Goods and Services Tax

Introduction : 

“Goods and Service Tax (GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and service at a national level.

GST is a tax on goods and services with value addition at each stage having comprehensive and continuous chain of set-of benefits from the producer’s/ service provider’s point up to the retailer’s level where only the final consumer should bear the tax.”

Overview of GST

GST is Goods and Services Tax. This is comprehensive tax levy on manufacturer, sales and consumption of goods and services at national Level

GST is charged on the taxable supply of goods and services made by a taxable entity in the course or furtherance of business Place in India.

GST replace the existing multiple tax structure of central and state tax is not only desirable but imperative in the emerging economic environment.

All Indirect taxes around 19 Taxes such as Excise, Custom, Vat, CST , Service tax,  Luxury, Entertainment, etc. are subsumed into GST.

The model GST law is currently available for public consumption and we are expecting the details of the law to be available soon, along with the details of GSTN. SAP is currently working on a solution design based on the Model GST law. However, the final solution from SAP can be made available only after the final law is available.

CURRENT CONSUMPTION TAXES IN INDIA

ASSUMPTION OF GST TAXES IN INDIA

Here for Simplified understanding taken the Vat 12.5 % and GST %  

Updates of GST INDIA :

The Constitution (One Hundred and Twenty Second Amendment) Bill, 2014, or the Goods and Service Tax (GST) bill in India has been passed by the lower and upper house of the Parliament on August 03, 2016. The expected GST implementation is 1st April, 2017.

At present,
1. More than 50% of the states have ratified the bill
2. The President has provided his assent to the bill
3. GST council is formed
4. GST Rates four-tier rate structure of 5, 12, 18 and 28 percent been proposed and Approved in GST Council but, yet to get approval from Parliament.

The model GST law is currently available for public consumption and we are expecting the details of the law to be available soon, along with the details of GSTN. SAP is currently working on a solution design based on the Model GST law. However, the final solution from SAP can be made available only after the final law is available.

SAP release the below OSS Notes as a part of the solution.

1.2252781 – FAQ on Tax procedure migration from TAXINJ to TAXINN

2.2014164 – TAXINJ to TAXINN Migration

3.2167294 – Prerequisite Note for SAP Note 2153807

4.2153807 – Improvements in Tax code update programs for Purchase Order/Scheduling Agreement

5.2161911 – Purchase order display and Invoice display/cancel issue

6. 2386065 – India GST: GSP and ASP

CHALLENGES : 

Enactment of GST Laws yet to form if this is in place before Dec 2016 then we are in good phase to continues the Implementation and further actions for GST India.

SAP offering for the last mile in the GST Regime will be GSTN (Goods and Services Tax Network) and  GST Reporting.

GST Rates are Yet to finalize in parliament as well as based on the business processes.

Place of Supply Rules and Credit are not yet clear in GST for further actions. i.e. Corporate office, Utilization depends on Seller Declaration, Business indirect spends

Awaited for confirmation for Transition provision
1.  Dual Assessment of Taxpayer
2.  Existing area based exemptions / benefit under State industry policy
3.  Way- Bills / C form / Check posts
4.  Defer Capital Expenditure / Purchases
5.  Refund not claimed – Accumulated Credit at the cut off date can not be C/F
6.  Input and input services – CENVAT
7.  Capital Goods – CENVAT and VAT
8.  VAT Credit

TRANSITION OF GST READY STATUS

   1. IT System Modification
2. Document Modification
3. To advise on process Compliance
4. Review of Costing Methodology
5. Deliverables

ISSUES TO CONSIDER IN GST IMPLEMENTATION

Taxability of supplies

Systems and documentation issues