Gst ppt.

Brief Introduction of India's Biggest Tax Reform GST[GOODS & SERVICE TAX]. Its impact on Indian economy , Its Benefit, Limitations and its Current Scenario in Other Countries

1. GST ( G oods an d Service s Tax) Biggest Tax Reform Since Independence….. By PARTH SHAH

2. Gst Goods and service tax (GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and service at a national level. Gst is a tax on goods and services with value addition at each stage. Gst will include many state and central level indirect taxes. It overcomes drawback present tax system

3. Tax Structure in India Direc t Tax : e . g . : I ncome Tax, Corp o ra t e Tax, W ea l t h Tax Indi r ec t Tax : e. g . : Exc i s e dut y , cu s t om dut y , Ser v i ce T ax, Oc t r a i T ax , V A T .

4. Method Of Taxation  Progre s s i v e Tax : I ncreasing ra t e of t a x f o r I ncreasing V a lue or V o lu m e.  Regre s s i v e Tax : Decreasin g ra t e t a x f o r I ncreasing V a lue o r V ol u me  Proportiona l Tax : Fi x ed ra t e of t a x f o r e v ery l e v e l of i ncome or produc t i o n

5. Short comings in current Tax System Tax Cascad i ng ( Tax on Tax) Comp l exity Ta x a t i o n a t M anufa c t u r i ng Le v el Exc l u s i o n of Ser v ices Tax E v asi o n Cor r up t i o n

6. Taxonomy of Indian Taxation vat / sales tax on sale of goods, other than newspapers Stamp duty on other than 10 specified instruments tax on agricultural income Toll tax on utilities Other taxes on land and buildings, entry of goods in local area (entry tax), consumption or sale of electricity, vehicles, luxuries including taxes on entertainment, betting and gambling, alcoholic liquor, narcotic drugs and opium

7. Pre-requisites for migrating to a GST regime Common/unified tax rate for goods and services which may be ideally, revenue neutral (a suitable GST rate) – dual tax proposed Avoiding or minimizing differential tax rates – under discussions Abolition of other small taxes - under discussions Abolition of CST in a phased manner - being done Power to levy service tax on select/agreed services to states - under discussions Issue of inter-state services and goods movement vis-à-vis levy of duty or tax to be sorted out - under discussions Revenue sharing mechanism to be rationalized - under discussions

8. What is GST  GST is a comp r ehensive v a lue a d ded t a x on g o o d s a n d services  It is col l ected on v a lue a d ded at each st a ge of sale or pu r chase in the supply chain  No diffe r ent i at i on between goo d s a n d services as GST is l e vied at each stage in the supply chain  Seamless input t a x c r edit th r o u g h out the supply chain  At all st a ges of p r oduction and d i stribut i o n , t a xes a r e a P a ss th r o u gh a n d t a x is borne by the fin a l consumer  All sect o rs a r e t a xed w ith very few exceptions / exemp t ions

9. History Fe b , 200 6 : Fi rs t t i m e in t r od u c e d c o n c ep t o f G S T an d an n oun c e d the da t e of it s imp l e mentat i o n in 2010 Jan . 2007 : F i r s t GST s t ud y b y ASS O C H AM r e l ea s e d b y D r . Shome Fe b . 2 7 : F . M . An no un c e d int r o duct i o n of GST from 1 April 201 i n Budget  Th e G ove r nm en t ca m e ou t with a Fi r st D i sc u s s i on Pape r o n GST i n No v em b e r , 2009  Intro d u c e d the 115 t h Constitut i o n Am end me nt ( G ST) Bil l i n the yea r 2011 .

10. Model Of GST GS T S t r u c t u r e cen t re GST GS T t o b e l ev i ed b y t h e Ce nt re S t a t e GST GS T t o b e l ev i ed b y t h e State Dua l GST GS T t o b e l ev i ed b y t h e Ce nt re a n d t h e S t at es co ncur r en t l y

11. Proposed GST Rate Pr e s e nt l y i t i s ( 2 6 . 5 % , CEN V A T- 1 4 % a n d S t a t e V A T 12 . 5 % ) I t e ms T o t a l G ST r a t e s ( i n %) C en t re S ta t e Goods 20 12 8 Ser v i c e s 16 8 8 E s s en t i a l Goods 12 6 6

12. Taxes propo s e d to be su b sumed in GST Centr al T a x es  E x ci s e D uty  A ddi t iona l Ex ci s e du t y  Excis e du t y u n de r m e d i cinal an d t o i l et preparatio n A ct  Service T ax  A ddi t iona l Cu s tom dut y commonly k n o w n as coun t er v ai l in g du t y ( CVD ) , s p e c ia l additional dut y ( S A D)  Sur c ha r ge  CEN V A T

13. Taxes propo s e d to be su b sumed in GST State T ax e s  V alu e add ed tax ( VA T)  E ntertainmen t tax l e v ie d b y s t ates  Luxur y T ax  T a x o n Lot t e r y , bettin g an d gambl i ng  En t ry tax o t he r than for lo c a l bodie s ( Oct r o i )

14. Product Excluded from GST  P e t r o l eum Pr o duct  A l coh o l  T o bacc o Pr o duct

15. Illustration Of GST Produc t A VA T S ystem GST System Bas e Price 100 100 + 12 % Ex c ise d u ty 12 NA +1 2 .5% V AT 14 NA State GST NA 8 centr e GST NA 12 Total Tax Burden 26 20 Valu e Of Produc t to Consumer 126 120

16. Why does India Need GST GST is being introduced majorly due to 2 reason The current indirect tax structure is full of uncertainties due to multiple rates. Due to multiple rates there are multiple forms. GST the tax complexity in the prevailing tax regime.

17. GST Council GST levy will be administered by Union finance minister(chairmen) Union minister in charge of state revenue or finance Minister in charge of finance or taxation. Any other minister(finance minister of the state) nominated by each state gvt would constitute the council.

18. Dispute Settlement Authority(DSA) Dispute between state and centre will be handled by the DSA. Appeal from dsa would be dealt with supreme court. Example: if a state receives less revenue in comparison with its previous one than it can appeal this case to the dsa .

19. Importance of Article 246(A) There is resistance by the SG as VAT is the main source of revenue for the SG. In 246(a) certain powers are allocated to the state government. The parliament & legislature of every state will have the power to make law with respect to goods and service tax imposed by union( gvt ) or by the state.

20. Benefits of GST  T rans p ar en t T a x S y s t e m  Uni f o r m T a x s y s t e m Across I ndia  Reduce T a x E v as i on  Expor t w il l be more compe t i t i ve

21. Hurdles in Implementation  D i sp u t e b e t we e n cen t re an d Tax o v er Tax Shar i ng  Hi g h l y soph i s t ic a t e d I T in f ras t ruct u re req u i r ed .  I ss u e of t ax i ng e - comm e rce i s t o b e appropr i a t e l y ad d ressed an d in t egrate d .  Poli t ic a l I mba l a ce

22. GST G l obal Scenar i o  M o re t han 1 4 coun t r i es ha v e a lready in t r o duced GST/ N a t i o nal V A T.  Fr a nce wa s t he f i rst c o un t ry t o in t r od uce GST sys t em i n 1 9 5 4.  T y pical l y i t i s a s i ngle ra t e sys t em b ut t wo/thr e e ra t e sys t e m s ar e a l s o pre v a l en t. Canada and Brazi l alon e ha v e a d ual V A T.  S t anda r d GS T r a t e i n most coun t r i es ran g es b e t we e n 1 5 - 2 %.

23. India's GST structure is complex, says IMF Report says the proposed GST structure will require the centre to coordinate with 30 states, which is an administrative challenge. Even as the international monetary fund ( imf ) says the proposed goods and services tax ( gst ) will improve tax compliance and enhance economic growth by 1-1.5 per cent over time, it finds the structure of the indirect tax regime in india complex. “The  gst  design being contemplated is... Fairly complex, with a dual administration arrangement that involves the tax authorities of both the centre and states separately taxing a single transaction,” says the fund in a report on india .

24. GST – Advantages As a developing country, india needs a transparent & unambiguous tax structure A complex tax structure with multiple rates of taxes Multiple taxes across the supply chain High transaction cost in the hands of the tax payers Increased tax collections due to wider tax base and better compliance Improvement in international cost competitiveness of indigenous goods and services. Enhancement in efficiency in manufacture and distribution due to economies of scale GST encourages an unbiased tax structure that is neutral to business processes, business models, organization structure, product substitutes and geographical locations Helping as a weapon against corruption GST operates on a negative list i.e. All goods and services are subject to GST unless specifically exempted

25. GST – Advantages Nature of complexities i.e. Classification to valuation regarding taxability, exist in the present structure. Some of such burning issues are: Excise on MRP Excise, VAT and service tax on software, VAT & service tax on: Works contracts Right to use

26. GST : Proposed Key Features Dual GST : central GST & state GST Destination based state GST Uniform classification Uniform forms – returns, challans ( in electronic mode) No cascading of central and state taxes Cross credit between centre and state not allowed Tax levied from production to consumption

27. GST : Global Perspective It has been a part of the tax landscape in Europe for the past 50 years. It is fast becoming the preferred form of indirect tax in the Asia-pacific region. While countries such as Singapore and new Zealand tax virtually everything at a single rate, Indonesia has five positive rates, a zero rate and over 30 categories of exemptions. In china, GST applies only to goods and the provision of repairs, replacement and processing services. It is only recoverable on goods used in the production process, and gst on fixed assets is not recoverable. There is a separate business tax in the form of vat.

28. GST : Global Perspective Goods and services tax in brazil Brazil was the first country to adopt GST system. Brazil has adopted a dual gst where the tax is levied by both the central and the provincial governments. Gst rate is 20 %.

29. GST- CAN WE ADOPT IT An information network allowing GST Council to cross-check payment information should be developed. What is needed is an IT system like the tax information network (tin), where the TDS or the vat credit is recorded in a central database. Paper bills and fraud to be largely eliminated.

30. Knowing more about GST We all will pay GST on every product or service we buy/ consume All indirect taxes levied by the states and the centre will be merged into one GST, we would exactly know how much tax we pay which at present is difficult to understand. The sellers or service providers collect the tax from their customer. Before depositing the same to the exchequer, they deduct the tax they have already paid. The success of GST would rest upon efficiency, equity and Simplicity.

31. Thank You