basic overview on gst- goods & service tax india

R.C.M.

Basic Overview on GST

ARPIT VERMA [email protected] +91-9540688557

Revised Model GST Law Dated 25-11-2016 .

Came into force on the date as may be notified.

R.C.M.G.S.T.

CONTENTS

A. Present Tax Structure

B. GST Law on Public Portal

C. Intra State & Inter State Supply

D. Levy & Collection of CGST/SGST/IGST

E. Input Tax Credit Overview

F. Utilization of ITC for Payment

R.C.M.Present Tax Structure

•Currently, India has a Dual System of Taxation on Goods & Services.

•Tax on activity of manufacture & provision of service is levied & collected by Union Government.

•Tax on sale of goods is levied & collected by State Government.

•Means- Multiplicity of taxes :• Be at Central Level.• Be at State Level.

G.S.T.

R.C.M.

Central Levy going to be subsumed

•Excise Duty including Additional Excise Duty.

•CVD & SAD under Custom Duty (excluding BCD).

•Service Tax.

•Surcharges & Cesses.

G.S.T.

R.C.M.State Levy going to be subsumed

•Value Added Tax. (VAT)

•Central Sales Tax. (CST)

•Entertainment Tax unless levied by local bodies.

•Luxury Tax.

•Entry Tax.

•Taxes on lottery , betting & gambling.

•State Cesses & Surcharges

G.S.T.

R.C.M.Introduction in Public Portal

•The Draft Model GST Law was 1st time placed on public portal by Government on 14th June, 2016.

•The Government once again placed Revised Model GST Law on 25th November, 2016.

•With the clear intention to implement GST by 1st April,2017.

•Applicable – whole of India.

•Date – to be notified.

G.S.T.

R.C.M.Goods & Services Tax

GST is defined in Article 366 of the Constitution (101st Amendment) Act, 2016:

•Goods & Service Tax means tax on supply of:• Goods, or• Services, or• Both.

•Except taxes on the supply of the alcoholic liquor for human consumption.

G.S.T.

R.C.M.G.S.T.

Levy & Collection SchemeGST would be leviable on Two types of Supply

Intra-State Supply

CGST & SGST

Inter-State Supply IGST

•CGST – Central Goods & Service Tax.

•SGST – State Goods & Service Tax.

•IGST- Integrated Goods & Service Tax.

R.C.M.Levy & Collection Scheme

Inter State Supply Includes-

•Supply from one state to another state.

•Import of Goods/Services in India.

•Export of goods/Services outside India.

•Supply of Goods/Services to Special Economic Zone developer or Unit.

G.S.T.


Normal Levy on Intra State Supply- [Section 8]

•The provisions of levy & collection on Intra State Supply are contained in Chapter III of Central/State Goods & Service Tax Act, 2016.

•CGST/ SGST shall be levied on Intra State Supply.

•CGST will be levied & collected by Central Government.

•SGST will be levied & Collected by State Government.

•At the rate as may be notified by CG/SG but not exceeding 14% CGST & 14% SGST.

G.S.T.


Levy under Reverse Charge on Intra State Supply- [Section 8(3)]

•The CG/ SG shall specify the categories of supply of Goods / Services fall under Reverse Charge.

•Reverse charge is only a mode of collection.

• which will describe the supplies where the receiver will be liable to pay GST (wholly or partially) to CG/SG

G.S.T.


Composition Levy on Intra State Supply- (Section 9)

•A registered taxable person:

whose aggregate turnover in a financial year does not

exceed fifty lakh rupees

may pay tax under composition scheme

At the rate as may be prescribed.

Which should not be less than:• 2.5% in case of Manufacturer

&• 1% in other cases.

G.S.T.


Composition Levy (Section 9)

•Composition Scheme not available for:

Person who is making supply of services;

Person who is making inter state supply;

•Taxable person opting composing scheme shall neither collect

any tax from the recipient on supplies made by him nor shall be

entitled for ITC.

G.S.T.


Normal Levy on Inter State Supply- [Section 5]

•The provisions of levy & collection on Inter State Supply are contained in Chapter III of Integrated Goods & Service Tax Act, 2016.

•IGST shall be levied on Inter State Supply.

•At the rate as may be notified by CG but not exceeding 28%.

•IGST will be levied & collected by Central Government which will be apportioned between Central & State Government.

G.S.T.


•Levy under Reverse Charge on Inter State Supply- [Section 5(3)]

The CG/ SG shall specify the categories of supply of Goods / Services

On which the tax shall be levied & collected under Reverse Charge.

•Composition Levy - Not Available on inter State Supply.

G.S.T.

R.C.M.Overview- Input Tax Credit

•On Account of the provisions of ITC, GST is a Value Added Tax as Govt. will collect tax on each stage of supply after allowing the Credits for the Inputs & Input Services.

•Input tax means tax paid on any inward supply of Goods or Services

•It also includes tax paid under Reverse Charge

•It does not include tax charged under Composition Scheme.

R.C.M.Eligible person to take Credit [sec. 16(1)]

•Every registered taxable person is eligible to take credit of input tax.

•Charged on any supply of goods/ services

•Which is used or intended to be used in the course or furtherance of his business

•The amount so charged shall be credited to electronic credit ledger of such person.

R.C.M.Condition to take credit [sec. 16(2)]

•Registered taxable person is entitled to get ITC if-Having possession of taxpaying docs such as invoice &

debit note & others.Has received or deemed to received the goods and/or

services.Tax charged for such supply has been actually paid .Has furnished return as per sec.34.

•If goods received in lots/installments- on receipt of last installment.

R.C.M.

Utilization of ITC for Payment

I T C

CGST I GSTSGST

CGST IGST SGST IGST IGST CGST SGST

R.C.M.After Implementation of GST

Multiplicity of Double taxation is going away after implementing the GST:

•If Excise charged by a manufacturer to a VAT dealer, Credit is not available in the hand of VAT dealer.

•Similarly, VAT charged by VAT dealer, Credit is not available in the hand of Manufacturer & Service Provider.

•CST Credit not available.

•Entry Tax Credit not available.

R.C.M.After Implementation of GST

•If a VAT registered dealer is having offices in 29 States. He should have follow 29 States which will go away in GST. •So, the Country is waiting of GST but this is a mammoth task before the government that is to be achieved within the target date of April, 2017

R.C.M.

Thank you

GST- Good Night, Sweet Dreams & Take Care.