Professional Documents
Culture Documents
GST PPT Taxguru
GST PPT Taxguru
Under GST structure, all different stages of production and distribution can be
interpreted as a mere tax pass through and the tax essentially sticks on final
consumption within the taxing jurisdiction.
Currently, a manufacturer needs to pay tax when a finished product moves out
from the factory, and it is again taxed at the retail outlet when sold. The taxes
are levied at the multiple stages such as CENVAT, Central sales tax, State
Sales Tax, Octroi, etc. will be replaced by GST to be introduced at Central and
State level.
Continued…….
Under GST, the taxation burden will be divided equitably between manufacturing
and services, through a lower tax rate by increasing the tax base and minimizing
exemptions.
The existing CST will be discontinued. Instead, a new statute known as IGST will
come into place on the inter-state transfer of the Goods and Services.
Indirect Tax =
Direct Tax GST (Except
customs)
CGST
•Additional duties of Custom (CVD)
•Service Tax
•Surcharges and all cesses
•VAT/sales tax
•Entertainment Tax
•Luxury Tax
•Lottery Tax
•Entry Tax
SGST •Purchase Tax
•Stamp Duty
•Goods and passenger Tax
•Tax on vehicle
•Electricity, banking, Real state
• CST
IGST
Download Source- www.taxguru.in
SGST and CGST for intrastate transaction : In the GST system, both Central
and State taxes will be collected at the point of sale. Both components (the
Central and State GST) will be charged on the manufacturing cost. This will
benefit individuals as prices are likely to come down. Lower prices will lead to
more consumption, thereby helping companies.
IGST for Interstate transaction: ‘IGST Model’ will be in place for taxation
of inter State transaction of Goods and Services. The scope of IGST Model is
that center would levy IGST which would be CGST plus SGST on all inter
State transactions of taxable goods and services with appropriate provision for
consignment or stock transfer of goods and services.
The GST paid on the purchase of goods and services, to be paid on the supply
of goods and services.
5.Government
2. Wholesaler
and Banks
Goods
+
Services
4.Consumer 3.Retailer
Cross utilization of ITC between the Central GST and the State
GST would, in general, be allowed.
ADC paid on Import of goods and service would fall under the
IGST and this duty would be allowed for setoff of SGST and
CGST.
Manufacturer : Let us suppose that CGST rate is 10% and SGST rate is 5% ,
with the manufacturer making value addition of Rs.30 on his purchases
worth Rs.100 of input of goods CGST paid @10%) and services used in the
manufacturing process. The manufacturer will then pay net CGST of Rs. 3
after setting-off Rs. 10 as CGST paid on his inputs (i.e. Input Tax Credit)
from gross CGST of Rs. 13 and Rs, 6.5 as SGST.
Gross Value:130 on that CGST 13/- and SGST 6.5/-
Input Credit: CGST 10-/ and SGST NIL/-
Net Liability: Rs. 3 + 6.5 = 9.5/-
Wholesaler: The manufacturer sells the goods to the wholesaler. When the
wholesaler sells the same goods after making value addition of (say), Rs.
20, he pays net CGST of only Rs. 2, after setting-off of Input Tax Credit of
Rs. 13, from the gross CGST of Rs. 15 and net SGST of only Rs. 1, after
setting-off of Input Tax Credit of Rs. 6.5, from the gross SGST of Rs. 7.5 to
the manufacturer.
Gross Value:150 on that CGST 15/- and SGST 7.5/-
Input Credit: CGST 13-/ and SGST 6.5/-
Net Liability: Rs. 2 + 1 = 3/-
Continued…….
Download Source- www.taxguru.in
Retailer: Similarly, when a retailer sells the same goods after a
value addition of (say) Rs. 10, he pays net CGST of only Re.1,
after setting-off Rs.15 from his gross GST of Rs. 16 and net
SGST of only Rs. 0.5, after setting-off of Input Tax Credit of Rs.
7.5, from the gross SGST of Rs. 8/- paid to wholesaler.
Gross Value:160 on that CGST 16/- and SGST 8/-
Input Credit: CGST 15-/ and SGST 7.5/-
Net Liability: Rs. 1 + 0.5 = 1.5/-
In both the cases, he would be required to deposit the CGST component into a Central Government
account and the SGST portion into concerned State Government account. He need not actually pay duty
in cash, as he would be entitled to set-off this liability against the CGST or SGST paid on his purchases
(say, inputs). But for paying CGST he would be allowed to use only the credit of CGST & SGST paid on
his purchases respectively. In other words, CGST credit cannot, in general, be used for payment of SGST.
Nor can SGST credit be used for payment of CGST.
Download Source- www.taxguru.in
With Constitutional Amendments, both CGST and SGST will be levied on
import of goods and services into the country.
The incidence of tax will follow the destination principle(Place of supply
rules).
Tax revenue in case of SGST will accrue to the State where the imported
goods and services are consumed.
Full and complete set-off will be available on the GST paid on import on
goods and services.
Thus, import of goods will attract BCD and IGST. It may be noted that
import of services, as against service tax at present, in GST regime, will
attract IGST.
Basic Custom Duty will continue to there under GST system. However, the
additional custom duty in lieu of CVD /Excise and the Special Additional
Duty (SAD) in lieu of sales tax/VAT will be subsumed in the import GST.
The import of services will be subject to Central GST and State GST on a
reverse charge mechanism. In other words, the GST will be payable by the
Importer on a self declaration basis.
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.
Tax on items containing Alcohol: Alcoholic beverages would be kept out of the purview of
GST. Sales Tax/VAT could be continued to be levied on alcoholic beverages as per the existing
practice. In case it has been made VA table by some States, there is no objection to that. Excise
Duty, which is presently levied by the States may not also be affected.
Tax on Petroleum Products: Petroleum and petroleum products have also been
constitutionally brought under the GST. However, it has also been provided that petroleum and
petroleum products shall not be subject to the levy of GST till notified at a future date on the
recommendation of the GST Council.
Tax on Tobacco products: Tobacco products would be subjected to GST with ITC. Centre
may be allowed to levy excise duty on tobacco products over and above GST with ITC.
Taxation of Services: As indicated earlier, both the Centre and the States will have concurrent
power to levy tax on goods and services. In the case of States, the principle for taxation of
intra-State and inter46 State has already been formulated by the Working Group of Principal
Secretaries /Secretaries of Finance / Taxation and Commissioners of Trade Taxes with senior
representatives of Department of Revenue, Government of India. For inter-State transactions an
innovative model of Integrated GST will be adopted by appropriately aligning and integrating
CGST and IGST.
CBEC
State 1Portal
(Central
Portal)
Common GST State 2 Portal
CGST and Portal
SGST and
IGST Returns (Reconciliation
IGST Return State N Portal
system)
MCA CBDT
NSDL