Understanding GST(overview) presentation

GOODS AND SERVICE TAX

Existing Tax Structure

Tax Structure in IndiaDirect Taxes

Indirect Taxes

Income Tax Gift TaxesState Tax

Central TaxCustom Tax

Excise Duty

Service Tax

CST

Surcharge & Cess

VAT

Entertainment Tax

Luxury Tax

Entry Tax

Surcharge & Cess Taxes on Lottery

Security Transaction Tax

Property Tax

Stamp Duty

Electricity Duty

Environment Tax

Export Duty

Taxes on Betting & Gambling

Proposed Tax Structure under GST

State TaxCentral Tax

Excise Duty

Service Tax

CST

Surcharge & Cess

VAT

Entertainment Tax

Luxury Tax

Entry Tax

Surcharge & Cess

Taxes on Lottery

Security Transaction Tax

Taxes to be subsumed under GST

Taxes not subsumed under GST

Basic Custom Duty

Export Duty

Property Tax

Stamp Duty

Electricity Duty

Environment Tax

Now What is GST?

One Tax For

Manufacturing

Trading

Services

Few Terms…

SGST ?CGST?IGST ?

Integrated GST

GST to be levied on Inter State Supplies

Tax Invoice Cost of Goods =

100IGST @20% =

20 Total =

120

Tax Invoice Cost of Goods =

100IGST @20% =

20 Total =

120

How GST Levied?

Tax Invoice (A)Cost of Goods =

100SGST (G) @10%

= 10CGST @10%

= 10 Total =

120

Tax Invoice (A)Cost of Goods =

100SGST (G) @10%

= 10CGST @10%

= 10 Total =

120

Location of

Supplier in

different state

Place of

Supply in

different

state

IGST

Location of

Supplier in

same state

Place of

Supply in

same state

SGST

LIMITATIONS OF CURRENT STRUCTURE

Credit of Excise not allowed

Credit of CST Not Available

MAHARASHTRA MADHYA PRADESH

1. Cascading Effect of Tax

2. Registration Under Different Act

No Entry Tax

Entry Tax

Value Added Taxe.g. on Sugar

@ 4%@ NIL %

4. Lack of Uniformity

5. Goods Vs. Services dilemma & Manufacturing Vs. Service dilemma:

Sale

Manufacturing

License Software in CD

Services

Sale of Food In Restaurant

Duties & Taxes

Cost of Goods

Burden of Tax make Local goods Costlier in International Market

6. Limited Export

Different Reg. no.

Different Tax Rate

Different Details

Different Valuation

Different Forms

Different Format

Manual/ Online

7. Complicated Invoice

Different Rules are require to be followed under Different Acts

Other Benefit of GST

Logistic BenefitPurchasing Option

TransparencyAbolishment of Purchase & Entry Tax

How GST will work?

Are you covered under GST?Threshold LimitExisting Taxes

ExciseRs. 150.00 Lakh

Service TaxRs. 10.00 Lakh

VATRs. 10 Lakh/ Voluntary

Proposed TaxGST

Rs.20.00 Lakh in otherNo Limit for - Interstate Supplies

- Reverse Charge- TDS (Like WCT)

- Agent

Registration

Compulsory Registration for Each State where business

situated

Option to take multiple registration for each business within same state

TRANSITIONAL PROVISION

Pre-GST

Registration under existing law i.e. VAT, S.Tax, Excise, etc

Not registered under existing law But liable to get Registration under GST

LAW:Issue of Registration Certificate on Provisional Basis

which will be valid for 6 MonthsApply for Registration within 30 days of becoming liable to Registration as per

Section 19.Liable to Reg under GST Not Liable to Reg under GST

Liable to furnish Info within prescribed time

Info furnished Info not furnished

Final Registration Granted

Registration will be cancelled

Follow the procedure as let down under Section 19 Apply for cancellation of

Registration

ELIGIBILITY FOR COMPOSITION SCHEME

Taxable Supplies

Exempted Supplies

ExportNon-Taxable Supplies

All supplies should be below Rs. 50.00 Lakh

Inter State Supplies not allowed

ELIGIBILITY FOR COMPOSITION SCHEME

Transaction all over the India should be consider for

eligibility i.e. PAN based turnover

Input Tax Credit Not allowed.

Taxes to be paid in Cash

Other Point related to scheme

E.g.: If Mr. X has to opt for composition scheme from 1st April, 2018, he has to fill the application on or before 31st March, 2018.If during the year, Mr. X’s turnover exceeds 50 lakhs at any point of time, his opted composition scheme will lapse and he will be shifted to the Normal scheme automatically.

Opt for scheme from 1st of financial year only

Application should be filed before 31st march of previous year

Can shift from composition scheme to normal scheme at any time during year

Automatically shift to normal scheme if turnover exceed Rs.50.00

Shift over from Normal scheme under Existing Law to Composition Scheme under GST

Normal Scheme in existing Law

Want to Opt Composition Scheme under GST

There is unutilized credit under existing law

Pay an amount equal to Credit of stock held utilized

for pay tax

Un-utilized Credit will Laps i.e. reverse it

Invoice Under GSTTax Invoice

Name of SupplierAddress of Supplier

GST Registration No. of Supplier

Customer Name : Date : DD/MM/YYYYCustomer Address : Invoice No:Customer GST No. :

Sr. Description of Goods/Service *HSN Code of Goods

Qty Rate Total Abetment Taxable Supplies

1 XYZ 10 100 1000 1000

Total 1000 1000

Add: CGST @10% 100

Add: SGST @10% 100

Total 1200 1200

Authorized Signature*HSN -Harmonized System of Nomenclature (HSN)

Input Tax Credit

Do You know Input Tax Credit?State Tax= 14( 10 + 2 + 2)

SGST = 10

SGST = 12ITC = ( 10)Pay = 2

SGST=14ITC = ( 12)Pay = 2

CGST =10

CGST = 12ITC = (10) 2

Tax Invoice (A)Value = 100CGST = 10SGST = 10Total = 120

Tax Invoice (B)Cost = 100Value = 120CGST = 12SGST = 12Total = 144

Tax Invoice (C)Cost = 120Value = 140CGST = 14SGST = 14 Total = 168

Central Tax= 14( 10 + 2 + 2)

CGST= 14ITC = (12) 2

Input Manufacturer

Output Manufacturer Dealer Consumer

CGST Rate : 10%

SGST Rate : 10%

Credit on purchase of Input i.e. Raw Material, finished goods, Input service

what about credit on existing stock?

Eligible persons Credit entitled As onPerson applied for registration within 30 days of liable to register

Inputs held in stock & inputs contained in Semi finished or finished goods held

in stock

The day immediately preceding the date from which he becomes liable to pay tax

Person who is not required to register, but obtains Voluntary registration

The day immediately preceding the date of registration

Person ceases to pay composition tax

The day immediatelypreceding the date from which he becomesliable to pay tax under regular scheme

Person applied for registration After 30 days of liable to register Not entitle to take Input Tax Credit

Credit Under Existing Law Carried Forward

Input Tax

Credit

CENVAT credit

VAT credit

It includes Central excise Service Tax Education cess NCCD krishikalyan cess (only to

service provider) Additional duty u/s 3(1) of Custom Tariff Act

It includesITC under VAT law of state CVD 3(5) under CTA

CGST

SGST

Transitional Provision of Credit Of Input Held In Stock

I) If assessee is not liable to Register under existing law i.e. VAT & Service Tax because of following reasons: Turnover not exceeding Rs.1 crore. Deals in exempted goods . Paying tax in composition scheme.II) And he is liable to register under GST: So assessee is eligible to take credit of input held in stock on applicable date of GST in following

manner.

CENVAT credit VAT credit


Can be availed against payment of CGST i.e.as a CGST Credit

Can be availed against payment of SGST i.e.as a SGST Credit

It includes Central excise Service Tax Education cess NCCD krishikalyan cess (only to service

provider) Additional duty u/s 3(1) of CTA

i. This Stock is used for making taxable goods

ii. Entity is not opted for composition scheme i.e. SEC 8

iii. Eligible to take credit under earlier law but not taken due to limit or due to exempted goods or Composition scheme.

iv. Person is eligible to take credit under GST law.

v. Having invoice/document of this stock as on applicable date of GST.

vi. Above invoices/documents issued not earlier than 12 months of applicable date

vii. Amount should be calculated as per GAAP .

CONDITIONS FOR TAKING CREDIT OF INPUT HELD IN STOCK U/S 145

Transitional Provision for CAPITAL GOODS U/S 144

In case of capital goods, credit under excise is allowed in two equal installments :- 50% in the year of purchase and 50% in the subsequent year or thereafter.

Credit booked in year of purchase & c/f in return

Credit not booked in year of purchase i.e. not c/f as per return.

Carried forward in GST as CGST/SGST as the

case may be

Carried forward as per sec.144 in following manner

Cenvat Credit VAT Credit

GST

It includes Central excise NCCD Special Duty/ Countervailing Duty Additional duty u/s 3(1) of CTA


CGST SGST

RETURN1

• Upload the detail of outward supplies-including taxable supplies, exempt, export, deemed supplies, etc BY 10TH OF NEXT MONTH under GSTR-1

2• Auto-draft of provisional GSTR-2 based on the detail

uploaded under GSTR-1 by supplier. By 15th of next month

3 • Accept/reject/modify such auto-drafted provisional GSTR-2

4 • Add additional purchase detail in GSTR-2 which has not been uploaded by the supplier

5 • Reconcile the GSTR-1 & GSTR-2 & finalize using online/offline facility

6 • GSTR-3 automatically generated on finalization as in Step:5

7 • Pay the amount as shown in payable under GSTR-3 & file the return by the 20th of next month.

• Identify whether you cover under GST

• Revision of existing contract and existing contracts should be drafted by considering the GST Provisions.

• Decide whether to opt for Normal Scheme or Composition Scheme under GST.

• Update your Accounts & Accounting Software before 31st of March to take credit carried forward in return

• Training to team/employee

• If you are trader plan to obtained excisable invoice so that you can take credit of that as CGST

• Update your Accounting software

ACTION TO BE TAKEN

CA Nikhil MalaiyaACA, B.com

Cell: 9545727818