Goods and Service Tax (‘GST’) is new buzz word in the tax regime. It is proposed to merge service tax, value added tax and central excise into one tax i.e. GST. Goods and Service Tax is a comprehensive indirect tax levy on manufacture, sale, supply and consumption of goods and services. Its main objective to converge all indirect taxes into a single tax, replacing multiple tax levies, overcoming limitation of current indirect tax structure and creating efficiencies in tax administration.
The current framework allows limited inter-levy credits between Excise Duty and Service Tax. However, no cross credits are available in respect of other taxes specifically VAT, CST, Entry tax. Introduction of GST would thus rationalize tax content in product price; enhance ability of assessee to compete globally and possible trickle down the benefit to ultimate consumer.
GST is levied at every stage of production-distribution chain with applicable set off/ credits in respect of tax paid at previous stages. Under dual GST system, taxable base is proposed to be subject to the following taxes:
Central Goods and Service Tax (hereinafter “CGST”): At the federal level, it is proposed that CGST will primarily subsume CVD, SAD, Central Excise Duty, Service Tax and CST.
State Goods and Service Tax (hereinafter “SGST”): At a State level, it is proposed that SGST will primarily subsume VAT, Octroi and Entry Tax.
Integrated Goods and Service Tax (hereinafter “IGST”): At the federal level, it is proposed that IGST would be CGST and SGST and applicable on all inter- State transactions of taxable goods and services.
A. Impact Analysis on the present Business Model:
Under Impact analysis, we are analyzing the effect of the GST on the current business model, Pricing of the product, logistics, backward integration, forward integration are few crucial area which we are considering on this study.
B. Implementation Assistance:
The introduction of GST would entail significant procedural changes and compliances under GST. Some of key procedural changes/ compliance requirements that is likely to arise upon transition to GST. We are providing services in relation to:
– Availability of CENVAT Credit on the intra, inter State Sale
– Review of the logistic like cost benefit analysis of the warehouses, branches etc
– Inventory Planning;
– Pricing and Marketing Strategy