Goods and Services Tax (GST) Vs Present Structure of Indirect Taxation

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Present Structure of Indirect Taxation Vs Goods and Services Tax (GST)

“A Comparative Analysis”

 

Sr.No

Concerned Areas Present Taxation

System

GST
1 Structural Difference a)Two separate VAT System

i) State

VAT

ii) CST

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 into the GST base. Moda de otoño T Shirt Givenchy Calvin Klein Ropa Interior Mujer 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

Local sale-state

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

VAT: None

Goods: 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.