Taxopedia
Taxopedia
Why Taxes, and HOW
To have fund to implement the developmental project
and governance.
To take fund from private source towards public source
To collect fund from general public except basic needs
and facilities.
Constitution of India allow state or central Govt. to tax
certain activities, transaction, events.
Taxopedia
Taxations
Direct taxation:- the burden of the tax is on the
person who pay. Income Tax, Wealth Tax etc.
Indirect taxations:- the ultimate burden is passed on
to the final consumer directly or otherwise. Sales Tax,
VAT, Excise Duty, Service Tax
Other levies- stamp duty, Road taxes, fees etc
Taxopedia
components indirect taxes
Excise- on Manufacture
Service Tax- on Service Being provided
Entry Tax- on entry to a state
VAT- on sale of Goods intra state
CST- on interstate sale transactions
GST- Goods and Service Tax
TAX Ingredients WE discuss
What is the Tax event
What is the taxable value
What is the tax rate
Who will pay the tax
Taxopedia
Evolution of Indirect taxes in India
Subsuming of Existing Taxes Taxopedia
• Central Excise
• Additional duties of Custom (CVD)
CGST • Service Tax
• Surcharges and all cesses
• VAT/sales tax
• Entertainment Tax
• Luxury Tax
• Lottery Tax
• Entry Tax
SGST • Purchase Tax
• Stamp Duty
• Goods and passenger Tax
• Tax on vehicle
• Electricity, banking, Real state
• CST
IGST
MAJOR FEATURES OF THE CONSTITUTION (ONE
HUNDRED AND FIRST AMENDMENT) ACT, 2016
Simultaneous power upon Parliament and the State Legislatures to make laws
governing Goods and Services Tax; [Article 246A(1)]
Exclusive power upon Parliament to make laws w r t Goods and Services Tax
where supply takes place in the course of Inter State Trade or Commerce;
[Article 246A(2)] {New Article 269A}
Petroleum product on a Future date. [reference to 279A(5)]
Omission of the concept of ‘declared goods of special importance’ [286(3)(a)
omitted]
Friday, October 20, 2017 CA Tarun Agarwalla 8
Continued…….
269A levy, collection & Sharing of Inter-State GST
-by central government, apportioned between state and centre;
- Additional duty on custom also covered
Cross utilization of IGST with SGST
270- amended – cross utilization of IGST with CGST
Compensation to the States for loss of revenue for a period of five years; from the
appointed day, base year 2015-16
GST Compensation ACT
279A Creation of GST Council to examine & recommend parameters like rates, taxes,
cesses and surcharges to be subsumed, exemption list and threshold limits, Model GST
laws, etc.
Friday, October 20, 2017 9
GST Set off Chain Taxopedia
• Input Credit of Goods+ services
Manufacturer • After taking set off of Input credit, pay the Output Liability on value addition
• Input Credit of Goods+ services from manufacturer
Wholesaler • After taking set off of Input credit, pay the Output Liability on value addition
• Input Credit of Goods+ services from wholesaler
Retailer • After taking set off of Input credit, pay the Output Liability on value addition
Consumer • Ultimate Output Liability recovered from consumer
Taxopedia
Proposed system of GST Cont…
Destination based Taxation
Apply to all stages of the value chain
Apply to all taxable supplies of goods or services (as against
manufacture, sale or provision of service) made for a
consideration
Dual GST having two concurrent components
Central GST levied and collected by the Centre
State GST levied and collected by the States
Interstate transaction would be collected as IGST by Central
Government and due credit flow to State Government.
Taxopedia
Proposed system of GST Cont…
CGST and SGST on intra-State supplies of goods or
services in India.
IGST (Integrated GST) on inter-State supplies of goods
or services in India
Import of goods and services
Inter-state stock transfers of goods and services
Export of goods and services – Zero rated.
taxopedia
Proposed system of GST
Destination based Taxation ,apply to all stages of the value chain
Supplier and Place Of Supply
INTRA State
CGST levied and collected by the Centre
SGST levied and collected by the States
INTAER State
IGST levied and collected by center and passed on to the consuming state
Basics of GST taxopedia
Minimum exemption limit – 20 Lakhs ( Odisha)
Voluntary registration can be obtained
Composition scheme can be opted only up to 100 Lakhs,
(not Applicable to works contractor)
Which taxes to remain- BCD, stamp duty, VAT on alcohol for
human consumption, Prof Tax
Tax slabs, 5%, 12%, 18%, 28%, add. cess. (Max 40%)
Basics of GST taxopedia
Separate Registration in every State or Union territory no
Centralized Registration.
There can be more than one registration in one state/ Union
territory.
Each registration Number is a distinct person (assessee) for GST.
Volume, frequency, continuity, regularity may not required for .
Double taxation VAT + ST or Excise+ ST have been replaced with
schedule –II
GST a new Understanding #
TDS provisions and E way bill would be applicable 01.04.2018
Reverse charge on specified goods or services. procuredfromunregisteredperson.
Compensation and money value for delayed payment subject to GST.
Advance Money for Supply would be applicable to GST.
ITC to be reversed if not paid in 180 days
taxopedia
Benefits and opportunities
The biggest benefactor of GST will be ‘Make in India’
initiative.
Competitive exports due to elimination of cascading
impact of taxes.
boost India's GDP growth by 0.9-1.7 per cent
GST will lead to the creation of a unified market
reduce the transaction cost of businesses.
lower down ordering quantity.
Taxopedia
Benefits and opportunities
P to B to C link will help manufacturer production
plan.
seamless movement of goods across states.
Transportation and logistic cost to reduced by 30-40%
(truck drivers spend 60 % of their time off roads ,11
categories of taxes are levied on the road transport
sector)
Taxopedia
Benefits and opportunities
A single taxation on producers would also translate into a
lower final selling price for the consumer.
Transparency -customers would know the visible and
invisible Burdon of tax. What you see what you pay
GST in inputs would encourage to buy raw material from
registered dealers and would bring in more and more
vendors and suppliers under the purview of taxation.
single unified list of concessions/exemptions as against
present disparity, dumping and evasion
GST Tax Model 6 Way Test
1. Is It a Supply?
2. Is it a Good or Services?
Services Rate, HSN, Classification
3. Is it a Non taxable or Exempted Supply?
Supply
4. Is the supply by a Taxable Person ? ( R / L to R)
5. What is the place of supply?
supply Intra State /inter sate
6. What is the Time of supply?
supply
===Tax Payable ( OT-
OT- ITC)
Proper two way compliance to provisions related to ITC and
Mismatch.
Mismatch
CA. Tarun Ku. Agarwalla
Taxopedia Advisory (P) Limited
taxopedia.pro@gmail.com
