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2017
  • In many respects, the Goods and Services Tax (GST) is less a tax reform than a business reform. GST implementation has brought a host of new changes to the taxation regime, but it will also impact the way business is normally conducted. The way goods are returned to a seller will have tax implication.
  • With GST coming into effect, businesses must take stock of how returns could be impacted, especially during the transition phase. The following questions provide a useful framework for understanding the changes to come:
    • What are the tax implications for goods sold prior to GST implementation date (let us call it ‘D-day’) but returned post D-day?
    • What are the tax implications for goods returned from registered and unregistered dealers?
    • What are the tax implications for returned goods that are exempt prior to D-day but taxable post D-day?

2017
  • Indian exporters are worried about the advent of GST and the liquidity crunch it could create for them. The crunch and issues connected to GST administration could adversely affect their overall competitiveness.
  • The Finance Ministry has recently assured exporters that 90 percent of taxes paid will be refunded within seven days. This is certainly good news for exporters. However, given that GST is a new system involving both the central government and states, the speed with which refunds will be issued remains a source of concern.
  • Exports are exempt from many domestic indirect taxes under the current tax regime. This will change once GST kicks in. GST is imposed every time value is added so manufacturing exporters will have to pay GST at various stages, beginning with raw materials. This will likely increase production costs and working capital requirements.

2017
  • Let us have a bird’s eye view for the GST return preparation and due dates for the month of July 2017 and August 2017.
  • There have been widespread concerns over the smooth rollout of GST and there were some glaring concerns from trade and industry. These have led to a decision by the government that for the first two months of the GST implementation, GST would be payable basis a simple return form – Form GSTR-3B. This will contain a summary of outward and inward supplies and you need to submit this before 20thof the succeeding month.

2017
  • The term “profiteering” means making unreasonably high profits in the course of ordinary trade or business. The government of India is committed to protecting consumers from profiteering during the implementation of the Goods and Services Tax (GST) regime. In its efforts to prevent profiteering and ensure the proper levy of GST in India, the government will incorporate an anti-profiteering clause.
  • Since goods and services are taxed at multiple stages of the supply chain, any change in tax structure or tax rates creates an opportunity to improve profit margins at each stage. Thus, the Indian government intends to take measures to ensure that benefits accrued due to the introduction of the indirect tax regime are duly shared with consumers in the form of reduced prices.
  • Under the anti-profiteering clause in GST (Section 163), the central government is authorised to examine whether input tax credits claimed by any registered taxable person result in a “commensurate reduction in the price” of goods and services sold by that person. The central government is authorised to impose penalties in the event such price reductions are not implemented. However, the law is not intended to quash all profits — it’s designed to protect consumers from undue exploitation.

2017
Here are some of its major advantages of GST :
  1. GST is a win-win situation for the entire country. It brings benefits to all the stakeholders of industry, government and the consumer. It will lower the cost of goods and services, give a boost to the economy and make the products and services globally competitive. GST aims to make India a common market with common tax rates and procedures and remove the economic barriers, thus paving the way for an integrated economy at the national level.

    By subsuming most of the Central and State taxes into a single tax and by allowing a set-off of prior-stage taxes for the transactions across the entire value chain, it would mitigate the ill effects of cascading, improve competitiveness and improve liquidity of the businesses. GST is a destination-based tax. It follows a multi-stage collection mechanism. In this, tax is collected at every stage and the credit of tax paid at the previous stage is available as a set off at the next stage of transaction. This shifts the tax incidence near to the consumer and benefits the industry through better cash flows and better working capital management.
  2. GST is largely technology driven. It will reduce the human interface to a great extent and this would lead to speedy decisions.

2017
  • Small dealers and businesses could opt for the composition scheme known as Composition Levy. Under this scheme, a Composite Tax Payer pays tax only at a certain percentage of his turnover.
  • “Aggregate turnover” means the aggregate value of
    1. All taxable and non-taxable Supplies
    2. Exempt supplies and
    3. Exports of goods and/or services
    4. Interstate supplies of a person having the Same PAN
    to be computed on all India bases and excludes taxes, if any, charged under The CGST Act, SGST Act and the IGST Act, as the case may be;
  • Explanation – Aggregate turnover does not include the value of supplies on which tax is Levied on reverse charge basis and the value of inward supplies.

Financial Management