GST - Goods & Service Tax
Goods and Services Tax (GST) in India is considered as one of most important tax reforms since independence. GST is one indirect tax for the whole nation on ‘supply’ of goods and services, right from the manufacturer/service provider to the ultimate consumer which will make India one unified common market. It is a comprehensive levy and envisages tax collection on both goods and services based on the principle of value added tax.
Both politically and economically, the passage of The Constitution (One Hundred and First Amendment) Act 2016 was a major landmark. There were many complex issues which the Government had to resolve leading to the introduction of dual GST structure. Now, both the Central and the State Government will simultaneously levy Central GST (CGST) and State GST (SGST) respectively across the value chain in intra-state supply. SGST shall be replaced by Union Territory GST (UTGST) in Union Territories. In case of inter-State transactions, the Central Government would levy and collect Integrated GST (IGST).
The GST Council, chaired by the Union Finance Minister of India, Shri Arun Jaitley, has approved various rules dealing with Registration, Returns, Invoice, Payment & Refunds, Valuation, Transition, Input Tax, Composition, Accounts & Records, Appeals & Revision, Advance Ruling etc. Further, the GST Council has broadly approved GST rate fitment structure for most products and services, the rates of GST Compensation Cess and the list of services to be covered under reverse charge mechanism. The transition provision to allow credit on goods held in stock where invoice /duty paying document is not available is a welcome move.
The Government has formed Goods and Services Tax Network (GSTN) as a non-profit organization to create an IT platform for all the concerned stakeholders to collaborate on a single portal. GSTN has entrusted GST Suvidha Providers (GSPs) with the responsibility of providing the much-needed support to taxpayers in the IT ecosystem for GST. Further, Application Service Provider (ASPs) will act as a link between the taxpayers and the GSPs. ASPs will focus on taking taxpayers’ raw data on sales and purchases and converting it into the GST returns. This GST returns will then be filed with GSTN via GSPs. It emphasizes on voluntary compliance and accounts based reporting.
The Government roll-out of the historic tax reform on 1 st July 2017.
Benefits of GST:
- Uniformity of tax rates including similar rates for interstate transactions
- Removal of cascading effect due to seamless flow of credit throughout the value chain
- Improved competitiveness due to reduced transaction cost
- Better tax compliance and effective way out to reduce trade based revenue leakage
- Reduced tax burden
- Increased certainty and ease of doing business
How we can Assist:
- GST Impact Analysis
- Tax Credits, Payment, and Accounting entries
- Tax Credit Transitions
- GST Registrations
- GST Compliances & Returns