Goods and Services Tax – GST – By: – Rakesh Garg – Dated:- 6-4-2017 Last Replied Date:- 6-4-2017 – 1. Structure of GST in India The term GST stands for Goods and Services Tax , and would be a comprehensive indirect tax levy in India on manufacture, sale and consumption of goods as well as services at the national level. Its main objectives are to cover most of the indirect tax levies into a single tax, replacing multiple tax levies, facilitating seamless credit across the entire supply chain, overcoming the limitation of current indirect tax structure, and creating efficiencies in the tax administration. Its first target is to eliminate number of taxes and duties presently levied and imposed under the category indirect taxes in India; and to achieve the same, it will subsume Central Excise Duty, CVD, SAD, Service Tax, Central Sales Tax, VAT, Entry Tax, Entertainment tax, Luxury tax, various Cesses relating to supply of goods or services, etc. All services and goods, except alcoholic l
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ic intent of the Government, which is ease of doing business , has been diluted. It is often stated that the taxpayer shall file almost 37 returns per year under the GST. Let us understand various compliances through an illustration: To illustrate: If ABC Ltd. have it Head Office at Delhi, Factory at U.P., and Warehouse cum Office at Haryana, HP and Punjab (Total 5 offices), it would have to make at least following compliances: ABC will have GST registrations in all the 5 states in CGST, IGST and respective State GST. It will be treated as distinct person for every State even for the purposes of CGST and IGST. Therefore, ABC would have 15 registrations on PAN India basis (CGST, IGST & SGST for each and every State). We understand that it would be treated separately in all the State GST Act. But, even for the purposes of CGST and IGST, even if governed by the same statute in every state, it would be considered as distinct person. Therefore, it would have 5 registrations in the CGST
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inter-State supply, charge IGST. Even for B2C transaction of more than specified value, it might have to ascertain the address of the customer, and charge tax accordingly. Since GST is a destination based tax, if a customer comes to Delhi from UP for making purchases, tax must go to UP. ABC would maintain following ledgers for all 15 registrations separately: – Electronic Credit Ledger; b. Electronic Cash Ledger; c. Electronic liability Ledger. These ledgers are State-specific: Amount cannot be transferred from one state to another. It will pay tax very carefully for all the 15 GSTINs separately. If the IGST of, say, Delhi is wrongly paid as CGST of Delhi: then it shall first pay the IGST not paid, and then claim refund of CGST wrongly paid. ABC will file separate returns for every tax period for all the 5 States. In every State, effectively there would be 3 returns (GSTR-1/2/3) for every tax period comprising three Statues (SGST/CGST/ IGST) in every return: thus, effectively 9 return
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to its compliance list of all 15 registrations. If ABC wants to transfer its GST credit rating to input services from one unit to another, it would require separate registration as Input Service Distributor. ABC might have to deduct TDS on certain supplies; if yes, then separate TAN for deduction of TDS. If ABC transfers its office from Delhi to Mumbai, it will get cancel its registration in Delhi, and obtain new registration in Maharashtra. The list does not end here, and 5 to 6 points can easily be added looking at the nature of business. Above list certainly gives the apprehension whether GST is really a One Nation One Tax . Certainly, the Governments would not have intended the same; and therefore, the Governments and GST Council must come forward, study the GST legislations, rules and procedures deeper and between the lines, and make all the efforts to make it simpler, and easy to comply; otherwise, it would be a hard time in GST, particularly for medium and small sized industrie
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