State Sales, Use, And Aviation Fuel Tax Return: Fill & Download for Free

What is GST?GST is a consumption based tax levied on sale, manufacture and consumption on goods & services at a national level. This tax will be substitute for all indirect tax levied by state and central government. Exports and direct tax like income tax, corporate tax and capital gain tax will not be affected by GST. GST would apply to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and natural gas. It would apply to all services barring a few to be specified. With the increase of international trade in services, GST has become a global standard. The proposed tax system will take the form of “dual GST” which is concurrently levied by central and state government.This will comprise of:Central GST (CGST) which will be levied by CentreState GST (SGST) Which will be levied by StateIntegrated GST (IGST) – which will be levied by Central Government on inter-State supply of goods and services.GST is a tax that we need to pay on supply of goods & services. Any person, who is providing or supplying goods and services, is liable to charge GST.Pros of GST·There is no doubt that in production and distribution of goods, services are increasingly used or consumed and vice versa. Separate taxes for goods and services, which is the present taxation system, requires division of transaction values into value of goods and services for taxation, leading to greater complications, administration, including compliances costs. In the GST system, when all the taxes are integrated, it would make possible the taxation burden to be split equitably between manufacturing and services.GST will be levied only at the final destination of consumption based on VAT principle and not at various points (from manufacturing to retail outlets). This will help in removing economic distortions and bring about development of a common national market.It will also help to build a transparent and corruption-free tax administration. Presently, a tax is levied on when a finished product moves out from a factory, which is paid by the manufacturer, and it is again levied at the retail outlet when sold.The tax structure will be made lean and simpleThe entire Indian market will be a unified market which may translate into lower business costs. It can facilitate seamless movement of goods across states and reduce the transaction costs of businesses.It is good for export oriented businesses. Because it is not applied for goods/services which are exported out of India.In the long run, the lower tax burden could translate into lower prices on goods for consumers.The Suppliers, manufacturers, wholesalers and retailers are able to recover GST incurred on input costs as tax credits. This reduces the cost of doing business, thus enabling fairer prices for consumers.It can bring more transparency and better compliance.Number of departments will reduce which in turn may lead to less corruptionMore business entities will come under the tax system thus widening the tax base. This may lead to better and more tax revenue collections.Companies which are under unorganized sector will come under tax regime.Benefits of GST BillFor the Centre and the StatesAccording to experts, by implementing the GST, India will gain $15 billion a year. This is because, it will promote more exports, create more employment opportunities and boost growth. It will divide the burden of tax between manufacturing and services.For individuals and companiesIn the GST system, taxes for both Centre and State will be collected at the point of sale. Both will be charged on the manufacturing cost. Individuals will be benefited by this as prices are likely to come down and lower prices mean more consumption, and more consumption means more production, thereby helping in the growth of the companies.Cons of GSTDoesn't include petroleum and alcohol products. Heavy loss to the exchequer.Instead of blurring out the difference between goods and services tax, it highlights them. An aam aadmi (common man) filing the tax-returns will have to suffer.It requires strong IT (Information Technology) infrastructure at grass-root levels. India essentially lacks this. This factor is going to be the bottleneck, if not addressed well in advance.Very high rates 16% compared to current 12.5 % VAT.Tax-sharing between states and the Centre was another bottleneck. Nice to see that there is a consensus now.Service businesses operating pan-India need to take state-wise registration leading to increased complianceAny supply (Ex: stock transfer, job-work)would be taxable (although fully creditable) leading to cash flows getting blockedBusinesses operating in multiple states need to re-align their branch network / warehouse / logistics strategyInput credit is subject to matching of invoicesA number of exemptions would be removedRequirement to determine ‘Point of Supply’No ITC for purchases from Compounding dealersRead more details about GST on below blogsGST by HKVK (GST by HKVK)Be Peaceful !!!

The complete guide to understanding India’s biggest tax reform—the GST.India’s biggest indirect tax reform since 1947 looks like it has finally arrived—the Goods and Service Tax (GST).From its first official mention in 2009 when a discussion paper was introduced by the previous United Progressive Alliance government to the point when the current Modi government tabled the Constitution Amendment Bill in the parliament, building consensus on the GST hasn’t been easy.The most prominent hurdle in introducing this new tax structure has been the ongoing struggle between the states and the centre on the loss of revenue. It’s taken years to resolve, but even now it is an issue that isn’t anywhere close to being completely fixed.Nonetheless, the introduction of the Constitution Amendment Bill in the parliament seems like the first key step towards bringing in the belated GST reform.Why does India need the GST?The GST is being introduced not only to get rid of the current patchwork of indirect taxes that are partial and suffer from infirmities, mainly exemptions and multiple rates, but also to improve tax compliances.The spread of GST in different countries has been one of the most important developments in taxation over the last six decades.Owing to its capacity to raise revenue in the most transparent and neutral manner, more than 150 countries have adopted the GST.With the increase of international trade in services, the GST has become a preferred global standard. All OECD countries, except the US, follow this taxation structure.The proposed frameworkThe center and the states are now trying to settle on the design and implementation of a uniform GST across the country.The unified tax will take the form of a “dual” GST, to be levied concurrently by both the levels of government. The unified tax will comprise of a Central GST and a State GST, which will be legislated, levied and administered by the respective levels of government. The same taxable base will be subject to both GSTs.The words “legislate, levy and administer” are key, since the center and the state will legislate the respective GST Acts and both will have power to administer the taxes.The proposed tax system will subsume a variety of central and state levies such as Central Excise Duty, Service Tax and VAT, thereby simplifying the complicated tax structure and reducing compliance costs.For tackling the complicated issues related to inter-state transactions, an innovative Integrated Goods and Services Tax is also under consideration.The fine printThe Bill, cleared by the cabinet on Dec. 17 and thereafter introduced in the parliament, has attempted to introduce the definition of GST.It is defined as any tax on the supply of goods or services that will subsume CENVAT, service tax, central excise duty, additional excise duties, excise duties levied under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, service tax, additional customs duty (countervailing duty or CVD), special additional duty of customs (SAD), central surcharges and cesses, State VAT, State sales tax, entertainment tax not levied by local bodies, luxury tax, taxes on lottery, betting, and gambling, tax on advertisements, State cesses and surcharges related to supply of goods and services and entry tax not levied by local bodies.The primary reason for introducing the Bill is to pave the way for the centre to tax sale of goods and the states to tax provision of services. The Bill further proposes that the central government will have the exclusive power to levy GST on imports and inter-state trade.The bill has also recognized the need to have a GST council. The union finance minister, the union minister of state in charge of revenue or finance, and the minister in charge of finance or taxation or any other minister nominated by each state government would constitute the council to ensure that both the centre and the states are on an equal footings.In addition, the Bill proposes to set up a Dispute Settlement Authority that would look into disputes between the States and the Centre. Appeals from the authority would directly lie with the Supreme Court.But, for the time being, the Bill has kept certain goods out of the purview of GST, which have been a point of contention between state governments and the centre.These include:Petroleum crudeHigh speed dieselPetrolNatural gasAviation turbine fuelAlcohol for human consumption.States shall have the power to levy taxes on these items, except in the case of imports and inter-state trade.Another important feature of the Bill is a proposal to levy additional tax on supply of goods on inter-state trade. The additional tax will not exceed 1% and will be collected by the central government for a period of two years. Finally, the amount so collected will be assigned to the states from where the supply originates.How does this help you?A unified GST is an economically efficient solution even for the multinationals, which have to compete with the companies in unorganized sector, as it simplifies the indirect tax structure to one general rate that can be paid by all companies.Under the GST structure, every company gets a deduction on the taxes already paid by its suppliers. That results in every buyer ensuring that his supplier has paid his part to claim his deductions.With the introduction of the Bill, the signal that the Modi government seems keen to send is that all the key decisions could well be in the hands of the GST Council. With both representatives from centre and states in place, the latter would likely have a say in the implementation of tax laws in their territories.Moreover, full compensation for the first three years for any kind of revenue loss may work wonders to dilute the initial apprehensions of the states regarding losing income post the introduction of GST.With the central government going that extra mile to take care of the interest of the states, one will have to wait and see if the states too return the favour by ratifying similar bills in their assemblies with the much needed two-third majority.In the meantime, the GST implementation deadline of April 2016 is looming.

Goods and Service Tax is being glorified as a system of taxation by which economy will take an upward swing and further it will ease the trade and industry with respect to the indirect tax system of the country. “Only one” indirect tax has to be paid by the trade and industry and all the other indirect taxes will be subsumed in GST.What is GST?GST is a consumption based tax levied on sale, manufacture and consumption on goods & services at a national level. This tax will be substitute for all indirect tax levied by state and central government. Exports and direct tax like income tax, corporate tax and capital gain tax will not be affected by GST. GST would apply to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and natural gas. It would apply to all services barring a few to be specified. With the increase of international trade in services, GST has become a global standard. The proposed tax system will take the form of “dual GST” which is concurrently levied by central and state government. This will comprise of:Central GST (CGST) which will be levied by CentreState GST (SGST) Which will be levied by StateIntegrated GST (IGST) – which will be levied by Central Government on inter-State supply of goods and services.THE NEED FOR GSTWe begin by elaborating on the important concept of – cascading effect of taxes. It is also, logically, referred to as “taxes on taxes”. It is simple to illustrate – say A sells goods to B after charging sales tax, and then B re-sells those goods to C after charging sales tax. While B was computing his sales tax liability, he also included the sales tax paid on previous purchase, which is how it becomes a tax on tax.​This was the case with the sales tax few years ago. At that time, a VAT system was introduced whereby every next stage dealer used to get credit of the tax paid at earlier stage against his tax liability. This reduced an overall liability of many traders and also helped to reduce inflationary impact this had on the prices.Similar concept came in the duty on manufacture – The Central Excise Duty –much before it came for sales tax. The CENVAT credit scheme (earlier known as MODVAT) was also a welcome move by trade and industry where credit of excise duty paid at the input stages was allowed to be set-off against the liability of excise on removal of goods. With effect from 2004, this system was extended to Service Tax also. Moreover, cross utilisation of credit between excise duty and service tax was also permitted. To a huge extent, the problem of cascading effect of taxes is resolved by these measures.However, there are still problems with the system that have not been solvedtill date. We shall talk about these problems now.The credit of Input VAT is available against Output VAT. In the same manner, the credit of input excise/service tax is available for set-off against output liability of excise/service tax. However, the credit of VAT is not available against excise and vice versa.VAT is computed on a value which includes excise duty, and no CENVAT credit is allowed for it. This shows that there is a tax on tax!Excise duty and service tax are levied by the Central Government, while the VAT is levied by the State Government, which is one of the reasons why such a cross-utilisation of credits was not allowed. However, this does not constitute a valid reason that justifies the cascading effect of taxes. For the people, it makes no difference if a tax is levied by the Centre or the State – a tax is a tax, and there is a tax on tax. The GST is introduced to combat this problem, among many others.PRESENT SYSTEM OF INDIRECT TAXESLet us first understand the various indirect taxes that are presently being levied by the Central & State Governments.​(*CVD – Countervailing Duty; SAD – Special Additional Duty)The GST shall subsume all the above taxes, except the Basic Customs Duty that will continue to be charged even after the introduction of GST. Other indirect taxes, such as stamp duties etc shall also continue.India shall adopt a Dual GST model, meaning that the GST would be administered both by the Central and the State Governments. This makes it the first tax of its kind in India!DUAL GST MODELWe begin by stating the dual GST model and the taxes levied on each kind of transaction. See these abbreviations before we understand them-SGST – State GST, collected by the State Govt.CGST – Central GST, collected by the Central Govt.IGST – Integrated GST, collected by the Central Govt.(The names may change in the actual law; our purpose is only to understand their nature)Now look at the chart that follows:​It is worth mentioning here that the levy of Excise or Service Tax was not dependent on the levy of VAT/CST, as they were governed by different laws.These are the taxes that shall be levied under the new system of GST. How this shall operate, and how can we have cross utilisation of credits can be seen in the discussion that follows –HOW GST OPERATES?Case 1: Sale in one state, resale in the same stateIn the example illustrated below, goods are moving from Mumbai to Pune. Since it is a sale within a state, CGST and SGST will be levied. The collection goes to the Central Government and the State Government as pointed out in the diagram. Then the goods are resold from Pune to Nagpur. This is again a sale within a state, so CGST and SGST will be levied. Sale price is increased so tax liability will also increase. In the case of resale, the credit of input CGST and input SGST (Rs. 8) is claimed as shown; and the remaining taxes go to the respective governments.​Case 2: Sale in one state, resale in another stateIn this case, goods are moving from Indore to Bhopal. Since it is a sale within a state, CGST and SGST will be levied. The collection goes to the Central Government and the State Government as pointed out in the diagram. Later the goods are resold from Bhopal to Lucknow (outside the state). Therefore, IGST will be levied. Whole IGST goes to the central government.Against IGST, both the input taxes are taken as credit. But we see that SGST never went to the central government, still the credit is claimed. This is the crux of GST. Since this amounts to a loss to the Central Government, the state government compensates the central government by transferring the credit to the central government.​Case 3: Sale outside the state, resale in that stateIn this case, goods are moving from Delhi to Jaipur. Since it is an interstate sale, IGST will be levied. The collection goes to the Central Government. Later the goods are resold from Jaipur to Jodhpur (within the state). Therefore, CGST and SGST will be levied.Against CGST and SGST, 50% of the IGST, that is Rs. 8 is taken as a credit. But we see that IGST never went to the state government, still the credit is claimed against SGST. Since this amounts to a loss to the State Government, the Central government compensates the State government by transferring the credit to the State government.ADVANTAGES OF GSTApart from full allowance of credit, there are several other advantages of introducing a GST in India:Reduction in prices: Due to full and seamless credit, manufacturers or traders do not have to include taxes as a part of their cost of production, which is a very big reason to say that we can see a reduction in prices. However, if the government seeks to introduce GST with a higher rate, this might be lost.Increase in Government Revenues: This might seem to be a little vague. However, even at the time of introduction of VAT, the public revenues actually went up instead of falling because many people resorted to paying taxes rather than evading the same. However, the government may wish to introduce GST at a Revenue Neutral Rate, in which case the revenues might not see a significant increase in the short run.Less compliance and procedural cost: Instead of maintaining big records, returns and reporting under various different statutes, all assessees will find comfortable under GST as the compliance cost will be reduced. It should be noted that the assessees are, nevertheless, required to keep record of CGST, SGST and IGST separately.Move towards a Unified GST: Internationally, the GST is always preferred in a unified form (that is, one single GST for the whole nation, instead of the dual GST format). Although India is adopting Dual GST looking into the federal structure, it is still a good move towards a Unified GST which is regarded as the best method of Indirect Taxes.POINTS TO PONDER : FOOD FOR THOUGHTThe GST is a very good type of tax. However, for the successful implementation of the same, we must be cautious about a few aspects. Following are some of the factors that must be kept in mind about GST:Firstly, it is really required that all the states implement the GST together and that too at the same rates. Otherwise, it will be really cumbersome for businesses to comply with the provisions of the law. Further, GST will be very advantageous if the rates are same, because in that case taxes will not be a factor in investment location decisions, and people will be able to focus on profitability.For smooth functioning, it is important that the GST clearly sets out thetaxable event. Presently, the CENVAT credit rules, the Point of Taxation Rules are amended/ introduced for this purpose only. However, the rules should be more refined and free from ambiguity.The GST is a destination based tax, not the origin one. In such circumstances, it should be clearly identifiable as to where the goods are going. This shall be difficult in case of services, because it is not easy to identify where a service is provided, thus this should be properly dealt with.More awareness about GST and its advantages have to be made, and professionals like us really have to take the onus to assume this responsibility.Read more details about GST on below blogsGST by HKVK (GST by HKVK)Be Peaceful !!!