CEMENT Positive The effective rate of tax for cement co mpanies is now 25%. If GST rates are fixed at 18-20% then the overall tax incidence will e lower GST IS expected to lead to savin!s in transportation cost" which c#rrentl$ comprises #p to 20-25% of total reven#e. ne common mar&et will rin! do wn the n#mer of depots in the co#ntr$. 'ltratech states that its depots will come down to 100 from 550 at present. Key beneficiaries ( beneficiaries ( )an India pla$ers s#ch as 'ltraTech" *++" *m#,a and Shree +ement
Impact of GST on +ement Ind#str$ GST implementation will bring good news for cement industry in India. Signicant tax reduction is being expected by experts for this sector of economy. economy. Currently, the prevalent tax rates are !" #$ but GST will bring the rates down to %&"'$. The new tax system will help cement industry in reducing their logistics costs. GST wil l also cover logistics and warehousing industry. industry. Cement industry is heavily dependent on logistics and warehousing industry which contribute to '"($ of their revenue generation. Indian cement industry is aim ed to grow at a C)G* of %%.%+$ in volume terms during - '%%"'%! and is expected to reach +'! million tons by arch '%!. This robust growth rate will further be boosted by GST. GST. Several big names among cement manufacturers, such as /ltratech, 01 Cement, and Shree Cement are expected to benet from from the new tax reform in India. The reports suggest that the introduction of Goods G oods and Services Tax in India India will will certainly benet the Indian cement industry and improve their protability as well. GST India is India is li2ely to have a positive impact on the cement industry and will also benet the concrete admixtures manufacturing sector sector..
)ccording to a recent report, 3India 4aphthalene and 5C6 based )dmixtures ar2et 7y Type, Type, Competition orecast 8 9pportunities, '%% : '%;, naphthalene and polycarboxy polycarboxylate late <5C6= admixtures mar2et in India is expected to reach /S> ? million by th e year '%. *eal estate sector is the ma@or consumer for cement industry. industry. Aowever the growth in the sector has been nearly stagnant for the past few years. Several reforms ta2en by the government are expected to give realty sector a boost. Strong growth in the real estate sector, increasing government pro@ects on infrastructure development and implementation of stringent regulatory norms will help in boosting demand for na phthalene and polycarboxylate <5C6= based admixtures in India by the coming next ve years. )gain the ma@or names among the naphthalene and 5C6 based admixtures manufacturers in the country include 7)S, osr osroc oc and SI1). Cement India is the second largest producer in the world and in the next %' years, India can become the net exporter of cement and clin2er. clin2er. The main raw materials for cement are limestone, coal and electricity. Bimestone, for uarrying, the cement companies have to pay royalty to the state governments and for coal, apart from the GST, there will be levy of clean energy cess which is not available as a credit because it is not part of the GST regime subsumes.
So, therefore, as far as the cement industry is concerned, these two factors will contin ue to be outside the GST and therefore, the refore, it has to be absorbed as cost of the cement production. If GST is levied on electricity, again it is going to increase the cost. So we hope all this is available as a credit while paying GST on the cement. The service tax paid on the transportation cost, etc. if it is not made available at the dealersD level, all becomes cost of the cement production and unless and until the rates of GST on cement is 2ept at the level of not more than % percent, it is going to have adverse impact as far as the infrastructure industry is concerned.
GST - A Boon for the Indian Cement Industry Twit ter LinkedIn India(( Transition to GST Goods and Services Tax in India is expected to red#ce t ax rate for the cement sector to 18-20%" from the India c#rrent tax rates of aro#nd 2/-2%. * si!nificant red#ction in indirect tax on the cement ind#str$ is anticipated to aid the cement companies to save on their lo!istic costs" d#e to rationaliation of wareho#ses and lower transportation costs comprisin! #p to 2025% of total reven#e. +ement ind#str$ in India is the second lar!est prod#cer across the !loe and it is forecast to ecome the net exporter of cement and clin&er over the next ten $ears. India cement ind#str$ is pro,ected to !row at a +*G of 11.13% in vol#me terms d#rin! 42011-4201/4" 42011-4201/4" and is forecast to reach 30/ million tons $ 6arch" 201/. 6a,or cement man#fact#res" s#ch as 7 +ement" 'ltratech and Shree +ement are expected to enefit from the restr#ct#rin! of indirect taxes in India. TechSci esearch depicts that the introd#ction of Goods and Services Tax in India wo#ld enefit the India cement ind#str$ and improve the profitailit$ of domestic cement man#fact#rers. Improvin! conditions of the India cement ind#str$ is pro,ected to have a positive impact on the concrete admixt#res ind#str$ of the co#ntr$. *ccordi n! to the re cent r eport p#lis hed $ TechSci Research " “Ind ia Naphthalene and PCE based Admit!res Mar"et #y Type$ Competition %orecast & 'pport!nities$ ()** + ()(*,, ()(* ,,"" naphthalene and pol$carox$late )+9 admixt#res mar&et in India is pro,ected to reach 'S:;8 million $ 2021. Stron! !rowth in constr#ction sector" increasin! !overnment emphasis on infrastr#ct#re development and implementation of strin!ent re!#lator$ norms is expected to contin#e oostin! demand for naphthalene and pol$carox$late )+9 ased admixt#res in India over the next five $ears. 4ew of the ma,or naphthalene and )+9 ased admixt#res man#fact#rers operatin! in the co#ntr$ incl#de <*S4" SI* and 4osroc" amon! others.
GST Impact on the Indian Cement Industry September 13, 2016 Subodh Kumawat GST Articles
Last updated on – March 08, 2017 The implementation of GST in the country will empower the cement industry !t is e"pected that the ta" rates could #et reduced to 18$20% from the current tax rates of 27-32% This si#ni&cant reduction in the ta" rates of the cement industry will help the cement companies to sa'e money in lo#istics costs ('erall, the GST will also include the warehousin# and lo#istics sector, sector , which is used )y the cement companies on a lar#e scale The warehousin# and transportation sector comprise of re'enue #eneration up to 20$2 *% !ndian cement industry is aimed to #row at a +G- of 111.% in 'olume terms durin# / 2011$/ 2017 and is e"pected to reach .07 million tons )y March 2017 rominent cement manufacturers, such as ltratech, 34 +ement, and Shree +ement are e"pected to )ene&t from the new tax reform in !ndia
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/at Ta" in !ndia5 ll ou 6eed t o 4now
The reports su##est that the introduction of Goods and Ser'ices Ta" in !ndia will certainly )ene&t the !ndian cement industry and impro'e their pro&ta)ility as well
GST India is
liely to ha'e a positi'e impact on the
cement industry and will also )ene&t the concrete admi"tures manufacturin# sector ccordin# to a recent report, !ndia 6aphthalene and +9 )ased dmi"tures Maret :y Type, +ompetition /orecast ; (pportunities, 2011 – 2021<, naphthalene and polycar)o"ylate =+9> admi"tures maret in !ndia is e"pected to reach S? @8A million )y the year 2021 Stron# #rowth in real estate sector, increasin# #o'ernment proBects on infrastructure de'elopment and implementation of strin#ent re#ulatory norms will help in )oostin# demand for naphthalene and polycar)o"ylate =+9> )ased admi"tures in !ndia )y the comin# ne"t &'e years /ew of the prominent names in the naphthalene and +9 )ased admi"tures manufacturers in the country include :S/, /osroc and S!4 The followin# concerns re#ardin# the +ement !ndustry ha'e )een e"pressed )y C Lashmiumaran, Mana#in# artner, Lashmiumaran ; Sridharan, +ement !ndia is the second lar#est producer in the world and in the ne"t 10 years, !ndia can )ecome the net e"porter of cement and cliner The main raw materials for cement are limestone, coal and electricity Limestone, for Duarryin#, the cement companies ha'e to pay royalty to the state #o'ernments and for coal, apart from the GST, there will )e le'y of clean ener#y cess which is not a'aila)le as a credit )ecause it is not part of the GST re#ime su)sumes So, therefore, as far as t he cement industry is concerned, these two factors will continue to )e outside the GST and therefore, it has to )e a)sor)ed as cost of the cement production< Recommended: GST
!mpact on utomo)ile !ndustry in !ndia
!f GST is le'ied on electricity, a#ain it is #oin# to increase the cost ! hope all this is a'aila)le as a credit while payin# GST on the cement,< he added Moreo'er, he further clari&ed The ser'ice ta" paid on the transportation cost, etc if it is not made a'aila)le at the dealersE le'el, all )ecomes cost of the cement production and unless and until the rates of GST on cement is ept at the le'el of not more than 12 percent, it is #oin# to ha'e ad'erse impact as far as the infrastructure industry is concerned<
India is notorio#s for its complex tax s$stem. 4or new #sinesses and start#ps" it ecomes impossile to navi!ate thro#!h vario#s direct and indirect taxes. +onstant chan!es to taxes li&e Service Tax are ma&in! thin!s even worst. <#t no w" the thin!s are set to chan!e with new Goods and service tax = commonl$ &nown as GST. >ets #nderstand what is GST" how it is different from other taxes" GST applicailit$" GST rates" its impact on $o#r #siness and latest #pdates ao#t GST ill. To ma&e thin!s eas$ to #nderstand" I will start with an example.. 6r. Sharma is a #sinessman who wants to start a #siness. 4or this he needs vario#s raw materials which have to e imported from +hina and will need to e ro#!ht to G#r!aon = where he has his factor$ = $ road thro#!h vario#s states. nce he !ets down on the process of estimatin! his costs he is a little tro#led.
4irst" he needs to pa$ a c#stoms d#t$ for importin! the materials on top of the shippin! char!es. This is fine #t there are a lot of other taxes which he seems to e #nale to comprehend. *lso he finds o#t that when he has his final prod#ct read$ he will have paid the +entral and State Governments at least 10 different taxes not all of which are excl#sive of each other. n divin! deeper he finds man$ cases where a tax is also taxed $ the !overnment. )etrol prices are the perfect example. The price char!ed to dealers $ the il 6ar&etin! +ompanies is s. 25.3; c#rrentl$ for a litre of petrol. ?ow 9xcise :#t$ is collected at s. 21.38 per litre $ the +entral Government and addin! the dealer commission the price now is s.
[email protected]. This is not the end and Aal#e *dded Tax is now char!ed at 2/% which ta&es the final price to s. ;2.51 in :elhi. *t first it ma$ seem fair that oth the Governments tax the prod#ct #t it is not that innoc#o#s. There is a tax on a tax hereB The State Government char!es 2/% of the final amo#nt in which +entral 9xcise :#t$ has alread$ een orne $ the #sinessman. The Goods and Services Tax promises to alleviate this prolem amon! man$ ot hers. It is ein! hailed as the !ame chan!er for IndiaCs econom$ and is ein! laelled as the i!!est chan!e in the +onstit#tion since IndiaCs independence. The Goods and Services tax or commonl$ referred to as the GST will replace the indirect taxes levied $ the +entral and State Governments and provide for a sin!le and streamlined process. It presents India as a #nified mar&et to #siness owners and also aims at rin!in! a lot of lac& mone$ ac& into the mainstream econom$. The tax will e implemented at ever$ step of val#e creation.
9"ample (f GST +alculation >et #s ass#me that the GST is set at 20%. S#ppose that the man#fact#rin! cost of a )rod#ct * is 100 and ass#min! a GST of 20% the total amo#nt is s. 120. The next step of taxation wo#ld e when the )rod#ct is sold to cons#mers" letCs sa$ at a price of 150. So the GST will char!e another 20% on ,#st the difference of s. 150 and s. 120 i.e. onl$ 20% on s. 0 which is eD#al to s. ;. So the final price is s. 150 E s. ;. 'nli&e the case of petrol pricin! there is no tax on a tax now. This eliminates the cascadin! effect of taxes which is ver$ prevalent in o#r econom$ and has een simplified to an elemental level in the example. Since the GST will e applied at ever$ step of val#e creation it will e ver$ diffic#lt for lac& mone$ owners to participate an$where in the val#e chain with the GST witho#t acco#ntin! for all other transactions. The GST is estimated to provide an immediate oost of 0.@% = 1.3% of the G:).
10 /reDuently sed Fuestions )out GST :ill 1> hat are &nal GST rate sla)sH The Goods and Services Tax GST will e levied at m#ltiple rates ran!in! from 0 per cent to 28 per cent. GST +o#ncil finalised a fo#r-tier GST tax str#ct#re of 5%" 12%" 18% and 28%" with lower rates for essential items and the hi!hest for l#x#r$ and de-merits !oods that wo#ld also attract an additional cess. Service Tax will !o #p from 15% to 18%. The services ein! taxed at lower rates" owin! to the provision of aatement" s#ch as train tic&ets" will fall in the lower slas. In order to control inflation" essential items incl#din! food" which presentl$ constit#te ro#!hl$ half of the cons#mer inflation as&et" will e taxed at ero rate. The lowest rate of 5% wo#ld e for common #se items. There wo#ld e two standard rates of 12 per cent and 18 per cent" which wo#ld fall on the #l& of the !oods and services. This incl#des fast-movin! cons#mer !oods. Fi!hest tax sla will e applicale to items which are c#rrentl$ taxed at 0-1% excise d#t$ pl#s A*T. 'ltra l#x#ries" demerit and sin !oods li&e toacco and aerated drin&s" will attract a cess for a period of five $ears on top of the 28 per cent GST. The collection from this cess as well as that of the clean ener!$ cess wo#ld create a reven#e pool which wo#ld e #sed for compensatin! states for an$ loss of reven#e d#rin! the first five $ears of implementation of GST. 4inance minister said that the cess wo#ld e lapsale after five $ears. The str#ct#re to a!reed is a compromise to accommodate demand for hi!hest tax rate of 30% $ states li&e erala. hile the +entre proposed to lev$ a 3% GST on !old #t the final decision on this was p#t off. :#rin! a press conference" finance minister 6r. 7aitle$ said" HGST rate on !old will e finalised after the fittin! to the approved rates str#ct#re of all items is completed and there is some idea of reven#e pro,ections. The principle for determinin! the rate on each item will e to lev$ and collect the GST at the rate sla closest to the c#rrent tax incidence on it. The GST will s#s#me the m#ltit#de of cesses c#rrentl$ in place" incl#din! the Swachh
2> hat are +GST, SGST and !GSTH India is a federal democrac$ that is one which has clear demarcation of powers" responsiilit$ and reven#e collection etween the states and the centre in its constit#tion. 4or example law and order falls #nder the stateCs ,#risdiction while the nationCs defence is the centreCs responsiilit$. The GST too needs to have clear provisions on what areas the centre and the state are allowed to collect reven#e from taxation to prevent an overlappin!. The +entral GST or +GST is the areas where the centre has the powers and State GST where the State has taxation capailities. The IGST or Inte!rated GST is for movement of !oods within the states of the Indian #nion. This will e collected $ the #nion however will e transferred over to the states. Th#s it is essential that if and when the GST comes o#t it is rolled over in the entire nation sim#ltaneo#sl$.
A> hat are the diIerences )etween the Es GST and the 6?Es GSTH
)etrole#m sector has een &ept o#t of the amit of GST
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>iD#or for h#man cons#mption is exempt however toacco and toacco prod#cts will fall #nder GST.
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There is a 1% tax on top of the GST for inter-state movement of !oods and services.
.> hat are the ta"es that GST replacesH The GST replaces n#mero#s different indirect taxes s#ch as( 1.
+entral 9xcise :#t$
2.
Service Tax
.
+o#ntervailin! :#t$
3.
Special +o#ntervailin! :#t$
5.
Aal#e *dded Tax A*T
;.
+entral Sales Tax +ST
/.
ctroi
8.
9ntertainment Tax
@.
9ntr$ Tax
10.
)#rchase Tax
11.
>#x#r$ Tax
12.
*dvertisement taxes
1.
Taxes applicale on lotteries.
*> hat will )e the short$term impact of GSTH The GST will f#el inflation for the short term. The GST rate starts at 5% and 18% taxation services s#ch as resta#rants" movies etc. are o#nd to increase prices. *nother prolem with the GST that man$ p#ndits feel is not incl#din! liD#or and petrole#m #nder GSTCs amit. These are ma,or reven#e so#rces for the !overnment and experts feel this is ein! done d#e to a few cron$ capitalists who need some time to f#nnel awa$ their lac& mone$ as the GST promises to widen the tax pa$in! pop#lation. Also read + Impact on GST on 9-+ommerce
@> hen will GST )e implementedH Government ma$ not e ale to meet the initial GST implementation date of 1st *pril 201/. Its widel$ ass#med that GST rollo#t will start onl$ after 1 7#l$ 201/. eep chec&in! the article for latest #pdates.
7> hat is a constitutional amendmentH * +onstit#tional *mendment as the name s#!!ests is an$ chan!e in the +onstit#tion. * democrac$ li&e India derives all its r#les and laws from the +onstit#tion and hence an$ chan!e in the +onstit#tion is a chan!e in the f#ndamental faric of the co#ntr$. The GST is the ne F#ndred and Twent$ Second s#ch proposed amendment and hence is named The +onstit#tion ne F#ndred and Twent$-Second *mendment
o& Saha and a,$a Saha.
8> hat are the &ner points in the implementation of the )illH Several committees were set#p to eval#ate the feasiilit$ and implementation of the GST. Some fine points which were considered are(
1.
The prolem of separatin! the taxation powers of the state and the centre which res#lted in +GST and SGST.
2.
9xemptions from the GST which c#rrentl$ incl#des )etrole#m and >iD#or for h#man cons#mption.
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GST will e applicale on imports too alon! with the
3.
The GST will e applicale at the point of sale. In comparison the Aal#e *dded Tax is a destination ased tax while excise d#ties are taxed at the ori!in.
5.
The wor&in!s in the implementation of IGST.
J> hat is the 9mpowered +ommitteeH The 9mpowered +ommittee is a committee of the 4inance 6inisters of the states. It was set #p $ the Aa,pa$ee Government to loo& into the Aal#e *dded Tax model. The committee has had an infl#ential hand in shapin! and str#ct#rin! of the GST.
10> hat will )ecome costlier and cheaperH Accordin- to eperts$ these items co!ld become costlier. •
+i!arette prices li&el$ to !o #p as GST rate for toacco will e hi!her than c#rrent d#ties
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+ommercial vehicles s#ch as tr#c&s will ecome costlier
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6oile phone calls ma$ !et costlier as s ervice tax will !o #p
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Textile and randed ,eweller$ ma$ ecome costlier And these co!ld become cheaper.
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*#to( )rices of entr$-level cars" two-wheelers" S'As ma$ fall
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+ar atteries li&el$ to !et cheaper
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)aint" cement prices li&el$ to fall
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6ovie tic&et prices li&el$ to fall as entertainment tax will come down
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9lectronics items li&e fans" li!htin!" water heaters" air coolers" etc. will !et cheaper
9ffective date of GST will e 1st 7#l$ 201/ once the ill is passed in a,$asaha. 4or f#rther readin! $o# can refer to 6inistr$ of 4inance. Fere is the complete draft of GST.
!s our :usiness -eady /or GSTH If $o# are r#nnin! $o#r #siness in India" its important for $o#r to ecome GST compliant. *t )rofit
1> hat is the ta"a)le e'ent under GSTH S#ppl$ of !oods andJor services. +GST K SGST will e levied on intra-state s#pplies while IGST will e levied on inter-state s#pplies. The char!in! section is section / 1 of +GSTJSGST *ct and Section 31 of the IGST *ct.
2> !s the re'erse char#e mechanism applica)le only to ser'icesH ?o" reverse char!e applies to s#pplies of oth !oods and services.
A> hat will )e the implications in case of purchase of #oods from unre#istered dealersH The receiver of !oods will not e ale to !et IT+. 4#rt her" the recipients who are re!istered #nder composition schemes wo#ld e liale to pa$ tax #nder reverse char!e.
.> !n respect of e"chan#e of #oods, namely #old watch for restaurant ser'ices will the transaction )e ta"a)le as two diIerent supplies or will it )e ta"a)le only in the hands of the main supplierH ?o. In the aove case the transaction of s#ppl$ of watch from cons#mer to the resta#rant will not e an independent s#ppl$ as the same is not in the co#rse of #siness. It is a consideration for a s#ppl$ made $ the resta#rant to him. The same will e a taxale s#ppl$ $ the resta#rant.
*> hether supplies made without consideration will also come within the pur'iew of Supply under GSTH es onl$ those cases which are specified #nder Sched#le I to the 6odel GST >aw.
@> ho can notify a transaction to )e supply of #oods andKor ser'icesH +entral Government or State Government on the recommendation of the GST +o#ncil can notif $ a transaction to e the s#ppl$ of !oods andJor services.
7> ill a ta"a)le person )e eli#i)le to opt for composition scheme only for one out of A )usiness 'erticalsH ?o" composition scheme wo#ld ecome applicale for all the #siness verticalsJre!istrations which are separatel$ held $ the person with same )*?.
8> +an composition scheme )e a'ailed if the ta"a)le person eIects inter$State suppliesH ?o" composition scheme is applicale s#,ect to the condition that the taxale person does not affect interstate s#pplies.
J> +an the ta"a)le person under composition scheme claim input ta" creditH ?o" taxale person #nder composition scheme is not eli!ile to claim inp#t tax credit.
10> +an the customer who )uys from a ta"a)le person who is under the composition scheme claim composition ta" as input ta" creditH ?o" c#stomer who #$s !oods fr om taxale person who is #nder composition scheme is not eli!ile for composition inp#t tax credit eca#se a composition scheme s#pplier cannot iss#e a tax invoice.
11> +an composition ta" )e collected from customersH ?o" the taxale person #nder composition scheme is restricted from collectin! tax. It means that a composition scheme s#pplier cannot iss#e a tax invoice.
12> hat is the threshold for optin# to pay ta" under the composition schemeH The threshold for composition scheme is s. 50 >a&hs of a!!re!ate t#rnover in financial $ear.
1A> ow to compute a##re#ate turno'erE to determine eli#i)ility for composition schemeH The methodolo!$ to comp#te a!!re!ate t#rnover is !iven in Section 2;. *ccordin!l$" La!!re!ate t#rnoverC means LAal#e of all s#pplies taxale and non-ta xale s#pplies E 9xempt s#pplies E 9xports and it excl#des Taxes levied #nder +GST *ct" SGST *ct and IGST *ct" Aal#e of inward s#pplies E Aal#e of s#pplies taxale #nder reverse char!e of a person havin! the same )*?.
1.> hat are the penal conseDuences if a ta"a)le person 'iolates the condition and is not eli#i)le for payment of ta" under the +omposition schemeH Taxale person who was not eli!ile for the composition scheme wo#ld e liale to pa$ t ax" interest and in addition he shall also e liale to a penalt$ eD#ivalent to the amo#nt of tax pa$ale. Section 8 of the 6G>.
1*> hat is the minimum rate of ta" prescri)ed for composition schemeH 6inim#m rate has een prescried as 1%.
1@> hen e"emption from whole of ta" collected on #oods andKor ser'ices has )een #ranted unconditionally, can ta"a)le person pay ta"H ?o" the taxale person providin! s#ch !oods or services shall not collect the tax on s#ch !oods or services.
17> hat is remission of ta"KdutyH It means relievin! the tax pa$er from the oli!ation to pa$ tax on !oods when the$ are lost or destro$ed d#e to an$ nat#ral ca#ses. emission is s#,ect to conditions stip#lated #nder the law and r#les made there#nder.
18> hether remission is allowed under GST lawH es" proposed section 11 of 6odel GST law permits remission of tax on s#ppl$ of !oods.
1J> hether remission is allowed for #oods lost or destroyed )efore supplyH emission of tax will appl$ onl$ when tax is pa$ale as per law i.e. taxale event sho#ld have happened and tax is reD#ired to e paid as per law. 'nder GST >aw" lev$ is applicale #pon s#ppl$ of !oods. here !oods are lost or destro$ed efore s#ppl$" taxale event does not occ#r in order to pa$ tax. *ccordin!l$" D#estion of remission of tax does not rise.
20> hether remission is allowed on #oods lost or destroyed for all reasonsH ?o" on plain readin! of the lan!#a!e of proposed Section 11" remission is allowed onl$ for those cases where s#ppl$ of !oods is fo#nd to e deficient in D#antit$ d#e to nat#ral ca#ses.
21> ?oes the model GST Law empower the competent #o'ernment to e"empt supplies from the le'y of GSTH es. 'nder Section 10 of the 6odel GST >aw" the +entral or the Stat e Government" on the recommendation of the GST co#ncil can exempt the s#pplies from the lev$ of GST either !enerall$ or s #,ect to conditions.
1> hat are the ayments to )e made in GST re#imeH In the GST re!ime" for an $ intra-state s#ppl$" taxes to e paid are the +entral GST +GST" !oin! into the acco#nt of the +entral Government and the State GST SGST" !oin! into the acco#nt of the concerned State Government. 4or an$ inter-state s#ppl$" tax to e paid is Inte!rated GST IGST which will have c omponents of oth +GST and SGST. In addition" certain cate!ories of re!istered persons will e reD#ired to pa$ to the !overnment acco#nt Tax :ed#cted at So#rce T:S and Tax +ollected at So#rce T+S. In addition" wherever applicale" Inter est" )enalt$" 4ees and an$ other pa$ment will also e reD#ired to e made.
2> ho is lia)le to pay GSTH In !eneral the s#pplier of !oods or service is liale to pa$ GST. Fowever in specified cases li&e imports and other notified s#pplies" the liailit$ ma$ e cast on the recipient #nder the reverse char!e mechanism. 4#rther" in some cases" the liailit$ to pa$ is on the third person sa$ in the case of e-commerce operator responsile for T+S or Government :epartment responsile for T:S.
A> hen is GST payment to )e done )y the ta"a)le personH *t the time of s#ppl$ of Goods as explained in Section 12 and at the time of s#ppl$ of services as explained in Section 1. The time is !enerall$ the earliest of one of the three events" namel$ receivin! pa$ment" iss#ance of invoice or completion of s#ppl$. :ifferent sit#ations envisa!ed and different tax points have een explained in the aforesaid sections.
.> hat are the main features of GST payment processH The pa$ment processes #nder proposed GST re!ime will have the followin! feat#res( •
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9lectronicall$ !enerated challan from GST? +ommon )ortal in all modes of pa$ment and no #se of man#all$ prepared challanM 4acilitation for the taxpa$er $ providin! hassle free" an$time" an$where mode of pa$ment of taxM
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+onvenience of ma&in! pa$ment onlineM
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>o!ical tax collection data in electronic for matM
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4aster remittance of tax reven#e to the Government *cco#ntM
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)aperless transactionsM
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Speed$ *cco#ntin! and reportin!M
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9lectronic reconciliation of all receiptsM
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Simplified proced#re for an&sM
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areho#sin! of :i!ital +hallan.
*> ow can payment )e doneH GST )a$ment can e done $ the followin! methods( i Thro#!h deit of +redit >ed!er of the taxpa$er maintained on the +ommon )ortal- ?> Tax can e paid. Interest" )enalt$ and 4ees cannot e paid $ deit in the credit led!er. Tax pa$ers shall e allowed to ta&e credit of taxes paid on inp#ts inp#t tax credit and #tilie the same for pa$ment of o#tp#t tax. Fowever" no inp#t
tax credit on acco#nt of +GST shall e #tilied towards pa$ment of SGST and vice versa. The credit of IGST wo#ld e permitted to e #tilied f or pa$ment of IGST" +GST and SGST in that order. ii In cash $ deit in the +ash >ed!er of the taxpa$er maintained on the +ommon )ortal. 6one$ can e deposited in the +ash >ed!er $ different modes" namel$" 9-)a$ment Internet
@> hen is payment of ta"es to )e made )y the SupplierH )a$ment of taxes $ the normal taxpa$er is to e done on monthl$ asis $ the 20th of the s#cceedin! month. +ash pa$ments will e first deposited in t he +ash >ed!er and the taxpa$er shall deit the led!er while ma&in! pa$ment in the monthl$ ret#rns and shall reflect the relevant deit entr$ n#mer in his ret#r n. *s mentioned earlier" pa$ment can also e deited from the +redit >ed!er. )a$ment of taxes for the month of 6arch shall e paid $ the 20th of *pril. +omposition tax pa$ers will need to pa$ tax on D#arterl$ asis. Timin! of pa$ment will e from 0000 Frs to 2000 Frs.
7> hether time limit for payment of ta" can )e e"tended or paid in monthly installmentsH ?o" this is not permitted in case of self-assessed liailit$. In other cases" competent a#thorit$ has een empowered to extend the time period or allow pa$ment in installments. Section 55 of 6G>.
8> hat happens if the ta"a)le person &les the return )ut does not mae payment of ta"H In s#ch cases" the ret#rn is not considered as a valid ret#rn. Section 2/ of the 6G> provides that the ret#rn f#rnished $ a taxale person shall not e treated as valid ret#rn #nless the f#ll tax d#e as per the said ret#rn has een paid. It is onl$ the valid ret#rn that wo#ld e #sed for allowin! inp#t tax credit IT+ to the recipient. In other words" #nless the s#pplier has paid the entire self-assessed tax and filed his ret#rn and the recipient has filed his ret#rn" the IT+ of the recipient wo#ld not e confirmed. *s per section 28" a taxale person who has not f#rnished a valid ret#rn shall not e allowed to #tilie s#ch credit till he dischar!es his self-assessed t ax liailit$.
J> hich date is considered as date of deposit of the ta" dues$ ?ate of presentation of cheDue or ?ate of payment or ?ate of credit of amount in the account of #o'ernment accountH It is the date of credit to the Government acco#nt.
10> hat are 9$Led#ersH 9lectronic >ed!ers or 9->ed!ers are statements of cash and inp#t tax credit in respect of each re!istered taxpa$er. In addition" each taxpa$er shall also have an electronic tax liailit$ re!ister. nce a taxpa$er is re!istered on +ommon )ortal GST?" 2 e- led!ers +ash K Inp#t Tax +redit and an electronic tax liailit$ re!ister will e a#tomaticall$ opened and displa$ed on his dashoard at all times.
11> hat is a ta" lia)ility re#isterH Tax >iailit$ e!ister will reflect the total tax liailit$ of a taxpa$er af ter nettin! for the partic#lar month.
12> hat is a +ash Led#erH The cash led!er will reflect all deposits made in cash" and T:SJT+S made on acco#nt of the taxpa$er. The information will e reflected on real time asis. This led!er can e #sed for ma&in! an$ pa$ment on acco#nt of GST.
1A> hat is an !T+ Led#erH Inp#t Tax +redit as self-assessed in monthl$ ret#rns will e reflected in the IT+ >ed!er. The credit in this led!er can e #sed to ma&e pa$ment of T*N ?> and not other amo#nts s#ch as interest" penalt $" fees etc.
1.> hat is the lina#e )etween GST6 and the authoriNed :ansH There will e real time two wa$ lin&a!e etween the GST? and the +ore
challan identification n#mer +I? is to a#tomaticall$ sent $ the
1*> ow to create or modify GST challanH * taxpa$er can create a challan from GST? portal for the p#rpose of pa$ment of taxes. The pa$ment partic#lars have to e fed in $ the tax pa$er or his a#thoried person. Its possile to fill in the challan form partiall$ and temporaril$ Hsave the c hallan for completion at a later sta!e. * saved challan can e Hedited efore finaliation. *fter the tax pa$er has finalied the challan" it will e !enerated. The remitter will have option of printin! the challan for his record. Its important to note that once a challan is !enerated online" it can not e modified. Fe can save the challan midwa$ for f#t#re editin!. Fowever once the challan is finalied and +)I? !enerated" no f#rther chan!es can e made to it $ the taxpa$er.
1@> !s there a 'alidity period of challanH es" a challan will e valid f or fifteen da$s after its !eneration and thereafter it will e p#r!ed from the S$stem. Fowever" the taxpa$er can !enerate another challan at his convenience.
17> hat is a +!6H +)I? stands for +ommon )ortal Identification ?#mer +)I? !iven at the time of !eneration of challan. It is a 13 di!it #niD#e n#mer to identif$ the challan. *s stated aove" the +)I? remains valid f or a period of 15 da$s.
18> hat is a +!6 and what is its rele'anceH +I? stands for +hallan Identification ?#mer. It is a 1/ di!it n#mer that is 13-di!it +)I? pl#s -di!it
1J> hat is the seDuence of payment of ta" where that ta"payer has lia)ilities for pre'ious months alsoH Section 58 prescries an order of pa$ment where the taxpa$er has tax liailit$ e$ond the c#rrent ret#rn period. In s#ch a sit#ation" the order of pa$ment to e followed is( 4irst self-assessed tax and interest for the previo#s periodM thereafter self-assessed tax and interest for the c#rrent periodM and thereafter an$ other amo#nts pa$ale incl#din! an$ confirmed demands #nder section 51. This seD#ence has to e mandatoril$ followed.
20> hat is an 9$/:H 9-4)< stands for 9lectronic 4ocal )oint
21> hat is T?S under GST -e#imeH T:S stands for Tax :ed#cted at So#rce T:S. *s per section /" this provision is meant for Government and Government #nderta&in!s and other notified entities ma&in! contract#al pa$ments in excess of s.10 >a&hs to s#ppliers. hile ma&in! s#ch pa$ment" the concerned GovernmentJa#thorit$ shall ded#ct 1% of the total pa$ale amo#nt and remit it into the appropriate GST acco#nt.
22> ow will the Supplier account for this T?S while &lin# his returnH *n$ amo#nt shown as T:S will e reflected in the electronic cash led!er of the concerned s#pplier. Fe can #tilie this amo#nt towards dischar!in! his liailit$ towards tax" interest fees and an$ other amo#nt.
2A> ow will the T?S ?eductorE account for such T?SH The T:S :ed#ctor will acco#nt for s#ch T:S in the followin! wa$s(
1.
S#ch ded#ctors needs to !et comp#lsoril$ re!istered #nder section 1@ read with Sched#le III of 6G>.
2.
The$ need to remit s#ch T:S collected $ the 10th da$ of the month s#cceedin! the month in which T:S was collected and reported in GST /.
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The amo#nt deposited as T:S will e reflected in the electronic cash led!er of the s#pplier.
3.
The$ need to iss#e certificate of s#ch T:S to the ded#ctee within 5 da$s of ded#ctin! T:S failin! which fees of s. 100 per da$ s#,ect to maxim#m of s. 5000J- will e pa$ale $ s#ch ded#ctor.
2.> hat is Ta" +ollected at Source =T+S>H This provision is applicale onl$ for 9-+ommerce perator #nder section 3+ of 6G>. 9ver$ 9-+ommerce perator needs to withhold a percenta!e to e notified later on the recommendation of the GST +o#ncil of the amo#nt which is d#e from him to the s#pplier at the time of ma&in! act#al pa$ment to the s#pplier. S#ch withheld amo#nt is to e deposited $ s#ch 9-+ommerce perator to the appropriate GST acco#nt $ the 10th of the next month. The amo#nt deposited as T+S will e reflected in the electronic cash led!er of the s#pplier.
2*> !s the pre$re#istration of credit card necessary in the GST6 portal for the GST paymentH es. The taxpa$er wo#ld e reD#ired to pre-re!ister his credit card" from which the tax pa$ment is intended" with the +ommon )ortal maintained on GST?. GST? ma$ also attempt to p#t in a s $stem with an&s in !ettin! the credit card verified $ ta&in! a confirmation from the credit card service provider. The pa$ments #sin! credit cards can therefore e allowed witho#t an$ monetar$ limit to facilitate ease of doin! #siness.
S)5 #
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Solution
Customer continues to be on •
igrate to condition based tax procedure
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Solution
6CC
9* Customer migrates to SF+A)4)
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Aelp you assess the impact to various business processes
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Guide you in your discussions with business partners, considering th
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ap your enterpriseD GST *egistration 4umbers in S)5
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Aelp prepare your relevant aster >ata to store GST relevant detail Services, etc.=
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alidating the various business processes li2e order"to"cash, procure
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inal igration and Cutover to GST ramewor2