GOODS AND SERVICE TAX IN INDIA

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OVERVIEW | IMPLEMENTATION CHALLENGES

Rajeev Dimri | Partner

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GST Why so much noise

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GST: IMPLEMENTATION CHALLENGES

Taxes to be subsumed under GST

Central Levies

State Levies

Excise Duties including the

additional excise duties

VAT/ Sales tax

Cesses in the nature of

excise duty /customs duty

CST to be abolished

Entertainment tax (unless

levied by the local bodies)

Subsumation
of taxes

Luxury tax
Taxes on lottery, betting and
gambling

Service tax
Cesses and surcharges
levied by Union ie education
cess etc
Central GST
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GST: IMPLEMENTATION CHALLENGES

Purchase tax to
be subsumed

Cesses and surcharges

levied by States, related to
supply of goods and services

Municipal levies - likely to be out

Stamp duty - likely to be out

State GST

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Additional duties of customs

(ie CVD and ACD)

Entry tax not in lieu of octroi

Overview of the new

landscape
KEY GST CONCEPTS
Place of supply

Taxable event to
be supply
States to levy tax
on services

Exemptions

Destination based tax

Valuation

Rules for services?

Multiplicity of
taxes
GST to subsume most current
indirect taxes

Credit

To be replaced by CGST and

SGST, IGST and additional
tax on inter-state supply

Possible expansion of
credit base
Credit pool to be
maintained for each state
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Likely to be
consistent for all
goods and
services MRP
valuation may go

GST: IMPLEMENTATION CHALLENGES

Classification

Likely to either be
withdrawn or be
converted into refund
mechanism

Rates
Tax rates to change
for inputs and outputs
Initially 1% additional
tax on inter-state sales

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Taxable event

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GST KEY IMPLEMENATION

CHALLENGES

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Paradigm shift

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GST: IMPLEMENTATION CHALLENGES

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Crafting a workable design

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GST: IMPLEMENTATION CHALLENGES

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Crafting a workable design

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GST: IMPLEMENTATION CHALLENGES

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Difference in SGST rates likely

challenges

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GST: IMPLEMENTATION CHALLENGES

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Transitional challenges

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GST: IMPLEMENTATION CHALLENGES

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Admin and infrastructural

preparedness

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GST: IMPLEMENTATION CHALLENGES

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Likely challenges to enforcement

agencies

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GST: IMPLEMENTATION CHALLENGES

Likely challenges for tax payers

A new tax law a whole lot of tax controversies

Transaction structuring to be
reviewed
Procurement pattern and
trading models to be analysed
No significant difference
between local and interstate
under GST?
Billing patterns, local vis--vis
inter state to be reviewed

Transition

Costing / Pricing of goods

Transition of credits
New registrations

Overall pricing of goods

factoring of GST credits
Change in rate of taxes

Change in contract
clauses
Review of procurement
costs
Taxability of transactions
spread across regimes
Treatment of tax paid
inventory

Records/ Accounting
State-wise sales records
Credit availment and utilization
records
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GST: IMPLEMENTATION CHALLENGES

Re-designing of the entire

ERP
Current ERP is aligned as
per the current taxes
Change in accounting
Re-defining the logics
Updating masters

Compliance
Tax computations
New formats for invoices /
records/ returns/
declarations
Validity of statutory form
(Form F/Form C)
Manner of payment of
taxes
New compliance dates
Documentation for
movement of goods

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Transaction restructuring

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BMRs take

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GST: IMPLEMENTATION CHALLENGES

Disclaimer
Purpose of this presentation is to give a highlights of the proposed GST regime in
India and not render any definitive opinion on any of the activities of stakeholders
under the GST regime
Prior professional advise is advised before implementation of aspects covered under
this presentation

Some of the features highlighted including the IGST model for interstate supplies are
understood to be under reconsideration
It is likely that the final model would differ from our understanding and the
implications discussed herein would accordingly vary and the contents of
this presentation would need to be updated basis the revised GST framework in the offing
BMR is under no obligation to update this presentation for future changes

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OVERVIEW & IMPLEMENTATION OF GST

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Our comments in the preceding slides are based on the GST framework outlined in
the First Discussion Paper on GST (2009) and the Constitution Amendment Bill, 2014