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Gstoverview2 170726103447
Gstoverview2 170726103447
•India launched VAT or Value Added Tax system way back in Indirect Taxes in India
2005.
•Excise Duty
•However several local taxes and levies continued to exist. •Service Tax
•VAT is state level multi point tax levied on value addition on •CST / State VAT
goods & is collected at different stages of SALE .
•Entertainment Tax
•CST is levied on inter state movement of goods.
•Entry Tax/ Octroi
•Excise Duty is levied on manufacturing.
•Luxury Tax
•Services are subject to Service Tax.
•Countervailing Duty
•Movie tickets are subject to Entertainment Tax, besides Service (CVD)
Tax.
GST Overview
• While input credit was available on VAT, no input credit was available on CST, Octroi and several other local
levies.
•GST is a tax on both Goods and Services except for some of the goods like alcohol for human
consumption)
How to Utilize Input Credit Under GST Will GST Increase Tax Collection?
Key Business Impacts? Not Just Change in Tax Regime, But Business Transformation
• Current network structure and product flows may need review and possible alteration
Pricing and • Current arrangements for distribution of finished goods may no longer be optimal with the
profitability? removal of the concept of excise duty on manufacturing
• Current network structure and product flows may need review and possible alteration
GST Overview
•Removal of the concept of excise duty on manufacturing can result in improvement in cash
Cash flow flow and inventory costs as GST would now be paid at the time of sale/supply rather than at
Impact?
the time or removal of goods from the factory.
• Potential changes to accounting and IT systems in areas of master data, supply chain
transactions, system design
• Existing open transactions and balances as on the cut-off date need to be migrated out to
System
ensure smooth transition to GST
changes and
transaction • Changes to supply chain reports (e.g., purchase register, sales register, services register),
management other tax reports and forms (e.g., invoices, purchase orders) need review
• Training of employees, compliance under GST, customer education, and tracking of inventory
credit are needed to ensure smooth transition to the GST regime
GST Overview
Tax Compliance Obligations Earlier, a service provider with operations, say in 20 states, can
obtain a single centralized service tax registration, whereas
under GST, separate registrations may have to be obtained in
each of the 20 states. A service provider who would currently
be filing only 2 service tax returns a year would have to file
three or four returns per state per month, which amounts to
about 60 to 80 returns per month, after the transition to GST.
Under GST, effective tax rate on goods • We simplify the preparation and filing of GST returns
(comprising around 70-75 per cent of the through our cloud-based software. We also have a FREE
CPI basket) will decline. Why? Because Bill Book which can be used to create GST-compliant
In the GST system, each business in the invoices and bills online.
supply chain can claim an input tax credit by • Become a knowledge centre on GST law.
showing evidence of a prior tax paid in the
• If upward and downward chain of suppliers and customers
value chain. file with us - we help make sure your input credit has been
At present, service-oriented components
duly deposited.
constitute 30-25 per cent of the CPI basket
• We provide easy means to maintain & view records of
input credit balances - IGST, SGST, CGST
• We help our registered Freelancers & small businesses
check whether they need to register for GST and help them
prepare and file returns.
GST Overview
• Every invoice raised will be in a standard format, contain some unique identifications
• Every invoice details needs to be uploaded to GST network except for interstate supply to unregistered
dealer having invoice value less than or equal to Rs.2,50,000 or Nil rated or Non GST supply. In the later cases,
consolidated invoice is allowed.