Goods & services tax act

goods & services tax (gst) status key features and goods and services tax electronic filing
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Published Date:04-07-2017
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GOODS & SERVICES TAX (GST) 1 PRESENTATION PLAN v  WHY GST : PERCEIVED BENEFITS v  EXISTING INDIRECT TAX STRUCTURE v  FEATURES OF CONSTITUTION AMENDMENT ACT v  GST COUNCIL v  FEATURES OF PROPOSED GST MODEL v  FEATURES OF DRAFT GST LAW v  GSTN v  ROLE OF CBEC v  WAY FORWARD 2 WHY GST? PERCEIVED BENEFITS 3 WHY GST : PERCEIVED BENEFITS v  To Consumers v  To Trade q  Simpler Tax system q  Reduction in multiplicity of q  Reduction in prices taxes of goods & services q  Mitigation of cascading/ due to elimination of double taxation cascading q  Uniform prices q  More efficient neutralization throughout the of taxes especially for exports country q  Development of common q  Transparency in national market taxation system q  Increase in q  Simpler tax regime employment §  Fewer rates and exemptions opportunities §  Distinction between Goods & Services no loner required 4 EXISTING INDIRECT TAX STRUCTURE 5 EXISTING INDIRECT TAX STRUCTURE Entry Tax & Octroi Customs Excise Entertainment Tax Duty Duty Electricity Duty Central Luxury Tax Levies VAT Central Service Cess Sales Tax Tax State Levies 6 FEATURES OF CONSTITUTION AMENDMENT ACT (CAA) 7 FEATURES OF CAA…. v  CAB passed by Rajya Sabha on 03.08.2016 & Lok Sabha on 08.08.2016 st v  Notified as Constitution (101 Amendment ) Act, 2016 on 08.09.2016 v  Key Features: q  Concurrent jurisdiction for levy & collection of GST by the Centre & the States – Article 246A q  Centre to levy & collect IGST on supplies in the course of inter-State trade or commerce including imports – Article 269A §  to be apportioned between Union & States on recommendations of the GST Council (GSTC) §  Parliament to have powers to formulate principles for determining when a supply takes place in course of inter- State trade or commerce 8 ….FEATURES OF CAA…. v  Key Features contd. q  Compensation for loss of revenue to States for five years on recommendation of GSTC – Clause 19 q  GST defined as any tax on supply of goods or services or both other than on alcohol for human consumption – Article 366 (12A) q  Goods includes all materials, commodities & articles – Article 366 (12) q  Services means anything other than goods – Article 366 (26A) q  GST on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas & aviation turbine fuel to be levied from a later date on recommendations of GSTC 9 ….FEATURES OF CAA…. v  Key Features contd. q  GSTC - Article 279A §  To be constituted by the President within 60 days from the coming into force of the Constitution Amendment §  Consists of Union FM & Union MOS (Rev) §  Consists of Ministers in charge of Finance / Taxation of each State §  Chairperson – Union FM §  Vice Chairperson - to be chosen amongst the Ministers of State Government §  Quorum is 50% of total members §  Decisions by majority of 75% of weighted votes of members present & voting 10 ….FEATURES OF CAA v  Key Features contd. q  GSTC - proposed Article 279A §  Weightage of votes: rd o  Centre – 1/3 of total votes cast rd o  States (all taken together) – 2/3 of total votes cast §  Council to be guided by need for o  a harmonized structure of GST; and o  a harmonized national market for goods & services §  Council to make recommendations on o  Taxes, etc. to be subsumed in GST o  Exemptions & thresholds o  GST rates o  Band of GST rates o  Model GST Law & procedures 11 GST COUNCIL 12 GST COUNCIL…. v GST Council constituted w.e.f. 12.09.2016 v Seven Meetings held so far: Decisions q  Threshold limit for exemption to be Rs. 20 Lakhs (Rs. 10 lakhs for special category States) q  Compounding threshold limit to be Rs. 50 Lakhs – not available to service providers & manufacturers (except of notified goods) q  Government may convert existing Area based exemption schemes into refund based scheme q  Formula for calculating compensation finalized 13 ….GST COUNCIL v Seven Meetings held so far: Decisions q  CGST & SGST Model Law broadly approved q  Tax rates §  Four tax rates namely 5%, 12%, 18% and 28% §  Some goods and services would be exempt §  Separate tax rate for precious metals §  Cess over the peak rate of 28% on specified luxury and sin goods 14 FEATURES OF PROPOSED GST MODEL 15 GST – FEATURES…. v  Destination-based Consumption Taxation v  Applies to all supplies of goods / services (as against manufacture, sale or provision of service) made for a consideration except – q  Exempted goods / services – common list for CGST & SGST q  Goods / services outside the purview of GST q  Transactions below threshold limits v  Dual GST having two concurrent components q  Central GST (CGST) levied & collected by Centre q  State GST (SGST) levied & collected by States v  CGST & SGST on intra-State supplies of goods / services in India 16 ….GST – FEATURES…. v  IGST levied & collected by the Centre applicable to q  Inter-State supplies of goods / services in India q  Inter-State stock transfers of goods q  Import of goods / services q  Export of goods / services (if made on payment of GST under claim of rebate) v  Export of goods / services – Zero rated v  All goods or services likely to be covered under GST except: q  Alcohol for human consumption - State Excise + VAT q  Electricity - Electricity Duty q  Sale / purchase of Real Estate - Stamp Duty + Property Taxes v  Five specified petroleum Products – to be brought under GST from a later date on recommendation of GSTC 17 v  Tobacco Products – under GST + Central Excise ….GST – FEATURES…. State VAT / Central Sales Excise Tax duty Entertainment Surcharges Tax (not levied & Cesses by local bodies) Additional Surcharge duties of & Cesses excise Central State Purchase Central Sales Tax Tax Taxes Taxes Excise duty levied under Service Medicinal & Taxes on Tax Toiletries Entry lottery, Preparation Tax betting & Act Additional gambling duties of Luxury customs Tax (CVD & SAD) Central & State Taxes to be subsumed in GST 18 ….GST – FEATURES…. v  Floor rate with a small band of rates for standard rated goods / services for CGST & SGST v  Optional Threshold exemption in both components of GST v  Optional Compounding scheme for taxpayers having taxable turnover up to a certain threshold above the exemption 19 ….GST – FEATURES…. ITC CGST IGST SGST CGST IGST SGST IGST IGST CGST SGST UElizaEon of Input Tax Credit (ITC) 20