GOODS AND SERVICE TAX (GST)

By…. Naresh Biloniya

PRESENTATION PLAN

What is GST ? Why GST ? Structure of GST Effects of GST Is it universal ?

GST: ‘G’ –Goods ‘S’ –Services ‘T’ –TaxGoods and Service Tax(GST) is a comprehensive tax levy on

manufacture , sale and consumption of goods and service at a national level.

GST is a tax on goods and services with value addition at each stage.GST will include many state and central level indirect taxes It overcomes drawback present tax system.

CONTINUE...

The Constitution (122nd Amendment) Bill, which was passed by the Lok Sabha(lower house) in May 2015.

GST has been passed in rajya sabha(upper house) in august 2016.But it will not come in process until it passes in more than half state’s

assembly. After GST tax rate will be 18%.

REGISTRATION UNDER GST

Under GST registration, it is likely to be linked with the existing PAN.13 digit PAN based common TIN RegistrationThe new business identification number was likely to be the 10-digit

alphanumeric PAN, in addition to two digits for state code and one or two check numbers for disallowing fake numbers. The total number of digits in the new number was likely to be 13-14.

Whole process will be online.

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EXISTING TAX STRUCTURE IN INDIA

Tax Structure

Direct Tax

Income Tax Wealth Tax

Indirect Tax

Central Tax

Excise Service Tax Customer

State Tax

VATEntry Tax, luxury tax, Lottery Tax,

etc.

SHORT COMINGS IN CURRENT TAX SYSTEM

Tax Cascading (Tax on Tax)ComplexityTaxation at Manufacturing Level Exclusion of Services Tax EvasionCorruption

PROPOSED TAX STRUCTURE Tax

Structure

Direct Tax

Income Tax Wealth Tax

Indirect Tax = GST (Except

customs)

CGST (Central)

SGST (State)

IGST (Central)

ONE NATION ONE TAX 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 Simpler Tax system. Improved compliance & revenue collections (tax booster). According to some economist after GST India’s GDP will increase 1-2%. Export of goods and services – Zero rated

Benefits to GST

EFFECT ON THE PRICE OF THE PRODUCT

Products at higher price Eg. mobile phones, garments , jewellery ,packaging food etc. Products at lower price Eg. House , car , eating out in restaurant etc.

What will be out of GST? Petroleum products Alcoholic products, Tobacco products Taxes on lottery and betting Electricity duties/ taxes

Non Harmonization of Tax rates Lack of automation Lack of Procedural Manuals Lack of Skilled officials Double Registration- Handling old Registration Poor Quality of tax Returns No System for 100% Scrutiny of Tax Returns and Tax Audit Lack of Cross Verifications with other tax administrations Lack of mechanism to control Evasion Impact on Prices Coordination between state & central departments

CHALLENGES IN GST

China -17% UK -17.5% Australia -10% France -19.6% Germany -16% Denmark -25% Pakistan -18%

GST- RATES WORLD WIDE

No. of Countries : 165

THANKS