goods and services tax impact analysis - gst · pdf filegoods and services tax impact...

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HELPING CLIENTS KEEP MORE OF WHAT THEY EARN
GOODSANDSERVICESTAX
IMPACTANALYSIS

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PROCESSMAP-CURRENTREGIME
HighGradeOre
COBPlantBalasoreAlloys
Chromeore(Mines)
LowGradeOre
Importprocurement
Localprocurement
CustomPort
FinishedgoodssoldtoDomesticCustomers
Finishedgoodsexported
Clearanceofgoods(Importvalue=100)BCD=10CVD=13.75(Cenvattable)SAD=4.55(Cenvattable)
[email protected]%=12.5CST@2%=2.25PurchasePrice=114.75
A:Sale(Domestic)
TotalCostwith10%Value
Addition=Rs.233.48
(Rs.100+Rs.100+Rs.2.25CST
+Rs.10Customduty)
InterstateSale(CST@2%onSP)
(233.48*2%)=4.67
TotalCost=238.14
B:Sale(export)
TotalSalesprice=233.48

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PROCESSMAP-GSTREGIME
HighGradeOre
COBPlantBalasoreAlloys
Chromeore(Mines)
LowGradeOre
Importprocurement
Localprocurement
CustomPort
FinishedgoodssoldtoDomesticCustomers
Finishedgoodsexported
Clearanceofgoods(Importvalue=100)BCD@10%=10IGST@16%=17.6(Cenvattable)Purchaseprice=127.6
Cost=100IGST@16%=16PurchasePrice=116
A:Sale(Domestic)
Totalcostwith10%value
Addition=Rs.231
(Rs.100+Rs.100+Rs10Customduty)CentralGST@8%*231=18.48StateGST@8%*231=18.48Totalcost-231.00*
B:Sale(export)
ExportisexemptedfromGST
TotalSalesprice=231CGST&SGSTavailableassetofftotheCustomer

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CURRENTPATCHWORK
StateVAT CENVAT/ServiceTax
PrimaryProducers
Manufacturers
DistributorsResellers
ServiceProviders
ServiceResellers
RealEstateLandComponent
PrimaryProducers
Manufacturers
DistributorsResellers
ServiceProviders
ServiceResellers
RealEstateLandComponent

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DRAFTLEGISLATIONSOFAR
TheConstitution115thAmendmentBill2011introducedinMarch,2011.
TheConstitution122ndAmendmentBill2014introducedinDec,2014.
DiscussionreportbyJointcommitteeonBusinessProcessesofGST,2015.
ModelGSTLawbytheempoweredCommitteeintroducedinJune,2016.

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CURRENTPATCHWORK
Customs
CENVATCredits
CentralExcise
ServiceTax
PhaseI2004-05
PhaseII2015-16
CentralSalestax
Otherlocaltaxes
StateSalestax StateVat
CentralGST
StateGST
Will also include other local taxes such as Entry Tax, Entertainment Tax, Luxury Tax, etc

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TAXESSUBSUMED
Powertolevytax
Centre
CentralExciseDuty
SpecialAdditionalDuty(SAD)
ServiceTax
OtherDutiesofExcise
CountervailingDuty(CVD)
State
StateVAT
PurchaseTax/Luxurytax.Octroi&Entrytax
CentralSalesTax
TaxesonAdvertisement,/lotteries/
betting/gambling
C G S T
S G S TNotCovered:-StampDutyTaxes&DutiesonElectricity
TaxesonVehicles,goodsandpassengers

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GST-EXCLUSION
CentralLevy(Entry84,List1,UnionList)
Petroleum
Tobacco&tobaccoproducts
StateLevy(Entry54,List1,StateList)
Alcoholforhumanconsumption
Petroleum
NotwithinGSTframework
LandComponentinRealState
Power&Energy

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PROPOSEDREVENUENEUTRALRATE
ParticularsRNR
(RevenueNeutralRate)
Rateonpreciousmetals
"Low"rate(goods)
"Standard"rate(goodsandservices)
"High/Demerit"rateorNon-GSTexcise(goods)
Preferred 156
1216.9
404 17.3
2 17.7
Alternative 15.56
1218.0
404 18.4
2 18.9
Electricity,Petroleum,Alcohol&realestateexcludedwhilecomputingRNR

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THRESHOLDSLIMIT
Particulars
Current
Goods Services Compounding GoodsplusServices Compounding
CentreTurnovertotheextentofRs.150
lakhs
ServicevaluetotheextentofRs.10lakhs
NA
*Rs.9/4lakhforgoodsand
servicescombined
TurnovertotheextentofRs.50
lakhs
State 5-10lakh NA
permissibleinSomeoftheStatesfor
someitemsandatvaryingrates
*Rs.9/4lakhforgoodsandservicescombined
TurnovertotheextentofRs.50
lakhs
*TurnoverfornorthEaststateisRs.4Lakhs*Export&Exemptedgoodsisincludedinthresholdlimit.

IGSTAct,201611
IGST-MODEL
IGST(CGST+SGST)
LeviablebyCentralGovernment
Inter-statetransactionwillattractIGST
SellertopayIGSTontheaccountofCentralGovernmentpostadjustmentofcredit
availableonIGST,CGST&SGST
BuyertoclaimcreditofIGSTpaidonInput
ThecorrespondingCentral/State
GovernmenttopayamountequivalenttoCGST/SGSTcredit
utilizedforpaymentofIGST

Section-12ofCentral/StateGoods&ServiceTaxAct201612
COMPOUNDINGLEVY
OptiontopayTax@1%of
Turnover
Turnover(Goods+ServiceTax)

TAXABLEEVENTINGSTREGIME
TaxableeventinGSTissupplyofGoods&Services.
Hence,thepresenttaxableeventsofmanufacture,forcentralexcise,andforsaleofgoodsforStateVAT,willhavenorelevance.
CGST/SGSTwouldbechargeableonlywhenthesupplierandtherecipientarebothlocatedwithintheState.
InterstateSupplyofgoodsandserviceswillattractIGST.

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GST-SUPPLY-MEANING&SCOPE
Allformsofsupplyofgoodsand/orservicethatincludesthefollowingwhicharemadeoragreedtobemadeforaconsiderationinthecourseorfurtheranceofbusiness.
Sale Transfer Barter Exchange Licence Rental Lease Disposal
Importationofservice,whetherornotforaconsiderationandwhetherornotinthecourseorfurtheranceofbusiness.
AnysupplyspecifiedinScheduleI,madeoragreedtobemadewithoutaconsideration.

Schedule-IofCentral/StateGoods&ServiceTaxAct201615
DEEMEDSUPPLY
IntheGSTregimefollowingtransactionwithoutconsiderationshallalsobeconsideredassupplyi.e.deemedsupply:
Permanenttransfer/disposalofbusinessassets. Temporaryuseofbusinessassetsforprivateornon-businessuse. Servicesutilisedforprivateornon-businessuse. Assetsretainedafterderegistration. Goods/servicessuppliedtotaxableornon-taxablepersoninthecourseofbusiness.
Goodssuppliedtojobworkisexceptiontodeemedsupply.
AccordinglygoodssuppliedonsamplebasiswillbecoveredunderGSTasdeemedsupply.

Schedule-IIofCentral/StateGoods&ServiceTaxAct2016 16
SUPPLYVsSERVICE
TRANSFER
Transferoftitleingoodsisasupplyofgoods
Transferofgoods,rightingoodswithouttransferoftitleisasupplyofservices
Transfer of title in goods at a future date upon payment of full consideration ( i.e financetransaction)isasupplyofgoods.
LANDANDBUILDING
Lease,tenancy,easement,licencetooccupylandisasupplyofservices.
JOBWORK
Anytreatmentorprocesswhichisbeingappliedtoanotherpersonsgoodsisnotasupplyofservices

SUPPLYFROMMINESTOFACTORYPREMISES
BALhasacaptivemineswhereinchromeorefinesisextracted.
Twotypesofchromeoreareextractedfrommines:
Highgradechromeorefines.
Lowgradechromeorefines.
Highgradechromeorefinesdirectlysenttothefactorypremises.
LowgradeoresarenotreadytoputintothefurnaceformanufactureofHCFC,sotheseoresaresenttotheCOBplantforbeneficationandthereafterremovedtothefactory.
UnderGSTtheconceptofpremisesisnottherebutlikeVATitisanentityconcept.HoweverchromeorefinestransferredfromminestoCOBplantandCOBplanttofactoryisnotasupplysincethesupplyistakingplacewithinstateofOrissa.

PointofTaxationunderthecurrentvis--visGSTregime
CentralExcise GSTPoint of Taxation for a manufacturer underCentralExciseAct:
Removalofgoodsfromfactory.
Theremovalmaybefor:
Sale
Transfertodepot
Captiveconsumption
Transfertoanotherunit
Freedistribution
ThisindicatesthatlevyofCentralExcisedutywilltrigger at the point when goods are removedfromfactoryofthemanufacturer.
PointofTaxationforasupplierunderGSTwilltriggeratearlierofthefollowingevent:
DateofissueofInvoice
Dateofremovalofgoodsfromfactory
Date on which goods are made available to the recipient
DateofReceiptofpayment
Dateonwhichrecipientshowsreceiptofgoodsinhisbooksofaccount

ServiceTax GST
Point of Taxation for a Service provider underServiceTaxisearlierofthefollowing:
Date of issue of Invoice issued for serviceprovidedortobeprovided
Dateofcompletionofservice, if invoiceisnotissuedwithinprescribedtimeperiod
Dateofreceiptofpayment, ifreceivedbeforeissueofinvoiceorcompletionofservice
PointofTaxationforasupplierunderGSTwillearlierofthefollowingevent:
DateofissuanceofInvoice
Dateofreceiptofpayment,
Date of completion of service (If invoice is notissuedwithinprescribedtimeperiod)
Date on which recipient reflects the receipt ofservicesinhisbooksofaccounts.

ServiceTax(ReverseChargeMechanism) GSTPoint of Taxation for a Service receiver underpurviewofServiceTaxincaseofreversecharge(RCM):
In case advance payment is made, date ofadvancepayment
Incasepayment ismade,within6monthsofinvoicedate,dateofpayment
In case payment ismade, after 6months ofinvoicedate:
DateofInvoice,ifsuchisissuedwithin30daysfromcompletionofprovisionofservice
Date of completion of provision of service , ifinvoice is not issued within 30 days fromcompletionofprovisionofservice
PointofTaxation for reverse

goods and services tax impact analysis - gst · pdf filegoods and services tax impact...

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