GST- Impact on Supply Chain-FMCG
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Transcript of GST- Impact on Supply Chain-FMCG
GST- Impact on Supply Chain-FMCG
Arijit GhoshMarch -2017
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Hub & Spoke Model
Max Warehouse Capacity Utilization
Reduction of Warehouse Overhead cost
Reduction of Material Cost Reduction of Supply chain
Blue-whip effects on Demand Planning.
Optimum Logistics Expenses
Reduction of Wastage
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Application Hub & Spoke Model in India
Intra/Inter state stock transfer
Stock transfers are taxable in the following two cases:Intrastate stock transfer: No Tax Applicable on transfer within same registration in one stateIntrastate stock transfer: Only when an entity has more than one registration in one stateInter state stock transfer: Transfer between two entities located in different states is taxable
Supply Chain Process Before GST
Finished Goods Transferred Depot I to another Depot II to avoid tax Depot II to CSA Transfer also non Taxable
Depot II
CSADepot I
Production Unit
Stock Transfer
Supply Chain Process After GST
Inter State Depo to Depot Transfer will be taxable - IGST CSA will be Super Stockist (Customer)- Transaction will be considered as Sale.-IGST
Depot N
Production Unit
Stock Sale (IGST)
Super Stockist
Depot WSeparate Registration Number
Stock Sale (IGST)
Customer
Internal Customer
Job Work Process Before GST
Raw Material Transferred to another State Branch II to avoid tax Issue Job Work to Third party and Received to Branch II
Branch I
Branch II
Third Party Job Work
Job Work Process After GST
The Branch 1 can sent for Job Work without payment of tax provided such goods are received back by the principal within one year of their being sent out.
Stock transfer will be Taxable for Interstate. To avoid Taxes - Branch 1 has to send for Job Work.
Branch I
Third Party Job Work
GST on Goods
Intra-State Supply
Dual tax – CGST-SGST Registered office not relevant;
location of goods is relevant Intra-State supply, if ‘from’ and
‘to’ in one State
Inter-State Supply
One tax – IGST (higher rate) Movement for ‘delivery’ relevant;
even stock-transfer taxable Imports – basic customs + IGST
‘From’ location ‘To’ location ‘To’ location
IGST
CGST-SGST
GST on Services
Intra-State Supply
Dual tax – CGST-SGST Place of usage relevant ‘Test’ of such place listed for
various services
Inter-State Supply
One tax – IGST (higher rate) Imports – receiver to pay IGST When ‘place of usage’ not fixed,
use recipient’s address
Supplier’s address of GST
registration
Place of usage of service
Place of usage of service or recipient’s address of
GST registration
IGST
CGST-SGST
Thank You !!!