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These days, Goods and Services Tax (GST) is a topic
for discussion. It is a hot topic for the news rooms, the
corporate boardrooms, trade and industry etc; this
reform has almost gobbled up three parliamentary
sessions. It is waiting to see the light of day hoping
that the tug of war between the government and the
opposition ends.
In the meanwhile, the Joint Committee, constituted
by the Empowered Committee of State Finance
Ministers, has made suitable recommendations for
certain processes under GST, such as:
i.Registration
ii.Return
iii.Payment
iv.Refund processes
Since GST era is expected to be conceptually different
from sales tax, service tax, excise duty etc; therefore, it
is pertinent to shed light on issues which an assessee
would encounter during the GST era.
1.Currently, levy of VAT/CST by states is ‘Origin
Based’ and payable at the place where the
movement of goods commences and under
service tax, the place of supply is destination based For Private Circulation - Educational & Information purpose onlyVaish Associates Advocates …Distinct. By Experience.
GST CAFÉVol. 1, No. 11 • December 1-31, 2015
Delhi • Mumbai • Gurgaon • BengaluruCelebrating over 40 years of professional excellenceCOST OF COMPLIANCE UNDER GSTi.e. location of the service receiver. As already
known, GST will be ‘Destination Based’ i.e. taxes
will be paid where the service receiver/consumer
of goods are located. Accordingly, the tax on
supply of goods or service is required to be
deposited in the state where the goods or services
are consumed.
2.The facility of centralized registration, currently
available to service tax and central excise assesses,
will be discontinued under GST thus, making it
incumbent for the assessee with offices/branches
situated in different states to follow the following:
i.obtain registration in places where the goods /
services are supplied
ii.maintain separate books of accounts for each
such premises
iii.control/maintainrecords of payment and
receipts (income and credit) for service
rendered or supply of goods
3.The pain doesn’t end here, as an organization
would be required to file the following returns
i.Four Monthly
ii.One annual return,Illustration
In case an assessee is registered in 6 states then the number of returns to be filed are as follows:
Sr. No.PeriodicityNo. of returnsNo. of StatesNo. of returns yearly
I. Monthly46288
ii. Yearly166
iii. Total Returns294
Disclaimer: While every care has been taken in the preparation of this GST Café to ensure its accuracy at the time of publication, Vaish Associates, Advocates assumes no
responsibility for any errors which despite all precautions, may be found therein. Neither this bulletin nor the information contained herein constitutes a
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GST CAFÉ24.In the reports on business processes by the Joint
Committee does not cover on the current Large
Taxpayer Unit structure or the setting up of MOSS
(mini one stop shop) type of facility as provided by
European Union. An Indian tax payer supplying
goods or services in multiple states should be
provided option to obtain a centralized registered
with single tax authority as it is done in the current
service tax / central excise regime.
5.It is pertinent to understand that the current
structure of GST has a resonance to affect every
part of business in India with regards to cash flow,
costing of capital, pricing of products and services,
financial reporting, tax accounting, compliance
processes, supply chain, procurements and
contracts and all technology currently enabling
this ecosystem. Furthermore, considerable efforts
will have to be made by the assessee to impart
training to their personnel for effective operation and better understanding under this new regime.
Certain processes namely GST registrations, tax
credit transitions, return reporting, other statutory
compliances, managed/ shared services, system
changes in ERP, EI tools, other technology tools,
compliance with GSTN requirements and for
audit, automation, tax credits, payments and
accounting, change assessment in accounting
entries (including revised chart of accounts,
compliance with Indian Accounting standards
etc.) etc. are certain core which will require
upgradation under the GST regime.
Conclusion:
The much anticipated GST regime seems to be a real
pocket burner as it seems that considerable cost
would be incurred by the assessee to effect a
transition and to adapt to the compliances of the new
regime.