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GOODS AND SERVICES TAX REFORM TO CONSOLIDATE INDIRECT TAXATION

GOODS AND SERVICES TAX REFORM TO CONSOLIDATE INDIRECT TAXATION. CA. SANJEEV MALHOTRA FCA, FCS, ACMA, LL.B. casanjeevmalhotra@gmail.com. What is GST. GST is a comprehensive value added tax on goods and services

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GOODS AND SERVICES TAX REFORM TO CONSOLIDATE INDIRECT TAXATION

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  1. GOODS AND SERVICES TAXREFORM TO CONSOLIDATE INDIRECT TAXATION CA. SANJEEV MALHOTRA FCA, FCS, ACMA, LL.B. casanjeevmalhotra@gmail.com

  2. What is GST • GST is a comprehensive value added tax on goods and services • It is collected on value added at each stage of sale or purchase in the supply chain • No differentiation between Goods and Services as GST is levied at each stage in the supply chain • Seamless input tax credit throughout the supply chain till tax is charged on final consumption value • At all stages of production and distribution taxes are a pass through and tax is borne by the final consumer • Exemption limit to be uniform; to maintain value chain, exemption limit to cover only retail trade where transactions with ultimate consumers; this will ensure proper input tax accounting and rebating mechanism for exports.

  3. Present Indirect Tax Structure

  4. Taxes to be Subsumed - Central

  5. Taxes to be subsumed - State

  6. Proposed Indirect tax Structure

  7. GST exclusions • Following goods and services will not be part of proposed GST. • Alcohol for human consumption. – State Excise plus VAT. • Electricity – Electricity duty. • Real Estate – Stamp duty plus property taxes • Petroleum Products – (to be included from the date to be notified by GSTC) • Tobacco Products – GST with Central Excise

  8. IGST Adjustments and Settlement • IGST credits can be adjusted for payment of IGST, CGST and SGST in sequence by importing dealer. • The exporting state will transfer to centre the credits of SGST used for payment of IGST. • The centre will transfer to the importing state the credits of IGST used for payment of SGST. • Central Govt. will act as a clearing house and transfer the funds across states.

  9. Process of Registration • Regn. To be done within 30 days. • PAN based 15 digits GSTIN to be allotted. • Gross Annual turnover all over the country will be considered for regn. Or compounding Scheme. • Compulsory registration for dealer of inter state sale or reverse charge cases. • Unique identification no. for UN Bodies and Govt. deptt./ PSUs • The concept of ISD to continue for services. • Suomoto registration in Enforcement cases. • Multiple registration in same state allowed for Business Verticals.

  10. Process of Registration… contd • The scheme of TRP and Facilitation Centres to be started. • Compulsion to use DSC in case reqd. by any other law. • Application in GSTN and printed Extract to be submitted to concerned tax authority within 30 days. • GSTN will communicate with applicant and concerned tax authority. • Approval or Rejection to be done within 3 working days otherwise it will be deemed approved by GSTN. • Risk profiling of assessee to be done by tax authority and input in GSTN.

  11. Process of Payment • Online tax payments are required. • Bank payments are restricted to Rs. 10,000/- per challan. • Challan to be generated from GSTN which will have unique Common Portal identification no. (CPIN). • CPIN will remain valid for 7 working days. • The system will be integrated with RBI system. • RBI will act as clearing house for Govt. • Cheque bouncing – System will bar such assessees from this facility.

  12. Process of Refunds • GSTN to be integrated with Customs deptt. • Refund application to be filed online. • Refund application to be made within time limit. (1 year as present) • Refund to be processed in a specified time limit. • Stress on online verification of information. • Pre and post audit of refunds to be carried out depending on amounts. • Provision of interest on delay in payment of refund.

  13. Way Forward for Introduction • Constitutional Amendment Bill to be passed. • To be ratified by 50% of State Assemblies. • Assent by President • Constitution of GSTC. • GSTC to recommend GST law and Procedure. • GST law to be introduced in Parliament and State Assemblies. • GSTN (GST network) to be made operational.

  14. Likely GST Administration • CGST by Union department and SGST by State Revenue deptt. • Cases with turnover upto 1.5 crores exclusively with State Revenue deptt. • Union to deal only with Enterprises having Pan India presence. • Routine matters with State and monitoring with Union.

  15. Returns • Mandatory E filing of Returns. • Returns to be made transaction wise. • Returns up to a certain turnover limit will be assessed by one AA.

  16. THANK YOU CA. SANJEEV MALHOTRA FCA, FCS, ACMA, LL.B. casanjeevmalhotra@gmail.com 9810995282

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