Gst
- 1. PGDIFA
- 2. ‘G’ – Goods ‘S’ – Services ‘T’ – Tax “Goods and Service Tax (GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and service at a national level. GST is a tax on goods and services with value addition at each stage having comprehensive and continuous chain of set-of benefits from the producer’s/ service provider’s point up to the retailer’s level where only the final consumer should bear the tax.”
- 3. Tax Structure Direct Tax Income Tax Wealth Tax Indirect Tax Central Tax Excise Service Tax Customs State Tax VAT Entry Tax, luxury tax, Lottery Tax, etc.
- 4. Tax Structure Direct Tax Income Tax Wealth Tax Indirect Tax = GST (Except customs) Intra- state CGST (Central) SGST (State) Inter State IGST (Central)
- 5. GOODS AND SERVICE TAX STATE LEVELCENTRAL LEVEL It may subsume : • Central Excise Duty • Additional Excise Duty • Service Tax • Counterveiling Duty • Additional Duty of Customs • Surcharge • Education cess/ SHEC It may subsume : • VAT/ Sales Tax • Purchase Tax • Entertainment Tax • Luxury Tax • State surcharge & cesses
- 7. Pricing, costing, margins Supply chain managements Change in IT-systems Treatment of excluded sectors Treatment of tax incentives Transaction cost Tax compliance
- 8. Low compliance cost Simple business processes Less requirement of automation initially Minimal ITC refund cases Exemptions instead of exclusions from GST Seamless flow of input credit Seamless flow of information between supplier, buyer and tax administration Need for IT portal or agency like NSDL, TINXSYS Contd…
- 9. Self policing Ease of compliance Automation of processes by way of e- registrations, e-returns and e-payments No requirement of verification in inter-state movement of goods Zero rating of supplies to exporters Administrative efficiency in case of assessment and adjudication
- 10. Dual model GST under federal structure i.e. CGST and SGST Elimination of cascading effects of the taxes CGST & SGST to be charged on the same price Set-off relief fully captured Destination based tax structure Free movement of goods & services throughout the country Application to all transactions of Goods & Services with some exceptions Inter State GST (IGST) – new model for Inter state transactions Contd…
- 11. Input tax credit (ITC) for the CGST/SGST and could be utilized for payment of CGST/SGST, but cross utilization not allowed, except IGST Refund for unutilized ITC will be discouraged Threshold limits will be on higher side Common Returns formats for CGST & SGST No exemption/remission of Tax to industry State will be empowered to Tax services It will also improve the international cost competitiveness of native goods & services
- 12. Benefits to assessee Reduction in multiplicity of taxes Mitigation of cascading/ double taxation More efficient neutralization of taxes especially for exports Development of common national market Reduction in the tax outflows in the hands of the consumers Simpler tax regime – o Fewer rates and exemptions o Conceptual clarity (Goods and services)
- 13. Simpler tax system Broadening of tax base Improved compliance and revenue collections in state and centre (tax booster) Efficient use of resources Enhancement in the competitiveness of exports
- 14. Could cut freight times by 20-30% Could cut logistics costs by even higher i.e. 30-40% Boost India’s key manufacturing sectors by 3-4% of net sales Help India to return to high growth path Enabling large-scale job creation
- 15. Legacy issues which will use resources Non-harmonization of tax rates Lack of procedural manuals Lack of skilled officials Lack of automation Lack of cross verifications with other tax administrations Contd…
- 16. No system for 100% scrutiny of tax returns and tax audit Poor quality of tax returns Double registration – Handling old registration Lack of mechanism to control tax evasion Impact on prices
- 17. Tax planning Tracking GST development Industry advocacy Review of draft legislation and impact analysis Review of final legislation and impact analysis Implementation assistance Post implementation support Record keeping Departmental audit
- 18. The base should be extended to all goods and services including immovable property, Banking services, goods & passengers There should be a single low rate There should be destination based The tax should be designed on invoice-credit method Full and immediate input tax credit in respect of capital goods Contd…
- 19. There should be seamless flow of tax through all stages of production and distribution so as to stick on “final” consumption The exports should be zero rated and imports should be fully taxed There should be a threshold exemption for small dealers Full computerization of the compliance and administrative systems The GST must replace all transaction based taxes on goods & services and factors of production
- 20. Common GST Portal (Reconciliation system) Taxpayer State 1Portal State 2 Portal State N Portal NSDL MCA CBDT CBEC (Central Portal) Banks and RBI Send Challan Upload Challan Details File Returns CGST and IGST Returns SGST and IGST Return
- 21. Rates and policy issues of VAT Emerging issues : • Bit coins/coupons • B2C • Online supply of transactions • E-commerce transactions • Dispute settlement between states • Exclusions • Revenue Neutral Rates (RNR)