Goods and services tax (GST)
Goods and Services Tax (GST) is one of the biggest tax reform in India, and applicable throughout India from 1 July 2017, which has replaced multiple cascading taxes levied by the central and state governments. It has “Dual Tax Model” with the Centre and the State governments simultaneously levying tax on a common base.
Taxes replaced with GST are as follows:
State Taxes:State VAT, Central Sales Tax, Purchase Tax, Luxury Tax, Entry Tax (all forms), Entertainment Tax, Taxes on advertisements, lotteries, betting and gambling, State cesses and surcharges.
Central Taxes:Central Excise Duty, Additional Duties of Excise (goods of special importance and textiles and textile products), CVD, SAD, Service Tax, Cesses and surcharges.
Key features of GST
- GST in India is a destination based tax against the earlier concept of origin based tax.
- It has submerged 17 indirect taxes at central Level and State Level under one umbrella.
- CGST and SGST will be applicable on “Intra State Supplies” of goods or services in India while IGST (Integrated GST) on intra state supplies and Import of goods and services in India.
- The administration of Central GST & Integrated GST would be with the centre and for State GST, the administration will be with the states.
- The threshold limit would be Rs. 20 Lakhs for General category states and Rs.10 Lakhs for the special category states.
- Composition threshold limit shall be Rs. 50 lakhs other than manufacturer and service providers.
- Tax rates under GST are zero, 5 percent, 12 percent, 18 percent and 28 percent.
- Export of Goods and Services are Zero Rated
Below are the key compliances under GST regime by businesses:
A. Filing of returns
In GST regime normally a tax payer is required to file minimum three monthly statements/ returns per registration apart from annual return. Key returns to be filed by businesses are summarized below:
There are three types of audit prescribed in the GST Act as explained below:
- Audit by Chartered Accountant or a Cost Accountant: Every registered person whose turnover exceeds the prescribed limit, would be required to get his accounts audited by a Chartered Accountant or a Cost Accountant. (Section 35(5) of the CGST/SGST Act)
- Audit by Department: The Commissioner or any officer of CGST or SGST or UTGST authorized by a general or specific order, may conduct audit of any registered person. (Section 65 of the CGST/SGST Act)
- Special Audit: Department may order a special audit by Chartered Accountant or Cost Accountant, at any stage of scrutiny, inquiry, investigations or any other proceedings, department is of the opinion that the value has not been correctly declared or credit availed is not with in the normal limits (Section 66 of the CGST/SGST Act).
Assessment means determination of tax liability under GST. Below are the various types of assessment under GST:
|Sr. No||Assessment||Type of Assessment|
|1||By Tax Payer||Self Assessment|
|2||By Tax Authority||
Scrutiny of Return
Best Judgement Assessment:
Apart from above requirements there are several other areas including assessments, registrations, input service distribution, payment of tax, refunds etc. where the businesses will need assistance of professional expert to ensure smooth compliance of the law and optimisation of the business resources.
At Proxcel, we are actively helping corporates to comply with requirements under GST law. Our range of services includes:
- Assistance in registration with tax authorities (migration or new);
- Advising on SAC (Service codes) under GST for raising invoices under reverse charge wherever applicable (expenditure) under GST regime;
- Preparation and filing of periodical return under GSTIN;
- Reconciliation and mapping of accounts and records of the company with that of the vender for any mis-match under GSTIN;
- Hand hold support on key issues and guidance on GST related matters;
- Validation of correct rate of tax applied, tax amounts, type of tax (IGST, CGST, SGST), PAN/GSTIN validation;
- Periodic audit and updates to identify key issues in GST compliances;
- Staff training.
GST Returns are facilitated by: