TAXATIONS POWERS VESTS WITH-

STATEUNION 1. Income Tax2. Excise Duty3. Custom Duty4. Service Tax5. Central Sales Tax6. Stamp Duty(Rates of Stamp Duty on 10 specified instruments)

1. VAT/Sales Tax2. Stamp Duty3. Tax on

betting,gambling4. Toll Tax5. Other Taxes-entry

tax, sale or consumption of electricity, luxury tax , etc.

Present- tax system suffer from

Confusion and mistrustComplex and lacking in stabilityHigh transactions costNarrow baseTo much litigationsHighly corruption etc.No state tax on imports

THE GIANT STEP-GST

Goods and service tax is a comprehensive tax levy on manufacturer, sale and consumption of goods and services at national level.

GST includes many state and central level indirect tax.

It overcomes drawback present tax system.

It is leviable at each point of sale or provision of service

GST: A UNIFICATION OF TAXES

• A GST classically entails unification of all levies on goods and services. In the Indian context, this would mean merging the following:

• Tax on manufacture of goods (excise duty levied by the Centre).

• Tax on sale of goods (CST / VAT levied by both Centre and states).

• Tax on services (levied by Centre and to some extent by states such as Entertainment tax, electricity cess, etc).

GST WORLDWIDE APPLICABLITY-(more than 140 countries have introduced GST)

In present, 165 countries has been implemented GST TAX STRUCTURE in the world.

PAKISTAN – 18%

166TH COUNTRY

GST JOURNEY-

GST introduced after 13 years

First discussed in report of kelkar Task Force on indirect tax.Proposal to introduce GST by 1st April 2010 was first mooted in the budget speech of FY 2006-07

For designing roadmap- Empowered Committee of State Finance Minister

Standing Committee of Finance of Parliament- for examination and reports

GST-Journey so far• FEB 2006- First time introduced concept

of GST and announced the date of its implementation in2010.

• Feb. 2007- F.M. announced introduction of GST from 1 April 2010 in budget.

• May 2007- Joint working group formed by EC and they submits their report.

• July 2009- FM announces commitment to bring GST from April 2010.

BUDGET 2010- FAILED TO APPLY GSTBUDGET 2011- FAILED TO APPLY GSTBUDGET 2012- FAILED TO APPLY GST

IN 2014• The constitution (122nd amendment) Bill,2014 was introduced in

the Lok Sabha (16th)by Finance Minister Arun Jaitley on 19th December 2014.

The bill was passed by the LOK SABHA house on 6th may 2015.Then govt. attempted to move the bill for consideration in Rajya Sabha on 11th may 2015.

FAVOUR AGAINST

352 37

PASS

ON 3RD AUG. 2016voting on GST BILL in Rajya Sabha-

FAVOUR AGAINST

203 0

PASS

THE ROAD AHEAD-

Then the bill has to be passed in at least 50% of the state legislatures (i.e. 15 out of 29 states) by a way of simple majority. Then it will sent to the president for its approval.IT HAS TO BE IMPLEMENTED IN INDIA FROM 1ST APRIL 2017After Presidential assent, a GST council comprising representatives from the States and the Centre will be setup. The council will help codify central GST and State GST laws which would be passed by Parliament and State assemblies.

GST IS ON THE WAY-------

The GST bill needs to be ratified by at least 15 STATE LEGISLATURES before the president can notify the GST council which will decide the new tax rate and other issues.

STATES RATIFICATION DATE

1) ASSAM 12 August

2) BIHAR 16 August

3) JHARKHAND 17 August

4) HIMACHAL PRADESH 22 August

5) CHHATISGARH 22 August

6) GUJARAT 23 August

7) MADHYA PRADESH 24 August

8) DELHI 24 August

9) NAGALAND 26 August

10) MAHARASTRA 29 August

11) HARYANA 29 August

12) SIKKIM 30 August

13)TELANGANA 30 August

14) MIZORAM 30 August

15)GOA 31 August

16)ODISHA 1 September

STATES RATIFICATION DATE

17) Puducherry 2 Sept.

18) Rajesthan 2 Sept.

19) Andhra Pradesh 8 Sept.

20)Arunachal Pradesh 8 Sept.

21) Meghalaya 9 Sept.

22) Punjab 12 Sept.

23) Tripura 26 Sept.

States ratified GST BILL

Gst council meeting on 22nd and 23rd September -

The council agreed to an exemption threshold of Rs. 20 lac for all the states except the north east and all hill area states i.e. of 10lac.

Formula for compensating states.(center will pay quarterly or bi-monthly)

Gst council also agreed to settle 2015-2016 as the base year for calculating the compensation.

Administrative control issue- state will have sole jurisdiction over assesses having a turnover of rs. 1.5crore or less. In case turnover exceeding that limit, the administrative control will be jointly of both the center and the state.

Gst council meeting on 30th September outcomes-

GST council finalized rules for registration, rules for payments, returns, refunds and invoices. With this as many as six issues have been settled by the council.

Gst council meeting 17-19th October outcomes-

• Rates were not finalized.

6%

12

12% 18%

26%

The five bands of tax rates have been fixed at 3rd Nov. meeting of council

0% 5% 12% 18%

28%

Another category of tax rates-

40% 65%

Food grains will be zero rated to insulate people from inflationary pressure.

There has been no consensus yet on the tax rate of gold.

The center has agreed to pay Rs. 50000crore as

compensationIn the first year of GST to makeGood the revenue loss incurred

By states.

0% on-

• 53% of the good of CPI basket will attract no tax.

• Food grains

5% on-

• Items for mass consumption• (the use or purchase of goods or services by

large no. of people)

12 and 18% standard rates.

18 – 28% SEVERAL ITEMS MAY TRANSFERRED

RNR FOR GST-

DUAL GST MODEL SGST- State GST, collected by the State Govt. CGST- Central GST, collected by the Central Govt. IGST- Integrated GST, collected by the Common Centralized

Authority.

NOTE-CGST,SGST & IGST would be levied at the rates to be mutually agreed upon by the center and the states under the ward of the GOODS AND SERVICE TAX COUNCIL.

TAXES TO BE COVERED IN GST

CENTRAL GST1. Central Excise Duty2. Service Tax3. Additional Excise Duty4. Additional duty and special

additional duty of customs5. Central cess and surcharges.

STATE GST1. Value added tax /sales tax2. Entertainment tax 3. Central sales tax4. Octroi and entry tax5. Purchase tax6. Luxury tax7. Taxes on lottery, betting, and

gambling8. State cess and surcharges

Note- ALCOHOLIC BEVERAGES FOR HUMAN CONSUMPTIONS ARE PROPOSED TO BE KEPT OUT OF THE PREVIEW OF GST.

HOW DOES GST WORK-Product A VAT system GST systemBase price 100 100

+12% Excise Duty 12 NA

+12.5% VAT 14 NA

State GST NA *Centre GST NA *

TOTAL TAX BURDEN 26 18

Value of product to consumer

126 118

Pros.• An end of cascading effect• Growth of revenue in states

and unions • One point single tax• Reduces the corruption• Reduce after tax burden• Reduces transaction cost

and unnecessary items.

Cons.• A domination Centre• Note a good choice for some

states• More rates of tax• Required strong information

and technology.• They decided all the things on

the way and during the way.• Inflation may have to face by

the people.

After GST-What become cheaper

( 30-31% then28% or 18%)

What become expensive-(25-35% then 40-65%)

All tobacco products-

Impact of GST on economy-SECTORS CHANGES

AFTER GSTIMPACT

Banks 18% to 15% negative

Pharmaceutical

15% to 18% negative

Real estate 15% to 16% Negligible impact

Media 22% to 18% positive

Telecom 15% to 18% negative

Auto mobiles

27% to 18% positive

Cement 27% to 18% positive

Hurdles in implementation-

Disputes between center and Tax over Tax Sharing

Highly sophisticated IT infrastructure required.

Issue of taxing financial services and e-commerce is to be appropriately addressed and integrated

Political imbalance

1. WHAT IS THE MAIN MOTIVE OF GOVT. BEHIND GST ?2. HOW DOES GST LEAD TO INFLATION?3. GST CAN BE PASSED IN 2015 BUT WHY IN 2016?4. TOTAL NO. OF INDIRECT TAXES THAT ARE SUBSUMED IN GST?5. HOW DOES GST LEAD TO BOOST THE GDP BY 2%?6. WHY EXPERTS SAID THAT GST CAN BE IMPLEMENT FROM AUG

OR OCT NOT FROM APRIL 2018?7. WHY MARUTI SUZUKI SAID THAT THERE WILL BE NO BAD

IMPACT ON INDUSTRY DUE TO SUB RATES?8. CAN U DEFINE THE TERM LUXURY IN CASE OF CARS?9. WHY CESS SHOULD NOT BE CHAREGED BUT U CAN INCREASE

THE TAX RATE?10. IF U HAVE TO GAVE % THAT HOW MUCH PERCENT GST SHALL

GAVE RELIEF TO COMMON PEOPLE OF INDIA?

Experts in GST reviews-

M S Mani, Senior Director, Indirect Tax, Deloitte India

Chief Economic Adviser Arvind Subramanian

Former CBEC Chairman Sumit Dutt Majumder

International Tax ExpertTP Ostwal

Mr. Arun Malhotra, Managing Director, Nissan

Pawan GoenkaMahindra & Mahindra head

Does GST will provide relief to common people-

yes no0%

10%

20%

30%

40%

50%

60%

70%

Series 1

Series 137%

63%

Presented by-sanjeet CHHIKARA

(MBA-2YR)