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Honda Cars India Ltd.
Date : 26 /10 /2016
Goods & Services Tax (GST)
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Honda Cars India Ltd.
Govt. GST implementation Road mapHonda Cars India Ltd.
September 2016
- Bill receives President assent- GST council formed- Draft rules for invoice, payment, registration, refund and returns approved Oct-Nov 2016
- Recommendation of Model laws
- Backend IT systems to be ready (CBEC and States)
- Change management and trainings
December 2016
- GST laws passed- Development of front
end and backend IT processes
- Trainings in IT systemsJanuary to March 2017
- Notification of GST Rules
- Testing of IT systems for all stakeholders
- Updation of development of GST
April 2017
August 2016 – CAB passed
GST in April 2017 seems to be a reality
Change in tax rates
Product/ Service Current Rate GST Rates being discussed
Essential commodities 0 ~ 4% Exempt
Merit rates 6 ~ 18%% 6% / 12 %
Standard Rate 25% 18%
Demerit Rate 40 ~ 50% 26% + Cess ?
Services Service tax 15% ~ 18%
Honda Cars India Ltd.Hot topics- Not yet finalised
Many queries needs to be answered
(1) Rates
(2) Credit on Stock in transit on 1st April 2017(3) Credit on Stock held by Traders(4) Assessing authority- Dual control / Single control(5) Cess on what items / what rate- Cenvatability
Overview of current Indirect taxes
Indirect tax Authority Applicable on General Effective Rate
Customs duty• BCD – 7.5/10%• ACD – 12.5%• Cess – 3%• SAD – 4%
Central Government
Import of goods from outside India
~29.44%.
Excise duty Central Government
Manufacture of goods in India
~ 12.5%.
VAT State Governments
Sale of goods within the State
~ 5% to 15%
CST Central Government
Inter-State sale of goods
2% against Form C.
Service tax Central Government
Provision of services
15%
Entry tax/ Octroi/ Local Body Tax
State Governments/ Local Authorities
Entry of goods into a State/ local area for use, sale or consumption
1% to 14%
Honda Cars India Ltd.
Different types of taxes arising on different taxable events.
Honda Cars India Ltd.Overview of GST
Text
Comprehensive ‘consumption tax’ on supply of goods and services**
Dual GST Model• CGST – by Central Government • SGST – by State Government
**
Inter-State supplies subject to IGST (Integrated GST)**
Cross utilization of credits between goods and services **
Exemptions under GST ???**
Goods and Services Tax (“GST”) is one Indirect tax regime forthe whole nation, which will make India one unified market.What is “GST”
Single taxes arising on one taxable event i.e Supply.
SGST
Current structure Proposed structure
Additional excise duties
CVD/SAD
Excise duty CST
GSTEntry
tax/octroiService
tax
VAT Luxury tax
State leviesIGST
Central levies
Honda Cars India Ltd.Current taxes vs. Proposed GST structures
7Most taxes to be merged in GST.
CGST
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Fiscal Impact-How it will Impact transactionHonda Cars India Ltd.
Issues Pre-GST Post GST Impact
Credit available on out-bound transportation x a
Availability of Credit across Trading –Manufacturing
x a
Storage of Raw material & Finished goods outside factory
Too many procedures
Simple
Labelling & processing in warehouse Litigation prone
Simple
100% credit on capital goods in first year x aNo Cascading effect of taxes x aAbolition of declaration forms (C, H etc.) x a
Many issues under current regime should settle in GST regime
CustomerFactory
CSTExcise Uttar Pradesh
CST
Finished goodsImport of goods
Full Credit
No CreditLocal Raw material
F
Inter-State Raw material
Manufacturing Operations (sale)- Post GST
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Manufacturing Operations (sale)- Pre GST Honda Cars India Ltd.
TamilNadu
Excise VAT
CVD/ SAD
Service Tax
Services
Excise CST
CustomerFactory
IGST Uttar Pradesh
CST
Finished goodsImport of goods
Full Credit
Local Raw material
F
Inter-State Raw material
TamilNadu
CGST SGST
IGST IGST
No cascading effect of tax under GST.
CustomerFactory
CSTExcise Uttar Pradesh
CST
Finished goodsImport of goods
Full Credit
No CreditLocal Raw material
F
Inter-State Raw material
Manufacturing Operations (sale)- Post GST
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Manufacturing Operations (sale)- Pre GST Honda Cars India Ltd.
TamilNadu
Excise VAT
CVD/ SAD
Service Tax
Services
Excise CST
CustomerFactory
IGST Uttar Pradesh
CST
Finished goodsImport of goods
Full Credit
Local Raw material
F
Inter-State Raw material
TamilNadu
CGST SGST
IGST IGST
No cascading effect of tax under GST (CST saving on each inter-state transaction)
GST Network design:Honda Cars India Ltd.
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Flow of Goods & Services
GST Network (GSTN)
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Supplier HCIL Dealer4
Customer
Tier 1
Tier 2
Flow of data for Credit passing
Suppliers to ensure compliance for their Tier 1 & 2 supplies
Details of outward supplies and tax payable
Details of inward supplies and tax credit
Data upload in GSTN- Must for GST credit
GST Network design:Honda Cars India Ltd.
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Flow of Goods & Services
GST Network (GSTN)
2 3
Supplier HCIL Dealer4
Customer
Tier 1
Tier 2
Flow of data for Credit passing
Suppliers to ensure compliance for their Tier 1 & 2 supplies
Details of outward supplies and tax payable
Details of inward supplies and tax credit
Data upload in GSTN- Must for GST credit
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Compliances
Registration- Single registration for IGST/ SGST/ CGST per State- Registration required in each State from where supplies made
Returns- 3 returns per month per State - Matching of returns- Annual return – Reconciliation with financials
TDS provision- Enabling TDS provision at 1% on payments for
works contract above 10 lakh - Separate TDS returns - TDS requirement on AMC?
Documentation- Waybill - Power to prescribe documents for consignment of
goods exceeding INR 50 thousand in value - Records to be maintained at State level for each registered
premises
Compliances under GSTHonda Cars India Ltd.
Simplified but voluminous compliances in GST e.g. detail of each outward supply
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Successful implementation of GST in the OrganizationHonda Cars India Ltd.
To understand about GST at every level in the Organization
Maximise credit – pass on GST benefit in the pricing of the product
Furnish GST return on time by paying proper taxes
Timely compliance – to ensure credit at supply chain
Reconsider strategic decision taken in earlier regime e.g. Warehouse in different states
Identify transition issues e.g. Credit on stock in transit & minimize impact
Need to Identify key steps to be taken for effective implementation in the Organisation
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Changes in HSCP to be done by HCILHonda Cars India Ltd.
Identify the changes to be made in HSCP
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Changes in HSCP: Designing by HCIL, data by SupplierHonda Cars India Ltd.
Identify the changes to be made in HSCP
GST Project Organization - HCILHonda Cars India Ltd.
Directors
Core Core TeamTeam
BMD Purchase Marketing Mfg(GNU)
Mfg(TKR)
IT PSF CS GA HGID SCM
Gaurav Gaurav AgrawalAgrawal
Praveen Praveen KatyayanKatyayan
Rahul Rahul PrasharPrashar
Abhishek Abhishek SahiSahi
AbhishekAbhishekGirdharGirdhar
AbhinavAbhinav KumarKumar
ShashiShashi BhushanBhushan
GurusharanGurusharan DhillonDhillon
GurmeetGurmeet SinghSingh
KunalKunal BehlBehl
Sandeep Sandeep MadanMadan
RavishRavish GadhokGadhok
VireshViresh KantKant
UditUdit Kumar Kumar
Vinod KumarVinod Kumar
BinuBinu
NishithNishith
Deepak Deepak
VikasVikas
SmitaSmita
TusharTushar
HiteshHitesh
PiyushPiyush MittalMittal
Praveen Praveen NautiyalNautiyal
Rakesh MishraRakesh Mishra
Ajay AgarwalAjay Agarwal
HemantHemant TanejaTaneja
Sanjeev BansalSanjeev Bansal
J J TekTekchandanichandani
M. C. Aggarwal
UditUdit GuptaGupta
PR PR RamakrishanRamakrishan
RavinderRavinder RustagiRustagi
Kamal KumarKamal Kumar
Project Evaluator
S Takahashi(BMD)
R K Sharma Y Jikuya(MFG)
H Shimizu(Sales)
M Honda
(IT)P Paranjape
(GA)
SteeringSteeringcommitteecommittee
R Wasan(MFG)
J Sen(Marketing)
P. Chakravarty(CS)
Hilal Khan(IT)
Sameer Jain(BMD)
Ashok Sharma(Purchase)
Advisors Y. Nakayama(BMD)
H Takahashi(Purchase)
Rajeev Gupta (Mktg.)
ArunSharma(MFG)
R Sidana(Sales)
N S Talib(NM)
T. Nakaya(SCM)
KS Malik(PT)-TKR
Project Management
K L Gupta(LPL)
Maninder Jain(APL)
Manish Agarwal(APL)
Directors
Functional Heads
IT SupportTax Head
Operational Team Members
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Honda Cars India Ltd.
Thank you Happy GST journey
Support us in GST implementation in HCIL