Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Understanding Goods & Services Tax (GST), India

4,883 views

Published on

This ppt gives an overview of the proposed GST bill in India. This ppt has custom animations which look like overlapped content on slideshare-viewer. It is recommended to download it on your system and then open using powerPoint-viewer.

Published in: Economy & Finance

Understanding Goods & Services Tax (GST), India

  1. 1. GOODS AND SERVICES TAX, INDIA PREPARED BY: ANKITA MAHAJAN
  2. 2. PRESENT TAXATION SYSTEM LIMITATIONS OF PRESENT SYSTEM PROPOSED GST TAXATION SYSTEM CURRENT STATUS CONCLUSION INTRODUCTION A G E N D A ADVANTAGES AND DISADVANTAGES HOW GST SOLVES PRESENT PROBLEMS
  3. 3. • DIRECT V/S INDIRECT TAXES • DEFINITION • SUBSUMED TAXES • GOALS • EXCLUSIONS AND ZERO-RATED Tax Indirect A tax levied on the price of a good or service Central – Service tax, Excise, CST State – VAT, Entry tax Town/Municipal - Octroi Direct A tax levied directly on personal or corporate income Income Tax EXCLUSIONS • ALCOHOL FOR HUMAN CONSUMPTION – STATE VAT PLUS EXCISE WOULD LEVY • ELECTRICITY – ELECTRICITY DUTY WOULD LEVY • REAL ESTATE – STAMP DUTY PLUS PROPERTY TAX • PETROLEUM PRODUCTS – WOULD BE APPLICABLE FROM A DATE IN FUTURE ZERO-RATED • EXPORTED GOODS AND SERVICES CONCESSIONAL THRESHOLD • TAXPAYERS WITH A TURNOVER BELOW A COMMON THRESHOLD, (RS 5 LAC FOR NORTH-EAST AND RS 10 LAC FOR OTHERS), WOULD BE EXEMPTED FROM GST • Empowered Committee of State Finance Ministers (EC) was requested to design road-map and structure of GST • GST was first mooted in Budget of 2006-07 • First Discussion Paper (FDP) on GST was released in November, 2009 • Objectives:  Elimination of cascading effect of taxes  Simplification of tax-compliance INTRODUCTION Goods and Services Tax (GST) is a nationwide comprehensive, value-added, indirect tax that will be levied on sale, manufacturing and consumption of goods and services, from April 2016. It will subsume the following:
  4. 4. PRESENT TAXATION SYSTEM TAX STRUCTURE DIRECT TAX INCOME TAX INDIRECT TAX CENTRAL TAX EXCISE SERVICE TAX CUSTOM STATE TAX VAT/SALES/CST ENTRY TAX, LUXURY TAX, LOTTERY TAX, ETC.
  5. 5. PRESENT TAXATION SYSTEM • CASCADING EFFECT OF TAXES • INTRODUCTION OF VAT: TO REDUCE CASCADING • SET-OFF OR TAX-CREDIT: “OUTPUT-MINUS-INPUT”  VAT-TO-VAT  CST-TO-CST  EXCISE/SERVICE-TO-EXCISE/SERVICE • SELLER A ADDS SALES TAX AT 10% AND SELLS GOODS WORTH RS 100 TO B AT RS 110 (100+10). • B ADDS SALES TAX ON PURCHASE PLUS PROFIT, AND RE-SELLS TO C AT RS 132 (100+10+10+12). • TAX-LIABILITY OF A IS RS 10 AND B IS RS 12 CASCADING EFFECT (Tax-on-tax) Tax-Paid-to- A TAX-LIABILITY OF A IS RS 10 AND B IS RS 2
  6. 6. LIMITATIONS OF PRESENT TAX SYSTEM CROSS-UTILIZATION OF CREDITS BETWEEN STATE AND CENTRAL TAXES NO TAX CREDIT FOR INTER-STATE TRADE DEPOSIT TAX, IRRESPECTIVE OF PAYMENT COMPLIANCE COST AND ADMINISTRATION DIFFICULTIES FILE MULTIPLE RETURNS LACK OF IT INFRASTRUCTURE
  7. 7. HOW GST SOLVES PRESENT PROBLEMS UNIFIED AND COMPREHE NSIVE SIMPLIFY TAX STRUCTURE CROSS- UTILIZATION ADMINISTRATI VE CONVENIENCE REDUCE COMPLIANCE COST FILE A SINGLE RETURN VALUE- ADDED CHARGEABLE AT EACH TRANSACTION DIRECT SALES STOCK TRANSFER DESTINATION- BASED, CONSUMPTION TAX TAXABLE EVENT IS “SUPPLY” NOT SALES, MANUFACTURE OR RENDER GST
  8. 8. PROPOSED GST TAXATION SYSTEM TAX STRUCTURE DIRECT TAX INCOME TAX INDIRECT TAX = GST (EXCEPT CUSTOMS) INTRA-STATE CGST (CENTRAL) SGST (STATE) INTER-STATE IGST (CENTRAL)
  9. 9. PROPOSED GST TAXATION SYSTEM SALE IN ONE STATE, RE-SALE IN THE SAME STATE
  10. 10. PROPOSED GST TAXATION SYSTEM SALE IN ONE STATE, RE-SALE IN ANOTHER STATE
  11. 11. PROPOSED GST TAXATION SYSTEM SALE OUTSIDE THE STATE, RE-SALE IN THAT STATE
  12. 12. ADVANTAGES OF GST GST CROSS UTILIZATION LESS MFT COST IMPORT & EXPORT INDUSTRIAL GROWTH MONITORING TAX COMPLIANC E LESS PRICES MORE REVENUE
  13. 13. CHALLENGES CHALLENGES ADMINSTRATIVE STATE RESISTANCE POLITICAL IT INFRASTRUCTU- RE EXEMPTIONS
  14. 14. CURRENT STATUS & WAY FORWARD THE GST 122ND CONSTITUTION AMENDMENT BILL PASSED BY LOK SABHA PROPOSED STANDARD GST RATE 27% CURRENTLY TABLED IN RAJYA SABHA GST COUNCIL (GSTC) TO BE CONSTITUTED GST NETWORK TO BE GIVEN AUTONOMY
  15. 15. CONCULSION INVESTMENT & EMPLOYMENT SIMPLIFICATION OF TAXES INDUSTRIAL GROWTH INCREASE IN TAX BASE GDP GROWTH
  16. 16. THANK YOU

×