGST/SGST ON ALL INTER STATE SUPPLIES HAVE TO FILE 1stRETURN FROM THE DATE

HE BECAME LIABLE TO REGISTRATION TILL THE END OF THE MONTH IN WHICH REGISTRATION HAS BEEN GRANTED.

4.

REGISTERED PERSON WHO APPLIES FOR CANCELLATION OF REGISTRATION SHALL HAVE TO FILE A FINAL RETURN

WITHIN 3 MONTHS OF THE DATE OF CANCELLATION.6.

BENEFITS

1. ELIMINATION OF CASCADING EFFECT & MULTIPLE TAXATION

WIDER TAX BASE

2. INCREASE IN THE % OF PEOPLE PAYING TAX

It has been projected that more number of people would come under the purview of GST, as compared to the present system.

The present threshold prescribed in different State VAT Acts, below which VAT is not applicable varies from State to State. Thus numerous returns have to be filed, which makes the task really complicated.

3. SIMPLIFICATION OF TAX STRUCTURE-PRESENT SITUATION

A uniform GST threshold across States is desirable, which would minimise the difficulty level. Different VAT returns will not be required to be filed.

-PROPOSED SITUATION

TAX (CGST)

TAX (SGST)

To the extent feasible, uniform procedure for collection of both CGST & SGST would be prescribed in the respective legislation for CGST & SGST.

4. UNIFORM PROCEDURE

GST-THE GAME CHANGER

GST Will Be A Game Changing Reform For Indian Economy By-

• Developing A Common Indian Market.

• Reducing The Cascading Effect Of Tax On The Cost Of Goods And Services.

According to World Bank & IMF, GST Will Be Instrumental In Helping The GDP Of India To Grow By 2%.

I M P A C T

Tax StructureTax Incidence

Tax ComputationTax PaymentCompliance

Credit utilisationReporting

GST WILL IMPACT…

… leading to a complete overhaul of the current indirect tax system.

THE STORY SO FAR…

**We are just a few steps away from the biggest tax reform in India since the

independence !!

**We are just a few steps away from the biggest tax reform in India since the

independence !!

PRESENT SCENARIO

Finance Minister Arun Jaitley met with state finance ministers in Kolkata, and said that 'virtually all states' except Tamil Nadu have backed the proposed GST Bill.

He urged PM Modi to meet Tamil Nadu CM Jayalalithaa and convince her to extend support for the bill.

1% additional tax as goods move across states.

The constitutional cap of 18 per cent and an independent dispute redressal mechanism.

MAJOR CONCERNS OF THE CONGRESS OVER THE BILL

We all have come a long way. With a bit of more effort, the day is not far away, when GST would actually become applicable in India!!

"JUST THE LAST PIECE TO FIT”

BIBLIOGRAPHY

www.ey.comwww.wikipedia.orgwww.imagesbazaar.comwww.everystockphoto.comwww.taxguru.inwww.caclubindia.comwww.google.co.in

PREPARED BY:PRERNA MITTAL

SHIKHAR MAHESHWARI(CA STUDENTS)