1 GST Benefits and Salient Features GST Updates on legal front - PowerPoint PPT Presentation

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 GST – Benefits and Salient Features  GST – Updates on legal front  GST - Registration, Returns, Refunds, Rates, Others  GST - Trade-friendly features  GST - Myths vs Reality  GST – Awareness and Preparedness 2

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 Central taxes  State taxes ➢ VAT ➢ Excise duty ➢ CST ➢ Additional Excise ➢ Entertainment Tax. Duty ➢ Luxury tax. ➢ Service tax ➢ Tax on Lottery, betting, ➢ CVD (Counter Veiling gambling. Duty) ➢ Entry tax. ➢ SAD (Special ➢ Purchase tax Additional Duty) ➢ State Surcharges & ➢ Central Cesses & Cesses. Surcharges 4

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➢ Single tax replacing multiple taxes ➢ Single Authority & Single interface for Trade Mitigates ill-effects of cascading ➢ ➢ Tax burden decreases - benefits common man Makes products and services competitive ➢ Boosts economic activity, GDP and job ➢ creation 6

Destination-based consumption tax  Present concepts of “sale”, “manufacture”, “provision of service” will be  replaced by the concept of “supply” Applicable on supply of all goods or services, barring a few  “Supply” includes sale, transfer, barter, exchange, licence, rental, lease or  disposal for a consideration in the course or furtherance of business; all import of services; the activities specified in Schedule I & II Tax liability depends on:  ▪ Time of Supply ▪ Place of Supply ▪ Location of Supplier and Location of Receiver 7

Coverage Traders Manufacturers Service Providers 8

Commodities not covered by GST Alcohol for human consumption Five Petroleum Products Electricity 9

Central GST ➢ Levied by Parliament on intra-State Supply of Goods & Services ➢ Revenue accrues to Central Govt. SGST/UT ➢ CGST Act, 2017 enacted GST ➢ Referred as “Central Tax” in the Act IGST Integrated GST 10

State GST ➢ On intra-State Supply of Goods & Services ➢ Revenue accrues to consuming State SGST/UT ➢ SGST Acts passed by 24 states so far GST ➢ Referred as “State Tax” IGST Integrated GST 11

Integrated GST ➢ On Inter-State Supply of Goods & Services ➢ Rate is a combination of CGST & SGST SGST/UT ➢ Apportionment of Tax & Settlement of GST funds between Centre and States ➢ IGST Act, 2017 enacted IGST Integrated GST ➢ Referred to as “Integrated Tax” 12

16/4: Telengana 16/5: Andhra Pradesh 24/4: Bihar 16/5: Uttar Pradesh 26/4: Rajasthan 17/5: Puducherry 27/4: Jharkhand 19/5: Orissa 28/4: Chattisgarh 22/5: Maharashtra 2/5: Uttarakhand 24/5: Sikkim 3/5: Madhya Pradesh 25/5: Tripura 4/5: Haryana 25/5: Mizoram 9/5: Goa 27/5:Nagaland 9/5: Gujarat 27/5:Himachal Pradesh 11/5: Assam 31/5:Delhi 12/5: Arunachal Pradesh 5/6:Manipur Total 24 States till 5/6 13

➢ All registered persons under Existing Laws ➢ If aggregate turnover in a financial year exceeds Rs. 20 lakhs ➢ The threshold turnover is Rs. 10 Lakhs in case of special category states 14

 any person making supplies not liable to tax or wholly exempt under the Acts  an agriculturist, to the extent of supply of produce out of cultivation of land 15

➢ Persons making inter-State taxable supply ➢ Persons required to pay tax under reverse charge ➢ E-Commerce operators ➢ Persons who supply goods through e-commerce operator ➢ Persons who supply goods and/or services on behalf of a registered taxable person ➢ Input Service Distributor (ISD) ➢ Persons required to deduct tax at source (TDS) ➢ Casual taxable persons ➢ Non-resident taxable persons 16

 PAN is mandatory statutory requirement for GST Registration  A person, though not liable to be registered, may take registration voluntarily  Registration is to be granted State-wise.  Person having multiple “business verticals” in a State may obtain separate registration  Time-bound grant of Registration (within 3 working days) 17

Simpler option given to small taxpayers  Aggregate turnover LESS THAN 75 lakh rupees in the preceding financial  year Amount payable in lieu of tax (as per draft Composition Rules):  ▪ (a) 2 per cent of turnover – manufacturers (1% under CGST & 1% under SGST) ▪ (b) 5 per cent of turnover- restaurants (2.5% under CGST & 2.5% under SGST) ▪ (c) 1 per cent of turnover – for other suppliers (0.5%under CGST & 0.5% under SGST) 18

 Suppliers making Inter-state supplies  E-Commerce operators  Manufacturers of Certain Notified goods  All service providers [except restaurants]  Supplies through e-commerce operators  Casual or non-resident taxable persons 19

GST Returns for normal taxpayer Return Nature Periodicity Remarks Details of outward Monthly by Data to be filled GSTR 1 supplies 10th by user Details of inward Monthly by Most Data will be GSTR 2 supplies 15th auto-populated Monthly by Most Data will be GSTR 3 Monthly return 20th auto-populated Consolidated details in Annual by 31 st Data to be filled GSTR 9 a financial year December by user 20

GST Returns for other categories Return Nature Periodicity Quarterly Return for 18th of the month succeeding GSTR 4 compounding Taxable Quarter persons Many data will be auto-populated 20th of the Month succeeding the Return for Non-Resident GSTR 5 tax period and 7 days from expiry of foreign taxable person registration 13th of the Month succeeding the GSTR 6 Return by ISD tax period GSTR 7 Return by TDS 10th of succeeding Month GSTR 8 Return by TCS 10th of succeeding Month Final Return by RTP on Within 3 months from date of GSTR 10 winding up of business cancellation of registration Details of Inward supply be 28th of the month following the GSTR 11 a person having UIN month for which statement is filed 21

GST Returns – Key features  “Valid return” : Return valid only if self- assessed tax is paid in full  Return once filed cannot be revised. Rectification/amendment can be effected in subsequent return  Separate returns for composition tax payer, TDS, TCS, ISD which are not relevant to normal taxpayer. 22

➢ Can be claimed within 2 years ➢ Refund of Input tax Credit allowed - in case of exports or - where the input credit accumulation is on account of inverted duty structure ➢ Refund shall be granted within 60 days from the date of receipt of application and Interest payable thereafter 23

➢ In case of refund claim on exports, 90% of the claim can be given immediately within 7 days, on provisional basis. 24

USAGE OF INPUT TAX CREDIT 25

Input Tax Credit – Key restriction 26

Invoice under GST For taxable supplies - to be Tax issued by Invoice regular taxpayers To be issued by Bill of suppliers of exempted goods Supply and Composition taxpayers 27

 For movement of goods of consignment value exceeding Rs. 50,000/-: (i) in relation to a supply; or (ii) for reasons other than supply; or (iii) due to inward supply from an unregistered person before commencement of movement, furnish information relating to the said goods electronically, on the common portal OR Facilitation Centres or by SMS - Same procedure for cancellation also - Can be generated by consignor, consignee or transporter 28

 “Job work” means any treatment or process undertaken by a person on goods belonging to another registered person  Value of goods after completion of job work is not includible in the job worker’s turnover but includible in the Principal’s turnover  Job worker is deemed as supplier of “service” 29

 Through Credit Cards, Debit Cards, Internet Banking (NEFT/RTGS)  Over the Counter [Upto Rs. 10000/- per tax period]  Single Challan for all types of payment  Real Time entry into Cash Ledgers 30

 All Existing Registered Traders, Manufacturers, Service Providers to be migrated automatically to GST  All eligible ITC balances and credits and all ITC credits on stock held under existing laws are transferrable to GST credit ledgers  All refunds in the existing law will continue to be sanctioned under existing laws. 31

 0%: On essential items  3%:Jewellery,Rough Precious & Semi- precious rates,etc  5%: On items of mass consumption  12% & 18%: Covering majority of manufactured items and Services  28%: Certain Luxury goods and services 32

 Seamless credit flow across the supply chain in the country –  IT-driven minimal physical interface with tax authorities  Uniform laws, rules, rates, procedures across the country 33

GST Compliance Rating of all GST registrants on public  domain facilitates informed decisions about prospective suppliers and customers by Trade Assistance through recognised GST Practitioners  Complete ‘zero rating’ of exports and supplies to SEZ  Units & Developers Flexibility of decision-making with government  34

 Interlocking of every tax payer in the network ensures enhanced compliance  No incentive for anyone staying outside tax net 35