New GST Bill and its Impacts

Applicability & Features

Draft bill for the Goods and Services Tax presented in Parliament on 19^th Dec.2014 with a view to implement the GST from 1^st April 2016 (F.Y.2016-17).

PAN based Tax Payer Identification Number (13 or 15 digits) will be allotted to all the RC holders.

GST would be a Destination Based Tax as against the present concept of Origin Based Tax.

GST would be applicable to all supply of goods and services except alcoholic liquor for human consumption. Petroleum products also may be out of GST for an initial period of 2-3 years from Yr.2016.

Tax Structure & Rates

Both the Central Govt. and State Govt. will simultaneously charge GST during the value chain of Transactions.

The GST may have following components:

1) Central Goods & Services Tax (CGST) which is being levied by Central Govt. on all transactions happening within the State. (Central Excise duty, Addl. Duties of Excise, Customs, Service Tax, Cess, Surcharge etc. will be replaced with CGST).

2) State Goods & Services Tax (SGST) which is being levied by the State Govt. on all transactions happening within the State. (VAT, CST, Entry Tax, Luxury tax, Entertainment tax, Cess, Surcharge etc. will be replaced with SGST).

3) Integrated Goods & Service Tax (IGST) which is being levied by the Central Govt. on Interstate Supply of Goods & Services.

4) Addl. IGST on Interstate Trade or Commerce which is being levied by the State Govt.

The Tax rates for CGST, SGST, and IGST is not yet declared. But the revenue nuetral may not be less than 27%. But the Addl. IGST may not be more than 1% as it is a Non Vatable tax.

Input / Output Tax Liability

-  CGST & SGST will be charged on all transactions within the State.

-  IGST and Addl. IGST will be charged on all Inter State Transactions.

-  As per the available information, there may be an Addl. IGST levy on Stock        Transfers from one State to another.

-  Exports will not have any tax liabilities.

-  Import of Goods & Services will be treated as Inter-State supplies and so    IGST will be levied in addition to the applicable customs duties.

Input Tax Utilization

-  Credit of CGST paid on inputs may be used only for paying CGST on the          output.

-  Credit of SGST paid on inputs may be used only for paying SGST on the output.