SKS Associates-Law Firm Page 1 NAVITGATING THE FUTURE OPPORTUNITIES FOR CS AFTER GST Presented by: Siddharth Srivastava Founder- B. Com, CS, LLB- S KS

SKS Associates-Law FirmPage 1

NAVITGATING THE FUTURE

OPPORTUNITIES FOR CS AFTER GST

Presented by: Siddharth SrivastavaFounder- B. Com, CS, LLB- SKS Associates- Indirect Tax Litigators & Consultants

Contact: +91-9560111577; +91-124-2218817Mail: [email protected]


Agenda

► HISTORY OF VAT

► PRESENT INDIRECT TAX STRUCTURE

► ROADMAP OF GST

► PROMINENT FEATURES OF GST

► TREATMENT OF INTERNATIONAL TRADE

► PLACE OF TAXATION

► SOFTWARE DEVELOPMENT INTERNATIONAL LAWS

► TREATMENT OF SOFTWARE AS PER CANADIAN LAWS

► BENEFITS OF THE CANADIAN TAXATION MODEL


History of VAT in India…

GST

State VAT

CENVAT

MODVAT

2016

2005

2004

1986


GST – AROUND THE WORLD

Almost 160 countries have already implemented the GST

Most of the countries have a unified GST system.

Brazil and Canada follow a dual system where GST is levied by both the Union and the state governments.

France was the first country to introduce GST system in 1954.


GST rates across the globe

Country SR/RR/Zero rate

United Kingdom 20%/5%/0%

Australia 10%

Canada 13%/5%

Thailand 7%/0%

Vietnam 10%/5%

Singapore 7%/0%

Malaysia 7%/0%


Present Indirect Tax Structure


Present Indirect Tax

Excise Duty

Entry No. 84, List I Schedule

VII

Taxable event is

manufacture

Residuary Entry No. 97,

List I Schedule VII

Taxable event is Provision of service

Sales Tax/ VAT/ CST

Entry No. 54 of List II (VAT) ; 92A of List I

(CST)

Taxable event is Sale

Customs Duty

Entry No. 83, List I,

Schedule VII

Taxable event is Import & Export

Entry Tax

Entry No. 52 List II,

Schedule VII

Taxable event is Entry of

goods

Structure

Service Tax


Present Indirect Tax

State Excise Duty

Entry No. 51, List II Schedule

VII

Taxable event is

manufacture

Entry No. 54 of List II (VAT)

and 92A of List I (CST)

Taxable event is purchase

Octroi


Schedule VII

Taxable event is Entry of goods

Luxury

Entertainment Tax


Schedule VII

Taxable event is

Entertainment of Goods

Electricity Duty


Schedule VII

Taxable event is Sale

Structure

Purchase Tax


Current Taxes - Shortcomings

Complexity

No Cross Credit

Compliance and Reporting

Tax on Tax

Classification issues


Road map to GST in India



2006, announcement of the intent to introduced GST by 01.04.2010.

November 2009-First Discussion paper(FDP) released by EC on which comments were provided by Government of India.

June 2010-Three sub working groups were constituted by government of India on:• Business process related issues• Drafting of Central GST and model state GST legislations.• Basic design of IT systems required for GST in general and IGST in

general

March 2011- Constitution (115th amendment) bill introduced in parliament

November 2012-Committee on GST design constituted by EC



February 2013- Three committees constituted by EC• Dual Control, Thresholds and exemption in GST regime• RNRs for SGST and CGST and place of supply rules• IGST and GST on Importers

March 2013- GSTN incorporated as section 25 company June 2013- Committee constituted by EC to draft model GST law August 2013- Standing committee on Finance submitted report April 2014- Committee constituted by EC to examine business process under

GST December 2014-122nd Constitutional amendment bill introduced in parliament May 2015 - The Constitution (122nd Amendment) Bill, 2014 (Bill) was passed

by the Lok Sabha. July 2015 - The report was adopted by the Select Committee and tabled in

the Rajya Sabha


PROPOSED GST STRUCTURE INDIA


Central Excise

Service Tax

Customs and SAD

CVD

VATOctroi

Entertainment Tax, Luxury Tax,

Lottery Tax

Surcharges And CESS

Purchase Tax

All covered under GST but non GST supplies will exist


PROPOSED RATES - GST

► The GST shall have two components: one levied by the Centre, referred as Central GST, and the other levied by the States referred as State GST.

► Rates for Central GST and State GST would be prescribed appropriately. Initial Proposed rates may varied between 20% to 25% in 1st year, 12% to 18% in 2nd year, 16% in 3rd year.

► CGST and SGST on intra- State supplies of goods or services in India.

► IGST shall be levied by the Centre► Import of goods and services► Inter state stock transfers of goods and services

► CGST for CGST and SGST for SGST. Except for IGST where both way utilisation is possible.


GST – EXCLUSIONS

• Alcoholic Beverages

• Tobacco Products

• Electricity Duty

• Real Estate

•Taxes on specified Petroleum Products, Crude Oil, Natural Gas, MS, HSD, ATF-To be considered later on


Particulars Before GST After GSTImport in India 10 10Add: BCD @ 20% 2 2Add: CVD @ 20% 2 -Add: SAD @ 4% 0.4 -Add: GST @ 20% - 2Supply to Manufacturer 14.4 14Value Addition 5 5Manufacturing cost 19.4 19Add: Profit @ 20% 3.88 3.8Value for Excise Duty 23.28 Add: BED @ 20% 4.656 Value for Sales tax/GST 27.936 22.8Add: Sales Tax @ 12.5% 3.492 -Add: GST @ 20% 4.56Purchase Price of Service provider 31.43 27.36Add: Service Charges @ 50% 15.71 13.68Taxable value 47.14 41.04Add: ST @ 12.36% 5.83 -Add: GST @ 20% - 8.21

Cost to Consumer 52.97 49.25


GST - Key Issues

Whether Land will be covered Power of States to amend SGST at their

end List of Exempted Goods or Services Sector specific provisions like Banking,

Real Estate, E-commerce, essential sectors

Exemption threshold Place of Supply Rules for Goods and

Services 1% Cascading tax Litigation structure


Opportunities for CS after implementation of GST


IMPACT OFGST


GST IMPACT AREAS

GST

Information System

Suppliers

Customers

Finance & AdminInternal / Human

Capital

Strategy

Legal

Sales & Marketing Strategies


Opportunities for Company Secretaries

Mapping and Audits of as is tax process in a company

Transitional Issues

Restructuring present and future agreements / legal documents

Realign pricing policies and supply chain management

Upgrade Information technology systems to record various supplies

Setting up reworked MIS process and strategic decisions

Supply chain and distribution chain management to ensure compliance


Opportunities for Company Secretaries

Supply chain and distribution chain management to ensure compliance

Ensure compliance records and returns and assessments

Training of people for multiple GST registrations and compliance

Representation with various Government agencies for clarifications and trade issues

Tax health check exercise to review client meeting the above requirements

Tax advisory on Indian GST tax positions and tax process

New Tax assessee base will be created

SKS Associates, Litigators & Consultants

# 98, Basement Floor, Sector 47, Gurgaon; 0124-2218817 ; 9560111577 ;

[email protected]

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SKS Associates-Law Firm Page 1 NAVITGATING THE FUTURE OPPORTUNITIES FOR CS AFTER GST Presented by: Siddharth Srivastava Founder- B. Com, CS, LLB- S KS