A Presentation by

Vinayak &TusharCAME

GOODS AND SERVICES TAX (GST) IN INDIA

How many types of taxes are at present

1. EXCISE DUTY on manufacturing : CENTRAL GOVERNMENT

2. SERVICE TAX on services : CENTRAL GOVERNMENT

3. VAT(Value Added Tax) : STATE GOVERNMENT 4. CST (Central Sales Tax) for inter state tax : STATE

GOVERNMENT TO CENTRAL GOVERTNMENT5. CUSTOM ON IMPORTS : CENTRAL GOVERNMENT6. SAD, CVD, STAMP DUTY, CESS SURCHARGE ON

TAXES BY CENTRAL GOVERNMENT AND MANY MORE………..

Tax Structure

Direct Tax

Income Tax Wealth Tax

Indirect Tax

Central Tax

Excise Service Tax Custome

State Tax

VAT

Entry Tax, luxury tax, Lottery Tax,

etc.

EXCISTING TAX STRUCTURE IN INDIA

GST• Super tax i.e. it will remove many indirect taxes like service tax, excise, VAT, SAD, CVD

•It will be administrated by both central and state government

• it is basically of three types 1. Central GST (CGST)2. State GST (SGST)3. Integrated GST (IGST) = CGST + SGST

TAXES THAT WON’T BE SUBSUMED IN GST

1) CUSTOM DUTY

2) EXCISE DUTY ON TOBACCO

3) SPECIFIC CESS

4) TAXES ON LIQUOR

5) ELECTRICITY CESS

6) PROPERTY TAX

7) TOLL TAX

8) STAMP DUTY

PURPOSE OF GST

•Widen the tax base

•Boost the economic growth and increase the GDP

• Prevent tax evasion

• Completely removing the remaining cascading effects of taxes

• To make the tax regime in India simplified, transparent and uniform

GST CONSTITUTIONAL STRUCTURE

• GST council will consist of1.Union finance minister as chairman2.Minister of state in charge of revenue3.State finance or taxation ministers• This council will take decision on which tax

to subsume ETC….will require 3/4th majority to pass the decision i.e. STATE HAS A GREATER SAY

TELECOM

•Increased in effective rate from 15% to 18%-20%•Decentralized compliance under GST•Multistate circles- A CHALLENGE•Marginal increase in prices

BANKING

•Increased in effective rate from 15% to 18%-20%•Marginal increase in prices

AUTOMOBILE

•Decrease in effective rate of tax from 25-40% to 18-20%•Excise duty, VAT/CST, Octroi, Entry tax to be subsumed under GST•Cross utilization of credit on goods and service•Automobiles will become cheaper

MEDIA

•Service tax(15%) and entertainment tax(7%) to be subsumed into GST(18-20%)•cross utilization of credit on goods and services •Marginal decrease in prices

PHARMACEUTECIALS

•Excise duty(4-8%), VAT(5%)/CST(2%) other state tax to be subsumed into GST•Cross utilization of credits on goods and service•Increase in price if GST applied at normal rate of 18-20%

REAL STATE

•Stamp duty to be continued on land and constructed immovable property•Cross utilization of credits on goods and services available under GST•Increase in price with stamp duty and GST both being levied

E-commerce

•Reduction in interstate trade barriers •Tax collected at source-INCRESE IN COMPLIANCE COST•Increase in rate•Marginal increase in prices

LOGISTICS

•Increase in effective rate from 15% to 18-20%•Re-designing of supply chain by other sectors likely to favour the logistics sector •Marginal increase in price