Post on 07-Apr-2018
⇒ TAXES WHICH ARE SUBSUMED IN GST
⇒ PROPOSED TAX STRUCTURE POST GST
⇒ BENEFITS OF GST - FOR BUSINESS, GOVERNMENT & CONSUMERS
⇒ INPUT TAX CREDIT
⇒ HOW DOES BASIC GST CALCULATION WORKS
⇒ COMPLIANCE REQUIREMENTS UNDER GST
⇒ ROUTINE COMPLIANCE
⇒ GST IMPACT ANALYSIS
⇒ BUSINESS DECISIONS NEEDING RE-CONSIDERATION IN GST REGIME
⇒ FINAL GST RATES
⇒ UNDERSTANDING GST IMPACT - AN EXAMPLE
⇒ GST TRANSITION PREPAREDNESS
⇒ ABOUT APMH
Char te red AccountantsAPMH & Associates LLP
Taxes Which AreSubsumed In GST
Service TaxSpecial
Additional Dutyof Customs (SAD)
AdditionalCustoms Duty
(CVD)
Central/AdditionalExcise Duty
(Goods of SpecialImportance /
Textile & TextileProducts)
Excise Duty-Medicinal
& ToiletriesPreparation Act
CentralSurcharge/Cess
(So KKC & SBC go away)
Central SalesTax (CST)
CentralTaxesGST
StateSucharge /
CessPurchase
Tax
StateEntry Tax
VAT / SalesTax
Taxes onLottery,
Betting orGambling*
EntertainmentTax /
Luxury Tax*
Octroi & Local Body Tax
(LBT)
StateTaxes -
GST
Exclusion from subsuming from GST
Basic Custom Duty (BCD)
Stamp Duty
* Except levied by local bodies
Tax on alcoholic liquor for Human
Consumption
Petroleum Products - levy of GST to be made effective at a
future date
Tax on entertainment and amusement levied
and collected by Municipal authorities
Char te red AccountantsAPMH & Associates LLP
Proposed TaxStructure Post GST
Tax Structure
Direct Tax
Income Tax
Indirect TaxGST
(Except customs)
ImportTransaction
Inter StateIntra- state
Customs Duty+
IGST (Central)
IGST (Central)SGST (State)CGST (Central)
Export (Zero Rated)
Import
Factory
CGST+SGST
Purchase
BCD - Cost
IGST - Credit
Sale
CGST+
SGST
Warehouse
IGST
Purchase
IGST
Trf in Maharashtra
No Tax
Warehouse
CGST+SGST
Sale
Transfer
Outside India
Overseas Supplier
Overseas Customer
Maharashtra
India
OMS(Outside Maharashtra State)
Distributor
Supplier
Distributor
Supplier
Char te red AccountantsAPMH & Associates LLP
For the Centre and the States
According to experts, by implementing the GST, India will gain $15 billion a year. This is because, it will promote more exports, create more employment opportunities and boost growth. It will divide the burden of tax between manufacturing and services.
For individuals and companies
In the GST system, taxes for both Centre and State will be collected at the point of sale. Both will be charged on the manufacturing cost. Individuals will be benefited by this as prices are likely to come down and lower prices mean more consumption, and more consumption means more production, thereby helping in the growth of the companies.
Benefits of GST - Know Who Gains What-Industry, Government, Consumers
BUSINESS GOVERNMENT FINALCONSUMER
Reduction inmultiplicity ofIndirect taxes
Increased taxcollections due to
wider tax base
Rate reductionin prices possible.
Reduced cascading effect due to cross tax credit mechanism under GST
Bettercompliance Reduction intaxes if Govt. tax
collection increases
Non creditable CST to be removed will lead to
cost reduction
The input tax credit on account of IGST during a tax period shall first be utilised towards payment of IGST; the amount remaining, if any, shall be utilized towards the payment of CGST and SGST, in that order.
The input tax credit on account of CGST during a tax period shall first be utilised towards payment of CGST; the amount
*Cross utilization of Credit of CGST & SGST shall not be allowed in input tax credit.
Tax Payable on Outward Supplies Input Tax Credit on Inward Supplies
CGST CGST, IGST, SGST *
SGST SGST, IGST, CGST *
IGST IGST, CGST and SGST
INPUT TAX CREDIT
Input tax is the GST incurred on any purchase or acquisition of goods and services by a taxable person for the purpose of making a taxable supply in the course or furtherance of business.
remaining, if any, shall be utilized towards the payment of IGST.
The input tax credit on account of SGST during a tax period shall first be utilised towards payment of SGST; the amount remaining, if any, shall be utilized towards the payment of IGST.
Char te red AccountantsAPMH & Associates LLP
HOW DOES BASIC GST CALCULATION WORKS
Compliance Requirements under GST
Char te red AccountantsAPMH & Associates LLP
Particular Manufacturer Wholesaler Retailer
Purchase Value of input 100 150 170
Value Addition 50 20 10
Sales Value 150 170 180
CGST@9% 9% 9% 9%
IGST@9% 9% 9% 9%
Output CGST 13.5 15.3 16.2
Output SGST 13.5 15.3 16.2
Input CGST 4.5 13.5 15.3
Input SGST 4.5 13.5 15.3
Net CGST 9 1.8 0.9
Net SGST 9 1.8 0.9
For New Dealers :
Single application to be filed online for registration under GST.
The registration number will be PAN based and will serve the purpose for Centre and State.
Unified application to both tax authorities.
Each dealer to be given unique ID GSTIN.
Deemed approval within three days.
Post registration verification in risk based cases only.
Registration already started w.e.f. 8th November 2016 on www.gst.gov.in.
Existing VAT/Central excise / Service Tax payers will not have to apply afresh for registration under GST.
Existing
New
For Existing Dealers :
Automatic issueof Provisional Registration
Within 30 Days Turover crossingRs. 19 Lacs
Separate Registrationfor each businessvertical possible
Need to furnish the prescribeddocuments within 6 month
“GST is a significant move, but implementation is key”- RC Bhargava, Chairman of Maruti Suzuki
Business Decisions needingre-consideration in GST regime
Routine Compliance
Annual Compliance
Type of Dealers
Periodical returns
GSTR 8 -Annual Return By
31st Dec.next year
Special Cases For Normal
Dealers(Monthly)
GSTR 4 / 5 / 6 / 7 for special filings
in prescribed frequency
GSTR 2 -Inward
Supplies
GSTR 3-MonthlyReturn
GSTR 1 - Outward Supplies
Supply chain
o Sourcing strategy - Make v/s Buy
Distribution strategy – Stock transfer/Depot vs. Distributor/Dealer
o Sourcing pattern – availability of increased credits to vendors on services like renting of
immovable property, securities services, housekeeping services etc.
o Supply/Inventory management
Capital Expenditure
Impact on Margin and thereby Selling Price –IGST, No Retention
Sales in Transit to be done away with
Impact on Works Contract / EPC / Maintenance Contracts currently subject to dual taxes non
procurement/sale side
Char te red AccountantsAPMH & Associates LLP
Goods and Services Tax is on the fast track for roll out. Looking at coordination of GST Networks & GST council, the speed at which the decisions are being taken and things are being implemented, we can envisage that GST will be a reality w.e.f. 1st of April 2017.
Larger business groups have already studied the draft provisions, analysed the impact on their complex business models & multistate presence and started the march towards “ahead of curve” implementation. With Impact Analysis and different business scenarios envisaged in the future, people are being trained, supply chain is being redesigned, IT systems are being tweaked, contracts are being redrafted and so on.
It’s need of the hour for the visionary companies to start working on the impact analysis of GST on it’s business model & industry, to ideate their best foot forward and take the transition to their advantage.
A specialized GST team at APMH has developed the IT enabled models suiting various industry specific businesses to generate empirical impact analysis in the GST era. This is a onetime exerciseworth undergoing for assessing the tax impact, P & L impact, Cashflow impact, Working Capital impact in “As is” and various strategic scenarios to catalyse objective decision making for being “ahead of curve”. Our endeavour is to leave behind a smart modelling tool for scenario analysis even in times to come.
Team APMH consists of collaborative experience of legal aspects of GST and business understanding in combination with the cutting edge Technology capabilities for making viable this modelling exercise.
Our Team
Principal Consultant - GSTCA Pranav Kapadia
Management ConsultantCA Mitesh Katira
Director Internal AuditMr. Madhav Wagle
GST Impact Analysis
Collecting tax related data from various data sources
Straightening the Data for analysis
Predictive Analysis for GST ERA
Developing Beneficial Scenarios for business
Decision making and followup for implementation
Char te red AccountantsAPMH & Associates LLP
Understanding GST Impact - An ExampleParticulars Current Scenario GST
Base Price of Goods (Manufacturer) 100000 100000
Add: Excise / CGST 12500 9000
Add : VAT / SGST 16875 9000
Total Sale Value 129375 118000
Less: Input Tax Credit 16875 18000
Landed Cost (Distributor / Dealer) 112500 100000
Value Addition (Distributor / Dealer) 10000 10000
Basic Sale Value 122500 110000
Add: VAT / SGST 18375 19800
Cost to end Consumer 140875 129800
Differential Saving Due to Tax 11075
Percentile Saving on Manufacturer’s Price 11.07%
Char te red AccountantsAPMH & Associates LLP
Char te red AccountantsAPMH & Associates LLP
GST Rates Finalized by GST Council Meeting on 03.11.2016
Rate on Gold to be Decided Later
Luxury Car, Aerated Water and Tobacco may be taxed more than 28%
Additional Cess on Goods covered in 28%
0
5
12
18
28
Zero Tax Rate
Essential Food Items &Mass Consumption Items
Standard Rates
Maximum Goods &all the Services Standard Rate
May be Luxury Items,Pan Masala etc., Aerated Drinks
GST Transition Preparedness
Implement - IT optimisation, Training, Registrations,Documentation Monitoring
Plan - Contracts, Input Tax Credit, Supply Chain, Costing Pricing
Understand - the relevant law vis-a-vis business impacts
Char te red AccountantsAPMH & Associates LLP
Char te red AccountantsAPMH & Associates LLP
About APMH
APMH & Associates LLP is a leading Chartered Accountant Firm in Mumbai with it's network spread Pan-India for VAT, Service Tax, GST transition Consulting. The Firm is ideal Consulting, Audit, Outsourcing & Company Secretary firm for Corporate Houses, Multinationals, SMEs & Startups.
Our Objective is to synergize the expertise with information technology, in order to enhance the service delivery with strong client focus.
Pranav’s expertise lies in Advisory, Audit, Compliance, Corporate Training,
Litigation Matters on Value Added Tax (VAT), Central Sales Tax (CST), Profession
Tax (PT) and Service Tax. Pranav has been consultant to large corporates with
presence in Multiple States with complex structures in the Indirect Tax, especially
VAT. Pranav lucidly deals in complex legal matters like Works Contracts (WCT),
About the Author
DDQ (Determination Disputed Question) now called Advance Ruling (AR), Assessments and
Appeals relates to the VAT and other Sales Tax Laws. He is the Vice President of The Sales Tax
Practitioners Association of Maharashtra for 2015-16. Pranav is also part of the Indirect Tax
Research Committee of the WIRC of ICAI. He has been past Chairman of Indirect Tax Committee of
The Chamber of Tax Consultants for 2014-15 and past Convenor of Ghatkopar CPE Study Circle of
ICAI. Pranav has addressed various seminars and lectures on MVAT and CST at the STPAM,
Chamber of Tax Consultants, WIRC Study Circles of ICAI and various Industrial Associations in
Mumbai. Pranav is also Vice President of Sales Tax Practitioner Association of Maharashtra.
Write to pranav@apmh.in for further information.
Contact Us
To know more about APMH & Associates LLP, please visit www.apmh.in
Head OfficeD-613/614, Neelkanth Business Park, Opp. Railway Station, Vidyavihar (W),Near Ghatkopar, Mumbai 400 086
Mumbai Branch201, Bhaveshwar Complex, Station Road, Vidyavihar West, Mumbai 400 086
Roha Branch101, Landscape Apartment, Seva Dal Aali,Dhavir Chowk, Roha, Raigad - 402 109
Talk to UsEmail: info@apmh.in
Mumbai HO: 022-25146854/55 /56 /57
Mumbai Branch: 022-25146858
Roha Branch: 2194-234498, +91 986750 8556
Disclaimer: The information contained in this document has been compiled or arrived at from other sources believed to be reliable, but no representation or warranty is made to its accuracy, completeness or correctness. The information contained in this document is published for the knowledge of the recipient but is not to be relied upon as authoritative or taken in substitution for the exercise of judgment by any recipient. This document is not intended to be a substitute for professional, technical or legal advice or opinion and the contents in this document are subject to change without notice.
Whilst due care has been taken in the preparation of this document and information contained herein, neither APMH nor other legal entities in the group to which it belongs, accept any liability whatsoever, for any direct or consequential loss howsoever arising from any use of this document or its contents or otherwise arising in connection herewith.