GOODS AND SERVICES

TAX
Presentation By:
GROUP 1, Section A :
Bhawana Choudhary
Ananya Bansal
Siddhant Joshi
Vakul Agarwal
Ayush Singhal

PROPOSED INDIRECT TAX

STRUCTURE

Goods and Service

Tax(GST)

It is a comprehensive tax which is levied on

manufacturing, sale and consumption of goods and
services at a national level.
It is a simpler and better extension version of VAT.
It will convert the whole country into a unified
market and replace all the indirect taxes currently
in place with the one single tax system.

Evolution of GST
Gross Receipts tax or gross excise tax :
It is a tax on the total gross revenues of a company, regardless of their source.
A gross receipts tax is similar to a sales tax, but it is levied on the seller of
goods or service consumers.

Sales tax or Consumption tax :

It is a consumption tax charged at the point of purchase for certain goods and
services. The tax is usually set as a percentage by the government charging the
tax.

Value Added tax (VAT) or General Sales tax (GST):

It is a form of consumption tax.
Buyer Perspective: It is a tax on the purchase price.
Seller Perspective: It is a tax only on the value added to a product, material
or service.
The manufacturer remits to the government the difference between these two
amounts and retains the rest for themselves to offset the taxes previously paid
on the inputs.

Benefits to Assesse from GST

Reduction in multiplicity of taxes (Central
Excise duty, VAT, Entertainment tax, luxury
tax at state level)
Mitigation of cascading/double taxation.
More efficient neutralization of taxes
especially for exports.
Development of common national market.
Simple tax regime
Fewer rates and exemptions.
Conceptual clarity (Goods vs. Services)

Benefits to Exchequer/Govt. from

GST
Simpler tax system.
Broadening of tax base
Improved compliance & revenue collections
(tax booster)
Efficient use of resources.
Separate taxes paid to State Govt. and
Central Govt.

Challenges in GST-Lesson from Present

System

Legacy issues which will use resources

Non Harmonization of Tax rates
Lack of automation
Lack of Procedural Manuals
Lack of Skilled officials
Double Registration- Handling old Registration
Poor Quality of tax Returns
No System for 100% Scrutiny of Tax Returns and Tax
Audit
Lack of Cross Verifications with other tax administrations
Lack of mechanism to control Evasion
Impact on Prices

Industry expectations from GST

Low compliance cost

Simple business processes
Less requirement of automation initially
Minimal ITC refund cases
Exemptions instead of exclusions from GST
Seamless flow of input credit
Seamless flow of information between, supplier, buyer and tax
administration
Need for IT portal or agency like TINXSYS, NSDL
Automation of process by way of e-registrations, e-returns, e-payment
No requirement of verifications during inter state movement of Goods
Zero rating of supplies to exporters
Administrative efficiency in case of assessment and adjudication
Ease of compliance
Self-policing

Features of Proposed GST

Destination based Taxation
Apply to all stages of the value chain
Apply to all taxable supplies of goods or services (as against
manufacture, sale or provision of service)made for a
consideration except
o Exempted goods or services common list for CGST & SGST
o Goods or services outside the purview of GST
o Transactions below threshold limits
Dual GST having two concurrent components
o Central GST levied and collected by the Centre
o State GST levied and collected by the States
CGST and SGST on intra-State supplies of goods or services in
India.
IGST (Integrated GST) on inter-State supplies of goods or services
in India levied and collected by the Centre.

Features of Proposed GST contd.

o
o

IGST applicable to
Import of goods and services
Inter-state stock transfers of goods and services
Export of goods and services Zero rated.
Additional Tax of 1% on Inter State Taxable supply of Goods by
State of Origin and non CENVATABLE

All goods or services likely to be covered under GST except :

o Alcohol for human consumption - State Excise plus VAT
o Electricity - Electricity Duty
o Real Estate - Stamp Duty plus Property Taxes
o Petroleum Products (to be brought under GST from date to be
notified on recommendation of GST Council)
Tobacco Products under GST with Central Excise duty.

Tax to be subsumed

Illustration Present Scenario (Intra-State

Trade of Goods)

Illustration GST Scenario (Intra-State

Trade of Goods)

Illustration Present Scenario (Inter-State

Trade of Goods)

Illustration GST Scenario (Intra-State

Trade of Goods)

Comparison (Trade of Goods)

Illustration Present Scenario (Intra-State

Trade of Services)

Illustration GST Scenario (Intra-State

Trade of Services)

Illustration Present Scenario (Inter-State

Trade of Services)

Illustration GST Scenario (Intra-State

Trade of Services)

Comparison (Trade of Services)