GST Momentous ahead: New Concepts, New Areas & New Procedures

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GST Momentous ahead: New Concepts, New Areas & New Procedures. The soon to be implemented Goods and Services Tax (GST) is expected to harmonize indirect taxes and build a unified Indian indirect tax structure. Currently there are myriad indirect taxes that are levied and collected by the union and state governments. Since each state government has the power to decide its own indirect tax policy (rates, exemption limits, etc.), each state taxes different commodities differently. A commodity, thus, is priced differently across states. This is seen to be inconvenient for traders involved in inter-state transactions and business concerns based across multiple states. GST shall harmonize all these indirect taxes and replace them with a uniform GST rate. With GST, similar commodities shall be taxed identically across states. Now check more details from below…

GST Momentous ahead: New Concepts, New Areas & New Procedures

Cardinal Points

  • Supply without consideration is Taxable
  • Interstate supply to own branches, Units would be taxable
  • Levy of GST on Billed to Shipped to transactions
  • Intangible would be considered as Goods & Services (Revised)
  • Concept of IGST
  • Head office to Branch or Vice-versa, within state and interstate – Taxability
  • Service oriented companies having provisions from different states then state wise separate Registrations, Returns & Payments
  • GST credits – GSTN & E- Credit Ledger, Provisional Credits
  • Taxation for Job Workers
  • E-commerce taxation (TCS)
  • No Revised Returns
  • ISD would distribute GST Credits, Separate Registrations for ISD
  • Separate Registrations for verticals of a Company in a state would be allowed. GST applicable on supplies between such Verticals.
  • Digital Record Allowed.
  • GST Council would be most powerful body under GST Regime as it would take most critical decisions.

Uniform Law & Design

1. NEW CONCEPT / DEFINITIONS

Supply of goods and services:

  • In the course of business or furtherance of business

Goods

Every kind of movable property,

  • Intangible Goods;
  • Does not include; Immovable Property, Actionable Claims & Money

Services

Anything other than goods

  • Works Contracts (Deemed Supply), Job Works etc.
  • Does not include Actionable Claims

GST RATES, EXEMPTIONS, THRESHOLDS

The GST Council has decided on Most of the Points:

  • GST Rates, Exemptions, thresholds Limits, dispute Resolution
  • Model GST Law

LEVY OF GST

  • Levy of GST on supply of goods and services, S-GST, C-GST & I-GST
  • I-GST would be handled by the Central Govt. which is applicable on imports, inter-state supplies and inter-state services
  • Provision for GST Credits on inputs

GST COMPLIANCE 

  • GST Registrations – Voluntary or threshold limit of Rs.20 lakhs, State wise Registrations .Vertical wise Separate Registrations in a State.
  • Returns – State wise monthly, & Annual Returns. Quarterly Returns for Composite Tax Payers. No Revised Returns.
  • GST Payments – Electronically through most of the Banks, State wise.
  • GST Refunds – Online process to be followed
  • GST Returns / Payments in the state of origin of goods or provision of services. IGST would be transferred to destination/consuming states by way of clearing house mechanism.

Composition Tax – Small Tax Payers

  • Rates – 2% for Manufacturers, 5% for hoteliers and 1% for others.
  • For Annual turnover below Rs. 50 Lakhs. No GST credits available.

Specific areas of GST Taxation

  • Taxation on Job works, supplies without Consideration, TCS for e commerce operators, Works Contracts, Intangible Assets, Branch Transfers etc.

Not Taxable under GST 

  • Tobacco & Tobacco Products – Subject to GST, Central Excise Duty
  • Alcoholic liquor for human consumption – State Excise and VAT to continue
  • Electricity Duty – States would continue to levy
  • Petroleum Products – Petrol, Diesel & ATF (Excise + VAT to continue)

GST – Concept, Levy & Design (Summary)

  • GST is destination based Consumption Tax.
  • I-GST – A Novel concept (Clearing House Mechanism).
  • Seamless Flow of GST Credits. No Cost to Business.
  • Returns – Output GST Payable (-) Input GST Credit = Net GST Payable or Refund (Single Return in each State).
  • Payments – Through Electronic Mode only
    1. C-GST to C-GST to I-GST, S-GST to S-GST to I-GST.
    2.  I-GST to I-GST to C-GST then to S-GST.
    3. No adjustment between C-GST & S-GST.
  • GST would not be issue for Companies for deciding on sourcing & distribution routes.
  • New Concepts – Taxable person, Supply of goods & services without Consideration etc.
  • Service Companies – State wise Registrations for Service Companies

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