• Save
Presentation on transaction taxes for retail or franchising sector
Upcoming SlideShare
Loading in...5

Like this? Share it with your network


Presentation on transaction taxes for retail or franchising sector



The presentation made at the FRO 2009 - Small Business Growth Summit on Sept 20, 2009 at Bangalore

The presentation made at the FRO 2009 - Small Business Growth Summit on Sept 20, 2009 at Bangalore



Total Views
Views on SlideShare
Embed Views



0 Embeds 0

No embeds


Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
Post Comment
Edit your comment

Presentation on transaction taxes for retail or franchising sector Presentation Transcript

  • 1. Operating in Retail TAX Know how Small Business Growth Summit Bangalore, September 20, 2009
  • 2.
    • Applicability of tax to a specific transaction
      • Combination of VAT / CST, Service Tax and Central Excise
      • Retrospective amendments
    • Multi products and locations
      • Warehousing & inventory policies
      • Differences in the state wise commodity tax laws
    • Inflexible contracting terms
      • Lead time for delivery
      • Supplier / customer demands
    • Increased NRV for the products
      • Tax savings / mitigations for all players in the supply chain
      • Product more attractive to resellers
    • Beat the competition
      • Passing of tax benefits to end users
    • Additional working capital
      • Credits, exemptions, refunds etc throughout the supply chain
    Tax Management
  • 3. Supply Chain Manufacturer or productised service provider Wholesaler / Aggregator (Company Outlet) Wholesaler / Aggregator (External Partner) E N D C O S U M E R S Retailer (External Partner) Retailer (Franchisee Outlet) Retailer (Company Outlet) Retailer (Wholesaler’s Outlet) Retailer (Consignment Sales) Retailer (Agency Relationship)
  • 4. Supply Chain
    • Refund of Additional Duty of Customs for resellers
    • Inter-State Sale vs. stock transfer
    • Franchising opportunities (utilise service tax credits)
    • Warehousing activities (utilise service tax credits)
    • Service tax on outward movements
    • Discounts vis-à-vis FOC
    • Storage vis-à-vis rent for exporters
    Opportunities Challenges
  • 5. Supply Chain
    • Forex implications on overseas brands supplying locally
    • Concentration of profits arising out of Service Tax / VAT credits
    • Service tax, Central Excise and VAT on the same transaction
    • Import of services and subsequent sale of goods
    • Factoring of tax cost into MRPs
    • Ineligible - VAT for service providers and Service Tax for resellers of goods
    • Utilisation of basic exemption threshold is not always beneficial
    Opportunities Challenges
  • 6. Managing the tax function
    • Corporate Governance
    • Stake holders and social responsibility
    • Right to access information
    • Business partners and public
    • Ignorance of law is no excuse
    • Presumption of culpable mental state
    • Steps initiated by the Govt.
    • Invoicing methodologies relaxed
    • Compliance made easy
    • Presumptive schemes of taxation
    • MRP based taxation
    • Self assessments
    • Self declarations in lieu of detailed scrutiny
    • GST…
  • 7. Managing the tax function
    • The BIG bang GST
    • Empowered Committee reaffirms implementation effective April 2010
    • Concurrent Dual Structure – State and Central GST
    • All other transaction taxes except Customs to be abolished
    • Credits across the board – Services vis-à-vis goods
    • Inter-State disparities and trade wars to vanish
    • Cascading impact on taxation to be completely removed
    • Principle of neutrality – uniform % of tax regardless of supply chain distribution
    • Simplification – computation, documentation, compliances…
    • What to look for?
    • Franchising / Retail
    • Reductions in the tax cost in the supply chain
    • Compliances further simplified
    • Complexities involved in multiple products / locations would be eliminated
    • Tax differences for goods and services to be wiped out
    • Inter-State disparities no longer a worry
    Look beyond… Franchising / Retail Unified account monitoring - Extension of tax support function to the franchisee / retailers Corporate Responsibility, Uniformity in positions, Economies of scale Demand for centralised compliance
  • 8. thank you [email_address] +91 . 80 . 4151 6187 www.accretiveglobal.com “ An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage” - Jack Welch