GST Basics
By: – Smitesh Desai
Goods and Services Tax – GST
Dated:- 11-8-2016
GST is most likely to be introduced with effect from 1st April 2017. With its introduction, the following 3 major taxes will be abolished:
* Central Excise Duty
* Service Tax
* Value Added Tax (VAT)
Supply will become the Taxable Event rather than Manufacture or Sale. GST will comprise of the following 3 elements:
* Central Goods & Services Tax (CGST)
* State Goods & Service Tax (SGST)
* Inter-State Goods & Services Tax (IGST) – not a different tax, really!
The taxation mechanism will operate in 2 formats:
* Intra-State ie. Within the state
* Inter-State ie. Between 2 states
Every transaction will attract both the taxes is CGST +
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in addition to Customs Duty.
Input Tax Credit (ITC) will be available to an assessee, ie manufacturer or service provider having turnover beyond the exempt limit (10.00 lacs). ITC will be operated as follows:
* Credit of IGST, CGST & SGST will be separately availed & accounted
* IGST credit will be first used for payment of IGST liability
* IGST credit remaining in balance will be utilised for payment of CGST liability
* IGST credit remaining in balance will be utilised for payment of SGST liability
* CGST credit will be first used for payment of CGST liability
* Balance of CGST credit will be then be used for payment of IGST liability
* CGST credit cannot be used for payment of SGST liability
* SGST credit will be usable f
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e from credits. The assessee will not have much say about credit management because the credit register maintained at the assessee's desktop must also be uploaded into the NSDL+RBI driven software, for computation of net GST liability. GST liability will be computed through the output register maintained by the assessee & uploaded on the RBI+NSDL software. The following chart explains the ITC & cash payment mechanism:
CGST
SGST
IGST
Opening Balance
Fresh Credits
Credit Available
Credits Utilised
Closing Balance/Cash Payment
ISD mechanism remains intact. Branch transfer will attract GST. Exports will remain zero-rated.
Reply By ramniranjan kandoi as =
Dear Smitesh.
Read your Article"GST Basics"
It is really short & sw
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