GOODS & SERVICE TAX
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Transcript of 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)