Indirect tax assignment presentation
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This document provides an overview of the Goods and Services Tax (GST) implemented in India. It discusses the design of GST, key features of the GST law, administration through the GST Network, and benefits of GST. It outlines the efforts over 10 years to develop GST, including constitutional amendments and approval of 5 laws. GST unified multiple indirect taxes and aimed to reduce cascading taxes, create a common market, benefit small taxpayers, and simplify compliance through an electronic tax system.
Indirect tax assignment presentation
- 1. RahulGaur RohitKumarPanjwani PrashantKrishnani GulshanKumar GST UnderstandingGoodsandServices T ax
- 2. Agenda Design of GST Main features of GST Law Administration and IT Network Benefits of GST and Way Forward 1
- 3. The Effort and Work Done 10Years… InMaking 14 ECMeetings in 10 years and 13 GSTC Meetings in6 months 30 + Sub-Groups& Committees 175 + Officers Meetings 18000+ Man Hoursof discussion by GSTCouncil 2 Constitution Amendmentand5 Lawsapprovedby collaborativeeffort
- 4. ExistingIndirect T axStructure inIndia Constitutionamendedto provideconcurrentpowersto both Centre& Statesto levy GST(Centreto tax saleof goodsandStatesto tax provisionof services) • Central Excise duty • Additional duties of excise • Excise duty levied under Medicinal & Toilet Preparation Act • Additional duties of customs (CVD & SAD) • Service Tax • Surcharges & Cesses • State VAT / Sales Tax • Central Sales Tax • Purchase Tax • Entertainment Tax (other than those levied by local bodies) • Luxury Tax • Entry Tax (All forms) • Taxes on lottery, betting & gambling • Surcharges & Cesses Central Taxes StateTaxes GST 3
- 6. Featuresof Constitution AmendmentAct Alcoholforhuman consumption Powerto tax remainswith the State Fivepetroleum products– crudeoil , diesel,petrol,natural gasandA TF GSTCouncilto decidethe datefrom whichGSTwill beapplicable Tobacco Part of GSTbut powerto levy additional excisedutywithCentral Government Entertainment tax levied bylocalbodies Powerto tax remainswith theState 5
- 7. GSTCouncil- Constitution Chairperson – Union FM Vice Chairperson- to be chosen amongst the Ministers of State Government Members - MOS (Finance)and all Ministers of Finance / Taxation of each State Quorum is 50% of total members States - 2/3 weightage and Centre - 1/3 weightage Decision by 75% majority Council to make recommendations on everything related to GST including laws, 6
- 8. GSTCouncil- Decisions(1/2) Threshold limit for exemption to be Rs. 20 lac (Rs. 10 lac for special category States) Compounding threshold limit to be Rs. 50 lac with - Government may convert existing Area schemes into reimbursement based scheme Four tax rates namely 5%, 12%, 18% and 28% Some goods and services would be exempt base d exemptio n Categories TaxRate Traders 1% Manufacturers 2% Restaurants 5% 7
- 9. Cess over the peak rate of 28% on specified luxury and sin goods To ensure single interface – all administrative control over 90% of taxpayers having turnover below Rs. 1.5 cr would vest with State tax administration 10% of taxpayers having turnover below of Rs. 1.5 cr. would vest with Central tax administration taxpayers having turnover above Rs. 1.5 cr. would be divided equally between Central and State tax administration GSTCouncil- Decisions(2/2) 8
- 10. Compensation Mechanism for States Revenueof all taxes subsumedin GSTby the State for 2015-16 as the base Assumption of 14% Annual Growth Rate Compensation to be provided through Cess Cess only on few specified luxury and demerit goods 9
- 11. Main Features of the GST Act(1/4) electronic mode –Non-intrusive administration PAN Based Registration Registration only if turnover more than Rs. 20 lac Option of Voluntary Registration Deemed Registration in three working days Input T ax Credit available on taxes paid on all procurements (except few specified items) 10 All transactions and processes only through
- 12. Main Features of the GST Act(2/4) 11 Credit available to recipient only if invoice is matched – Helps fight huge evasion of taxes Set of auto-populated Monthly returns and Annual Return Composition taxpayers to file Quarterly returns Automatic generation of returns GST Practitioners for assisting filing of returns GSTN and GST Suvidha Providers (GSPs) to provide technology based assistance
- 13. Main Features of the GST Act(3/4) 12 Tax can be deposited by internet banking, NEFT / RTGS, Debit/ credit card and over the counter Concept of TDS for certain specified categories Concept of TCS for E-Commerce Companies Refund to be granted within 60 days Provisional release of 90% refund to exporters within 7 days
- 14. Main Features of the GST Act(4/4) 13 Interest payable if refund not sanctioned in time Refund to be directly credited to bank accounts Comprehensive transitional provisions for smooth transition of existing tax payers to GST regime Special procedures for job work System of GST Compliance Rating Anti-Profiteering provision
- 15. GSTNetwork (GSTN) 14 A section 25 private limited company with Strategic Control with the Government To function as a Common Pass-through portal for taxpayers- submit registration application file returns make tax payments To develop back end modules for 25 States (MODEL – II) Infosys appointed as Managed Service Provider (MSP) 34 GST Suvidha Providers (GSPs) appointed
- 16. 16 Taxpayer GSTN Supplier Invoice Details upload from 1st of Julyto 10th of August Supplier File GSTR-Iby 10th of August Auto-Population of invoice detailsin GSTR-2of recipient Recipient Amend or modify and file GSTR-2 by 15th of August Supplier and Recipient Toreconcile details by 17th of August Supplier File GSTR-3by 20th of August &pay tax ReturnProcess(Example: Returnfor July2017) 1
- 17. Role of CBEC(Now CBIC) 16 Role in Policy making: Drafting of GSTLaw, Rules & Procedures – CGST, UTGST & IGST Law Assessment, Audit, Anti-evasion & enforcement under CGST, UTGST & IGST Law Levy & collection of Central Exciseduty on products outside GST – Petroleum Products & Tobacco Levy & collection of Customs duties Developing linkages of CBEC - GST System with GSTN Training of officials of both Centre & States
- 18. Benefitsof GST(1/2) 17 1 2 3 4 5 Overall Reduction in Prices Reduction in Cascading of Taxes Common National Market Benefits to Small Taxpayers Self-Regulating Tax System 6 Non-Intrusive Electronic Tax System Decrease in Inflation Ease of Doing Business Decreasein “Black” Transactions
- 19. Benefits of GST (2/2) 18 7 8 9 10 Simplified Tax Regime Reduction in Multiplicity of Taxes Consumption Based Tax Abolition of CST More informed consumer Poorer States to Gain Make in India 11 Exports to be Zero Rated 12 Protection of Domestic Industry - IGST
- 20. Way Forward 19 SGST law to be passed by the State Legislatures GST Council to fit tax rates to various categories of Goods or Services Sector Wise guidance notes to be prepared Migration and handholding of existing tax payers Outreach program for trade and industry Change Management
- 21. Thank You The following material is available on www. cbec.gov.in • Presentation on GST • GST – Concept & Status • FAQs on GST in Hindi and English • CGST, UTGST, IGST & Compensation Acts • Draft 14 Rules • Constitutional Amendment Act
- 22. Rs.132 32% Rs.100 Rs.128 Rs.100 Cost of production of goods is Rs. 100 Cumulative taxes of 32% levied All other taxes are replaced by GST Overall incidence of tax will be reduced Reductionin Price of Goods under GST VAT 14.5% Excise 12.5% Service T ax–1% Entry Tax 2% CS T 2% GST@ 28% 28% 22 2
- 23. Rs.115 15% Rs.97 Rs.~115 Rs.97 Cost of production of goods is Rs. 97 Service tax 15% and embedded VAT of ~3% Service tax replaced by GST Overall incidence of tax will be same Reductionin Price of Goods under GST GST 18% Service T ax VA T Rs.100 23 2