Goods and Services Tax (GST) and Consultants India

Goods and Services Tax (GST) and Consultants India

GST is an indirect tax and will emerge at the time of supply, is charged to purchaser of service, who
in turn gets credit and finally the end customer bears this expense as the last individual/entity in the supply chain.

GST comes on from 1st July 2017.

There are 3 different taxes inside GST:

  1. CGST (Central),
  2. SGST (State) and
  3. IGST (Integrated GST is for movement of goods outside the state)

GST will apply on “supply”, the erstwhile taxable heads, for example, “manufacture”, “MRP”, “sale”
and “provision of services”, will lose significance.

GST would be payable on the “transaction value”, being the cost actually paid or payable, and said to
incorporate all costs in connection to sale, for example, packing and commission.

All Goods and Services will get covered baring those which are particularly exempt (like food grains)
yet Petroleum and Liquor not secured which will continue to be covered in excise and VAT.

According to 122nd constitutional amendment for implementation of Goods and Service Tax (GST),
the Government has proposed to implement Goods and Service Tax (GST) with impact from 01.07.2017. GST will replace Central Excise obligation, Service Tax, States Sales Tax or VAT, Entry Tax,Luxury Tax, Entertainment Tax (except to the degree levied by local bodies). GST is a historic point
robust reform for Indian economy reducing the falling impact of tax on the cost of goods and services.
There will be complete upgrade in current indirect tax system specifically Tax Structure, Tax Incidence, Tax Computation, Tax Payment, Reporting and so forth. It will have affect on all aspects
of the business operations for example, pricing of items and services accounting, change in invoice
formats, payment system and tax compliance systems. Presently, the Union Bank of India with its
4257+ branches and other administrative offices (Overseas Branches/Offices, International Banking
Division, Currency chest and Regional/Zonal offices) in India needs to agree to every one of the regulations and prerequisites under GST law.

Registration of Place of Services

Prior under Service Tax it was Centralized registration so provider of services can render services
from wherever in India with a single Registration and single return and assessment.
However, in GST regime centralised registration won’t be accessible as the dealer or the service
provider needs to get registered with that specific state Government where he has the provision for
registering business site office also from where he is planned to give services.

PAN based identification number distributed to each tax payer so as integrate GST (Indirect Tax)
with Income Tax (Direct Tax) which will encourage joint effort of information.
Documenting of periodical Returns to both State and Central Government yet whole framework is
electronic and uniform.

Turnover Limits:

Limit is settled at Rs.20 lakh for Registration. Prior Limit under Excise was Rs.1.5 cr., under
Maharashtra VAT was Rs.5.0 lakh and Service Tax was Rs.9.0 lakh.In Income Tax, Limit is Rs.25 lakh for maintainence of Books.

  • Consultants for Implementation of Goods and Service Tax (GST)

Audit under GST

Anyone with an Annual Turnover above Rs.1.00 cr.

GST composition scheme (For SME`s and Traders)

Turnover in the preceding financial year did not exceed Rs. 50 lakh and GST Rate between 1% to
2.5%. However Service suppliers can’t exploit the Composition Scheme.
The negative list of services has 18 heads which incorporate just essential goods for mass utilization
and services, for example, health care, education, goods transport agency, non-air- conditioned restaurants and so on.

Advantages of GST

  • Simplified tax regime and Increased compliance

GST will change over the nation into unified market

Integration of Multiple Taxes, for example, VAT, Works Contract Tax, central sales tax, octroi and
entry tax, purchase tax, luxury tax, taxes on lottery, gambling, betting, state cess and charges,entertainment taxes.

  • Ease of Business

Businesses or Service providers right now need to experience multiple registrations- Excise, Each
State VAT and Central Tax Registration, Customs (for Import of inputs), Octroi, and Service Tax
registration for Service Providers. You don`t get cross credits for Taxes paid. Like Business and
Manufacturers loses Service Taxes paid by them in course of businesses and Service Providers loses
VAT and CVD (Customs Duty) paid by them. Registration under GST is secured crosswise over India,One India One Tax, reduces corruption.

Decrease falling impact of tax assessment predominant under old framework where VAT was levied on Excise and Octroi was paid on all other taxes.

Boost to India`s GDP @ 1.5% to 2% and few estimate recommend increase in around 4%.

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