Tax layers under proposed GST Model with Examples, Tax Structure of New GST Model, It is a Dual-GST structure proposal wherein the Central Government and State Government will simultaneously charge GST on the same economic supply. Recently we provide complete details for GST Current Tax Structure and proposed GST Regime. Now you can scroll down below and check more details for “Tax layers under proposed GST Model”
Tax layers under proposed GST Model
Inter-state transactions or supplies to be charged an Integrated GST (IGST) which is a combination of Central-GST (CGST) and State-GST (SGST) rates
Unique input tax credit mechanism; as illustrated below:
Comparative Analysis (Intra-State Trade)
(Assumed Rates for Excise Duty, CGST & SGST @12%, VAT @12.5%)
| Transaction | Current Scenario (Rs.) | GST Scenario (Rs.) |
| Cost of Raw Materials to Input Manufacturer | 100 | 100 |
| Profit Margin @ 25% | 25 | 25 |
| Assessable Value | 125 | 125 |
| Add: Excise Duty @12% | CGST @ 12% | 15 | 15 |
| Add: VAT@12.5% | SGST@12% | 18 | 15 |
| Invoice Value (Input Manufacturer to Output Manufacturer) | 158 | 155 |
| Cost of Goods to Output Manufacturer (Net of ITC) | 100 | 100 |
| Add: Value Addition @ 40% on Cost (incl. of Profit Margin) | 40 | 40 |
| Assessable Value (Manufacturer to Wholesaler) | 140 | 140 |
| Add: Excise Duty @12% | CGST @ 12% | 16.80 | 16.80 |
| Add: VAT@12.5% | SGST@12% | 19.60 | 16.80 |
| Invoice Value (Manufacturer to Wholesaler) | 176.40 | 173.60 |
| Cost of Goods to Wholesaler (Net of ITC) | 156.80 | 140.00 |
| Add: Profit Margin of Wholesaler @10% | 15.68 | 14.00 |
| Add: Excise Duty @12% | CGST @ 12% | 0.00 | 18.48 |
| Add: VAT@12.5% | SGST@12% | 21.56 | 18.48 |
| Invoice Value (Wholesaler to Retailer) | 194.04 | 190.96 |
| Cost of Goods to Retailer (Net of ITC) | 172.48 | 154.00 |
| Add: Profit Margin of Retailer @10% | 17.25 | 15.40 |
| Add: Excise Duty @12% | CGST @ 12% | 0.00 | 20.33 |
| Add: VAT@12.5% | SGST@12% | 23.72 | 20.33 |
| Final Price to be paid by Consumer | 213.44 | 210.06 |
| Cost Saving to Consumer | 3.39 |
Comparative Analysis (Inter-State Trade)
(Assumed Rates for Excise Duty, CGST & SGST @12%, CST @ 2% each)
| Transaction | Current Scenario (Rs) | GST Scenario(Rs) |
| Cost of Raw Materials to Input Manufacturer | 90 | 90 |
| Profit Margin Rs.10 | 10 | 10 |
| Assessable Value | 100 | 100 |
| Add: Excise Duty @12% I CGST @ 12% | 12 | 12 |
| Add: Vat 12.5% I SGST@12% | 14 | 12 |
| Invoice Value (Input to Output Manufacturer) | 126.00 | 124 |
| Cost of Goods to Output Manufacturer (Net of ITC) | 100 | 100 |
| Add: Value Addition @ 40% on Cost (incl. of Profit Margin) | 40 | 40 |
| Assessable Value (Manufacturer to Wholesaler) | 140 | 140 |
| Add: Excise Duty @12% I CGST @ 12% | 16.80 | 0 |
| Add: CST@2% I IGST@24% | 3.14 | 33.60 |
| Add: Additional Tax @1% | 0 | 1.40 |
| Invoice Value (Manufacturer to Wholesaler) | 159.94 | 175.00 |
| Cost of Goods to Wholesaler (Net of Input Credit) | 159.94 | 141.4 |
| Add: Profit Margin of Retailer @10% | 15.99 | 14.14 |
| Add: Excise Duty @12% I CGST @ 12% | 0 | 18.66 |
| Add: VAT@12.5% I SGST@12% | 21.99 | 18.66 |
| Invoice Value (Wholesaler to Retailer) | 181.93 | 178.73 |
| Cost of Goods to Retailer (Net of Input Credit) | 175.93 | 155.54 |
| Add: Profit Margin of Retailer @10% | 17.59 | 15.55 |
| Add: Excise Duty @12% I CGST @ 12% | 0 | 20.53 |
| Add: VAT@12.5% I SGST@12% | 24.19 | 20.53 |
| Final Price to be paid by Consumer | 217.71 | 212.16 |
| Cost Saving to Consumer | 5.56 |
Must Read – GST Definition, Objective, Framework, Action Plan & Scope
Current Scenario – Tax Implications against Sales and Stock Transfers by an MNC
(Assumed Rates for Excise Duty @12%, VAT@12.5%, CST @ 2% each)
| Particulars | Basis | Amt. (in Rs.) |
| Purchase of Raw & Packing Materials 20000 Kgs. @ Rs.50 | 1000000 | |
| 18000 Kgs. (Intra-state) | A | 900000 |
| 2000 Kgs. (Inter-State) | B | 100000 |
| Input Credit of Excise on Intra-State Purchase @ 12% | C=A x 12% | 108000 |
| Input Credit of VAT on Intra-State Purchase @ 12.5% | D=A x 12.5% | 126000 |
| Input Credit of Excise on Interstate Purchase @ 12% | E=B x 12% | 12000 |
| Input Credit of CST on Inter-state Purchase 2% | F=B x 12% | 2240 |
| FG sold within State-A (200 Kgs. @ Rs.75 ) | G | 15000 |
| Excise Duty Payable @ 12% | H=G x 12% | 1800 |
| VAT Payable @ 12.5% | I =G x 12.5% | 2100 |
| FG Stock Transfer to State -B (17000 Kgs. @ Rs.65 (TDR)) | J | 1105000 |
| Excise Duty Payable @ 12% | K=J x 12% | 132600 |
| VAT Payable @ 12.5% on Local Sales by Depot | L=J x 12.5% | 159375 |
| Reversal of ITC of VAT (ITC x 3/12.5) | M= D x 3/12.5 | 30240 |
| FG Inter-State Sales to State -C (2800 Kgs. @ Rs.75 ) | N | 210000 |
| Excise Duty Payable @ 12% | O=N x 12% | 25200 |
| CST @ 2% | P=N x 2% | 4704 |
| Net Excise Duty Payable after Cenvat Credit | Q=(H+K+O-C) | 39600 |
| Net VAT Payable after Vat Input Credit | R=(I+L+M-D) | 65715 |
| Net CST Payable after CST Input Credit | S=(P-F) | 2464 |
| Net Liability of Duties & Taxes | T=(Q+R+S) | 107779 |
Must Read – Introduction, Meaning and Purpose of GST
GST Scenario – Tax Implications against Sales and Stock Transfers by an MNC
(Assumed Rates for SGST & CGST @12%, IGST @ 24%, Add. Tax @ 1%)
| Particulars | Basis | Amt. (in Rs.) |
| Purchase of Raw & Packing Materials 20000 Kgs. @ Rs.50 | 1000000 | |
| 18000 Kgs. (Intra-state) | A | 900000 |
| 2000 Kgs. (Inter-State) | B | 100000 |
| Input Credit of CGST on Intra-State Purchase @ 12% | C = A x 12% | 108000 |
| Input Credit of SGST on Intra-State Purchase @ 12% | D=A x 12% | 108000 |
| Input Credit of IGST on Inter-State Purchase@ 24% | E = B x 24% | 24000 |
| Additional Tax @1% on Inter-State Purchase | F = B x 1% | 1000 |
| Total Credit of GST Available to Unit-A | G = (C+D+E) | 240000 |
| FG sold within State-A (200 Kgs. @ Rs.75 ) | H | 15000 |
| CGST Payable @ 12% | I=(H x 12%) | 1800 |
| SGST Payable @ 12% | J=(H x 12%) | 1800 |
| FG Stock Transfer to State -B (17000 Kgs. @ Rs.65 (TDR)) | K | 1105000 |
| IGST Payable @ 24% | L =K x 24% | 265200 |
| Additional Tax@1% | M= K x 1% | 11050 |
| FG Inter-State Sales to State -C (2800 Kgs. @ Rs.75 ) | N | 210000 |
| IGST Payable @ 24% | O=N x 24% | 50400 |
| Additional Tax@1% | P=N x 1% | 2100 |
| Balance of CGST Input Credit to be adjusted against IGST Payable | Q= C – I | 106200 |
| Balance of SGST Input Credit to be adjusted against IGST Payable | R= D – J | 106200 |
| Net IGST Payable against Stock transfers and Interstate Trade | S=(I+J+L+O-G) | 79200 |
| Non-Vatable Add. Tax to be retained by respective State Governments | T | 14150 |
| Total of Duties and Taxes Payable | U=S+T | 93350 |
| Savings in Net Tax Payable | (1,07,779-93,350) | 14,429 |
Must Read –
- When will GST be applicable
- GST Definition, Objective
- Tax layers under proposed GST Model
- Filing of GST Returns
- Returns Under GST
- GST Current Tax Structure
- Expected Scheme of GST
- GST Registration
- GST Rates
- Impact of GST in Indian Economy
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