PRESENTATION PLAN – GOODS & SERVICES TAX (GST)
GST
Dated:- 26-9-2016
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Document 1
GOODS &
SERVICES TAX
(GST)
1
PRESENTATION PLAN
WHY GST: PERCEIVED BENEFITS
✰ EXISTING INDIRECT TAX STRUCTURE
â– FEATURES OF CONSTITUTION AMENDMENT BILL
* FEATURES OF PROPOSED GST MODEL
* FEATURES OF DRAFT GST LAW
✰ GSTN
* ROLE OF CBEC
✰ WAY FORWARD
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WHY GST?
PERCEIVED
BENEFITS
3
WHY GST: PERCEIVED BENEFITS
To Trade
☠Reduction in multiplicity of
taxes
☠Mitigation of cascading/
double taxation
â–¡ More efficient
neutralization of taxes
especially for exports
☠Development of common
national market
â–¡ Simpler tax regime
â–ª
Fewer rates and
exemptions
Distinction between Goods
& Services no loner
required
* To Consumers
☠Simpler Tax system
☠Reduction in prices of
goods & services due
to elimination of
cascading of taxes
â–¡ Uniform prices
throughout the country
â–¡ Trans
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˜ Compensation for loss of revenue to States for five years on
recommendation of GSTC – Clause 19
☠GST defined as any tax on supply of goods or services or both
other than on alcohol for human consumption – Article 366
(12A)
â–¡ Goods includes all materials, commodities & articles – Article
366 (12)
☠Services means anything other than goods – Article 366 (26A)
â–¡ 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
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…FEATURES OF CAB…
* Key Features contd.
☠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
State Government
–
to be chosen amongst the Ministers of
Quorum is 50%
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current components
☠Central GST (CGST) levied & collected by Centre
State GST (SGST) levied & collected by States
CGST & SGST on intra-State supplies of goods / services
in India
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☑
….GST – FEATURES….
IGST levied & collected by the Centre applicable to
Inter-State supplies of goods / services in India
Inter-state stock transfers of goods
Import of goods / services
Export of goods / services (if made on payment of GST under
claim of rebate)
✰ Export of goods / services – Zero rated
–
All goods or services likely to be covered under GST except:
Alcohol for human consumption – State Excise + VAT
Electricity – Electricity Duty
Sale / purchase of Real Estate – Stamp Duty + Property Taxes
–
Five specified petroleum Products – to be brought under GST
from a later date on recommendation of GSTC
Tobacco Products – under GST + Central Excise
–
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Surcharge
& Cesses
Service
Tax
….GST – FEATURES….
Central
Excise
duty
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x Credit (ITC)
ITC
CGST
SGST
IGST
CGST IGST SGST IGST IGST CGST
SGST
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FEATURES OF
DRAFT GST LAW
(MGL)
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Ü€
Ü€
Ü€
FEATURES OF MGL…
â˜
â˜
Tax on supply of goods or services rather than manufacture /
production of goods, provision of services or sale of goods
Powers to declare certain supplies as supply of goods or of
services or of neither – Schedule II
On Intra-State supplies of goods and/ or services – CGST & SGST
shall be levied by the Central and State Government respectively,
at the rate to be prescribed
On Inter-State supplies of goods and/ or services – IGST shall be
levied by the Central Government, at the rate to be prescribed
Elaborate Rules provided for determining the place of supply
Intra-State supply of goods and/or services – where the location of
the supplier and the place of supply are in the same State
Inter-State supply of goods and/or services – where the location of
the supplier and the place of supply are in diffe
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ss
purposes)
Negative list approach for non-allowance of ITC
ITC of tax paid on goods and / or services used for making
taxable supplies by a taxable person allowed subject to four
conditions:
possession of invoice;
receipt of goods or services;
tax actually paid by supplier to government;
furnishing of return
Full ITC allowed on capital goods in one go
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Ü€
Ü€
Ü€
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*
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….FEATURES OF MGL….
Proportionate credits allowed in case inputs, inputs services
and capital goods are used for business and non-business
purposes
Proportionate credits allowed in case inputs, inputs services
and capital goods are used for taxable and non-taxable
supplies
ITC cannot be availed on invoices more than one year old
ITC available only on provisional basis for a period of two
months until payment of tax and filing of valid return by the
supplier
Matching of supplier's and recipient's invoice details
ITC to be confirmed only after matching of such inf
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suo-moto
cancellation by the tax authorities
Normal taxpayers, compositions taxpayers, Casual
taxpayers, non-resident taxpayers, TDS Deductors, Input
service Distributors (ISDs) to file separate electronic returns
with different cut-off dates
Annual return to be filed by 31st December of the following
Financial Year along with a reconciliation statement
Short-filed returns not to be treated as a valid return for
matching & allowing ITC and fund transfer between Centre
and States
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….FEATURES OF MGL….
System of electronic cash ledger and electronic ITC ledger
Tax can be deposited by internet banking, NEFT / RTGS,
debit/credit card and Over The Counter
Date of credit to the Govt. account in the authorized bank is
the date of payment for credit in electronic cash ledger
Payment of Tax is made by way of the debit in the electronic
cash or credit ledger
Hierarchy for discharging payments of various tax liabilities
Provision for TDS on certain entities
E-Commerce
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.
â˜
Self-assessment of tax
Provisions for assessment of non-filers, unregistered persons &
summary assessments in certain cases
Provision made for provisional assessment on request of taxable
person to be finalized in six months
–
Audit can be conducted at the place of business of the taxable
person or at the office of the tax authorities, after prior intimation to
taxable person
Audit to be completed within 3 months, extendable by a further
period of 6 months
On conclusion of audit, the taxable person to be informed about
findings, his rights and obligations and reasons for the findings
Adjudication order to be issued within 3/5 years of filing of annual
return in normal cases & fraud / suppression cases respectively
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Ü€
…FEATURES OF MGL
No separate time lines for issue of SCN and adjudication order
Taxable person can settle at any stage, right from audit/investigation to
the stage of passing of adjudication order and even thereafter
Officers to have
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xes
Role in Policy making: Drafting of GST Law, Rules &
Procedures – CGST & IGST Law
Assessment, Audit, Anti-evasion & enforcement under
CGST & IGST Law
Levy & collection of Central Excise duty on products
outside GST – Petroleum Products & Tobacco
Levy & collection of Customs duties
* Evolving a joint Dispute resolution mechanism
* Developing linkages of CBEC-GST System with GSTN
â– Training of officials of both Centre & States
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WAY FORWARD
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WAY FORWARD….
* Constitution (101st) Amendment Act already notified on
Ü€
Ü€
*
*
08.09.2016
GST Council already notified wef 12.09.2016
Recommendation of Model GST laws by GST Council
Cabinet Approval for the CGST and IGST laws by Centre
and for SGST laws by all states
Passage of CGST and IGST laws by Parliament and
passage of SGST laws by all State legislatures
Notification of GST Rules
Establishment of IT framework
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….WAY FORWARD
* Meeting implementation challenges
* Effective coordination bet
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