GOODS AND SERVICE TAX

1. GOODS AND SERVICE TAX

2. AGENDA

3. Present Indirect Tax Structure of India

4. Why GST

5. What is GST

6. Multiple Taxes To Single Unified Tax System STATE TAXES CENTRAL TAXES CGST SGST

7. Multiple Taxes To Single Unified Tax System

8. Multiple Taxes To Single Unified Tax System

9. Proposed Indirect Tax Structure

10. GST -Value Added Multipoint Tax • Goods and Services Tax system that is set to be introduced, tax will be levied only on the value ADDED at each stage. • It is a single tax (collected at multiple points) with a full set-off for taxes paid earlier in the value chain.

11. GST -Value Added Multipoint Tax • FC • C1 • C2 S1 steel S2 Car body S3 Car maker

12. GST -Value Added Multipoint Tax • FC • C1 • C2 S1 steel S2 Car body S3 Car maker ss • Inward value 247.80 Itc- 0 • total value= 247.880 • Inward value= 177 ITC- 27 total value= 150 value addition= 60 basic supply = 210 GST 18 % = 37.80 total value = 247.80 • Basic supply= 100 • GST 18% = 18 • total invoice value= 118 • Inward value=118 • -ITC= 18 • total cost= 100 • value addition= 50 • basic supply= 150 • GST 18% =27 • Total invoice value =177 Tax payable=37.80 -ITC=27 Net Tax Paid=10.80 Tax payable=27 -ITC=18 Net Tax Paid=9 Value addition=60 GST 18 %=10.80 Value addition=50 GST 18 %=9 Net Tax Paid= 18 + Net Tax Paid = 9 + Net Tax Paid = 10.80 Total Tax Paid = 37.80

13. GST is destination based tax • GST is destination based and consumption based tax. • place of consumption will decide the state that will collect tax. • The parody behind destination based of taxation is the producing/selling state gets nothing while the consuming states receive complete share of revenue Bhopal Mumbai Tax collected to Maharashtra

14. Levied concurrently by both Central & State Dual Levy Central CGST State SGST or Union Territory UTGST

15. Levied concurrently by both Central & State • In case of Intra State Transaction/ within the state , there will be two components of GST Central GST (CGST) and State GST (SGST) being levied on the value of goods and services. • Both the Centre and States will simultaneously levy GST across the value chain. • In case of inter-state transactions, the Centre would levy and collect the Integrated Goods and Services Tax (IGST). • The IGST would roughly be equal to CGST plus SGST.

16. Supply is the basis for levy & collection • Supply is a fundamental concept in GST. • GST revolves around it. • Supply have three key elements Time of supply Place of supply Value of supply

17. GST Present Taxable Event ProposedTaxableEvent Supply

18. CLASSIFICATION OF SUPPLY AS INTRA STATE/ INTER STATE

19. Supply - basics • The term supply defined inclusively to inter alia includes • Specific supplies without consideration schedule-I • Activities whether goods or services- Schedule -II • Activities neither Goods nor Services Schedule-III Supply = Goods OR Services OR Both

20. Meaning and scope of supplySupply Includes

21. Schedule II- Services vs. Goods Transfer • Any transfer of the title in goods is a supply of goods.(G) • Any transfer of goods or of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of services.(S) • Any transfer of title in goods under an agreement which stipulates that property in goods will pass at a future date upon payment of full consideration as agreed, is a supply of goods.(S)

22. Schedule II- Services vs. Goods Land and Building • Any lease, tenancy, easement, licence to occupy land is a supply of services.(S) • Any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services.(S)

23. Schedule II- Services vs. Goods • Renting of Immovable property (S) • Temporary transfer or permitting the use or enjoyment of any intellectual right (S) • development, design, programming, customisation, adaptation, up gradation, enhancement, implementation of information technology software(S) • agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act.(S) • Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration (S)

24. Schedule II- Services vs. Goods • construction of a complex, building, civil structure or a part thereof , including a complex or building intended for sale to a buyer, wholly or partly (S) except where the entire consideration has been received after issuance of completion certificate,(GOODS) • works contract (S) “works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract

25. Schedule II- Services vs. Goods • supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), (S) • where such supply or service is for cash, deferred payment or other valuable consideration.

26. Composite supply • Supply of two or more goods or services together. • They are naturally bundled and supplied together in the ordinary course of business. • One of them is a Principal Supply. • EXAMPLE- I. work contract II. Hotel service III. Tour package with food

27. Mixed Supply” • Mixed Supply means two or more individual supplies of goods or services or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply; Example- supply of toothpaste with brush Tax invoice –charging GST Tax rate highest of all Supplier Receiver

28. GST Proposed Tax Structure

29. Point of Taxationdetermine-rate of tax, value and payment of tax

30. “TIME OF SUPPLY OF GOODS” (SEC -12)

31. TIME OF SUPPLY OF GOODS

32. TIME OF SUPPLY OF GOODS

33. TIME OF SUPPLY OF SERVICES

34. TIME OF SUPPLY OF SERVICE

35. Nature of supply

36. Levy of Tax

37. Place of supply –Different situation

38. Place of supply

39. Place of supply

40. PLACE OF SUPPLY OF GOODS

41. Place of supply –import/export

42. Place of supply of service

43. Place of Supply of service in India directly in relation to an immovable property, • including services provided by architects, interior decorators, surveyors, engineers and oestate agents, any service provided by way of grant of rights to use immovableproperty • by way of lodging accommodation by a hotel, inn, guest house, home stay,club or campsite, and including a house boat or any othervessel; • by way of accommodation in any immovable property for organising any marriage or reception or matters related thereto, official, social, cultural, religious or business function. • any services ancillary to the services referred to in clauses (a), (b) and the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located:

44. Place of Supply-Restaurant • The place of supply of restaurant and catering services, personal grooming, fitness,beauty treatment, health service including cosmetic and plastic surgery The location where the services are actually performed

45. Place of supply of service

46. Place of supply of service

47. Place of supply of service

48. Place of supply of service

49. Place of supply of services

50. Valuation rules • Apply to the supply of goods/service • Value of the goods/service shall be transaction value. • Transaction value shall be determined in monetary term. • The transaction value shall be accepted even where the supplier and recipient of supply are related.