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Contents
Present taxation system of India What is Goods and Service Tax (GST) An Introduction Silent features on First Discussion Paper on GST Broad propositions Not covered and clear Broad propositions - Reasonable clear Challenges before Industry/Service Sector Proactive actions Requirement Areas - Tax Synergy
By CA. Vinay Bhushan
Manufacturing Sector
Service Sector
GST shall have two components (1) levied by Central Government (Central GST) (2) levied by State Government (State GST) GST Will be governed by multiple statutes
Cross utilization of Input Tax Credit (ITC) between Central GST & State GST would not be allowed
Periodical returns need to be filed with Central and State authorities separately, tax will be deposited through separate account heads PAN- linked taxpayer identification number will be issued
Threshold Limit:State GST for Goods & Services Central GST for Goods Central GST for Services
INR 1.00 Million INR 15.00 Million Not provided (however it is conveyed that it will be appropriately high)
Composition/compounding limit
CENVAT CREDIT MECHANISM UNDER PRESENT TAXATION AND PROPOSED GST Present Taxation Scheme
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Proposed GST
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Cross credit of good and service tax is allowed since September 10, 2004; But limited to Central Excise & Services Tax Cross credit among VAT and Service Tax, Central Excise is not allowed Credit on inter- State transactions is not allowed; Cross Credit of VAT with CST liability is allowed
Cross credit of good and Services would be allowed Cross credit with respect to Central GST and State GST transaction would not be allowed
State Taxes
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Central Excise Duty Additional Excise Duty Service Tax Additional Customs Duty (CVD) Special Additional Duty of Customs (SAD) Surcharges and Cesses
VAT /Sales Tax Entertainment Tax Luxury Tax Tax on Lottery, betting & Gambling State Cesses and Surcharges Entry Tax
GST
CGST
IGST
By CA. Vinay Bhushan
SGST
GST rates are not disclosed Valuation mechanism of Goods and Services Place of provision of Services or place of receipt in case of services are not clear Taxable event- whether on receipt basis or on receivable basis No discussion on Stamp duty on Immovable property
Business Restructuring:
Phasing out of CST Change in tax rates of goods and services Logistics, Transaction model etc.
Location Based Exemptions Export Obligations Change in ERP Systems Training of Middle Management Team
Implementation Assistance
Transition Stock Planning Registration under new legislation/s Maintenance of records as per new formats Manner of computation of Credit and tax liability Invoice Formats Changes in ERP/accounting system
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