Gst guidelines and presentation, Lecture notes of Management Theory

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Raakesh Saraff

GST

My Learning as a

entrepreneur from

the experts on GST

• (^) GST means Goods and Services Tax
• (^) One Nation One Tax
• (^) It’s a destination based Tax
• (^) Biggest Tax Reform as well as Business Reform
• (^) Original Idea in 2006
• (^) Proposed Implementation 2010
• (^) Finally Coming in 2017

WHAT IS GST ??

**Description Manufacture Distributor Wholesaler Retailer Total Consumer Purchase value of inputs 100 120 150 160 - 165 Supply value 120 150 160 165 - - Value addition 20 30 10 5 65 - *GST Rate 20% 0.2 0.2 0.2 0.2 0.2 0. GST Payable (Output tax) 24 30 32 33 119 ** Input tax credit 20 24 30 32 106 - Net GST (Payable) 4 6 2 1 13 *****

GST Working

• Compliance Cost : High (Many Taxes : Excise, Service Tax, VAT, CST, Entry Tax, Octroi, SAD, CVD, Purchase Tax, Entertainment Tax, Luxury Tax etc.)
• Admin Cost : High
• Complexity
• Interpretation Issue (Software both Good and Service)
• Tax Evasion (Now Straight as well as Reverse Charge Mechanism)
• Corruption (Now Online)

Existing Law Shortcomings

• (^) (i) Simpler tax system
• (^) (ii) Reduction in prices of goods and services due to elimination of cascading (Refer Example)
• (^) (iii) Uniform prices throughout the country
• (^) (iv) Transparency in taxation system
• (^) (v) Increase in employment opportunities

Benefit for Citizens

• (^) Reduction in multiplicity of taxes
• (^) Mitigation of cascading/double taxation
• (^) More efficient neutralization of taxes especially for exports
• (^) Development of common national market
• (^) Simpler tax regime-fewer rates and exemptions

Benefit for Trade/Industry

• (^) The Central Goods and Services Tax Act, 2017
• (^) The Integrated Goods and Services Tax Act, 2017
• (^) The Union Territory Goods and Services Tax Act, 2017
• (^) The Goods and Services (State Compensation) Tax Act, 2017
• (^) The State Goods and Services Tax Act, 2017 (State wise)

Five Acts

• IGST : Integrated GST (Inter-state sale & Stock Transfer, Import – SAD+CVD, Export is Zero rated)
• SGST : State GST
• CGST : Central GST (Intra-State) TYPES OF TAXATION IN GST

• (^) Exempt
• (^) 0% : Zero Rated for export
• (^) 3% : Gold
• (^) 5% : Essential Goods
• (^) 12% : Basic Necessity Products
• (^) 18% : Revenue Neutral Rate
• (^) 28% : Demerit Goods Rate of Tax (Highest Can Go up to 40%)

• (^) GST Company Incorporated (49% Central 51% State and Govt Companies)
• (^) Infosys Appointed as Managed Service Provider (MSP) Rs. 1380 Crore
• (^) 34 IT Companies Appointed as GST Suvidha Providers (GSP)
• (^) Saksham Project Rs. 2256 Crore for IT re- engineering

GSTN

• (^) Exemption Limit : 20 Lacs (within state), 10 lacs for North East State like Assam, HP etc.
• (^) Export : No Tax because its Zero Rated
• (^) Exempt Supply :
• (^) Transaction in Securities (Shares)
• (^) Sale of Land
• (^) Sale of Building

Exemptions

• (^) Turnover Limit Rs. 75 lacs (preceding year)
• (^) 2% for Manufacturer (Other than Ice Cream, Tobacco, Pan Masala)
• (^) 1% for Traders
• (^) 5% for restaurants COMPOSTION SCHEME

• (^) No C Form
• (^) No F Form
• (^) No H Form
• (^) Stock Transfer : GST Applicable (Inter State)

C, F & H Forms

• (^) No Tax Free Zones
• (^) Existing Tax Free Zones (1st^ Pay then Refunds)

Tax Free Zones