November 22, 2017

We welcome the Government of India’s decision to implement Goods and Services Tax from 1st July 2017.

Below are a few main points that a business should pay attention to in the near term

1.GST is a destination based tax system and not origin based.

2.Under GST all details of office, godown, factory and job works need to be provided.

3. In the case a company is in multiple businesses then each vertical of business needs to be registered under GST to simplify the filing procedures.

4. All existing credit will be transferred under GST.

5. Register all existing stock as per GST procedures.

6. In the case excise is not paid on goods held, then GST needs to be paid, 60% /40% credit of which will be given the following month. 60% credit will be given for goods and services falling under the 18% or more tax bracket. 40% credit will be given for goods and services falling below 18% tax bracket.

7.In case excise has been paid but goods are not currently held then no credit will be given under GST. However, the old procedure for getting credit can be followed.

8.All existing stock needs to be cleared by December 2017, post which, no credit will be available.

9.Filing under State GST/ Central GST or Integrated GST needs careful handling and understanding. For e.g. if buyer and seller are located within the same state but goods are delivered to another state – this transaction will come under State GST/Central GST and not IGST. However, if buyer is from a different state as compared to the seller but goods are delivered in the sellers state itself – this transaction will fall under IGST.

10.High sea sales will attract double IGST.

11.In the case a company has two business verticals – one which falls under GST and another which does not fall under GST, the business can claim the excise duty or VAT paid under the vertical which falls under GST.

Disclaimer: We are not taxation experts and have provided inputs as per suggestion given by experts on GST. These pointers are given only to create some awareness on GST and not to be taken as the final word. Please consult your taxation consultant before taking any decisions.

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