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GST – Benefits and Salient Features GST – Updates on legal front GST - Registration, Returns, Refunds, Rates, Others GST - Trade-friendly features GST - Myths vs Reality GST – Awareness and Preparedness 2
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Central taxes State taxes ➢ VAT ➢ Excise duty ➢ CST ➢ Additional Excise ➢ Entertainment Tax. Duty ➢ Luxury tax. ➢ Service tax ➢ Tax on Lottery, betting, ➢ CVD (Counter Veiling gambling. Duty) ➢ Entry tax. ➢ SAD (Special ➢ Purchase tax Additional Duty) ➢ State Surcharges & ➢ Central Cesses & Cesses. Surcharges 4
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➢ Single tax replacing multiple taxes ➢ Single Authority & Single interface for Trade Mitigates ill-effects of cascading ➢ ➢ Tax burden decreases - benefits common man Makes products and services competitive ➢ Boosts economic activity, GDP and job ➢ creation 6
Destination-based consumption tax Present concepts of “sale”, “manufacture”, “provision of service” will be replaced by the concept of “supply” Applicable on supply of all goods or services, barring a few “Supply” includes sale, transfer, barter, exchange, licence, rental, lease or disposal for a consideration in the course or furtherance of business; all import of services; the activities specified in Schedule I & II Tax liability depends on: ▪ Time of Supply ▪ Place of Supply ▪ Location of Supplier and Location of Receiver 7
Coverage Traders Manufacturers Service Providers 8
Commodities not covered by GST Alcohol for human consumption Five Petroleum Products Electricity 9
Central GST ➢ Levied by Parliament on intra-State Supply of Goods & Services ➢ Revenue accrues to Central Govt. SGST/UT ➢ CGST Act, 2017 enacted GST ➢ Referred as “Central Tax” in the Act IGST Integrated GST 10
State GST ➢ On intra-State Supply of Goods & Services ➢ Revenue accrues to consuming State SGST/UT ➢ SGST Acts passed by 24 states so far GST ➢ Referred as “State Tax” IGST Integrated GST 11
Integrated GST ➢ On Inter-State Supply of Goods & Services ➢ Rate is a combination of CGST & SGST SGST/UT ➢ Apportionment of Tax & Settlement of GST funds between Centre and States ➢ IGST Act, 2017 enacted IGST Integrated GST ➢ Referred to as “Integrated Tax” 12
16/4: Telengana 16/5: Andhra Pradesh 24/4: Bihar 16/5: Uttar Pradesh 26/4: Rajasthan 17/5: Puducherry 27/4: Jharkhand 19/5: Orissa 28/4: Chattisgarh 22/5: Maharashtra 2/5: Uttarakhand 24/5: Sikkim 3/5: Madhya Pradesh 25/5: Tripura 4/5: Haryana 25/5: Mizoram 9/5: Goa 27/5:Nagaland 9/5: Gujarat 27/5:Himachal Pradesh 11/5: Assam 31/5:Delhi 12/5: Arunachal Pradesh 5/6:Manipur Total 24 States till 5/6 13
➢ All registered persons under Existing Laws ➢ If aggregate turnover in a financial year exceeds Rs. 20 lakhs ➢ The threshold turnover is Rs. 10 Lakhs in case of special category states 14
any person making supplies not liable to tax or wholly exempt under the Acts an agriculturist, to the extent of supply of produce out of cultivation of land 15
➢ Persons making inter-State taxable supply ➢ Persons required to pay tax under reverse charge ➢ E-Commerce operators ➢ Persons who supply goods through e-commerce operator ➢ Persons who supply goods and/or services on behalf of a registered taxable person ➢ Input Service Distributor (ISD) ➢ Persons required to deduct tax at source (TDS) ➢ Casual taxable persons ➢ Non-resident taxable persons 16
PAN is mandatory statutory requirement for GST Registration A person, though not liable to be registered, may take registration voluntarily Registration is to be granted State-wise. Person having multiple “business verticals” in a State may obtain separate registration Time-bound grant of Registration (within 3 working days) 17
Simpler option given to small taxpayers Aggregate turnover LESS THAN 75 lakh rupees in the preceding financial year Amount payable in lieu of tax (as per draft Composition Rules): ▪ (a) 2 per cent of turnover – manufacturers (1% under CGST & 1% under SGST) ▪ (b) 5 per cent of turnover- restaurants (2.5% under CGST & 2.5% under SGST) ▪ (c) 1 per cent of turnover – for other suppliers (0.5%under CGST & 0.5% under SGST) 18
Suppliers making Inter-state supplies E-Commerce operators Manufacturers of Certain Notified goods All service providers [except restaurants] Supplies through e-commerce operators Casual or non-resident taxable persons 19
GST Returns for normal taxpayer Return Nature Periodicity Remarks Details of outward Monthly by Data to be filled GSTR 1 supplies 10th by user Details of inward Monthly by Most Data will be GSTR 2 supplies 15th auto-populated Monthly by Most Data will be GSTR 3 Monthly return 20th auto-populated Consolidated details in Annual by 31 st Data to be filled GSTR 9 a financial year December by user 20
GST Returns for other categories Return Nature Periodicity Quarterly Return for 18th of the month succeeding GSTR 4 compounding Taxable Quarter persons Many data will be auto-populated 20th of the Month succeeding the Return for Non-Resident GSTR 5 tax period and 7 days from expiry of foreign taxable person registration 13th of the Month succeeding the GSTR 6 Return by ISD tax period GSTR 7 Return by TDS 10th of succeeding Month GSTR 8 Return by TCS 10th of succeeding Month Final Return by RTP on Within 3 months from date of GSTR 10 winding up of business cancellation of registration Details of Inward supply be 28th of the month following the GSTR 11 a person having UIN month for which statement is filed 21
GST Returns – Key features “Valid return” : Return valid only if self- assessed tax is paid in full Return once filed cannot be revised. Rectification/amendment can be effected in subsequent return Separate returns for composition tax payer, TDS, TCS, ISD which are not relevant to normal taxpayer. 22
➢ Can be claimed within 2 years ➢ Refund of Input tax Credit allowed - in case of exports or - where the input credit accumulation is on account of inverted duty structure ➢ Refund shall be granted within 60 days from the date of receipt of application and Interest payable thereafter 23
➢ In case of refund claim on exports, 90% of the claim can be given immediately within 7 days, on provisional basis. 24
USAGE OF INPUT TAX CREDIT 25
Input Tax Credit – Key restriction 26
Invoice under GST For taxable supplies - to be Tax issued by Invoice regular taxpayers To be issued by Bill of suppliers of exempted goods Supply and Composition taxpayers 27
For movement of goods of consignment value exceeding Rs. 50,000/-: (i) in relation to a supply; or (ii) for reasons other than supply; or (iii) due to inward supply from an unregistered person before commencement of movement, furnish information relating to the said goods electronically, on the common portal OR Facilitation Centres or by SMS - Same procedure for cancellation also - Can be generated by consignor, consignee or transporter 28
“Job work” means any treatment or process undertaken by a person on goods belonging to another registered person Value of goods after completion of job work is not includible in the job worker’s turnover but includible in the Principal’s turnover Job worker is deemed as supplier of “service” 29
Through Credit Cards, Debit Cards, Internet Banking (NEFT/RTGS) Over the Counter [Upto Rs. 10000/- per tax period] Single Challan for all types of payment Real Time entry into Cash Ledgers 30
All Existing Registered Traders, Manufacturers, Service Providers to be migrated automatically to GST All eligible ITC balances and credits and all ITC credits on stock held under existing laws are transferrable to GST credit ledgers All refunds in the existing law will continue to be sanctioned under existing laws. 31
0%: On essential items 3%:Jewellery,Rough Precious & Semi- precious rates,etc 5%: On items of mass consumption 12% & 18%: Covering majority of manufactured items and Services 28%: Certain Luxury goods and services 32
Seamless credit flow across the supply chain in the country – IT-driven minimal physical interface with tax authorities Uniform laws, rules, rates, procedures across the country 33
GST Compliance Rating of all GST registrants on public domain facilitates informed decisions about prospective suppliers and customers by Trade Assistance through recognised GST Practitioners Complete ‘zero rating’ of exports and supplies to SEZ Units & Developers Flexibility of decision-making with government 34
Interlocking of every tax payer in the network ensures enhanced compliance No incentive for anyone staying outside tax net 35
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