Providing Excellent Professional Services with Integrity.
Finding The Right Balance For Improved Performance
Stimulating Competition By Creating Opportunities
Timely Solutions To Business Problems
Goals Aligned With Business Needs & Priorities
Salient Features of GST in INDIA :-
Following are the major features of the proposed GST in INDIA :-
(1) It will be a "destination/Consumption" based taxation instead of present "Origin" based taxation.
(2) Dual GST having two concurrent components –
o Central GST levied and collected by the Centre
o State GST levied and collected by the States
(3) Apply to all stages of the value chain
(4) Apply to all taxable supplies of goods or services (as against manufacture, sale or provision of service) made for a consideration except –
o Exempted goods or services – common list for CGST & SGST
o Goods or services outside the purview of GST
o Transactions below threshold limits
(5) CGST and SGST on intra-State supplies of goods or services in India.
(6) IGST (Integrated GST) on inter-State supplies of goods or services in India – levied and collected by the Centre.
(7) IGST applicable to
o Import of goods and services
o Inter-state stock transfers of goods and services
(8) Optional Threshold exemption in both components of GST
(9) All goods or services likely to be covered under GST except :
o Alcohol for human consumption - State Excise plus VAT
o Electricity - Electricity Duty
o Real Estate - Stamp Duty plus Property Taxes
o Petroleum Products (to be brought under GST from date to be notified on recommendation of GST Council)
(10) Export of goods and services – Zero rated.
(11) Additional Tax of 1% on Inter State Taxable supply of Goods by State of Origin and non CENVATABLE
(12) GST Rates – to be based on RNR – Four rates
o Merit rate for essential goods and services
o Standard rate for goods and services in general
o Special rate for precious metals
o NIL rate
(13) Floor rate with a small band of rates for standard rated goods or services for SGST
(14) Optional Threshold exemption in both components of GST
(15) Optional Compounding scheme for taxpayers having taxable turnover up to a certain threshold above the exemption
(16) Model GST Law including Rules and procedures to be recommended by GST Council –
o Certain features to be common between the Centre and the States and across the States
o Certain other features may vary to allow flexibility to the Centre and the States
(17) Place of Supply Rules –
o to determine Place of Supply of goods or services
o to determine whether the supplies are intra-State or inter-State
(18) HSN Code likely to be used for classification of goods
(19) Present System of classification of services likely to be used
(20) ITC availed by importing dealers
o ITC of IGST to be used for payment of IGST, CGST & SGST in that order
o ITC of CGST to be used for payment of CGST & IGST in that order
o ITC of SGST to be used for payment of SGST & IGST in that order
(21) Credit of SGST used for payment of IGST – to be transferred by Exporting State to the Centre
(22) Credit of IGST used for payment of SGST – to be transferred by Centre to Importing State
(23) Inter-Governmental Transfers to take place at the end of Tax Period
(24) Central Government to act as a clearing house and transfer the funds across States
(25) GSTN to function as pass through portal where all GST dealers would
o submit registration application
o file returns
o make tax payments
(26) Common Registration, Return filing & e-Payment services for tax payers
(27) The administration of the Central GST would be with the Centre and for State GST with the States.
(28) The taxpayer would need to submit periodical returns to both the Central GST authority and to the concerned State GST authorities.
(29) Each taxpayer would be allotted a PAN-linked taxpayer identification number with a total of 13/15 digits. This would bring the GST PAN-linked system in line with the prevailing PAN-based system for Income tax facilitating data exchange and taxpayer compliance. The exact design would be worked out in consultation with the Income-Tax Department.
(30) Keeping in mind the need of tax payers convenience, functions such as assessment, enforcement, scrutiny and audit would be undertaken by the authority which is collecting the tax, with information sharing between the Centre and the States
(31) Provision of compensation to States for initial Five Years.
(32) Cascading effect (Tax on Tax) will be removed to much extend, However it will not entirely eliminated due to Additional Tax of 1% and due to certain specified products have been kept out of the preview of the GST.
(33) Centre will be entitled to levy CGST/IGST on supply of goods from manufacture to final retail sale/ consumption.
(34) State will be entitled to levy SGST on Supply of Services.
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.