Citizens Galore at GST Awareness Programme at KCCI
Citizens Galore at Goods and Services Tax (GST) Awareness Programme at Kanara Chamber of Commerce and Industry (KCCI) on July 12, 2017.
Mangaluru: The Central Government, with the cooperation from the State Governments and Union Territories, has brought about a revolutionary change in the Indirect Taxes, by implementing a Pan India Taxation System on Goods and Services, with effect from 1 July 2017. In the new legislation, certain Central and State levies have been subsumed and a consolidated Goods and Service Tax has been implemented, where there is a requirement to show SGST, CGST, IGST etc on the tax invoices and bills of sale. The final version of the GST law is in the public domain. The GST Council and Finance Ministry of the Government of India, are issuing various notifications, clarifications and press notes, in order to help the citizens understand the new law.
The KCCI has already conducted a series of Dealers’ and Stake holders’ awareness programmes on GST in the recent past, to help our members and the general public, in a smooth transition to the new tax regime. In order to bring more awareness and for a better understanding of its provisions and for an easy implementation of the new law, ‘Goods and Services Tax (GST)’ a seminar was organized at Kanara Chamber of Commerce and Industry on July 12 at the Meeting Hall from 10 am-2 pm. This ‘GST Awareness Program’ was inaugurated by Dr. M. Subramanyam, IRS, Commissioner of Central Excise & Central Tax [GST], Mangaluru Commissionerate who was also the Chief Guest of the same.
The chief guest gave an elaborate talk on GST and its benefits, which was very much complimented by the participants, and they also clarified some of their doubts on GST with Dr Subramanyam. During the interaction, Senior officials from the State and Central Tax Departments who also attended the programme, explained the new provisions and also answered the questions raised by the participants at the program. The program commence at 10.00 a.m. and concluded by 2.00 p.m.
Welcome address was delivered by Jeevan Saldanha-president of KCCI, followed by introduction of the chief guest by Ms Vathika Pai-Vice President of KCCI. Vote of thanks was proposed by Abdul Hameed, the Honorary Secretary of KCCI. Ganesh Bhat-Treasurer of KCCI was also seated on the dais. The programme was attended by a large audience comprising of KCCI members and general public. It was indeed a successful awareness programme.
What is GST? Here’s a 10 point simple guide on Goods and Services Tax (GST):
Goods and Services Tax (in short ‘GST’) is by far one of the most awaited tax reforms in the country. Here are the ten essential points on this much awaited mega reform: Though GST is a tax reform, it is going to impact every sphere of business activity, be it procurement, supply chain, IT, logistics, pricing, margins, working capital, etc. Though GST is a tax reform, it is going to impact every sphere of business activity, be it procurement, supply chain, IT, logistics, pricing, margins, working capital, etc. as a number of business decisions taken based on the current tax structure may no longer be relevant in the new GST regime.
What we have in the public domain now is the draft GST law and the four business processes on Registration, Returns, Payments and Refunds which gives a fair idea on the basic construct of the GST structure.
Here are the ten essential points on this mega reform:
1. GST would be levied on ‘supply’ of goods and services and hence the present prevalent concepts of levy of excise on the manufacture, VAT/CST on sales, entry tax on entry of goods in the local area would no longer be relevant. The ambit of ‘supply’ is quite wide and covers the supply of goods and services without consideration from one taxable person to another.
2. There would be dual GST i.e. both the Centre and the States would concurrently levy GST across the entire goods and services supply chain on a common base. Centre would levy Central GST (CGST) and States would levy State GST (SGST) on every supply of goods and services within a State. Integrated GST (IGST) would be levied on all inter-state supplies by the Centre and then transferred to the Destination State. Unlike in the present scenario, IGST would have to be paid on all inter-state supplies, be it in the nature of a sale or stock transfer.
3. Present Central Taxes like Central Excise, Service Tax, CVD, SAD, CST and State Taxes like VAT, CST, Entry Tax, Luxury Tax would get subsumed under GST. Customs is outside GST and hence Basic Customs Duty would continue on imports.
4. GST is a destination based consumption tax, which essentially implies that the revenue will accrue to the State where the consumer resides. This is unlike the present origin based levy where the revenue accrues to the origin state from where the movement originates.
5. Seamless flow of credit would be there under GST whereby CGST would be allowed to be set-off against CGST and IGST, SGST against SGST and IGST and IGST against IGST, CGST and SGST in that order. However, CGST credit will not be allowed to be set-off against SGST and vice versa. Thus, under GST, the present cost of 2% CST on inter-state sale will not be there as IGST would be totally fungible in the Destination State. However, credit fungibility is state-centric as credit accumulated in one State cannot be used against tax pay-outs in another State.
6. Liability for payment of GST would arise at the time of supply of goods and service. In terms of model law, receipt of advance payments for supply of goods and/or services would be considered as ‘time of supply’ and tax liability would arise on such advance receipt. However, receipt of goods and services is one of the pre-conditions for allowing input tax credit under GST and hence, even if GST is paid on advance payments, credit for the same would be available only on receipt of goods and services.
7. Registration threshold has been presently kept at Rs. 10 Lakhs (Rs. 5 lakhs in case of North East States and Sikkim) in the draft model law. Existing registered assesses would be migrated into GST, first provisionally and then finally subject to furnishing of requite information. Assesses have the option to take business segment-wise registration.
8. Option of composition levy is also prescribed, if aggregate turnover of a tax payer is < Rs. 50 lakhs. Persons adopting composition levy would be neither entitled to charge GST from its customers nor to avail credit of input tax. However, composition levy is not allowable to assesses who affects inter-State supplies.
9. Under GST, every assesses would have to upload invoice level outward supply details for B2B transactions. Details of inward supplies and tax credit would be auto-populated based on sales details uploaded by the vendor. Hence, a robust IT infrastructure at the end of both supplier and recipient is critical for hassle free tax credits and avoid denial of credits due to mismatch issues.
10. Provisions relating to payment of tax under reverse charge, tax deductions at source are expected to continue under GST regime for specified persons/transactions. Thus, additional compliance’s would continue on the part of recipients, so far as tax payments under reverse charge and deduction at source are concerned.