Goods and Services Tax (GST) is a proposed system of indirect taxation in India merging most of the existing taxes into single system of taxation.
"Goods and Services Tax" would be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the central and state governments.
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.
This method allows GST-registered businesses to claim tax credit to the value of GST they paid on purchase of goods or services as part of their normal commercial activity.
|STATES||START DATE||END DATE|
|Gujarat, Maharashtra, Goa, Daman and Diu, Dadra Nagar Haveli, Chhattisgarh||14/11/2016||29/11/2016|
|Odisha, Jharkhand, Bihar, West Bengal, Madhya Pradesh, Assam, Tripura, Meghalaya, Nagaland, Arunachal Pradesh, Manipur, Mizoram||30/11/2016||15/12/2016|
|Uttar Pradesh, Jammu and Kashmir, Delhi, Chandigarh, Haryana, Punjab, Uttarakhand, Himachal Pradesh, Rajasthan||16/12/2016||31/12/2016|
|Kerala, Tamil Nadu, Karnataka, Telangana, Andhra Pradesh||01/01/2017||15/01/2017|
|Service Tax Registrants||01/01/2017||31/01/2017|
|Delta All Registrants (All Groups)||01/02/2017||20/03/2017|
Cost of services to increase:
As against the current service tax rate of 15%, proposed rate of GST around 18% shall result, increase in the cost of services. Hence the final consumer shall have to bear the burden of increased rate.
Boost to exports:
Currently, exports are reimbursed for central indirect taxes (excise and customs duties) but don’t get full offsets for CST and certain state level taxes such as entry taxes and octroi. Post GST, this non-rebated indirect tax-induced distortions would be removed, enhancing competitiveness of Indian exporters. Based on study done by CRISIL, GST will be largely a beneficiary for Automobiles, Cement, Media and Entertainment sector. GST will have a negative impact on service industries such as restaurants and quick service restaurants (QSR). Impact of GST on real estate will depend on its treatment with regard to abetment value.
Supply chain to improve:
Since all the procedures under GST will be online, physical check posts shall be dismantled. Further there will be online verification of tax credits, check posts will not be required. This shall result in speeding up the movement of goods.
Savings will accrue as a result of phasing out of the central sales tax (CST), consolidation of warehouse space, faster transit of goods since local taxes will be subsumed into the GST and as state level check posts will be dismantled.
Organized sector to gain further:
Since GST shall cover the entire chain of transaction upto end consumer, the scope to hide the transactions from regulatory authorities shall reduce drastically. Hence the organized sector which as such is currently paying the taxes shall have a level playing field with the unorganized sector which currently has the cost advantage by choosing not to pay the taxes. This shall benefit the organized sector tremendously.
Every supplier shall be liable to be registered under GST in the state from where he makes taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds threshold limit as announced by GST Council on 24.09.2016 of :
2. Every person who is liable to be registered under this Act shall apply for registration in every such State in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed.
3. A person having multiple business verticals in a State may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed.
4. A person, though not liable to be registered under Schedule V, may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered taxable person, shall apply to such person.
1. Every registered taxable person, other than an input service distributor and a person paying tax under the provisions of section 8 or section 37, shall furnish, electronically, in such form and manner as may be prescribed, the details of outward supplies of www.gstindia.com goods and/or services effected, during a tax period on or before the tenth day of the month succeeding the said tax period and such details shall be communicated to the recipient of the said supplies within the time and in the manner as may be prescribed.
2. Penalty For Late Filing:
|1.||GSTR-1||Details of outward supplies of taxable goods and/or services effected|
|2.||GSTR-1A||Details of outward supplies as added, corrected or deleted by the recipient|
|3.||GSTR-2||Details of inward supplies of taxable goods and/or services claiming input tax credit|
|4.||GSTR-2A||Details of inward supplies made available to the recipient on the basis of FORM GSTR-1 furnished by the supplier|
|5.||GSTR-3||Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax|
|6.||GSTR-3A||Notice to a registered taxable person who fails to furnish return under section 27 and section 31|
|7.||GSTR-4||GST Quarterly Return for compounding Taxable persons|
|8.||GSTR-4A||Details of inward supplies made available to the recipient registered under composition scheme on the basis of FORM GSTR-1 furnished by the supplier|
|9.||GSTR-5||Return for Non-Resident foreign taxable person|
|11.||GSTR-6A||Details of inward supplies made available to the ISD recipient on the basis of FORM GSTR-1 furnished by the supplier|
Notwithstanding anything contained in this section, but subject to the provisions of section 36, no registered taxable person shall be entitled to the credit of any input tax in respect of any supply of goods and/or services to him unless,-
(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other taxpaying document(s) as may be prescribed;
(b) He has received the goods and/or services;
(c) The tax charged in respect of such supply has been actually paid to the account of the appropriate Government, either in cash or through utilization of input tax credit admissible in respect of the said supply; and
(d) He has furnished the return under section 34: PROVIDED that where the goods against an invoice are received in lots or installments, the registered taxable person shall be entitled to take credit upon receipt of the last lot or installment: PROVIDED FURTHER that where a recipient fails to pay to the supplier of services, the amount towards the value of supply of services along with tax payable thereon within a period of three months from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in the manner as may be prescribed.
Input Service Distributor (ISD) means an office of supplier of Goods and/or Services , which receives tax invoices issued under section 23 towards receipt of input services and issues tax invoices or such other document as prescribed for the purposes of distributing the credit of CGST (SGST in State Acts) and/or IGST paid on the said services to a supplier of taxable goods and/or services having same PAN as that of office referred to above.
A registered taxable person paying tax under the provisions of section 9 shall, for each quarter or part thereof, furnish, in such form and in such manner as may be prescribed, a return, electronically, of inward supplies of goods or services, tax payable and tax paid within eighteen days after the end of such quarter.
Every taxable person registered as an Input Service Distributor shall, for every calendar month or part thereof, furnish, in such form and in such manner as may be prescribed, a return, electronically, within thirteen days after the end of such month.
|1||0%||Essential items including food|
|2||5%||Common usage items|
|3||12% and 18%||Standard Rates|
|4||28%||Items which are Currently taxable with (30-31%)|
|5||28% with Cess||Luxury and de-merit Goods|
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GST may not subsume the following taxes within its ambit:
FAQ's on Goods and Service Tax (GST)
Any person, who contravenes any of the provisions of this Act or any rules made there under for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to twenty five thousand rupees.
Any registered taxable person who repeatedly makes short payment of tax shall be liable to a penalty of rupees ten thousand or ten percent of the tax short paid, whichever is higher – clause 66(2) of GST Model Law, 2016.
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