GOODS & SERVICE TAX (GST) Presented By : inoday
inoday Consultancy Services (P) Ltd.
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One Country One Tax One Market ■ GST is one indirect tax for the whole nation, which will make India one unified common market. ■ Goods and Services Tax (GST) would be a significant step in the reform of indirect taxation in India ■ Goods and Services Tax would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method. ■ Keeping in mind the federal structure of India, there will be two components of GST – Central GST (CGST) and State GST (SGST).
inoday Consultancy Services (P) Ltd.
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KEY CONCEPTS TO CHANGE ■
Taxable event changed from ‘manufacture’/ ‘sale’/ ‘provision of services’ to ‘supply’
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Uniform across States
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GST to subsume majority of indirect taxes
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Likely to be consistent for all goods and services
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Rates to change, exemptions to be withdrawn/ pruned or converted to refund schemes
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Destination based rules
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No differentiation between goods and services for credit availment
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Trader, Manufacturer and Service provider will be at par in terms of claiming credit
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Credit pool to be maintained State-wise
inoday Consultancy Services (P) Ltd.
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TAX STRUCTURE Taxes to be subsumed
Central Taxes
State Taxes
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Additional duty of customs
• Value Added Tax (‘VAT’)
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Special additional duty of customs
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Central excise duty
• Other State taxes such as Luxury tax, octroi, entry tax, purchase tax, etc.
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Service tax
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Central Sales Tax (‘CST’)
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Surcharge and cess related to supply of goods and services
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Medicinal and toilet preparations (Excise duties) Act, 1955
• Surcharge and cess related to royalties and supply of goods • Taxes on lottery, betting and gambling
Taxes outside the purview of GST •
Basic customs duty
• State excise duties
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Stamp duty
• Taxes and duties on electricity
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Taxes and duties on alcohol for human consumption
• Additional duties on tobacco and tobacco products*
Taxes and duties on petroleum products may be included within GST from a notified date inoday Consultancy Services (P) Ltd.
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RATE STRUCTURE Rate structure at 0%, 5%, 12%, 18% and 28% Particulars
Rate
Exemption
0%
Fruits, vegetables, essential items/medicines
Lower rate (mass consumption items)
5%
Edible oil, spices, tea, coffee
Standard Rate
12%/18%
Higher rate (demerit goods)
28% cess levied
Applicable on all other goods, services to be taxed at 18% White goods e.g. LED TV sets
• Services may also be subject to lower tax rates as per slabs mentioned above, such as goods transport agency services • Cess on demerit goods such as luxury goods, etc., to be reviewed annually and to be phased out in 5 years
inoday Consultancy Services (P) Ltd.
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CREDIT MECHANISM Credit Type
Paid On
Applicable Credit
CGST
• Local supply of goods/ services
• CGST • IGST
• Local supply of goods/ services
• SGST • IGST
• Inter-State supply of goods/ services
• IGST • CGST • SGST
SGST
IGST • Imports* into India of goods/ services
inoday Consultancy Services (P) Ltd.
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inoday Consultancy Services (P) Ltd.
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