GOODS AND SERVICES TAX (GST) IGST MODEL (MARCH...
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GOODS AND SERVICES TAX (GST) IGST MODEL (MARCH 2015) CA. UPENDER GUPTA, IRS Additional Commissioner GST CELL CBEC 1
Transcript of GOODS AND SERVICES TAX (GST) IGST MODEL (MARCH...
GOODS AND SERVICES TAX (GST)
IGST MODEL
(MARCH 2015)
CA. UPENDER GUPTA, IRS Additional Commissioner
GST CELL CBEC
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Taxation of Inter-State Sales / Supplies
Present
Proposed
Various Models
IGST Model
Requirements
Working
Advantages
PRESENTATION PLAN
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TAXATION OF INTER-STATE SALES / SUPPLIES
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Centre levies CST on Inter-State Sales - Article 269 r/w
Entry 92A of List I – Central Levy but collected &
retained by originating State
Entry Tax levied by Importing State – Article 246 r/w
Entry 52 of List II
Some %age of Input Tax Credit availed on goods used
in exported goods - retained by Exporting State
Forms used for accountal & verification of inter-state
movement of goods
Verifications at Border Check posts
ITC of CST / Entry Tax not allowed to buying dealer
PRESENT TAXATION OF INTER STATE SALES
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Centre to levy & collect Integrated GST (IGST) on supplies of goods or services in the course of inter-State trade or commerce including imports – proposed Article 269A
Centre to levy non-vatable Additional Tax not exceeding 1% on inter-state supply of goods – to be collected & retained by originating State
IGST applicable to
Inter-State supplies of goods or services in India
Inter-state stock transfers of goods
Import of goods or services
ITC of IGST allowed to buying dealer
ITC of Additional Tax not allowed to buying dealer
Place of Supply of goods or services Rules
PROPOSED TAXATION OF INTER STATE SUPPLIES
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VARIOUS MODELS
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Origin-based taxation
Deferred payment and reverse charge
Dual VAT with deferred payment
Compensating VAT (C-VAT)
Viable integrated VAT (VIVAT)
Prepaid VAT (PVAT)
Split Payment Method (SPM)
VARIOUS MODELS
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Bank Model
TDS Model
SGST Authority Model
CGST Authority Model
TINXYS Model / Dematted ‘C’ Form Model
Full DEMAT Model
VARIOUS MODELS contd.
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IGST MODEL
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REQUIREMENTS FOR IGST MODEL
Uniform e-Registration
Common e-Return for CGST, SGST & IGST
Common periodicity of Returns for a class of dealers
Uniform cut-off date for filing of Returns
Mandatory reporting of sales and purchase invoice details prior to or along with filing of e-Return
System based verification of returns on monthly basis
System based validations/consistency checks on the ITC availed, utilized & Tax payments
WORKING OF IGST MODEL
Tax payments by suppliers in Exporting Sate
ITC availed by importing dealers
ITC of IGST to be used for payment of IGST, CGST & SGST in that order
ITC of CGST to be used for payment of CGST & IGST in that order
ITC of SGST to be used for payment of SGST & IGST in that order
WORKING OF IGST MODEL contd.
Credit of SGST used for payment of IGST – to be transferred by Exporting State to the Centre
Credit of IGST used for payment of SGST – to be transferred by Centre to Importing State
Inter-Governmental Transfers to take place at the end of Tax Period
Central Government to act as a clearing house and transfer the funds across States
INPUT MANUFACTURER
CAR MANUFACTURER
DEALER CONSUMER C
VAT = 11
CENTRAL TAX TOTAL
= Rs.11 (10+1)
TAX INVOICE A VALUE = 100 CENVAT = 10 VAT = 11 121
TAX INVOICE B COST = 100 VALUE = CENVAT = CST =
123.42
TAX INVOICE C COST = VALUE = 139.06 VAT = 13.91 152.97
E
STATE TAX (X)
TOTAL = RS. 11 (11+0)
CENVAT= 10
CST = 2.42 ITC = (2.42) 0
A B
CENVAT = 11 ITC = (10) 1
VAT = 13.91
STATE TAX (Y)
TOTAL = RS. 16.91 (13.91+3) ENTRY
TAX =
CENVAT = 10% VAT = 10% CST = 2% VALUE ADDITION = 10% ITC = INPUT TAX CREDIT
INPUT MANUFACTURER
CAR MANUFACTURER
DEALER CONSUMER
STATE (X) TAX TOTAL = RS. 1.10 (10-10*+
1.10)
STATE (Y) TAX TOTAL =
RS. 12.22 (2.44 + 9.78**)
TAX INVOICE A VALUE = 100 CGST (10%) = 10 SGST (10 %) = 10 120
CENTRAL TAX TOTAL = Rs.12.22 (10+2+10*-
9.78**) CGST = 10 TE
S SGST = 10
A B
TAX INVOICE B COST = 100 VALUE = IGST (20%) = 22 ADDL. TAX (1%) = 133.10
IGST = 22 CGST = (10) SGST = (10) 2
TAX INVOICE C COST = VALUE = 122.21 CGST (10%)= 12.22 SGST (10 %)= 12.22 146.65
C
CGST = 12.22 IGST=(12.22) 0
SGST = 12.22 IGST= (9.78) 2.44
* STATE (X) WILL TRANSFER RS. 10 ( SGST) USED FOR PAYMENT
OF IGST TO CENTRE ** CENTRE WILL TRANSFER
RS.9.78 (IGST) USED FOR PAYMENT OF SGST TO STATE (Y)
ADDL. TAX = 1.10
COMPARISON
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S. No. Particulars Inter-state
Present Proposed
1. Initial Value 121.00 120.00
2. Centre’s Tax 11.00 12.22
3. State (X)’s Tax 11.00 1.10
4. State (y)’s Tax 16.91 12.22
5. State’s Total Tax 27.91 13.32
6. Total Tax paid to Govt. 38.91 25.54
7. Non-Vatable Tax borne by Business
25.00 1.10
8. Total Tax paid by Consumer 13.91 24.44
9. Final value paid by Consumer 152.97 146.65
ADVANTAGES OF IGST MODEL For Taxpayers
Maintenance of uninterrupted ITC chain on inter-State transactions for dealers located across States
No refund claim for suppliers in exporting State, as ITC is used up while paying the Tax
No substantial blockage of funds for the inter- State supplier or buyer
No cascading as full ITC of IGST paid by supplier allowed to buyer
Model handles ‘Business to Business’ as well as ‘Business to Consumer’ transactions
ADVANTAGES OF IGST MODEL contd.
For Tax Administrations
Upfront tax payments by suppliers in exporting State
No refund claims on account of inter-state supplies
Tax gets transferred to Importing State in accordance with Destination principle
Self monitoring model
Result in improved compliance levels
Effective fund settlement mechanism between the Centre and the States
