Goods and Services

Tax

Sanjog Singh Group 3 Kaushik

Ahuja (001)
Chakraborty (111)
Aparna Bhargava Saumya Pandey
(004) (143)

Rijal Kadakia Neha Shugani

(023) (154)
 One Country, One Tax

GST
What is it?

GST Would
Proposed system Mitigate Double
of I Indirect Taxation
Taxation in India Reduce the tax
which combines Comprehensive burden on
To be levied on
various taxes into Consumers
Indirect Tax Each stage of sale
a single tax (Currently 25%-
system Manufacturing, and purchase of
30%)
Sales and goods
Consumption of Will Replace
Goods and Taxes levied by
Services State and Central
throughout India Governments
Tax Rate Under
Proposed GST
GST Council (November
3, 2016)

Tax Rate Slabs

5%, 12%, 18%, 28%
Luxury and Demerit Goods
-28% plus cess
Daily Needs 5%
 PROBLEMS IN THE CURRENT
SYSTEM
MULTIPLICITY OF TAXES CASCADING EFFECTS OF TAXES
Central:-Excise Duty, Central Tax on Tax
Sales Tax No credit of tax on
State:- Sales Tax, VAT manufacturing stage to
other stages
No credit of tax paid in one
state to other states

COMPLEX TAX ARBITRAGE

Hidden Costs of Acts as barrier to
Trade . trade
 Why to
implement GST?
3. Lower Cost 4. Reduces Red Tape
of Doing
Business
2. Enhanced
Compliance 5. Enhanced Delivery
System

1. Fair Pricing
to Consumers 6. Greater
Transparency
Why to 7. Improved Standard of Living

Implement
GST 8. Nation Building

9. Fairness and
Equality

10. Increase Global

Competitiveness
 Roadmap to
Implementation
Apr 2009 Aug 2016
1st discussion Bill Passed in RS
paper & LS

FEB 2006 Dec 2014

Announcement 1st Amendment Sept 2016
Bill

State FMs Assam, Bihar,

submitted Jharkhand,
report Chhattisgarh,
HP, Gujarat,
Delhi, 6 states
FM in budget Constitution 15 states
Empowered ratified
(122nd ratified Section 12
State FMs to Amendment)
enforced
design Bill introduced
GST Council
roadmap Passed by LS
1 Apr 2010 with FM as
in May 2015
Chairman,
 Roadmap to
Implementation

Sept 2016 November 2017

Sept 2016
GST Council
All Sections enforced
GST Portal
The Union Live
1st Meeting- 10L www.gst.gov.i
Minister of State
for NES, 20L for n for migration
in charge of
ROI of existing
Revenue States
GSTCouncil can assesses
jurisdiction over easy filing of
hold meetings
1.5cr turnover returns - PIN
and take
or less
decisions on 2nd Meeting-
issues including
Legislations
Model law, rate of
onpayment,ret
taxes,
urns,refunds,
exemptions etc.
invoice
andregistration
CHRONOLOGY OF MEETINGS
DATE MEETING AGENDA
Sept 2016 II reached at a consensus on area-
based exemption
Reimbursement from the annual
budgets to the exempted categories
Oct 2016 III Four-tier rate structure comprising a
lower rate of 6%, two standard rates of
12% and 18%, and a higher rate of 26%
with an additional cess for luxury and
demerit goods
Nov 2016 IV 0%-food items
5%-common use items

V Draft legislations
VI Inconclusive- contentious issue of dual
control of assessees could not be
Dec 2016
sorted
VII Draft CGST and SGST Law cleared
along with compensation law
VII split in tax rate in ratio of 60:40
between states and centre instead of
equally dividing GST between centre
Jan 2017 and states raised
VIII Roll out on 1 July, not 1 Apr
90% by states till 1.5cr
>1.5cr, 50:50
 Lessons from countries that have
implemented the GST
Total 160 countries have adopted GST or equivalent system (8 of them are non-UN
members)
 Lessons from countries that have
implemented the GST
Some major countries
 Lessons from
While increasing
countries that have the GST rate the
implemented the GST govt. decreased
the IT rate at
Singapore both individual
and corporate
level
Introduced in 1994 @ 3%
High inflation for first couple of
years and then stabilization

Currently it
is @ 7%
Lessons from countries that have
implemented
2. the GST
Canada

Introduced GST in 1991 amidst great internal conflict

and disagreement
3 provincesAlberta, Ontario and British Columbia
even sued the federal government for violating
constitutional agreements and limits
Over the years, Canada has pioneered a unique system
 GST
Regime in

Malaysia
Rate of GST is 6%
GST exemptions
Piped water
First 200 units of
effective from April electricity per
1, 2015 month (domestic
GST abolished sales consumers)
Transportation
tax (10%) and services
service tax (6%) Education
Imposed across the services
supple chain Health services
Time period for
preparedness 18 Price Control
months was adopted
Resentment from by MDTCA to
business community keep inflation
(SMEs) due to lack of under check
preparedness
Sector specific
guidance paper(s)
 Roadblock's to
IT Infrastructure GST
System would need
Major decisions of
GST Council
synchronization of all hardware road ahead might throw many
across all departments being challenges including decision on
driven by uniform software and RNR (Revenue Neutral Rate),
this is an area which is yet to be which is likely to see some high
tested for its operational level deliberations from various
effectiveness. stakeholders.

Training of staff At the Business end

Government need to train its Directly impact the Tax Structure,
entire revenue staff and it is Tax Incidence, Tax Computation,
believed that almost 60,000 Tax Payment, Compliance, Credit
revenue officials of state and Utilization and Reporting leading
central governments are already to a complete overhaul of the
receiving training on GST law and current indirect tax system.
GSTN
Sensitizing various
Stakeholders
At present people who do not
participate in legal trade
practices and mainly work in
cash, would try to find ways to
circumvent the provisions of GST
References

http://www.financiale http://
xpress.com/economy/gs gst.customs.gov.my/en/g
t-lessons-from-countr st/Pages/gst_ci.aspx
ies-that-have-impleme
nted-the-goods-and-se http://www.gatewayhouse
rvices-tax/331289/ .in/key-gst-lessons-fro
m-the-world/