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ROLLER COASTER OF GST

ROLLER COASTER OF GST. Rishabh R. Adukia CA Final Mumbai. Topics to be Covered. Introduction to GST Need for GST Global Scenario of GST Key Features of GST to India Latest Updates Conclusion. DID YOU READ TODAYS NEWSPAPER ? Yes…. DO YOU WANT TO READ TOMORROWS NEWSPAPER ?.

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ROLLER COASTER OF GST

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  1. ROLLER COASTER OF GST Rishabh R. Adukia CA Final Mumbai

  2. Topics to be Covered • Introduction to GST • Need for GST • Global Scenario of GST • Key Features of GST to India • Latest Updates • Conclusion Rishabh R. Adukia

  3. DID YOU READ TODAYS NEWSPAPER ? Yes…. DO YOU WANT TO READ TOMORROWS NEWSPAPER ? Rishabh R. Adukia

  4. Introduction to GST • One of the biggest taxation reforms in India -- the Goods and Service Tax (GST) -- is all set to integrate State economies and boost overall growth. • GST is a broad based and a single comprehensive tax levied on goods and services consumed in an economy. • GST will create a single, unified Indian market to make the economy stronger. Rishabh R. Adukia

  5. NEED FOR GST • Abolition of taxes such as • Octroi, • Central Sales Tax, • State-level sales tax, • Entry tax, • Stamp duty, • Telecom license fees, turnover tax, tax on consumption or sale of electricity, taxes on transportation of goods and services, thus avoiding multiple layers of taxation that currently exist in India. INTEGRATION Rishabh R. Adukia

  6. GLOBAL SCENARIO OF GST • France was the first country to introduce GST system in 1954. • Almost 150 countries have already implemented the GST. (Around 194 countries in world as per UN) • Most of these have a unified GST system. • Brazil and Canada follow a dual system where GST is levied by both the Union and the State governments. Rishabh R. Adukia

  7. GLOBAL SCENARIO RATES- AVG 15-20% Goods And Service Tax Rishabh R. Adukia Ashay Upadhayay

  8. Key Features of GST • Simple Tax Structure with Single Rate • Central GST and State GST is likely to operate in a parallel fashion • Alcohol, tobacco, petroleum products are likely to be out of the GST regime. • Also items below threshold limits to be excluded Rishabh R. Adukia

  9. Indicative Exemptions • Exempted Products: Food Grains, Bread, Salt, Milk, Vegetables, Meat and Fish • Goods At Lower Rates: Tea, Milk Powder, Coffee Beans, Toys, Beedis, Bicycles • Exempted Services: Govt. aided public health and education Rishabh R. Adukia

  10. Type of GST Models Rishabh R. Adukia

  11. Likely Dual Structure for India Rishabh R. Adukia

  12. Integrated GST (IGST) • For inter-state transactions • Centre to levy IGST which would be CGST + SGST • Inter-state dealer will pay IGST after adjusting IGST, CGST and SGST credit on purchase Rishabh R. Adukia

  13. Set - off … • CGST against CGST • SGST against SGST • No Cross sectoral set-off between CGST & SGST • IGST for CGST/SGST & vice versa Rishabh R. Adukia

  14. IGST … • The seller in State X will pay the IGST to the Centre • While paying IGST, seller will adjust his lying IGST/CGST/SGST credit • Suppose Seller adjusts the SGST against IGST payable,State X will have to transfer the credit of SGST used by the seller for payment of IGST to the Centre Rishabh R. Adukia

  15. RATE OF GST • Rate is expected around 14-16 per cent. After the total GST rate is arrived at, the States and the Centre will decide on the CGST and SGST rates. • Currently, services are taxed at 10 per cent and the combined charge indirect taxes on most goods is around 20 per cent. Rishabh R. Adukia

  16. Some Figures to Wonder ? • Balance Sheet Figure ? • Kareena Kapoors Figure ? • It is estimated that India will gain $15 billion a year by implementing the Goods and Services Tax as it would promote exports, raise employment and boost growth. It will divide the tax burden equitably between manufacturing and services. Source: NCAER • Centre’s Tax-GDP Ratio has increased from 9.2% to 10.94% Rishabh R. Adukia

  17. Why are some States against GST; will they lose money? • The governments of Madhya Pradesh, Chhattisgarh and Tamil Nadu say that the information technology systems and the administrative infrastructure will not be ready to implement GST. • The central government has offered to compensate States in case of a loss in revenues. Rishabh R. Adukia

  18. Why are some States against GST; will they lose money? • Some States fear if the uniform tax rate is lower than their existing rates, it will hit their tax kitty. The government believes that dual GST will lead to better revenue collection for States. • However, backward and less-developed States could see a fall in tax collections. Rishabh R. Adukia

  19. Issues In Implementation • Agreement on GST rates among states and Centre • Constitutional amendments empowering states to levy tax on services & empowering centre to levy tax on sales. • Compensation to be given by the Centre to States incurring revenue losses on implementation of GST. Rishabh R. Adukia

  20. Issues In Implementation • Drafting & implementation of Centre GST and State GST laws are lagging behind. • Final approval and support of industry is a must. • Success of GST would depend upon implementation of IT resources in every nook and corner of the country. Rishabh R. Adukia

  21. Recent News Items • Hon’ble Finance Minister PranabMukherjee • December 15,2010 - Postponement of likely dates to roll out GST along with DTC i.e.1.4.2012-13 • December 14,2010– GST will be introduced in phases to bring consensus among states in new regime while earlier stand was to come out in transitory manner Rishabh R. Adukia

  22. SUMMING UP What is GST ? • G-Good • S- Simple • T- Transition Rishabh R. Adukia

  23. SUGGESTIONS.. COMMENTS !! QUESTIONS ?? Rishabh R. Adukia

  24. Rishabh R. Adukia rishfca@gmail.com 098198 61049 Facebook: Rishabh Adukia Rishabh R. Adukia

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