GST – IndiaRajesh Sharma8th. December, 2016

Contents

GST – Overview - history

In the year 2000 Vijpayee Government started discussion, for introduction of GST, Committee set up under Asim Dasgupta (Finance Minter of West Bengal), role of committee was design GST model as well as check IT preparation for same.

In his in budget speech of 2004-05, the then finance minister P .Chidambaram says: “In the medium-to-long term, it is my goal that the entire production-distribution chain should be covered by a national VAT (value added tax), or even better, a goods and services tax, encompassing both the centre and the states.”

GST – Overview - History

2010 – Government launches mission mode for computerisation of Taxes, this is foundation stone for GST.

2011 – Congress introduces Constitution Amendment bill in Loksabha, main opposition parties oppose (BJP & Left) – bill sent to standing committee, , finally bill lapses in year 2014.

2012 – P. Chidambaram, has meeting with all state Finance Ministers to discuss GST.

2013 – Standing committee provides suggestion on Tax reforms and changes.

2015 Feb – Jaitley announces implementation of GST, in year 2016,

2016 May- Government passes Constitutional Amendment bill.

GST – Area of impact

Tax Registration Define GST Registration Level

Master Data Maintenance Business Partner Tax Data, GST Accounts

Tax Configuration & Computation Configure Tax and Pricing procedures ; Tax computation

Document Numbering Outgoing Invoice Numbering

Business Process Localization Extend to currently localized Business Processes

GST Tax Postings GST Input and Output Tax postings

Utilization Input tax credit utilization against payable for GST Taxes

Reporting Tax Register

GST – Present Status

Digital Platform

Customers

State - GSTCentre GST

GST – Unique Number

15 digit number

2 - Digit represents State

Next 10 - Digit represents PAN

Number

13th. digit number Consist of registration number of assesse,

14th digit is Z, for all number

15th. digit number is correction number

GSTIN-GST Identification numberSingle registration for CGST, SGST and IGSTIndividual registration to be obtained in each state of business establishmentPAN based registration number – Up to 15 characters in length

GST – Registration

1.All the taxpayers with PAN validated from CBDT’s database are not required to apply for fresh

registration under GST. They can get provisional GSTIN from GST portal with a validity of 6

months so that they can provide relevant data as per GST registration form.

2.GST – Registration has started in most of states.

GST – Concept

1. Consumption state to earn tax.

2. Manufacturing state will loose tax earnings.

3. States to be compensated for 5 years.

4. Avoids Cascading effect of tax.

GST – Rates

The four GST slabs have been set at 5%, 12%, 18% and 28% for different items or services.

To keep inflation in check, essential items including food, which at present constitute roughly half of the consumer inflation basket, will be taxed at a zero rate. The lowest rate of 5 per cent would apply to common use items.

The peak rate of 28% will apply to luxury goods. Luxury cars, tobacco products and aerated drinks will attract an additional cess on top of the highest tax rate.

The additional cess and a clean energy cess will create a revenue pool which will be used to compensate states for any loss of revenue during the first five years of the implementation of GST, Mr Jaitley said.

Service Tax will go up from 15% to 18 %, said Revenue Secretary Hasmukh Adhia.

Master Data Maintenance

Business Partner Tax Data • GST reg. no. to be captured for each Registered Customer and Vendor

GST Tax Accounts • Separate tax A/P and A/R accumulation might be required at GST registration level • To be defined for CGST, SGST and IGST separately

Vendor GST Registration

Customer GST Registration

Tax Account

• Business Place based G/L account determination – Both for MM and SD

GST - Tax Configuration and Computation

Intra-state transactions

CGST and SGST applicable

Inter-state/Import transactions

– IGST applicable

Export Transactions

– Zero rated

Region level rate variations may exist

New condition types/access sequences and account determination

Tax Configuration and Computation- Proposed Solution

Tax Procedure – New Condition Types

Tax Configuration and Computation- Proposed Solution

SD Pricing Procedure – New Condition Types

Tax Configuration and Computation- Proposed Solution

SD Pricing Procedure – Access Sequence

Tax Configuration and Computation- Proposed Solution

MM– Access Sequence

Document Numbering

Unique sequential numbering for outgoing GST invoices• Criteria for legal numbering may be specified by govt. • It could be for example:

Registration level

Document type (Invoice / Credit Memo)

A combination of above

Document Numbering-Proposed Solution

Maintain Document Class

Assign Document class to Document Types

Document Numbering-Proposed Solution

Assign Number Range to Business Place

Business Process Localization

• Sales Processes • Procurement Processes • Stock Transfers • Subcontracting • Others

Sales - Proposed Solution

Sales Order

Sales - Proposed Solution

Sales Order

Sales - Proposed Solution

Billing Document (A/R)

Sales - Proposed Solution

Billing Document (A/R)

Sales - Proposed Solution

Billing Document (A/R)

GST – Credits

1. Liberal Credits

2. Credits on all bills

3. Uploads Necessary to claim credits

GST – Coverage - Subsumed

Subsumed:

Excise Duty

CVD, SAD

Service Tax

VAT

CST

Entry Tax

Octroi

LBT

GST – Coverage - Excluded

Exculded:

Basic Customs Duty

Entertainment Tax

Taxes at Municipal Level

Electricity Duty

GST – Issues

Old Wine in New Bottle

GST Staff

State and Central sharing.29 states and the two Union Territories with legislatures. Given the sharp

differences in the structure of the economy and sales tax revenue (as a ratio

of gross state domestic product, or GSDP) across states, the interests of the

states do not always coincide and considerable effort is needed to persuade

them to adopt a uniform or even a broadly harmonised structure and

administrative system for the tax.

Transitional period, accounting/ inventory/ set-off

GST

Thank You

GST – Issues

Old Wine in New Bottle

GST Staff

State and Central sharing.29 states and the two Union Territories with legislatures. Given the sharp

differences in the structure of the economy and sales tax revenue (as a ratio

of gross state domestic product, or GSDP) across states, the interests of the

states do not always coincide and considerable effort is needed to persuade

them to adopt a uniform or even a broadly harmonised structure and

administrative system for the tax.

Transitional period, accounting/ inventory/ set-off