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PRANAB KUMAR DASMEMBER (CUSTOMS)
MINISTRY OF FINANCE
GOVERNMENT OF INDIA
ROLE OF CUSTOMS
IN
INDIRECT TAX COLLECTION
• Introduction of GST – A transformative Reform in Indirect taxes
• Customs Role in Indirect Tax Collection:
• Legislative Basis
• Harmonization of Procedures:
o Imports and Input Tax Credit
o Exports and Refund of GST
• Leveraging Technology – Integration of Customs Single Window System and GSTN Portal
• Cooperative Framework through MoUs and Audit
• Trader Identification – Customs and GST are based on PAN number issued by Direct Tax authorities
• Focus on Data Analytics
Customs and Indirect Tax Collection
• Bring Clarity, Consistency and Certainty in tax laws
• Increase transparency and make tax administration more responsive
• Create litigation-free environment and ensure low cost of compliance
• Address distortions in duty structures and provide incentives to boost manufacturing
• Simplify and rationalize key business processes
• Create a conducive environment that promotes ease of doing business and Make in India initiative
Introduction of GST
Driven by wish list from Tax Payers
Constitution amended to provide concurrent powers to both Centre & States to levy GST (Centre to tax sale of goods and
States to tax provision of services)
•Central Excise duty
•Additional duties of excise
•Excise duty levied under Medicinal & Toilet Preparation Enactment
•Additional duties of customs(CVD & SAD)
•Service Tax
•Surcharges & Cesses
•State VAT / Sales Tax
•Central Sales Tax
•Purchase Tax
•Entertainment Tax (other than those levied by local bodies)
•Luxury Tax
•Entry Tax (All forms)
•Taxes on lottery, betting & gambling
•Surcharges & Cesses
Central Taxes State Taxes
GST
GST Tax Design : A Federal handshake
13 Central Cesses
Earlier Indirect Tax Structure in India v/s GST
Earlier Tax Regime After GST
•Multiplicity of rates
•Cascading effect of tax on tax- tax credit could not be offsetfully
•Varied business rules /compliance requirements ofdifferent governments
•Border check posts led toefficiency loss in logisticschain and rent-seeking
•Uniform rate in entire country
•Seamless credit flow,complete offsetting of inputtaxes
•Uniform compliance requirements for registration, payment of taxes and return-filing
•Border check postscompletely eliminated. Auniform electronic E-way-billsystem
Legislative provisions linking Customs & Indirect Taxes
• Levy of GST on import under Customs Tariff Act
• Levy of GST Compensation Cess on import under Customs Tariff Act
• Levy of Countervailing duty on petroleum products which are outside GST
• IGST Refund against exports which are zero rated.Two types of Refunds for exporters:
o Pay IGST first on export products and claim refund
o Export without payment of IGST and claim refund of Input Tax Credit (ITC)
6
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
(in M
illion U
SD
)
CVD from July,2016- June, 2017
IGST from July, 2017- June 2018
CVD from July, 2017- June 2018
Collection of GST by Customs
Automated IGST Refund through Customs
Pre-requisites for auto-sanction of IGST refunds by Customs:
• Payment of IGST + Export of Goods
• Exporters file Export declarations and GST Returns on respective portals
• Shipping lines / Airlines file Export General Manifest (EGM)
GSTN
Server
Customs
Server
(ICEGATE/
ICES)
GSTR Returns filed
by exporters
Validated GSTR
Info transmitted
Shipping Bills
filed by
exporters
EGM to be filed
by shipping
lines
SWIFT
24/7 Integrated
System
Importers
Exporters
Customs Brokers
Banks
RBI
Airlines Shipping
lines Freight
ForwardersPorts, Airports
Air cargo complexes
ICD/CFS
Customs & PGAs to
Customs Network
GSTN
Customs Single Window System - SWIFT
GSTN
Settlement
Registration
Payments
Returns
E-way bills
Refunds
Common Portal - Technology Backbone of GST
Goods and Service Tax Network (GSTN)
Tax Payer (GSTN) State-wise Disposal of IGST Refund(% of Total IGST claim)
(July-17 to July-18)(All figures in Rupees Crores)
1
2
1.44
3
4
5
287
877
1,365
1,214
789
921
0
200
400
600
800
1,000
1,200
1,400
1,600
Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18
(In M
illion U
SD
)
IGST CESS TOTAL
IGST Refund in FY 2018–19
• MoU between:
o CBIC handling Indirect Tax (GST) and Customs
o CBDT handling Direct Tax on Corporates and Individuals
o Corporate Affairs Ministry handling Companies Act
• Audit findings shared between Customs and GST
• Risk Profiling of Refunds and flagging suspicious transactions
• Risk profiling of Commercial Imports not getting into Input Tax Credit chain
Cooperative Framework
Taxpayer Identity is common amongst all statutes
Customs and GST Data Analytics
Enhancing Indirect Tax revenue
Mobilisation & Compliance
Increasing taxpayer base
Across GST, Customs & C. Excise
Supporting data-driven tax policy formulation
Leveraging Technology for serving Taxpayers
Analytics on
GST, Customs &
CX data
Public Data
Portal
Predictive &
Fraud Analytics
State of Art Data
Visualization
Skill
Upgradation
Access on
Mobile DevicesBig Data
Real time Data
Capture and
Exchange
Thank You!
“A tax collector should collect taxes from a taxpayer just like abee collects honey from a flower without disturbing its petals.”
- Kautilya, Arthashashtra (2nd Century BC)