Why G. S. T ?
It is designed to simplify present indirect tax system by integrating the union excise duties, customs duties (CVD/SAD), service tax, central taxes (Central Excise Duties, ST, Surcharge & Cess, Excise Duties levied under the Medicinal & Toiletries Preparation Act), state taxes (Sales Tax/ Local VAT, CST, Purchase Tax, Entertainment Tax, Entry Tax, Taxes on lottery, gambling & betting, Surcharge & Cess)
Proposed GST Indirect Tax Structure
Taxes will be charged as under
(1) Central GST – Excise & Service Tax
(2 ) State GST – Local VAT & Other Taxes
(3) Integrated GST
What is Input Tax Credit System in GST?
CGST/SGST/IGST interconnected set off will be allowed under GST regime. Currently CST paid is not allowed as tax credit for the vat that is not the case under GST.
What are the Benefits of GST to Industry?
- Low Compliance Cost
- Simple Business Processes
- Easy Refund to asseseee
- Exemptions instead of exclusions from GST
- Smooth Flow of Input Credit (all credit will be available)
- Flow of Information between supplier, buyer & tax administration in smooth manner.
- All things will be online like e-regitstration, e-returns, e-payment
- No requirement of verification during inter state movement of Goods like currently having done check naka.
- Administrative efficiency in case of assessment & adjudication
- Ease of Compliance
What will be the Model of GST?
As per the recent news on GST proposed GST Model will be like that:
GST will be destination Based Taxation
GST will be apply to all stage of the value chain
Dual GST having concurrent components – Central GST levied & collected by the Centre and State GST levied & collected by States
Integrated GST on Inter-State supplies of goods or services in India- levied & collected by the Centre
IGST applicable to Import of goods & services ,Inter-state stock transfers of goods & services
Optional Threshold exemption in both components of GST
Optional Compounding scheme for taxpayers having taxable turnover upto a certain threshold above the exemption
HSN (Harmonised System of Nomenclature) Code likely to be used for claasification of goods
Present Accounting codes of service tax likely to be used for Services in gst
What will be the rates in GST?
GST rates to be based on RNR (Revenue Neutral Rate) and there will be Four Rates in GST
(1) Merit Rate for essential goods & services
(2) Standard Rate for all the general goods & services
(3) Special Rate will be usede for precious metals
(4) NIL Rate for some products
Where GST will be applicable ?
Apply to all taxable supplies of goods or services made for a consideration except-
Exempted goods or services mentioned in the GST. Exempted list will be common for all CGST & SGST
Goods & Services outside the purview of GST
Transaction below threshold limits
What is IGST?
- Uniform e-registration
- Common e-Return for CGST, SGST & IGST
- Common periodicity of returns for a class of dealers
- Uniform cut-off date for filling of Return
- System based validations/consistency check on the ITC availed, tax refunds
What are the Emerging Issues in GST bill?
- Rates & Policy issues of VAT
- Dispute Settlement between States
- Determination of Revenue Neutral Rates (RNR)
- Emerging Issues
- Bit Coins/Coupons
- Online Supply of Services
- E-Commerce Transactions
Recent News on GST bill
- As per the recent news there should be eight forms for filling of returns by tax payers.
- The joint committee also suggested that the GST low should provide for automatic imposition of late fees for non-filers & late filers of returns.
- In case the return is filed without full payment of taxes, the report said they should be rendered invalid. There will, however, no provision for revision of GST returns.
- The Rate of GST is normally around 25%-30%.
- Threshold Limit in GST is around 25 lakhs to 30 lakhs.
Taxes which are not Included in GST bill
- Tax on items containing Alcohol
- Taxes on Tobacco Product
- Tax on Petroleum Products
- Tax on Real Estate like stamp duty & Property Taxes
For more recent update visit the government sites – Gstindia.com