Tag Archives: Goods & Service Tax

Tax adviser in India

GST and its Impact on Indian Economy

Goods and service tax (GST)

The GST is a new concept that simplifies the giant tax structure by supporting and enhancing the economic growth of a country. It is a comprehensive term levy on manufacturing, sale and consumption of goods and service at a national level.

Goods and service tax bill or GST also referred to as the constitution (one hundred and twenty-second Amendment) bill 2014 initiate a value added tax to be implemented on national level. In India, GST will be an indirect tax at all the stages of production to bring about uniformity in the system.

 

Positive impact of GST on India’s GDP

A comprehensive and robust tax structure that will bring the current set of indirect taxes like VAT, sales tax, excise duty etc. under one umbrella and will be instrumental in creating a seamless experience across all states. By bringing the varied tax structures under one net, it is also expected to reduce the cost of transaction for various business entities that had to comply with multiple taxes. We are well aware of the fact that transport and logistics industry is pivotal to the growth of Indian economy as there are lot of products that are delivered from one part of the country to another on a daily basis. So, it is assumed that implementation of a decent GST structure will eliminate other taxes and the export of goods and services will become economical.

 

Negative impacts of GST

There can be no gain without pain and that may be especially true when it comes to GST. As about 160 countries overhauled their indirect tax systems, they confronted numerous challenges. Latecomer India is unlikely to escape some havoc.

  • Service tax rate 15% is presenting charged on the services, so, if GST is introduced at a higher rate which is likely to be seen in near future, the cost of services will rise. In simple words, all the services like telecom,, banking, airlines, etc will become expensive.
  • Increased cost of services means an add to your monthly expenses.
  • You will have to reschedule your budget to bear additional tax
  • Increase in inflation might be seen initially
  • Being a new tax, it will take some time for the people to understand it completely, its actual implications can be seen only when the rate of tax is determined.
  • If the actual benefit is not passed to consumer hand then the seller increase his profit margin, the prices of goods can also see a rising trend.

 

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Tax adviser in India

GST on digital advertising companies

Assessment of impact on digital advertising companies

Present Scenario

  • 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

 
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GST-ROll-Out-COnfirmation

GST rollout: Retailers working overtime to be prepared, deny impact on sales

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.

Goods and Service Tax

Records you should Maintain under GST

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:

  1.  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.
  2.  Service Tax : Under Service Tax, the suggested records include the bill register, receipt register, debit/credit notes register, CENVAT credit register, etc.
  3.  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.

 

Related Posts:

Goods & Services Tax

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How GST Works in India