Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: empanelment :: VAT RATES :: list of goods taxed at 4% :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: TDS :: articles on VAT and GST in India :: ACCOUNTING STANDARD
 
 
« Service Tax »
 GST Network to begin accepting fresh registrations from June 25
 Indian GST is significantly unique, but is it better?
 GST example of national integration
 6 reasons you need not fear the GST regime
 Tax return filing extension on GST may not be enough
 GST: ‘Tech readiness, tax administration key challenges’
 GST return filing rules relaxed for Jul-Aug, July 1 rollout
 GST Council gives return filing breather to India Inc for 2 months
 All eyes on 18 June as GST Council meets to iron out niggling issues
 GST Council's June18 meet to finalise e-way bill, anti-profiteering rules
 Valuation of Tax liabilities Under GST Regime

There is still ambiguity on GST framework
May, 10th 2010

The first discussion paper of the state finance ministers and task force report on GST has succeeded in providing an insight into the broad framework of the GST. However, there still remains ambiguity regarding the issues affecting the stakeholders.

To ensure an effective and purposeful transition to the GST from the existing indirect tax regime, the Centre has to be mindful of certain key issues that businesses are likely to encounter, primarily among them being the transitional provisions.

The transition to the GST regime should be such that it addresses the critical issues that are likely to be faced by businesses. These include issues such as treatment of unutilised tax credit under CENVAT and state VAT, tax treatment of advances/deferred payments, treatment of stock-in-hand, which has been subject to CST/VAT and the provisions for registration under GST.

The GST structure is expected to lead to an increased availability of credits across goods and services with suppliers at each stage being permitted to set-off of GST paid through a tax credit mechanism. However, from a business perspective one of the first things to consider is whether, and the manner in which, unutilised credit under the current tax regime would be carried forward to the GST.

Under the current regime, accumulation of credit is major worry for businesses and can be caused by various factors. A reason for such accumulation is the inverted-duty structure where the duty on the finished product is lower than that on intermediate products. This inverted duty structure acts as a disincentive for businesses.

Currently, there has been no clarity on carry forward of excess credits from the present regime into the GST. Transitory provisions must be framed allowing either the carry forward of excess credit or refund of such credits.

Alternatively, in case there is no carry forward of credit, adequate refunds should be allowed in respect of tax paid goods held in stock on the date of implementation of GST.

Complications would also arise with respect to on-going contracts where payments are made on milestone basis or as advances. Special rules would be required which take into consideration cases where the period of execution of the contract is spread across the existing tax regime and the GST regime but payments are made on lumpsum basis either prior or post the implementation of the GST.

Similarly, complications would also arise in respect of taxability of payments made before the commencement of GST for goods to be sold or services to be performed after commencement of the GST. Other issues such as treatment of goods sold under the current regime, but returned as sales returns under the GST regime would also need to be addressed.

The industry expects that there should be similar formats for registration, returns and other records under both Central GST and State GST. A common format for different procedural requirement would erase the existing compliance difficulties faced by assessees.

Further, adequate time should be provided to allow assessees to obtain registration post implementation of the GST with minimal procedural requirements for dealers already registered under the current regime.

During the consideration of the Finance Bill 2010 in the Parliament, the finance minister has reiterated the government's commitment towards implementation of the GST with effect from 1st April, 2011. A revised discussion paper is expected to be released by next month followed by draft legislation, to be placed before Parliament in the monsoon session.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Portfolio

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions