Transition of Input Tax Credit

            Transition of Input Tax Credit

Input tax credit claimed in the return filed under previous laws for the period prior to the appointed day (1 July 2017) would be transferred to the electronic credit ledger. Existing manufacturers/dealers can claim the CENVAT credit in respect of input held in stock, semi-finished or finished goods held in stock if the following conditions are satisfied-:

• Such inputs and/or goods are used or intended to be used for making taxable supplies under GST;
• The said taxable person passes on the benefit of such credit by way of reduced prices to the recipient;
• The said taxable person is eligible for input tax credit on such inputs under GST;
• The said taxable person is in possession of invoices and/or other prescribed documents evidencing payment of duty under the earlier the law in respect of such inputs;
• Such invoices and/or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day;
• The supplier of services is not eligible for any abatement under GST.

GST Advantages

   GST Advantages

·   GST is a transparent tax and also reduce number of indirect taxes.

·       GST will not be a cost to registered retailers therefore there will be no hidden taxes and the cost of doing business will be lower.

·       Benefit people as prices will come down which in turn will help companies as consumption will increase.

·       There is no doubt that in production and distribution of goods, services are increasingly used or consumed and vice versa.

·       In the GST system, when all the taxes are integrated, it should make possible the taxation burden to be split equitably between manufacturing and services.

·       GST will also help to build a transparent and corruption free tax administration.

·       GST is backed by the GSTN, which is a fully integrated tax platform to deal with all aspects of GST.

GST Council gives relaxation of 2 months for filing of GST returns

India’s tryst with its most comprehensive indirect tax reform, the goods and services tax (GST), will begin on July 1. The GST Council, the apex decision body for the new tax, has stuck to the scheduled rollout. 

GST seeks to bundle state and central levies into one and create a seamless national market throughout the country. But the norms for filing returns have been relaxed until September to ensure that the transition doesn’t hurt small traders and others who may not be ready for the new regime. It set the rate on lotteries at 12% of face value for those run by state governments and at 28% for those authorised by state governments but run by private entities. It revised the levy for restaurants inside five-star hotels to the standard rate of 18% from 28%. 

GST for consumers: What you should know before paying when the new tax regime kicks in

Much has been talked about the Goods and Services tax (GST) implementation starting next month, its impact on industries and how it will benefit the consumer. Just to reiterate, Goods and Services Tax is one indirect tax reform, which will make the country one unified common market for industries to pay taxes.

What should the consumer be It is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off aware of with regard to GST.

5 things that will make you GST ready

GST law is by no means a simple tax law ('simple tax' is of course an oxymoron). Additionally, the GST Rule set (14 Rules) provide for detailed documentation requirements. Apart from taming the elephant in the room , read 'managing mismatches of input credits', configuring ERPs to multiple rates, State level GSTINs, different types of reverse charges, TDS and TCS BSE -0.95 %, applicable GST on job work and advances is going to keep India Inc. on its toes. As it evolves, one can expect frequent updates and amendments in the GST law, particularly in the first year of its implementation. 

·          Cross-functional training

·          Transition planning 

·          Technology re-vamping

·          Focus on business network partnership

·          Cross-functional training 

IMPACT OF GST

• A unified tax system removing a bundle of indirect taxes like VAT,CST,Service tax, CAD,SAD, Excise etc.
• Less tax compliance and a simplified tax policy as compared to earlier tax structure.
• Removes cascading effect of taxes i.e. removes tax on tax.
• Due to lower burden of taxes on the manufacturing sector, the manufacturing costs will be reduced, hence prices of consumer goods likely to come down.
• Due to reduced costs some products like cars, FMCG etc. will become cheaper.