GST Advisory in India
Goods and Services Tax is one of the significant indirect tax reforms in India since Independence. It was first introduced in July 2017. Goods and services tax is a single unified tax on both the Goods and Services that is levied only on 'value-added' to goods and services at each stage in the industrial supply chain.
GST has brought a broad impact on each facet of business operations in the country, such as pricing of products and services, optimizing the supply chain, IT accounting, and tax compliance systems. It overall impacts the tax incidence, tax structure, tax payment, tax computation, compliance, credit utilization, and reporting that changed the entire indirect tax system's functioning.
The Government has been very active in structuring its processes and adjusting to the demands of the industry. The various clarifications or changes in law at the time of the introduction of GST were done to ensure that no businesses get affected in the future.
At CAGMC, our professionals assist the clients by providing a varied range of GST Advisory services, including conducting GST diagnostic review, assistance in litigation, advising on various GST related issues and representation before the GST council, etc. Additionally, our GST Advisory experts will help you obtain GST refunds and undertake GST compliances and audits.
What is GST in India?
On 29th March 2017, the Government introduced the Goods and Service Tax to unify the state economies and enhance the country's overall economic growth. GST is a form of indirect tax that subsumes all other taxes. The GST Act became effective on 1st July 2017, and since then, GST has replaced all the taxes that existed before it. GST is a comprehensive tax that is imposed at every stage of the sale.
The GST regime also offers reduced tax liabilities to businesses as per the composition scheme. To get the benefit of this scheme, companies must have a supply turnover of under Rs. 50 lakh, and will also not be able to avail of input-credit. This scheme will not, however, apply to the service industry or businesses making inter-state sales.
What are the Features of GST?
The features of GST are as follows:
Taxes Covered
Many indirect taxes of both the centre and the state are integrated under the GST. There are three important indirect taxes at the center. They are union excise duties, service tax, and customs duties. Of these, the service taxes and central excise duties are brought under GST. Customs duties as a tax on trade were not merged with the GST. States, in turn, have combined sales tax with GST.
The four-tier rate structure
GST proposed a four-tier rate structure. The Government has fixed the tax-slab at 5%, 12%, 18% and 28% besides the 0% tax on essentials.Essential components such as foods are exempted from taxes under the GST. Other common items are taxed at a rate of 5 %.
Service Tax under GST
There is a differential tax structure under GST. A tax rate of 5% is imposed on essential services. Commercial services are charged at the rate of 18%, whereas standard services at 12%. Services provided by educational institutions are exempted from service tax.
Turnover Limit under GST
GST applies when the turnover of any business exceeds Rs. 20 lakhs per year. Traders supplying goods to other states need to apply for GST registration even if their sale is less than Rs. 20 lakhs. There is also a composition scheme for a selected group of taxpayers whose turnover is up to Rs. 75 lakhs per year.
Tax Revenue Appropriation between the Centre and the States
The Centre and the states share the tax revenue at a ratio of 50:50 except the IGST. The centre and the states are merging their higher indirect taxes under GST. Both get their own share. For this purpose, the GST council has adopted dual GST components: The Central GST and the State GST.
What are the Benefits of GST Registration?
GST removes the contradicting effect of the tax.
Higher threshold for registration.
Composition scheme for small businesses.
The number of compliance is less.
Defined treatment for E-commerce operators.
Improved efficiency.
Unorganized sectors are regulated due to GST.
How CAGMC Provides GST Advisory Services?
At CAGMC, we closely monitor the developments on GST. We assist the business in anticipating the policy changes and assessing its impact on their operations. We provide specialized GST Advisory services, including analysing the impact of GST on business, scenario analysis, including the alternative business model, legislative business level implementation assistance, transition management, and undertaking major compliances. Our GST Advisory services process includes:
Broad Impact Assessment
Develop a specific level of concept to impact the areas based on the information available in the public domain and compare the GST structures in similar jurisdictions.
Shift impact areas into the areas of opportunities and threats.
Help with the representation process to GST policymakers to minimize its impact areas.
Identify the manner in which opportunities could be improved.
Looking at Complete Scenario
Perform adequate calculations of the impact of GST on business for the purpose of GST advisory.
Identify the possible scenarios under which the identified opportunities or issues could be maximized or minimized.
Short-list all the scenarios that can be implemented for GST preparedness.
Implementation Assistance
Look at the custom-design changes, internal controls, and accounting as part of GST Advisory.
Assist in making relevant changes in the supply chain.
Review and suggest the changes in documentation, processes, and policies to meet the GST requirements.
Plot manner in which the GST credits and liabilities can be auto-picked for tax pay-outs and compliances.
Transition Management
Looking at the GST registration process.
Assisting in meeting the first cycle of GST compliances (invoice formats, returns, etc.).
Assistance in transitioning the tax credits and liabilities, looking at the rules.
Address individual needs, such as suggestions in matters related to assistance.
GST has brought a broad impact on each facet of business operations in the country, such as pricing of products and services, optimizing the supply chain, IT accounting, and tax compliance systems. It overall impacts the tax incidence, tax structure, tax payment, tax computation, compliance, credit utilization, and reporting that changed the entire indirect tax system's functioning.
The Government has been very active in structuring its processes and adjusting to the demands of the industry. The various clarifications or changes in law at the time of the introduction of GST were done to ensure that no businesses get affected in the future.
At CAGMC, our professionals assist the clients by providing a varied range of GST Advisory services, including conducting GST diagnostic review, assistance in litigation, advising on various GST related issues and representation before the GST council, etc. Additionally, our GST Advisory experts will help you obtain GST refunds and undertake GST compliances and audits.
What is GST in India?
On 29th March 2017, the Government introduced the Goods and Service Tax to unify the state economies and enhance the country's overall economic growth. GST is a form of indirect tax that subsumes all other taxes. The GST Act became effective on 1st July 2017, and since then, GST has replaced all the taxes that existed before it. GST is a comprehensive tax that is imposed at every stage of the sale.
The GST regime also offers reduced tax liabilities to businesses as per the composition scheme. To get the benefit of this scheme, companies must have a supply turnover of under Rs. 50 lakh, and will also not be able to avail of input-credit. This scheme will not, however, apply to the service industry or businesses making inter-state sales.
What are the Features of GST?
The features of GST are as follows:
Taxes Covered
Many indirect taxes of both the centre and the state are integrated under the GST. There are three important indirect taxes at the center. They are union excise duties, service tax, and customs duties. Of these, the service taxes and central excise duties are brought under GST. Customs duties as a tax on trade were not merged with the GST. States, in turn, have combined sales tax with GST.
The four-tier rate structure
GST proposed a four-tier rate structure. The Government has fixed the tax-slab at 5%, 12%, 18% and 28% besides the 0% tax on essentials.Essential components such as foods are exempted from taxes under the GST. Other common items are taxed at a rate of 5 %.
Service Tax under GST
There is a differential tax structure under GST. A tax rate of 5% is imposed on essential services. Commercial services are charged at the rate of 18%, whereas standard services at 12%. Services provided by educational institutions are exempted from service tax.
Turnover Limit under GST
GST applies when the turnover of any business exceeds Rs. 20 lakhs per year. Traders supplying goods to other states need to apply for GST registration even if their sale is less than Rs. 20 lakhs. There is also a composition scheme for a selected group of taxpayers whose turnover is up to Rs. 75 lakhs per year.
Tax Revenue Appropriation between the Centre and the States
The Centre and the states share the tax revenue at a ratio of 50:50 except the IGST. The centre and the states are merging their higher indirect taxes under GST. Both get their own share. For this purpose, the GST council has adopted dual GST components: The Central GST and the State GST.
What are the Benefits of GST Registration?
GST removes the contradicting effect of the tax.
Higher threshold for registration.
Composition scheme for small businesses.
The number of compliance is less.
Defined treatment for E-commerce operators.
Improved efficiency.
Unorganized sectors are regulated due to GST.
How CAGMC Provides GST Advisory Services?
At CAGMC, we closely monitor the developments on GST. We assist the business in anticipating the policy changes and assessing its impact on their operations. We provide specialized GST Advisory services, including analysing the impact of GST on business, scenario analysis, including the alternative business model, legislative business level implementation assistance, transition management, and undertaking major compliances. Our GST Advisory services process includes:
Broad Impact Assessment
Develop a specific level of concept to impact the areas based on the information available in the public domain and compare the GST structures in similar jurisdictions.
Shift impact areas into the areas of opportunities and threats.
Help with the representation process to GST policymakers to minimize its impact areas.
Identify the manner in which opportunities could be improved.
Looking at Complete Scenario
Perform adequate calculations of the impact of GST on business for the purpose of GST advisory.
Identify the possible scenarios under which the identified opportunities or issues could be maximized or minimized.
Short-list all the scenarios that can be implemented for GST preparedness.
Implementation Assistance
Look at the custom-design changes, internal controls, and accounting as part of GST Advisory.
Assist in making relevant changes in the supply chain.
Review and suggest the changes in documentation, processes, and policies to meet the GST requirements.
Plot manner in which the GST credits and liabilities can be auto-picked for tax pay-outs and compliances.
Transition Management
Looking at the GST registration process.
Assisting in meeting the first cycle of GST compliances (invoice formats, returns, etc.).
Assistance in transitioning the tax credits and liabilities, looking at the rules.
Address individual needs, such as suggestions in matters related to assistance.
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