TAXES

DIRECT

INCOME TAX

WEALTH TAX

INDIRECT

SALES TAX/VAT

CSTCENTRAL

EXCISE DUTY

SERVICE TAX

CUSTOM

TAXES

DIRECT

INCOME TAX

WEALTH TAX

INDIRECT

SALES TAX/VAT

CSTCENTRAL

EXCISE DUTY

SERVICE TAX

CUSTOM

TAXES

DIRECT

INCOME TAX

WEALTH TAX

INDIRECT

CUSTOM

GST

Ref. Tax Levy by Levied on

Credit

can be

set-off

against

Covered by

GST

1Central

Excise duty CentreManufacture 1,2 Yes

2Service Tax Centre

Providing

services1,2 Yes

3Customs Centre Import

-No

4 CVD* under

Customs Centre

Import

(compensating

Excise)1,2 Yes

5

SAD* under

Customs

Centre

Import

(compensating

Sales Tax)1 Yes

6CST Centre

Inter-State

sales- Yes

7VAT State

Sales within a

state7 Yes

(* CVD-CounterVailing Duty;Sad-Special Additional Duty)

THE PRESENT SYSTEM OF INDIRECT TAXATION

THE NEED FOR GST

REMOVE CASCADING EFFECT OF

TAXES

Price=100+taxes@10%=110

Purchase Price 110+Tax@10%=121

CB

A

PurchasePrice 121+Tax@10%=133

Transaction NEW System OLD System Comments

Sale within the state SGST

CGST

VAT &Excise/

ST

Under the new system, a transaction of sale within the state shall have two taxes, SGST-which goes tothe State; and CGST which goes to the Centre

Sale outsideThe state

IGST CST &Excise/

ST

Under the new system, a transaction of sale from one state to another shall have only one type of tax, the IGST-which goes to the Centre

A(MUMBAI)

Sale Price=100

B(PUNE)

Sale Price=200

C(NAGPUR)

SGST@8%=8CGST@8%=8

SGST@8%=16-Input SGST=8CGST@8%=16-Input CGST=8

CENTRAL

MumbaiMAHARASTR

A

A(INDORE)

Sale Price=100

B(BHOPAL)

Sale Price=200

C(LUCKNOW)

SGST@8%=8CGST@8%=8

IGST@16%=32-SGST & CGST=16

CENTRAL

MADHYA PRADESH

Transfer ofcredit : SGST

A(DELHI)

Sale Price=100

B(JAIPUR)

Sale Price=200

C(JODHPUR)

IGST@16%=16

CGST@8%=16-Input IGST(8)=8CGST@8%=16-Input CGST(8)=8

CENTRAL

JaipurRAJASTHAN

Transfer ofCredit : IGST

Reduction in prices Increase in Government Revenue Less compliance and procedural cost Taxes which cannot be set off will reduce All India tax will be based on value added No value added implies no tax to be paid to the

government Creation of a tax neutral supply chain. You follow any route; the tax given to the government will

remain the same. Entry tax, Octroi etc. Will be there, but as is evident, these

are also being slowly removed. This will make the supply chain perfectly neutral to taxes

Factors to be kept in mind about GST

All the states implement the GST together and that too,at the same rates.

For smooth functioning, the GST legislation clearly sets out the taxable event.

It should be clearly identifiable as to where the goods are moving.

CAs will have to take the onus to spread the awareness about GST.