gst in india  

VAT Service Tax India
Service Tax New Delhi
Central Excise and Service Tax
Service Tax Cenvat
Service Tax Exemption
Service Tax Tribunal

Justification of GST
Preparation for GST
Purchase Tax of GST
GST Rate Structure
VAT at the Central & State level
Goods & Services Tax Model For India
Central and State Taxes under GST
Special Industrial Area Scheme
Inter-State Transactions of Goods
Rules for CGST and SGST
Implementation of GST

GST - Common concerns

Single Rate:

  • A single rate would help maintain simplicity and transparency by treating all goods and services as equal without giving special treatment to some ‘special’ goods and / or services.
  • This will reduce litigation on classification issues.

Proper schedule entry / classification in case of multiple rates:

  • Currently, as in the Sales tax / Commercial tax regime, there are multiple rates (0%, 2%, 4%, 12.5%, 20% and above) and the states have a free hand on increasing the rates by levying taxes under the guise of ‘additional tax / surcharge/cess ’.
  • Multiple taxes not only increase the compliance burden but also give rise to classification disputes.
  • In case of multiple GST rates, there should not be more than 2 tax rates.
  • Further, a proper entry / classification would lay such issues to rest. To minimize litigation,

Subsume all kinds of indirect taxes/cesses/duties:

  • GST regime should subsume and bring under its umbrella other levies and tax regimes like CST, Entry tax, Service tax, Octroi (levied by local municipalities / municipal corporations), Entertainment tax, Stamp duty and their like.
  • This would help in reducing the compliance requirements and result in savings in man hours required to be spent on the same.

Unambiguous definition of services / works contract supply of goods:

  • Currently, works contract has to suffer VAT as well as Service tax.
  • A simple and clear definition of services, works contract, supply of goods and taxable event will be of great help to trade and industry.
  • Under GST transactions like works contract or indivisible contracts where service and goods values cannot be individually identified should bear the burden of tax only once.

Seamless and unrestrictive input tax credit:

  • Currently, credit of input tax can be utilized only against the output tax paid under the same legislation. Further, it is restricted in most of legislations by one or another way.
  • Under GST, a dealer should be able to avail and utilize input tax credit paid for all inputs, input services, all expenses involving supply of goods and services and adjust against their output GST liability or to claim refund of same.

Availability of input tax credit in case of interstate transactions:

  • As on date credit of CST cannot be utilized against VAT or Service tax as it falls under a different tax regime.
  • Under the GST regime, dealers should be able to utilize credit on tax borne on interstate transactions or purchase of goods as well as services.

EPC/Multi State contracts:

  • The present laws lack clarity in taxable event / applicability of GST and availability of input tax credit in case of EPC contracts / construction contracts
  • Under GST regime that there should be clarity with regard to taxable event, deductions available, availability of input tax credit or refund on such transactions.

Simplified refund procedure:

  • Presently, the unutilized CENVAT credit is not available as refund to the manufacturers/service providers who are not exporting their goods/services. However, there are no such restrictions in the State VAT laws of most of the States.
  • Option of claiming refund should be given to all the businesses which are unable to utilize the credit of GST during their reporting period. Credits of taxes should be treated at par with taxes paid in excess. It is difficult to understand why the differential treatment under two different indirect laws.
  • Moreover, at present refunds claims are to be made separately under Service tax/Excise laws. Such claims are scrutinized in a manner which results into prolonged delays and undue harassment of the tax payers.
  • The refund claims should be credited to the claimant’s bank account automatically within 15 days on receipt of return. In the cases of excess/fraudulent refund claims a penal interest may be charged to the assessee.

Read More about GST - Common concerns: Page2


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