Goods and Service Tax

India is noted for its intricate and complex tax structure. The much talked about ‘GST in India’ triggered the tax structure to eliminate the multiplicity of the taxes and their cascading effects and to harmonize the Center and State tax administration. GST is an indirect tax reform, which aims to remove tax barriers between states and create a single market. It is collected on value added at each stage of supply chain right from production till distribution.

The current tax structure is undetermined and uncertain due to multiple rates, which further leads to multiple forms. However, GST will replace all the various indirect taxes and bring them under one umbrella to make compliance easier. GST in India is perhaps India’s most revolutionary and detailed tax reform ever and has been envisioned as an efficient tax system making India one unified common market.

India is a federal country where both the Center and the States have been delegated the powers to collect or levy taxes. Both the levels of Government have separate responsibilities to fulfill and perform, as per the Constitution, for which they need to raise resources. A dual GST will, therefore, be keeping with the Constitutional requirement of fiscal federalism. The Center and State will be simultaneously levying GST on each activity.

GST in India will have two components- Central GST (CGST) and State GST (SGST). The Central GST and State GST will simultaneously be applied on every transaction of supply of goods and services except on goods and or services, which are exempted and lie outside the realm of GST. However, IGST will be levied on inter state sales and imports. It will be shared equally between the Center and the State.

The Goods & Services Tax (GST) will be imposed at various rates ranging from 0% to 28%. The GST Council decided a four- tier tax structure of 5%, 12%, 18% and 28% with lower rates for the necessities and the essential items and the highest for inessential and luxurious merchandise, having a significant impact on every consumer and every industry. Activities such as traveling, eating out, phone bills, banking and insurance will be seen on the higher budget side whereas buying cars, movie tickets, processed food, cement will be seen on the lower end.

India finally seems to be on the edge of executing the much-awaited tax reform of GST in India. With the passing of the CGST Act, 2017, IGST Act,2017, UTGST Act, 2017, we moved a step closer to the benefit of the country bringing uniformity. If executed well, GST in India will help improve the nation’s economy and help make the process of levying taxes effective and efficient and in effect, help achieve – ‘ONE NATION, ONE MARKET, ONE TAX.’

Our Indirect tax team comprehends a thorough understanding of the evolving Goods & Services tax law and its emerging trends and issues in various sectors and their impact on clients’ businesses.

This paradigm shift to Goods & Services Tax in India will lead to far reaching impacts on different business processes including operations, supply chain model contractual agreements, pricing, information technology, human resource & tax compliances.

Business houses need to be ready for smooth transition to GST and prepare a roll out plan.

Effective transition planning needs engagement with concerned team, providing training, compliance manuals, imparting education of the system and practical action points.

Here is an indicative glimpse of services we offer, in light of a dynamic and evolving regulatory environment surrounding Goods & Services Tax: Overview assessment of different business functions and operations in order to be better prepared for GST transition.

 Assistance and advice for diagnostic / impact analysis to assess the operational, commercial and financial impact of GST

 Assistance and support in planning transition to GST including on the prevailing ERP.

 Migration of existing assessees under GST and Registration of new dealers under GST

 Presenting updates on regular basis on implementation, Model GST law and other legal aspects & clarifications on Indian GST provided by Government.

 Support on Compliance with filings and records as may comprehensively be required under the GST regime.

 Review of how and in what manner the service tax levies would be dovetailed into GST, and also to plug in any existing leakages and gaps in the present regime.