Present Structure of Indirect Taxation Vs Goods and Services Tax (GST)
“A Comparative Analysis”
|Concerned Areas||Present Taxation
|1||Structural Difference||a)Two separate VAT System
b) Tax on services is levied by Centre under separate Legislation.
c)No Comprehensive Taxation of services at the state level
d) Imports in India are not subject to state VAT.
|1) A tax system with both Central and state GST levied on same base. Thus all the goods and services except Petroleum ,High Speed Diesel, Motor spirit, Natural gas,
Aviation Turbine fuel and Liquor will be brought in GST net on a later date as per the recommendation of the GST Council.
2) It allows seamless Input Tax credit.
|2||Excise Duty||Taxed by the Centre under Separate Act; Taxed upto Manufacturing Point.
|To be subsumed in GST; Taxable Event: Supply of
Goods, To be Taxed up to the Retail Level.
|3||Basic Custom Duty||Taxed by Centre, Under Separate Act; Taxable Event: Import||No Change|
|4||CVD/SAD||By Centre under separate Act,
Taxable event: Import
|To be subsumed in GST; Taxable event :Import|
|5||Service Tax||Taxed by centre under finance Act;
Taxable Event :Provision of services
|To be Subsumed in GST ;
Taxable event: Supply of services
|6||Central Sales Tax||Taxed by Centre Under CST Act; Collection assigned to states;
Taxable event :Sale by movement of Goods from one State to another
|To be Phased out; To be applicable to goods kept outside the GST.
Additional tax of 1% on interstate supply of goods –Status of the goods/items yet to be confirmed
|7||State VAT||Taxed by State; Taxable event :Sale within the State||To be subsumed in GST ;Taxable event: Supply of Goods|
|8||Interstate Transactions||Services: Taxed By the Centre ;
Goods :CST is collected and apportioned with the Centre
|To be subsumed in GST & Subject to IGST(SGST+CGST)|
|9||Place of taxation||Taxable at the place of sale of Goods or rendering of Services||It is generally consumption (Destination) based tax.|
|10||Power to levy Tax on manufacturer||Excise Duty (Cenvat): Levied and collected by the centre||No such power in GST-Tax on supply of Goods.|
|11||Power to levy Tax on Sale of Goods||Centre-Interstate
|Concurrent powers to centre & States ;however ,Powers to levy tax on interstate supply of goods & services vests with Centre only|
|12||Power to levy Tax on Provision of Services||Centre||Concurrent powers to Centre & States ; however ,Powers to levy tax on interstate supply of goods & services vests with Centre only|
|13||Tax on Import in India||-Goods :Under Customs Duty (Comprises Basic Custom duty, CVD & SAD)
-Services: Under Service Tax
|-Basic Custom duty on goods: No change
-CVD & SAD on imports of goods and import of services: to be summed in GST-IGST to be levied, Which would be Vatable.
|14||Tax on Export of Goods & Services||Exempt/Zero Rated||No change|
|15||Tax on Inter State Transfer of Goods to Branch or Agent||Exempt against Form F||To be taxable|
|16||Tax on Transfer of Goods to Branch or Agent within State||Generally Exempt; Depends Upon State Procedures||Might Be taxable , Unless TIN of Transferor and Transferee is same|
|17||Cross-Levy set Off||Excise duty and Service tax: Cross Set-off is allowed.
|No cross Set-off between CGST and SGST|
|18||Cascading effects||Allow tax credit between Excise Duty & Service Tax, But not with VAT on Purchase of Goods||Allow Seamless tax credit|
|19||Non Creditable Goods||Exist||Might exist|
|20||Credit on Inputs used for exempted Activities||Not allowed||Might not be allowed|
|21||Various Exemption-Excise Free Zone or VAT Exemption||Exists||May Go in a Phased Manner|
|22||Inter-State Transit sale and High Seas sale||Exempt from Sales Tax /VAT, Subject to conditions||Might be taxable|
|23||Transactions against Declaration Forms||Exists Under the CST Act.||Forms will be abolished, except those goods which are outside GST.|
|24||Taxation on Govt and Non Profit Public Bodies||Partially Taxed||Might Not change|
|25||Stamp Duty on Immovable Property||Presently Taxed By states||No Change|
|26||Tax Base||Comparatively narrow||wider|
|27||Excise Duty threshold limits||Rs. Guía de compras T Shirt Fendi Homme 1.5.Crores||To be decided by the GST Council|
|28||VAT Threshold Limit||Varies from State to State from Rs. Emporio Armani Ea7 Calvin Klein Tanga 5lacs to 20 lacs||Rs.10 Lacs to 20 Lacs to be decided by the GST Council.|
|29||Service tax threshold limit||Rs.10 Lacs||Rs.10 Lacs to 20 Lacs to be decided by the GST Council.|
|30||Classification of commodities||Excise Duty: HSN
Services: Existing Classification may be used
|31||VAT/GST Registration||Simple TIN (Some states :PAN Based)||PAN Based GSTIN|
|32||Procedures for collection of Tax and filing of returns||Excise Duty & Service Tax :Uniform
VAT: Varies From State to state
|Will be uniform|
|33||Administration||Complex due to no.|