/
Goods and Service Tax Goods and Service Tax

Goods and Service Tax - PowerPoint Presentation

faustina-dinatale
faustina-dinatale . @faustina-dinatale
Follow
407 views
Uploaded On 2017-05-13

Goods and Service Tax - PPT Presentation

Rambabu Pathak Chairman ICAIAsansol Chapter Dy Manager Finance ECL GDP Growth Go Up by about 1 International Competitiveness by about 5 Increased FDI Already seen All those who gain to be part of tax payment ID: 547738

gst tax goods state tax gst state goods impact taxes service supply levied india reduce services states duty cst

Share:

Link:

Embed:

Download Presentation from below link

Download Presentation The PPT/PDF document "Goods and Service Tax" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.


Presentation Transcript

Slide1

Goods and Service Tax

Rambabu PathakChairmanICAI-Asansol ChapterDy. Manager (Finance), ECLSlide2

GDP Growth Go Up by about 1%

International Competitiveness by about 5%.

Increased FDI- Already seen.

All those who gain to be part of tax payment.Lower transaction cost – reduced corruptionIncreased IDT + Direct Tax Revenue

Why GST needed in IndiaSlide3

The power to make laws in respect of supplies in the course of inter-State trade or commerce will be vested only in the Union government. States will have the right to levy GST on intra-State transactions including on

services.Centre will levy IGST on inter-State supply of goods and services. Import of goods will be subject to basic customs duty and IGST.

GST

defined as any tax on supply of goods and services other than on alcohol for human consumption. Salient Feature of Proposed Indian GSTSlide4

Central taxes like, Central Excise duty, Additional Excise duty, Service tax,

Additional Custom duty and Special Additional duty and State level taxes like, VAT or sales tax, Central Sales tax, Entertainment tax, Entry tax, Purchase tax, Luxury tax and Octroi will subsume in GST.

Petroleum

and petroleum products i.e. crude, high speed diesel, motor spirit, aviation turbine fuel and natural gas   shall be subject to the GST on a date to be notified by the GST Council.1% origin based additional tax to be levied on inter-State supply of goods will be non-creditable in GST chain. The revenue from this tax is to be assigned to the Origin State. This tax is proposed to be levied for initial two years or such period as recommended by the GST Council.Provision for removing imposition of entry tax / Octroi across India.Slide5

Impact Assessment

Impact

on

TradersImpact on Manufacturer

Impact on Service provider

Impact

on consumers

Impact

on Central Government

Impact

on State Government Slide6

IMPACT ON TRADERS

Tax on value addition: The impact of tax on the wholesaler or retailer would be limited to the value addition. The tax paid at earlier stages (except SGST of other states) would be available as set off for payment of GST on supplies. Therefore traders would prefer to buy/receive supplies with invoice. Reduce

cascading:

Cost of products and services would reduce due to the cascading effect of tax being reduced. SGST levy: SGST would be levied on the local supply of goods within State. IGST (comprised of CGST and SGST) would be levied on interstate supply of goods. CST Act could be abolished in course of time and as a preliminary step the rate of CST could be brought down to 1%. Form C would be abolished under GST law. Slide7

Stock transfers:

Presently, stock transfer is done without charging CST against Form F. Under GST law, stock transfers from one State to other to one’s branch or consignment agent might be treated as inter-State sale and tax levied thereon.Stock transfers to branches/consignment agents within the State:

Under

GST, these transfers could also be levied to tax, unless the BIN number of transferor and transferee is same. Slide8

Impact on Manufacturers[Competitive

in market: There would be a saving in taxes due to less or no restrictions in taking setoff of taxes paid at various stages of manufactures reducing the cost of goods sold. This would make them more competitive both in domestic and international markets.

Valuation of the supply of goods:

At present, excise duty is paid on the event of manufacture of excisable goods and VAT on the sale of goods. VAT/CST is computed on sale price+ excise duty paid. With the shift of taxable event from manufacture to supply of goods, the valuation of goods could be simplified. Under GST, actual value received as a consideration for the supply of goods would be subject to GST.Slide9

Cheaper exports:

The exports would be cheaper as taxes paid at earlier stages could be refunded to higher extent.Transaction costs:

The

transaction costs of compliance could reduce due to widespread computerization and online filling and filing of forms/payment of taxes and returns. However the huge need to upload all transactions may lead to the compliance cost for medium sector to rise and for small sector it may not be bearable.Slide10

Impact on Service ProvidersPresent destination based to consumption based levy

: Presently, service tax is levied at origin and is a destination based levy, the burden of which is borne by the end customer. Under GST, they would be taxed at the place of consumption.Service tax-SGST levied by States:

Under

GST law, the service tax would be levied not just by Centre but also by the States who would be empowered to levy SGST by amendment to the Constitution of India. Taxes received by consuming State: If services are rendered from one State to another, then tax would ultimately go to the consuming State.Slide11

Impact on the Consumers:Reduction

in price: Generally the purchase price would reduce as tax content of most products would come down. But if a product has evaded tax completely then it may find increase. Further those items which are now taxable where tax rate earlier was zero may be more expensive as exemption and zero rated list of items may come down

in the

GST regime.Transparency: The tax paid would be clearly mentioned in the invoice given to the customer.Options to customer: There would be free trade and commerce between states and throughout the country which would provide more options to the consumer.Slide12

Impact on Central Government:

Increased collection of CGST and IGST: The collection of taxes-CGST and IGST would increase when more and more assesses register and pay taxes due to simplified tax laws under GST regime.Loss of CST revenues:

The

CST which would be reduced to 1% and then gradually removed (may be within 2 years of GST implementation). This maybe dropped in the final law.Refunds under GST: The refunds which under Central excise and service tax law take long time in coming, could come faster.Reduce Corruption:

When the laws are simplified, then the chances of multiple interpretations would reduce, leading to fall in disputes and consequent litigation. Also the automation of the payments/returns filing and other compliances could mean that the interaction between the assessee and the department officers would come down to minimum. Compensation for loss of revenues to States: The compensation of loss of tax revenues to the States on account of implementation of GST would be an outgo.Slide13

Impact on the countryIncreased FDI:

The Foreign Direct Investments may flow in an increased manner once GST is implemented as tax laws are one of the reasons foreign Cos are wary of coming to India in addition to high corruption levels.Growth in overall revenues: It

is estimated that India could get revenues $15 billion pa by implementing the

Goods and Services Tax as it would promote exports, raise employment and boost growth.Single point taxation: Uniformity in tax laws leading to single point taxation for supply of goods or services all over India. This increases the tax compliance and more assesses come into tax net.Simplified tax laws: This reduces litigation and waste of time of the judiciary and the assessee due to frivolous proceedings at various levels of adjudication and appellate authorities. Present law appears

to be much worse and an amalgam of the bad parts of VAT/ ST/ CE.Increase in exports and employment-

GST

could also bring raise in employment, promotion of exports

and consequently

a significant boost in overall economic growth and factors of production-land labour and capital

. Slide14

ROLE OF CMAs IN GSTSlide15

STRATEGIC CONSULTANCY

FUNCTIONAL SUPPORTIT AND ERP SYSTEMSAUDIT, ASSURANCES AND LEGAL COMPLIANCES

ACCOUNTING AND TAXATION

PARTNERS IN TRANSITIONSlide16
Slide17
Slide18
Slide19
Slide20
Slide21
Slide22

Benefits of GSTSlide23

GST has been envisaged as a more efficient tax system, neutral in its application and distributionally attractive. The advantages of GST are:

Wider tax base, necessary for lowering the tax rates and eliminating classification disputesElimination of multiplicity of taxes and their cascading effectsRationalization of tax structure and simplification of compliance procedures

Harmonization of center and State tax administrations, which would reduce duplication and compliance

costsAutomation of compliance procedures to reduce errors and increase efficiencySlide24

Destination principle:

The GST structure would follow the destination principle. Accordingly, imports would be subject to GST, while exports would be zero-rated. In the case of inter-State transactions within India, the State tax would apply in the State of destination as opposed to that of origin.Slide25

Challenges to implement GSTSlide26

A large part of the success of GST depends on two prominent factors – ‘RNR’ & ‘threshold limit’ for GST. RNR stands for Revenue Neutral Rate & is the rate at which there will be no revenue loss to the government after implementation of GST. RNR will impact India economy adversely, if it will be higher than the present tax

structure.The threshold limit of turnover for dealers under GST is debatable issue & if threshold limit will be high then It will also increase the tax payers under GST.

Robust

IT backbone which needs to develop for GST.Critics claim that CGST, SGST and IGST are nothing but new names for Central, Excise, Service Tax, VAT and CST, and hence GST brings nothing new to the table.Slide27

THANK YOU