GST Consultants India – GST India – GST in India
1. What is the meaning of GST?
The introduction of the GST bill is one of the biggest tax reforms in India. The GST (Goods and services tax) will simplify the current system of taxation. As the name suggests the GST is a tax levied when a consumer buys a good or service, it is a consumer based tax. GST will enable broadening of the tax base, which will further result in reduction in effective rate of tax.
2. Which other taxes will be replaced by GST?
Central Excise duty
Additional duties of excise
Excise duty levied under Medicinal & Toiletries Preparation Act
Additional duties of Customs (CVD & SAD)
Surcharges & Cess
State VAT / Sales Tax
Central Sales Tax
Entertainment Tax (not levied by the local bodies)
Entry Tax (All forms)
Taxes on lottery, betting & gambling
Surcharges & Cess
3. All goods or services likely to be covered under GST except :
1. Alcohol for human consumption – State Excise plus VAT
2. Electricity – Electricity Duty
3. Real Estate – Stamp Duty plus Property Taxes
4. Petroleum Products (to be brought under GST from date to be notified on
Recommendation of GST Council)
4. Tobacco Products under GST with Central Excise duty.
5. Following are the stages of the GST implementation process (What we will do as Business consultants at Pearl)
Step1: Meet our consultant to discuss about your company and we will propose the customized GST Impact Analysis Approach.
Step2: We will conduct an interview with the concerned person of your organisation and complete Business Review Questionnaires.
Step3: Our consultant analyses and reviews the Business Review Questionnaires (BRQ).
Step4: Our consultant prepares GST Impact Advisory Report on GST impact assessment, implications and actions required.
Step5: Organize GST training for management and staff.
Step6: GST registration and post implementation support.
6. E-Registration under GST
The E- Government has already initiated the process of collecting data of the existing registered dealers Under the VAT, Excise and Service tax laws so as to auto register the Assessee under the GST law Without any further compliance. The key features of the registration process for the new dealers under GST would be as follows:
• A simple PAN based registration procedure
• A GST identification number a 15 digit common identification number (GSTIN) will be allotted to the applicant.
• Deemed registration in case no query is raised within 3 days
• Verification may be initiated post registration by the department in certain cases.
7. Persons requiring registration
Following are the persons required to take registration under this act.
Nature of supply Registration Required
1. Taxable inter-state supply Yes
2. Exempted inter-state supply No
3. Intra-state supply(upto Rs 9 Lacs) No
4. Intra-state supply(exceeding Rs 9 Lacs) Yes
5. Casual taxable person Yes
6. Non-resident persons Yes
7. Input service distributor Yes
8. Agent or the like Yes
9. E-commerce operator Yes
10. Supply through E-commerce operator-Branded or otherwise Yes
11. Intra-state supply upto Rs 9 Lacs As an agent Yes
12. Aggregator-supplying services Yes
13. Required to deduct TDS providing intra-state supply upto Rs 9 Lacs. Yes
14. Reverse charge-for personal use beyond prescribed limit Yes
15. Reverse charge-other than personal use Yes
8. Other Aspects of GST
• Option available for separate registration for each business vertical
• Option of voluntary registration is available.
• Every person applying for registration should have PAN number.
• Non residents may be granted registration on any other documents as prescribed in absence of PAN number.
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GST AND APPLICABILITY
One must register for GST if the aggregate turnover of supply of goods and services is 9 lakhs. The threshold for payment of tax is 10 lakhs. However, in certain cases persons shall be taxable irrespective of the threshold or value of aggregate turnover;
Persons effecting an inter-state supply
Persons requiring to pay tax under reverse tax mechanism
Casual taxable persons i.e. who occasionally undertakes transactions involving supply of goods and services, whether as principal agent or in any other capacity where there is no fixed place of business.
Non-resident taxable persons
Persons supplying goods and/or services through an electronic commerce operator
Job worker, in terms of goods supplied by the job worker after completion of his work
Benefits of the GST Model
The Model estimates to bring in
An increase in GDP
An increase in international competitiveness
Increases Foreign Direct Investment.
Acquiring funds from developed countries may become easier.
Increases revenue from Direct and Indirect taxes in the country.
Reduces trade barriers and lowers transaction costs through reduced corruption.
Traders can benefit by claiming full tax credit on the supply of goods with GST.
Reduced tax burden at multiple levy point and also for the final customer.
Traders can avail the credit of service tax and excise duty.
Credit of import duties will make import cheaper for retailers.
The taxable person may be eligible to take tax credit on input tax not more than one year from the date of issue of tax invoice relating to supply. However, certain transfers may not be eligible for an input tax claim such as goods and services used primarily for personal use or consumption of employees, or goods and services acquired by the principal in the execution of works contracts of immovable property, other than plant and machinery, or if the taxable person has claimed depreciation on the tax component of the cost of capital goods under Income Tax Act, 1961.
GST AND TRANSITIONAL PROVISIONS
The existing tax payers/persons registered under any of the earlier laws shall be granted provisional registration under the GST law. The provisional registration is valid for 6 months and on furnishing certain information as may be prescribed the certificate of registration will be granted on a final basis.
To claim an input tax credit under GST the amount of duty, tax or cess carried forward as per the accounts will be immaterial. The input tax credit carried forward as per the last return under the earlier law for the period ending 31st March 2017 with the day proceeding the day when the GST becomes applicable will only be taken into account.
Input tax credit under VAT law will be carried forward as SGST. Swachh Bharat Cess will not be admissible as Opening CGST. If no CENVAT credit on Capital goods was availed during the year the full input tax credit will be available as CGST on 1st April, 2017 if the same is applicable under the earlier law and the GST. CENVAT Credit on capital goods can only be availed as CGST credit in the Electronic Credit Ledger and VAT credit as SGST credit in the very same Electronic Credit Ledger. The CENVAT Credit Rules provides a period of 1 year from the date of issue of invoice for allow ability of CENVAT Credit the same applied to GST law. If an unavailed Input Tax Credit on Capital Goods was availed under the GST law was found to be inadmissible as per the proceedings of the Department such amount will be recovered under the GST law.
It is compulsory to be registered under GST if the existing tax payer is liable to be registered under the Schedule III of the Act within 30 days from the date he becomes liable to registration.
One can apply for registration voluntarily if not liable to be registered under the Schedule III of the Act.
In case of multiple business verticals in a state there is an option to obtain separate registration for each business vertical.
PAN card is mandatory.
Non-resident taxable person may be granted registration on the basis of any other document as may be prescribed.
Where a person liable to be registered under this Act fails to obtain registration, the proper officer may, proceed to register such person in a manner as may be prescribed.
Any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act 1947, Consulate or Embassy of foreign countries and any other person or class of persons as may be notified by the Board/Commissioner shall obtain Unique Identity Number for the purposes notified including refund of taxes on the notified supplies of goods and/or services received by them.
The registration or the Unique Identity Number shall be granted or rejected after due verification in the manner and within the period as may be prescribed.
Every Registered taxable person must furnish every calendar month in prescribed form and manner, an electronic return
Of inward and outward supplies of goods and/or services
Input tax credit availed
Tax paid and
Other particulars as may be prescribed
Within 20 days after the end of such month
A return furnished by the registered taxable person without payment of full tax due as per the return shall not be treated as a valid return for allowing input tax credit in respect of supplies made by such person
Summary of the due dates
GSTR 1- Outward supplies made by taxpayer (other than compounding taxpayer and ISD) to be filed by 10th of the next month.
GSTR 2- Inward supplies received by a taxpayer (other than a compounding taxpayer) to be filed by 15th of the next month.
GSTR 3- Monthly return (other than compounding taxpayer and ISD) to be filed by 20th of the next month.
GSTR 4- Quarterly return for compounding Tax Payer to be filed by 18th of the month next to quarter.
GSTR 5- Periodic return by Non-resident Foreign Taxpayer to be filed last day of registration.
GSTR 6- Return for Input Service Distributor (ISD) to be filed 15th of the next month.
GSTR 7- Return for Tax Deducted at Source to be filed 10th of the next month.
GSTR 8- Annual Return to be filed by 31st December of next financial year.
GST Exemption list
The Centre and states have already agreed to a five-slab structure for GST rates — 5, 12, 18 and 28%, as well as a cess of 28% on sin and luxury goods such as tobacco, big cars and aerated drinks. The cess is likely to be in proportion to duties attracted by these items currently.
About 80 items are likely to make it to the exemption list under the proposed goods and services tax (GST), including grains, green coconut, poha, unprocessed green tea leaves, and non-mineral water.
Items such as coffee and processed foods like biscuits, Rusk, butter and cheese currently exempted from excise duty, may draw GST.
There are currently around 300 items in the exemption list from central excise duty and 90 from the states value added.
The government has been pruning the excise exemption list for quite some time. From 542 items in 2011, it has come down 300 items.
It should be noted that some petroleum products would come under zero rate till the time the GST Council decides to bring them under GST rates. This means that the state will continue to impose VAT and the Centre excise duty on these items.
Zero rated is different from exemption as input credit is given in case an item is zero rated. Or in other words, items drawing zero rates are in the GST chain.
This blog contains information on the current available GST Model only. The intention of the blog is to only give an overview of the Model Law. The Model is still being updated; any changes to the information will be fully available after the updates are announced.
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