GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. In other words, Goods and Service Tax (GST) is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is a single domestic indirect tax law for the entire country.
GST rate for various goods and services is divided into four slabs: they are 5% GST, 12% GST, 18% GST, & 28% GST.
- It brings benefits to all the stakeholders viz.industry, government and the citizens.
- Ease of invoicing for manufacturers and exporters.
- Input Tax Credit available on taxes paid on all procurements (except few specified items)
- Under the GST regime, exports will be zero rated in entirety
- All taxes paid on the goods or services exported or on the inputs or input services used in the supply of such export goods or services shall be refunded.
- The export of goods or services is considered as a zero-rated supply. GST will not be levied on export of any kind of goods or services.
- Relief in the overall tax burden
Although it's a welcome move by the government, it is still a new scheme. Hence, there are some complex problems which have arisen as the country is moving towards it's adoption. Following are some of them:
- The Script of DGFT cannot be used for payment of IGST, CGST, or SGST for domestic procurements.
- Project Imports: All the imports under project imports will be charged @18% IGST.(as per current provision)
- Refund of SAD paid on imports – SAD paid by the dealers/traders can take set off their GST liability –when they supply. Certain items which are out of GST can claim a SAD refund.
- For any Import and Input tax credit (ITC) GSTIN No is compulsory to put in the Bill of Entry. Then only the ITC will be available.
Companies are finding it increasingly difficult to adapt to the ever changing rules of the government. Hence, many of them are receiving legal notices from the government.
We can help you solve this problem. Not only will we consult you on the changing rules, but also carry out all the legalities on behalf of your organisation. For further discussions please get in touch with us.
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