PPT on GST Bills

1. Presented By:

2.  It was first tried to be implemented by UPA
government in 2011 but was opposed by
opposition party and State Government
 Lately in 2016 it was cleared by NDA
Government in Loksabha but yet to be ratified
in Rajyasabha.

4.  Direct Tax
◦ Income Tax
◦ Corporate Tax
◦ Minimum Alternate Tax
 Indirect Tax
◦ Sales Tax
◦ Service Tax
◦ Excise Duty

5.  Excise Duty
 Service Tax
 State VAT
 Central Sales Tax

6.  Excise Duty
◦ Tax on Manufacturing
◦ Paid to Central Government
◦ Paid by manufacturer
 Service Tax
◦ Tax on Service
◦ Paid to Central Government
◦ Current Rate is 14.5%
 State Value Added Tax (VAT)
◦ Sales & Consumption of goods within state
◦ Levied by State Government
 Central Sales Tax
◦ Tax on Interstate Sales & Consumption of goods
◦ Levied by Central Government

7.  Purchase Tax
 Entertainment Tax
 Luxury Tax
 Special Additional Duty
 Entry Tax etcetera..

9. GST is a comprehensive tax structure which is
going to replace most of the indirect tax in
country.

10.  GST is also referred as VAT in some countries
 Consumption based tax
◦ Tax is levied at consumption place whereas earlier
tax started to get levied at the point of origin
 Doesn’t differentiate between goods &
services
 Tax is levied on Supply of goods & services
 Works on the principle of charging tax on the
value addition at each business stage.

12.  Taxes will be levied at two levels
◦ Central GST (CGST)
◦ State GST (SGST)
◦ Interstate Transaction (IGST or Integrated GST)
Additional tax of 1% on Interstate transactions for
initial 2 years.

13.  Introduction as the 122nd Amendment to the
Constitution
 33 GST laws to be passed
◦ 1 CGST law
◦ 31 SGST laws including 2 Union Territories
◦ 1 IGST law

14.  Revenue neutral rate of 17% - 18%
 Proposed lower rate of 12% - 14% for
concessional goods
 “Sin Tax” of 40% on items like luxury cars,
tobacco

15. Inflation
Current rate Service Tax
of service tax under GST
14.5% 17% - 18%
But this is going to be a temporary
phenomenon

16. • Benefits of tax offsetting to capital expenditure
in manufacturing
• More automation of production activities
• Higher return of primary factors of production
labor salaries
capital interest/dividend
land rent
• Share of primary input is higher in agriculture &
service industry which leads to quality
employment

17.  Make in India
◦ Manufacturing Capital Expenditure
 Startup India
◦ Support Entrepreneurship
 Skill India
◦ Building Skills among Citizens

18. NON GST
 Raw material worth RS,100
inclusive of Rs,10 in taxes
 Manufacturer adds value of
Rs,3o Now total cost is Rs,130
◦ Assuming tax rate of 10% he will
have to pay Rs,13 as tax
 Dress is sold to wholesaler at
Rs,(130+13) i.e 143
◦ Wholesaler adds margin of Rs,20 to
the product
◦ Price will be Rs,(143+20) i.e 163
GST
 Raw material worth RS,100
inclusive of Rs,10 in taxes
 Manufacturer adds value of
Rs,3o Now total cost is Rs,130
◦ Rs,13 I tax can be offset against the
tax paid on raw material so effective
tax will be Rs,(13-10) i.e 3
 Dress is sold to the wholesaler
at Rs,130 as there is no “tax in
tax”
◦ Wholesaler adds margin of Rs,20 to
the product
◦ Price will be Rs,(130+20) i.e 150

19. ◦ After adding tax @10% which is
Rs,16.30 the amount becomes
Rs,179.30
 Retailer buys at Rs,179.30 and
adds margin of Rs,10
increasing cost to Rs,189.30
◦ Add a an amount of Rs,18.93 @10%
tax resulting the final amount to be
Rs,208.23
 Total tax paid is
Rs,(10+13+16.30+18.93) i.e
58.23
◦ 10% tax here will be Rs,15 which will
be offset against Rs,13 tax paid
earlier. GST incidence on wholesaler
will be Rs,2
 Retailer buys at Rs,150 & he
adds margin of Rs,10
increasing its cost to Rs,160
◦ Tax of Rs,16 at 10% incidence will be
Rs,(16-15) i.e 1 so total fixed price
will be Rs,166
 Total tax paid is
Rs,(10+3+2+1) i.e 16