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PROPOSED GST SCENARIO V/S PRESENT SCENARIO –

PRACTICAL APPROACH

 

FOR PROVISION/SUPPLY OF SERVICES :-

ILLUSTRATIONS TO UNDERSTAND

 

Illustration -1

(1) For eg. M/s A (Input Service provider based in Haryana) provided/supplied services to M/s B (Output service provider Based in Haryana) for basic sale price of Rs. 100/-. M/s B also purchased/consumed some consumables (i.e. stationery etc.) worth Rs. 10/- and further provided/supplied services to Mr. C (Consumer in Haryana) for Rs. 120/-.

 

Presumptions :-

a.     Service Tax Rate – 14%

b.     Proposed CGST Rate – 10%

c.      Proposed SGST Rate – 10%

d.     Haryana VAT Rate – 12.50%

e.      On the addition of goods by M/s B, he paid which he paid SGST and CGST @ 10 % each in GST regime and Haryana VAT @ 12.50%.

 

Particulars

GST Scenario Amount (in Rs.)

Present Scenario Amount (in Rs.)

Transaction from M/s A to M/s B

 

 

 

 

 

Basic price of services from M/s A to M/s B

100.00

100.00

Add :- Service Tax @ 14 %

-

14.00

Add :- CGST @ 10%

10.00

-

Add :- SGST @ 10%

10.00

-

Total Invoice Value

120.00

114.00

 

 

 

Transaction from M/s B to Mr. C

 

 

 

 

 

Basic Sale of Goods from M/s B to Mr. C

120.00

120.00

Add :- Service Tax @ 14 %

-

16.80

Add :- CGST @ 10%

12.00

-

Add :- SGST @ 10%

12.00

-

Total Invoice Value

144.00

136.80

 

 

 

Comparative Analysis

 

 

 

 

 

Total Profit to M/s B

 

 

Basic Service cost

100.00

100.00

Cost towards Goods consumed

10.00

10.00

Cost towards Taxes paid on goods

-

1.25

Total Cost of M/s B

110.00

111.25

 

 

 

Net Profit of M/s B

10.00

8.75

 

 

 

Total Credit of input taxes availed by M/s B

22.00

14.00

(In GST regime B will take ITC of Rs 2/- taxes paid on goods also)

 

 

Net Tax payble by M/s B

2.00

2.80

 

 

 

Total revenue to Central Govt.

12.00

16.80

Total revenue to Haryana State Govt.

12.00

1.25

Total Cost to Mr. D (Consumer)

144.00

136.80

 

 

(2) For eg. M/s A (Input Service provider based in Haryana) provided/supplied services to M/s B (Output service provider Based in Delhi) for basic sale price of Rs. 100/-. M/s B also purchased/consumed some consumables (i.e. stationery etc.) worth Rs. 10/- and further provided/supplied services to Mr. C (Consumer in Delhi) for Rs. 120/-.

 

Presumptions :-

a.     Service Tax Rate – 14%

f.       Proposed CGST Rate – 10%

g.     Proposed SGST Rate – 10%

h.     Proposed IGST Rate  - 20%

i.       Delhi VAT Rate – 12.50%

j.       On the addition of goods by M/s B, he paid which he paid SGST and CGST @ 10 % each in GST regime and Delhi VAT @ 12.50%.

 

Particulars

GST Scenario Amount (in Rs.)

Present Scenario Amount (in Rs.)

Transaction from M/s A to M/s B

 

 

 

 

 

Basic price of services from M/s A to M/s B

100.00

100.00

Add :- Service Tax @ 14 %

-

14.00

Add :- IGST @ 20%

20.00

-

Total Invoice Value

120.00

114.00

 

 

 

Transaction from M/s B to Mr. C

 

 

 

 

 

Basic Sale of Goods from M/s B to Mr. C

120.00

120.00

Add :- Service Tax @ 14 %

-

16.80

Add :- CGST @ 10%

12.00

-

Add :- SGST @ 10%

12.00

-

Total Invoice Value

144.00

136.80

 

 

 

Comparative Analysis

 

 

 

 

 

Total Profit to M/s B

 

 

Basic Service cost

100.00

100.00

Cost towards Goods consumed

10.00

10.00

Cost towards Taxes paid on goods

-

1.25

Total Cost of M/s B

110.00

111.25

 

 

 

Net Profit of M/s B

10.00

8.75

 

 

 

Total Credit of input taxes availed by M/s B

22.00

14.00

(In GST regime B will take ITC of Rs 2/- taxes paid on goods also)

 

 

Net Tax payble by M/s B

2.00

2.80

 

 

 

Total revenue to Central Govt.

12.00

16.80

Total revenue to Delhi State Govt.

0.00

0.00

Total revenue to Haryana State Govt.

12.00

1.25

Total Cost to Mr. D (Consumer)

144.00

136.80

 

Disclaimer: Though full efforts have been made to compile this article correctly, yet we are not responsible / liable for any loss or damage caused to anyone due to any mistake / error / omissions in the above and contrary views/ opinions are welcomed.