The document discusses India's proposed Goods and Services Tax (GST) structure and implementation timeline. It provides details on: 1) The current indirect tax structure consisting of central excise duty, VAT, service tax, customs duty, and other taxes. 2) Taxes that will be subsumed under GST including central sales tax, state VAT, entertainment tax, luxury tax, and more. 3) The proposed GST framework including a dual GST with CGST and SGST, and IGST on inter-state sales. GST is expected to be implemented in April 2017 after the passage of GST laws.

1. Sandesh.mundra@smaca.in
Ahmedabad Maheshwari Yuva Sangathan

2. Sandesh.mundra@smaca.in
Some of the companies who have attended our
Training Programmes

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Present Indirect Tax Structure of India
Present Tax Structure
[ 4 Important Constituents]
Excise
Duty
Entry No. 84,
List I, Schedule
VII
Taxable Event
is
Manufacture
Service
Tax
Residuary Entry
No. 97, List I,
Schedule VII
Taxable Event
is Provision of
Service
Sales Tax /
VAT/
CST
Entry No. 54 of
List II ( VAT)
and 92A of List I
( CST)
Taxable Event
is Sale
Customs
Duty
Entry No. 83,
List I, Schedule
VII
Taxable Event
is Import &
Export
Entry Tax/
Entertainment
Tax
Entry No. 52
&62 List II,
Schedule VII
Taxable Event
is Entertainment
& Entry of
Goods

4. Sandesh.mundra@smaca.in
Sector Wise Tax Rates

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Taxes to be subsumed in GST
CGST
Taxes on
lottery
Entry Tax
& Octroi
Entertainmen t
Tax (except by
local bodies)
Purchase Tax
& Luxury Tax
Central
Sales Tax
VAT
Taxes on
betting and
gambling
SGST

7. Sandesh.mundra@smaca.in
GST Framework in India Roadmap to GST
Formation of GST
Council and
recommendation
on GST law by
Ratification GST Council
by 50%
States
and
Presidential
Assent
(Sep/Oct
2016)
(Nov/Dec 2016)
Passage of
GST law by
Centre and
States
(Winter
Session-
Nov/Dec
2016)
Notification
of GST Rules
(Jan 2017)
Implementation
of GST
(April 2017)
Parallel Actions
• Development of IT Infra: by Dec 16
– Testing of IT Infra: Jan-March 17
– Migration of existing dealers: Feb-Mar 17
• Feedback from Trade and Industry: Aug- Oct 16
• Change management: Sept-Mar17
7

8. Sandesh.mundra@smaca.in
Exceptions to GST

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Custom Duty
IGST
Proposed Indirect Tax Structure
Within
Gujarat
CGST
From Gujarat
to other state
IGST
SGST
Import From
Outside
India

10. Sandesh.mundra@smaca.in
SGST + CGST % Supply of Goods & Services
0% Social Goods + Social services + Exports
2% Gold & Silver ornaments, precious & semi-precious stones
Around 10-12%
Goods/Services of basic necessities, all industrial & agricultural
inputs & passenger transport services
Around 18%
Normal Rate on all goods & services other than mentioned else
where
Goods & services
without restriction on
rate
Cigarettes, other tobacco products, lottery tickets, luxury services,
entertainment, betting & gambling
Expected Rates under GST

11. Sandesh.mundra@smaca.in
Impact on Construction of a Building
Existing Taxes under a Building Contract
Particulars Amt in Rs. Excise VAT Service Tax Total Tax Tax in Rs
Cement 15 12% 15% 27.00% 4.05
Steel 25 12% 5% 17.00% 4.25
Other Materials 15 12% 10% 22.00% 3.30
Sand / Aggregate 10 0% 5% 5.00% 0.50
Labour 20 14% 14.00% 2.80
Admin & o/h 3 14% 14.00% 0.42
Depreciation 2 15% 14% 29.00% 0.58
Profit 10 14% 14.00% 1.40
Composition VAT 2% 2.00
Total 100 19.40

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Supply
• Threshold – 10/25
• Sale / Barter / Exchange
• Free Supplies
• Private Use
• Closure of Business
• Sale of Business
• Promotions
• Branch Transfer
• Agents
SGST + CGST
IGST

14. Sandesh.mundra@smaca.in
Input Credit
CGST
SGST
IGST
Matching Issues
Cross Credit
Supplier Rating
Impact on Working Capital

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Un-matchedMatched
ITC Reversed to be paid along with
Interest by Purchaser
Two months period for
reconciliation
Reconciled Non-Reconciled
ITC Finalized in Purchaser's
ITC Ledger
ITC finalized in Purchaser's ITC
ledger
GSTN to
inform
purchaser
GSTN to
inform both
supplier and
purchaser
Matching by GSTN

16. Sandesh.mundra@smaca.in
Input Tax Credit Set Off Rules

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TDS / Reverse Charge Mechanism

18. Sandesh.mundra@smaca.in
Time of Supply of Goods / services
Currently Under GST
Dispatch
of Goods
/ Service
Date of
Invoice
Dispatch
of Goods
Date of
Invoice
Receipt
of
Payment
GRN by
buyer
Critical Issues expected to be faced :-
a. Tracking all four events in the IT software from tax calculation view point
b. Receipt of adhoc advance against a bulk order – ascertaining the rates ?
c. Non availability of the GRN date of the buyer – what if he commits a mistake
d. Future Interest burden expected at the time of audits / assessments
e. Goods dispatched on 31st March ?

19. Sandesh.mundra@smaca.in
Issue – Place of supply of service
Concern –
 How place of supply of service would be
determined under GST ?
 What if we do AMC of 20 offices of a client under a
composite billing ? Where will the services deemed
to have been consumed ?
 If the construction is undertaken at State A and the
design and architect services are availed by Head
office in State B

20. Sandesh.mundra@smaca.in
• Automatic Registration
• Multiple Registrations

21. Sandesh.mundra@smaca.in
 GSTR 1 by 10th / GSTR 2 to be auto populated / GSTR 3 after payment of taxes
by 20th
 Compounding taxpayers quarterly return: by 18th day of succeeding month of
the Quarter GSTR-4
 Foreign NR Taxpayers monthly return within 7 days after expiry of registration
- GSTR-5
 ISD monthly return: by 15th day of succeeding month – GSTR-6
 Tax Deductors monthly TDS return: by 10th of succeeding month – GSTR- 7
Periodicity of Returns

22. Sandesh.mundra@smaca.in
 All Regular and Compounding to file Annual Return
 Last date - 31st December following the end of the financial year
 Simpler Annual Return for Compounding & notliabletoaudit
 Annual Return accompanied with reconciliation statement as per
Returns and as per audited accounts
 Reconciliation statement for person liable to audit under Income
Tax Act
Concept of Annual Return

23. Sandesh.mundra@smaca.in
GST – Action Points
Focus
Areas
Action points
Contracts
extending
beyond
31.03.2017
 Statutory variation clause – does it covers GST related changes ?
 Amendments – to effect changes in sourcing/ procurement etc.
 Assessment of impact of GST provisions on each contract / project
 Educating the Suppliers
Business
preparedness
 New GL codes/ COA / IT Software / Multiple Registrations
 Existing Excise/ VAT assessments may continue for few years
 Existing Invoice system – compatibility with GST requirements
 GST will take away flexibility – manual adjustments
 Checklist of do’s and dont’s prior to implementation once the law if finalised
Transitional
issues
 Impact on Profits / Working Capital / Revenue
 Existing VAT assessments – pressures to complete will increase, pending statutory forms
demand ..
 Closing CENVAT balances/ VAT ITC credits – monetization
 Form collection drive/CENVAT audits to be carried out

24. Sandesh.mundra@smaca.in
Conclusion
• Not an ideal GST - considering the present political situation , this is the
best that could be achieved.
• The proposed GST will surely be better than the existing situation.
• IGST & concept of ‘supply’ are the game changers. It will help in developing
national market and considerably reduce the cascading effect of taxes.
• Ease of doing business will drastically changed with the introduction.
• GDP will improve by 1% to 2%.
• Hope & Pray GST is be introduced after giving sufficient time for preparation
to the stakeholders.

25. Sandesh.mundra@smaca.in
How can we help in GST ?
Feasibility studies
• Analyse the impact of the GST on your business activities – Revenue / Profit / Market
/ Working Capital
• Suggest on continuation of valuation schemes
• Provide advice on any additional guidance issued by the authorities from time to
time.
IT and systems
• Advice on accounting, billing and invoicing systems keeping POS in mind.
• Review and consider manual work-around solutions or additional bolt on software
where required.
• Testing of systems

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How can we help in GST ?Compliance
• Identify additional compliance responsibilities.
• Assist with registrations across the country.
• Compliance outsourcing
Advisory
• Help identify instances where the changes to the rules could potentially create
complex issues for businesses in specific sectors.
• Provide guidance on VAT implications for contractual terms for your future
supplies.
• Advise businesses on planning PAN India registrations
• Advice on Place of Supply Implications
• Advise on approaches to valuing bundles of products consisting of both services
and goods

27. Sandesh.mundra@smaca.in
Thank You……Now let us repair GST..