Proposed GST 20… Thinking ahead – Implementation Issues Dept of Central Excise and IMC Joint...

Proposed GST 20…Thinking ahead – ImplementationIssues

Dept of Central Excise and IMC

Joint Workshop

23 February 2015

Presenter: Bhavna Doshi

© 2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

2

Today’s Agenda

Place of Supply of Goods & Services –

Implication Issues


3

Place of Supply

Act to be enacted by Parliament – Article 269A of the Constitution

Amendment Bill, 2014

Inter-state trade and import – GST - Exclusive domain of Centre –

Article 246A(2)

Revenue Sharing with States – GST Council

Current – Origin(Inter-state)/destination ( intra-state) basedNew – Destination / consumption based


4

Place of Supply - Significance


5

Determination of Place of Supply - Complexities

Several permutations and combinations:

One supplier location and one customer location – both in

same State or different States

One supplier location and several customer locations – within

and outside State

Several supplier locations and one customer location, and,

other combinations based on location of consumption

Import and Export


6

Terms – “Supply”, “Goods”, “Services”

Meaning of “Supply” – Not defined in Bill

What are goods and what are services and what are neither -

“service” defined in the Bill

Separate rules for goods and services ?

Fundamental Principle : Where it is consumed ?


7

Place of Supply - Goods

Same as Sections 3, 4 & 5 of Central Sales Tax Act, 1956?

Section 3 – Inter-state:

Sale occasions movement from one state to another

Transfer of documents of title – during movement

Goods passing through territory of other States but origin &

destination in same State


8


Section 4 – Intra-state:

Essentially, where origin and delivery is within the State

Specific goods – contract for sale –location within the State

Unascertained / Future Goods – location at the time of

appropriation to the contract

Single contract – goods at different locations


9


Section 5 – Import /Export:

Occasions Export /transfer of documents after crossing

customs frontier

Occasions Import / transfer of documents before crossing

customs frontier

Penultimate sale – export ?

Article 269A – Import – equivalent to Inter-State


10

Place of Supply – Goods

Stock Transfers

Sale or Return –Approval basis

Job work

Works contract

Goods sourced from one country and delivered/supplied to

another country – both outside India or foreign co sourcing and

delivering goods in India


11

Place of Supply of Services

Current Service Tax Place of Supply of Services as a base –

General/Specific Rules ?

Location of Immovable property

Place of Performance

Location of Service Provider

Location of Service Recipient

General Principle – destination – effective use and enjoyment -

OECD Draft Paper – February, 2013


12

Place of Supply of Services

Order of application: More than one - later


13

Place of Supply of Services – Issues ?

How to determine inter-state ?

Location of recipient vs place of consumption

Telecommunication

Banking & Financial Services

Works contract

Sporting/recreational event

Repairs / Jobwork

GST – Is it coming soon ?


15

Where are we today ?

Constitutional Amendment – Bill introduced

Empowered Committee – working on several aspects

Compensation – Loss of revenue

Model - firmed up – C-GST, S-GST and I-GST

1

2

3

4

CST akin tax – phase out / no phase out ?5


16

Impact Areas for Businesses

Pricing, Costing, Margins

Supply-chain management

Change in IT Systems

Treatment of tax incentives – package scheme of incentives

Treatment of excluded sectors

Transition issues

Compliance


17

Professionals

© 2015, KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registeredtrademarks or trademarks of KPMG International Cooperative ("KPMG International").

Thank You

MumbaiLodha ExcellusApollo Mills CompoundNM Joshi Marg, MahalaxmiMumbai 400 013Tel: +91 22 3989 6000Fax: +91 22 3983 6000

Pune703, Godrej Castlemaine,Bund Garden,Pune 411 001Tel +91 20 3058 5764/65Fax +91 20 305 85775

Kochi4/F, Palal TowersM.G.Road, Ravipuram, Kochi 682 016 Tel +91 484 302 7000 Fax +91 484 302 7001

BangaloreMaruthi Info-Tech Centre11-12/1, Inner Ring Road Kormangala, Bangalore 560071Tel +91 80 3980 6000Fax +91 80 3980 6999

ChandigarhSCO 22-23 (1st Floor), Sector 8 C, Madhya MargChandigarh 160019Tel: 0172 393 5777/781Fax: 0172 393 5780

ChennaiNo.10 Mahatma Gandhi Road, Nungambakam, Chennai 600 034Tel +91 40 3914 5000Fax +91 40 3914 5999

Hyderabad8-2-618/2Reliance Humsafar, 4th FloorRoad No. 11, Banjara HillsHyderabad 500 034Tel +91 40 6630 5000Fax +91 40 6630 5299

KolkataInfinity Benchmark, Plot No.G-1, 10th floor,Block - EP & GP, Sector - V, Salt Lake CityKolkata 700091Tel: +91 33 44034066Fax: +91 33 4403 4199

New DelhiBuilding No.10, 8th Floor, DLF Cyber City, Phase – IIGurgaon 122002 HaryanaTel +91 124 3074000Fax +91 124 2549101

Ahmedabad Safal Profitaire,B4 3rd Floor, Corporate Road,Opp. Auda Garden, Prahlad Nagar,Ahmedabad 380 015Tel +91 79 4040 2200Fax +91 79 4040 2244

Proposed GST 20… Thinking ahead – Implementation Issues Dept of Central Excise and IMC Joint...

Documents

Transcript of Proposed GST 20… Thinking ahead – Implementation Issues Dept of Central Excise and IMC Joint...