ON

1
PRESENTATION ON GOODS SERVICES TAX
By Shri Jalaj Shrivastava
Commissioner (Trade
Taxes) Govt.
of NCT of Delhi

2
what we know !

• Official announcement made in 2007, by the then
  Union Finance Minister to implement GST w.e.f.
  Ist April,2010.
• An Empowered Committee of State Finance
  Ministers, to work out the Road Map for
  introduction of GST, and to serve as harmonising
  agency
• CST to be phased out, and several Central State
  Taxes to be subsumed, thus simplifying the
  current Indirect Tax Structure.

3
To recap GST is

• a VAT-plus, consumption and destination
  point-based system of regime.
• Concept of Services at par with Goods, based on
  Value-addition at each stage, with set-offs in
  respect of Input Tax Credit, as for VAT
• Sale as the event for Taxation
• Subsuming various Indirect Taxes
• Dual structure of Central and State GSTs,
  combined as Integrated GST

4
Contd

• Cost-reduction due to removal of Cascading effect
  of multiple points of Central State Indirect
  Taxes.
• CGST and SGST to be paid into the accounts of
  Centre States, respectively.
• Input Tax Credits paid against CGST to be taken
  as credit for Centre only, similarly for SGST. No
  cross-utilization allowed between these two
  accounts, except Inter-State transactions.

5
In summation, GST is

• Thus, GST shall have two components to be
  levied by the Centre and to be levied by the
  States. However, the basic features of law such
  as chargeability, definition of taxable person,
  measures of levies etc. to be uniform across
  these States for GST to be truly pan-Indian.
• The Central GST and State GST should be
  applicable to all transactions of goods
  services.
• Administration of CGST and SGST would be with the
  Centre and the States, respectively.

6

• Introduction of GST in the States a challenging
  exercise in a federal country like India.
• Not yet total harmony in rates of VAT on
  different commodities among States. Deviations
  exist.
• Before introduction of VAT, unhealthy sales tax
  rate war existed.

7
HAVING SAID THIS, WHY NOW GST ???

• Successful implementation of VAT.
• Still certain shortcomings in the structure of
  VAT both at Central State level.
• The deficiency in CENVAT lies in non-inclusion of
  several indirect taxes
• No steps to capture the value-added chain in the
  manufacturing and distribution stages.

8
In the existing State- level structure

• Indirect tax goods such as luxury tax,
  entertainment tax etc yet not subsumed in VAT for
  set-off relief.
• CENVAT load on goods remains included in value
  of goods to be taxed in the State VAT.
• CENVAT load needs to be removed.
• Commodity is produced on the basis of physical
  inputs as well as services.
• A Constitutional amendment shall be necessary to
  levy tax on services as well.

9
GST A SELF-FULFILLING PROPHECY ? Thus GST
would provide- (a) Comprehensive set- off relief
for trade, industry and agriculture. (b) Removal
of cascading effect on CENVAT load and (c)
Additional power of taxation of services to the
States.
10
GST Model for India

• (a) The working sub-group has suggested various
  models.
• (b) The Empowered Committee recommended the dual
  structure model which has the following
  features-
• The GST shall have two components
• The Central GST and State GST should be
  applicable to all transactions of goods
  services at what rates ??

11

• The Central GST State GST to be credited to the
  accounts of the Centre and States separately,
  with a Uniform procedure for collection for both
  Central GST and State GST, and keeping the
  administration of the Central GST to the Centre
  and for State GST to the respective States.
• A uniform SGST threshold across States (except
  for the Special Category States and North Eastern
  States).

12
(i) The tax payers to submit periodical returns
to both the Central GST authority and to the
State GST authorities concerned. (ii)
Assessment, enforcement, scrutiny and audit to be
undertaken by the authority collecting tax, with
information sharing between the Centre and the
States. (iii) Composition/Compounding Scheme for
the purpose of GST to be designed.
13
RATE STRUCTURE AND OTHER ISSUES
(i) Rate Structure for SGST., issue of RNR
computation (ii) Exempted list of Goods
Services. (iii) Threshold limit (iv) Rules for
Taxation of Services. (v) IGST Model for
inter-state transactions of Goods. (vi) GST
Compensation (vii) Legislature Measures at
Centre States (viii) Purchase Tax
14

• Essential conditions for Model governing the
  inter-state transactions
• For States Governments -
• Automation to an extent to receive e-return etc.
  
• Single e-return with common periodicity for
  State and Centre.
• Uniform Rules and procedure for treatment of
  inter-state transaction.
• Uniform rate of tax on commodities.

15
(b) For Central Government Mechanism for dispute
redressal Mechanism for refund etc. Automation to
an extent to receive e-return. (c) For
dealers E-enrollment E-return E-payment Access to
computer with net connectivity
16
And lastly,THANK YOU FOR YOUR PATIENCE !!