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Goods and service Tax – Importance things to know (Expert Article)
Posted on: 20/Mar/2015 2:38:54 PM
1. Preamble:
- With the Finance Minister indicating the onset of Goods and Service Tax Regime from 01.04.2016, it is pertinent for all the businesses to revisit their supply chain mechanism to make their operations more effective and efficient.
- It is high time for the dealers to have a look at their clients’ delivery channels to make them in consonance with the proposed regime, as such reorientation normally takes a substantial period to become operational.
- This article aims to pass on a brief profile of the GST regime.
2. Duties and Taxes which are replaced:
Central Excise Duty, Additional EDs, Service Tax, CVD and Special Additional Duty on imports, Surcharge and Cesses Central GST (CGST)
- CGST + SGST are pegged at 16% to 18%.
- No distinction between services and goods
- CGST paid on inputs / input services can be set off CGST payable on output / output services.
- Similar, SGST on inputs / input services can be set off against SGST on outputs / output services.
- Cross utilization between goods and services is allowed.
- Cross utilization between SGST and CGST is not possible.
VAT, Entry Tax (not in lieu of Octroi), Entertainment Tax, Luxury Tax, Taxes on lottery / gambling, states cesses / surcharge State GST (SGST)
CST Inter-State GST
- IGST is also expected around 16% to 18%.
- It can be claimed as credit when the goods are sold in another state.
- Earlier, CST used to be cost. Post GST regime, it becomes eligible for credit.
In case of imports, Basic Customs Duty on imports be levied in addition to CGST + SGST.
In the next article, we shall discuss on the impact of GST on the purchase and selling costs.
CA T.R.Srinivasan
Shree Guru Kripa’s Institute of Management
Ph.No.: 97899 76079
Mail ID: trs.connects@gmail.com
