Assessment of impact on digital advertising companies
- For services rendered by a digital advertising company, it charges a service tax @15%
- For input services availed by a company, it claims an input tax credit (“ITC”)
- However, a digital advertising company is not eligible to claim ITC on any products used in producing digital content or capital goods purchased by it
- The company file its service tax return on half yearly basis
- Two returns annually which can be revised within a period of 90 days from date of filing
Goods & Service Tax (“GST”)
Registration : Registration is mandatorily required as threshold exemption is not available to E-commerce operators*
Rate under GST :GST will be charged @18% on all invoices
Input Tax Credit : ITC can be availed on any supply of goods or services or both which are used or intended to be used in the course or furtherance of business
Organised retailers do not expect the Goods and Services Tax (GST) to impact their sales despite general fears that it could disrupt businesses, and hope to be fully ready for the uniform tax regime in the next few weeks. “As GST will be rolled out from July 1, we have to be prepared. It will lead to better compliance and an organised way of doing things,”
“We are not anticipating any sales disruptions. Nobody has expressed concerns on that…For retailers, benefits will come as and when manufacturer change the prices, which we, in turn, will pass it on to consumers,” he added. July onwards, large retail companies, including Reliance Retail, Future Group, Trent HyperCity and DMart, among others, are looking at aggressive price reductions.
The common objective of all retailers is also that margins should be protected, while ensuring that prices remain under check. “We will reduce prices by 2 to 20 per cent on various consumer products,”
GST will create a level-playing field for modern trade,” he added, explaining that the biggest challenge is to see that customers are not unhappy. “I believe tax rates should not be so complex as to create variations that adversely affect consumers,” he said.
Most retailers are awaiting more clarity on various issues, including input tax credit and e-way bills. Several retail stores have announced big discounts especially in the consumer electronics segment ahead of the GST rollout, in a bid to to clear inventories and to avoid implementation issues.
GST Laws in India mandate that all registered persons under GST maintain records and accounts in a specified manner. Every law of Direct and Indirect Tax in our country also mandates that information in a prescribed manner has to be captured and preserved for a certain period of time. In this article, we look at the list of records to be maintained under GST in detail.
Present Tax System:
- Excise Duty : Under Excise, the general records to be maintained are the RG-1 register (Daily stock account of excisable goods), Form IV register (Register of receipt or issue of raw material), invoice book and job work register.
- Service Tax : Under Service Tax, the suggested records include the bill register, receipt register, debit/credit notes register, CENVAT credit register, etc.
- VAT (Value Added Tax) : Under VAT, the records to be maintained include purchase records, sales records, stock records, VAT account containing details of input and output tax, works contract account, etc
Documents to be Maintained (GST)
- Details of production or manufacture of goods.
- Details of inward and outward supply of goods or services.
- Stock of goods.
- Input tax credit availed.
- Output tax payable and paid.
- Any other particulars as may be prescribed.
If more than one place of business is specified in the registration certificate, accounts relating to each place of business must be kept at the respective places.
Maintaining books and records in electronic form will be ideal and convenient for accurate and timely compliance under GST.
Goods & Services Tax
Basics that Every One Should Know about GST
How GST Works in India
Impact analysis on various sectors
India’s looming the new regime of Goods & Service Tax (“GST”), a modern tax reform which will usher in growth and opportunities for businesses in India. It is a tax trigger, which will lead to business transformation for the industry. It will have a far-reaching impact on business avenues, compelling organizations to realign bottlenecks such as production cost, production time, supply chain, compliance, logistics etc. with changing indirect tax structure.
GST is a value added tax where tax is imposed only on the value added at each stage in the supply chain. It is levied at all points in the supply chain. Credit is paid for acquiring inputs used in making the supply. In India GST is defined as “tax on supply of goods or services other than alcohol for human consumption”. In simple language, GST is a single tax on all goods and services in the entire economy.
GST can make the indirect tax system very efficient and will benefit all stakeholders including manufacturers, sellers, the ultimate consumers and the tax collecting governments apart from giving a substantial boost to GDP growth.
GST will turn India into one common market, leading to greater ease of doing business and big savings in logistics costs from companies across all sectors. GST may not have a uniform impact on all sectors, given their varying taxation structures. Some companies will gain more as the GST rate will be lower than the current tax rates they pay, others will lose as the rate will be higher than the present effective rate.