Tax Accounting Goods and Service Tax GST The

Tax Accounting Goods and Service Tax (GST) : The Biggest Transformation of Indirect Tax Structure in India Dr. Pranam Dhar Former Head & Chairperson, Post-graduate Department of Commerce & Management, West Bengal State University. Email : pranamdharit@yahoo. com 12/28/2021 Online Course - Indian Academic Researchers' Association 1

12/28/2021 Online Course - Indian Academic Researchers' Association 2

“King must collect taxes like honeybee, it should be enough to sustain but not too much to destroy” Chanakya 12/28/2021 Online Course - Indian Academic Researchers' Association 3

History of tax p p The word tax is origin from the Latin word ‘taxare’ which means to estimate. A tax is not an optional payment or donation, but it’s a passer to contribution, which mentions by the legislative authority and otherwise any contribution imposed by government whether under the name of toll, tribute, import duty, custom, excise, subsidy, aid, supply, or other name indicate by the law of tax. The first known system of taxation was in Ancient Egypt around 3000 BC - 2800 BC in the first dynasty of the Old Kingdom. In 1922, the country witnessed a paradigm shift in the overall Indian taxation system. Setting up of administrative system and taxation system was first done by the Britishers. Broadly, there are two types of Taxes viz. Direct and Indirect taxes. Taxes in India are levied by the Central Government and the State Governments. Some minor taxes are also levied by the local authorities such as Municipality or Local Council. The authority to levy tax is derived from the Constitution of India which allocates the power to levy various taxes between Centre and State. Time to time change the mileage of tax system in our country. 12/28/2021 Online Course - Indian Academic Researchers' Association 4

Historical repot of tax system reform in India Time Major focal point to reform in indirect tax 1994 Report of LK JHA Committee suggest VAT 1986 Introduce new form of VAT called MODVAT 1991 Chelliah committee suggest VAT/GST and suggestion accepted by Govt 1994 Implement the service tax 1999 Establish the empowered committee on state VAT 2000 Implementation of uniform floor Sales tax rates and Abolition of tax related incentives granted by States 2003 Haryana Govt. starts VAT 2004 Meaningful progress towards CENVAT 2005 -6 VAT implementation in more than 26 states 2007 First GST draft norms released by Mr. P. Shome in January 2007 F. M announce for GST in budget speech 2007 CST phase out start in April 2007 Joint working group formed and repot submitted 2008 EC finals the view of GST structure in April 2008 Online Course - Indian Academic Source: Girish Garg, IJSRM volume 2 issue 2 feb Researchers' Association 12/28/2021 5

Countries where GST already issued and levied 1. Number of UN Member States are 193 and out of the 193, only 41 Member States do not implement VAT/GST, as follows: No Region 1 ASEAN Malaysia, Brunei, Myanmar 3 2 Asia Afghanistan, Bahrain, Bhutan, Iraq, Kuwait, Maldives, North Korea, Oman, Qatar, Saudi Arabia, Syria, Timor Leste, United Arab Emirates, Yemen etc. 14 3 Europe Andorra, San Marino. 2 4 Oceania Kiribati, Marshall Islands, Micronesia, Nauru, Palau, Solomon Islands, Tuvalu, 7 5 Africa Angola, Comoros, Djibouti, Eritrea, Liberia, Libya, Sao Tome and Principe, Somalia, South, 10 6 Caribbean, South, Central & North America Bahamas, Cuba, Saint Lucia, Suriname, United States of America, 5 12/28/2021 Country Online Course - Indian Academic Researchers' Association No of country 6

12/28/2021 Online Course - Indian Academic Researchers' Association 7

12/28/2021 Online Course - Indian Academic Researchers' Association 8

12/28/2021 Online Course - Indian Academic Researchers' Association 9

12/28/2021 Online Course - Indian Academic Researchers' Association 10

12/28/2021 Online Course - Indian Academic Researchers' Association 11

12/28/2021 Online Course - Indian Academic Researchers' Association 12

12/28/2021 Online Course - Indian Academic Researchers' Association 13

12/28/2021 Online Course - Indian Academic Researchers' Association 14

Highlights of GST Common threshold limit across the country Continuity of tax credit across the supply chain till it reaches the consumer Elimination of tax cascading effect in the supply chain PAN Based Registration ‘on Supply’ tax liability instead of ‘Removal / Sale’ 12/28/2021 Online Course - Indian Academic Researchers' Association 15

Highlights of GST Valuation method broadly as ‘Transaction Value’ Branch transfers taxable and credit eligibility Tax credit eligibility on inward supply of goods / services for Inter-state transaction No declaration forms (Form – C, F, etc……. ) 12/28/2021 Online Course - Indian Academic Researchers' Association 16

12/28/2021 Online Course - Indian Academic Researchers' Association 17

12/28/2021 Online Course - Indian Academic Researchers' Association 18

12/28/2021 Online Course - Indian Academic Researchers' Association 19

12/28/2021 Online Course - Indian Academic Researchers' Association 20

12/28/2021 Online Course - Indian Academic Researchers' Association 21

Registration – Threshold Limit Regular Dealer North East India Rest of India Aggregate Turnover exceeds 9 L for Registration 19 L for Registration 10 L for Payment of Tax 20 L for Payment of Tax Composition Scheme Composition Levy 12/28/2021 Aggregate Turnover does not exceeds Online Course - Indian Academic Researchers' Association 50 L 22

12/28/2021 Online Course - Indian Academic Researchers' Association 23

12/28/2021 Online Course - Indian Academic Researchers' Association 24

12/28/2021 Online Course - Indian Academic Researchers' Association 25

12/28/2021 Online Course - Indian Academic Researchers' Association 26

12/28/2021 Online Course - Indian Academic Researchers' Association 27

Transition Registration Migration Automatic Registration First provisional & then final registrations 12/28/2021 Online Course - Indian Academic Researchers' Association 28

Registration Process and Forms - Existing Dealer Registration No Form GST REG-21 GSTN Provisional Registration certificate If details Or information is satisfactory, Registration certificate will be issued Form GST REG-23 Yes Show cause notice Within 6 M Hearing on show cause notice. Successful? Yes Existing Registered Dealer Form GST REG-06 Form GST REG-20 Submission of details and documents 12/28/2021 Certificate of Registration Online Course - Indian Academic Researchers' Association No Form GST REG-22 Cancellation order of Provision Registration 29

Registration Forms Registration forms for other stakeholders Form No. Form Type Form GST REG-07 Application for Registration as Tax Deductor or Tax Collector at Source Form GST REG -08 Order of Cancellation of Application for Registration as Tax Deductor or Tax Collector at Source under Section 21 of the Form GST REG-09 Application for Allotment of Unique ID to UN Bodies/Embassies Form GST REG-10 Application for Registration for Non Resident Taxable Person. 12/28/2021 Online Course - Indian Academic Researchers' Association 30

Amendment of Registration details Amend Registration Details Form GST REG-11 Registered Dealer Change in registration details Making change as per Form GST REG-11 Form GST REG-12 GSTN Approval by an officer For changes specified in Rule 12/28/2021 Online Course - Indian Academic Researchers' Association Form GSTREG-12 Order to amend details Only for changes specified in Rule 31

Cancellation of Registration Form GST REG-14 Registered Dealer Application for cancellation of registration Within 7 days Form GST REG-16 Order to cancel registration GSTN Form GST REG-15 Show Cause Notice 12/28/2021 Show cause Hearing Successf ul? Ye s Online Course - Indian Academic Researchers' Association 32

Revocation of Cancelled Registration Revoke cancelled Registration Form GST REG-17 Form GST-REG-04 Application to revoke registration Provide Additional Details or clarification Form GST REG-05 Rejection of revocation application No Registered Dealer Within 7 working days from the date of Form GST REG-03 Within 30 days from the date of cancellation order Hearing on show cause notice. Successful ? Form GST REG-19 No Form GST REG-03 Notice seeking Additional details or Clarifications GSTN Complete details are provided? Within 3 working days from the date of Form GST -REG-17 12/28/2021 Details are satisfactory? No Yes Show cause notice Yes Within 30 days from the date of Form GST REG-17 or Form GST REG -04 Online Course - Indian Academic Researchers' Association Form GST REG-18 Order to revoke the registration 33

Mandatory Registration Taxable person carrying on interstate supply Casual and Non-resident Taxable Persons Businesses liable to pay tax under reverse charge Agents supplying on behalf of Taxable Person Input Service Distributor Persons responsible to deduct TDS Sellers on e-commerce platforms Aggregator supplying services under his brand name 12/28/2021 Online Course - Indian Academic Researchers' Association 34

12/28/2021 Online Course - Indian Academic Researchers' Association 35

12/28/2021 Online Course - Indian Academic Researchers' Association 36

12/28/2021 Online Course - Indian Academic Researchers' Association 37

12/28/2021 Online Course - Indian Academic Researchers' Association 38

12/28/2021 Online Course - Indian Academic Researchers' Association 39

12/28/2021 Online Course - Indian Academic Researchers' Association 40

12/28/2021 Online Course - Indian Academic Researchers' Association 41

Examples 12/28/2021 Online Course - Indian Academic Researchers' Association 42

12/28/2021 Online Course - Indian Academic Researchers' Association 43

12/28/2021 Online Course - Indian Academic Researchers' Association 44

Tax scenario under GST Existing Example of Car: Cost of Manufactures 4, 00, 000 Excise @ 12 % + Infrastructure cess 1% Vat 12. 5% 52, 000 CGST@11% 44, 000 56, 500 SGST@11% 44, 000 Dealer Invoice 5, 08, 500 4, 88, 000 Dealer Cost (4, 000 + 52, 000) 4, 52, 000 4, 000 45, 200 40, 000 4, 97, 200 4, 40, 000 Margin @ 10 % Sale Price for dealer Vat 12. 5% Price to customer 62, 150 CGST@11% 48, 400 SGST@11% 48, 400 5, 59, 350 Saving to Consumer 12/28/2021 Online Course - Indian Academic Researchers' Association 5, 36, 800 Amount. Percentage 22, 550 4% 45

Positive Impact of GST Transparency in the Taxation System p Reduces the Price instead of increasing it p Generates Employability among the youth, specially, self-employability p MSME sector is benefitted p 12/28/2021 Online Course - Indian Academic Researchers' Association 46

12/28/2021 Online Course - Indian Academic Researchers' Association 47

12/28/2021 Online Course - Indian Academic Researchers' Association 48

Negative Impact of GST Confusion p Compliance Cost p GST Audit p Execution of certain clauses like Draconian Clause p 12/28/2021 Online Course - Indian Academic Researchers' Association 49

Negative Impact of GST 12/28/2021 Online Course - Indian Academic Researchers' Association 50

Conclusion The Study focus on why GST for India. p More than 150 countries are smoothly run the GST system their GDP has increased gradually, for ex. New Zealand, Canada, Singapore and Australia. p If the GST system is implemented properly in India, revenue and GDP will increase and employability will be generated among the youth to a large extent. p 12/28/2021 Online Course - Indian Academic Researchers' Association 51