goods and services tax (gst) · 2018-10-31 · exemptions in gst regime committee on rnrs for sgst...
TRANSCRIPT
GOODS AND SERVICES TAX (GST)
(February 2015)
CA. UPENDER GUPTA, IRS B. COM. (HONS.), FCA, FCS, FCMA, LL.B.
1
Important Design Issues
Discussions about GST Design
GST Planning Impact Areas for Business
Role of Chartered Accountants
PRESENTATION PLAN
2
IMPORTANT DESIGN ISSUES
3
Rigors of Dual Control
Handling of inter-State supplies – IGST Model
Advantages
GST rate Structure – RNRs
Exempted Goods or Services – VAT List
Exemption Threshold – CE / ST / VAT
Composition Threshold – VAT
Place of Supply Rules for Goods or Services
Guiding Principles
IMPORTANT DESIGN ISSUES
4
Fund Transfers between Centre & States
One State one Registration
Dual Authority
Dispute Resolution
Recovery
Refunds
Audit
Recovery
IMPORTANT DESIGN ISSUES contd.
5
DISCUSSIONS ABOUT GST DESIGN
6
Committee on Dual Control, Thresholds and Exemptions in GST regime
Committee on RNRs for SGST & CGST and Place of Supply Rules
Committee on IGST and GST on Imports
Committee to examine Business Processes for GST
Committee to draft Model GST Law
DISCUSSIONS ABOUT GST DESIGN
7
GST PLANNING
8
Pricing, Costing, Margins
Supply-chain management
Change in IT systems
Treatment of tax incentives
Treatment of excluded sectors
Transaction issues
Tax compliance
Impact Areas for Businesses
9
Tracking GST development
Review of draft legislation and impact analysis
Industry advocacy
Review of final legislation and impact analysis
Implementation assistance
Post implementation support
ROLE OF CHARTERED ACCOUNTANTS
10
Tax Planning
Record Keeping
Departmental Audit
External Audit of GST Records
System Audit
Certifications for Tax credits and Special audits, if any
Assisting the Governments -- both Central and State
ROLE OF CHARTERED ACCOUNTANTS contd.
11
ADVANTAGES OF IGST MODEL For Taxpayers
Maintenance of uninterrupted ITC chain on inter-State transactions for dealers located across States
No refund claim for suppliers in exporting State, as ITC is used up while paying the Tax
No substantial blockage of funds for the inter- State supplier or buyer
No cascading as full ITC of IGST paid by supplier allowed to buyer
Model handles ‘B2B’ as well as ‘B2C’ transactions
ADVANTAGES OF IGST MODEL contd.
For Tax Administrations
Upfront tax payments by suppliers in exporting State
No refund claims on account of inter-state supplies
Tax gets transferred to Importing State in accordance with Destination principle
Self monitoring model
Result in improved compliance levels
Effective fund settlement mechanism between the Centre and the States
Principles for good Supply Rules
Destination is where effective use and enjoyment – OECD Draft Paper – February , 2013
Revenue neutrality should be achieved to the extent possible
Tax administration should not lay claim to B2B transaction, being a wash transaction, unless intended otherwise
SGST to reach the State where supplies are actually made – competing demand from States
Destination / Consumption Principle
Decision as to how to conduct business should not be influenced by tax policy unless specifically intended
GUIDING PRINCIPLES
15
GST chain should integrate with the supply chain. Input Stage Tax should move along with supply chain and ultimate incidence of tax should be at the final consumption point
Rules should be implementable without any undue compliance burden to the taxpayer or administrative complexities to tax administration
Rules should be such that they would not lead to increase in cascading burden and not deviate from the objective of creating a common market under GST regime
Rules for B2B supplies should normally be the location of recipient of goods or services and not where goods / services is actually delivered / performed
GUIDING PRINCIPLES contd.
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