GST

GOODS AND SERVICE TAX

TABLE OF CONTENT
Introduction to GST.
Fundamentals and Rates
GST Administration & Compliance.
International Comparisons.
Macro-economic Impact.
Industry Impact
JOURNEY SO FAR
GST REPLACES BELOW TAXES
 GST MODEL
Transaction New Regime Old Regime Comments

Sale within the state CGST + SGST VAT + Central Revenue will now be
Excise/Service tax shared between the
Centre and the State

Sale to another State IGST Central Sales Tax + There will only be one type
Excise/Service Tax of tax (central) now in
case of inter-state sales.
 INPUT TAX CREDIT

Action Cost 10% Tax Total Action Cost 10% Actual Total
Tax Liability
Buys Raw 100 10 110
Buys 100 10 10 110
Material
Raw
@ 100
Materia
l
Manufact 150 15 165
ures @ Manufa 150 15 5 155
40 ctures
@ 40
Adds 195 19.5 214.5
Adds 185 18.5 3.5 188.5
value @
Value
30
@ 30
Total 170 44.5 214.5 Total 170 18.5 188.5
GST ADMINISTRATION & COMPLIANCE

Taxpayers: Turnover up to Rs. 20 Lakh.

Taxpayers: Turnover > Rs. 1.5 Crore.
Taxpayers: Turnover < Rs. 1.5 Crore
GST on Exports.
Filing of Tax Return in GST regime.
Compensation to States.
INTERNATIONAL COMPARISON
Standard GST Rate

20% 20%
18%
17%
16% 16%

10% 10% 10%

8% 8%
7%
5%

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MACRO-ECONOMIC IMPACT
INFLATION
The tax rates on food and beverages, that has nearly 46% share in CPI,
is likely to reduce by 2%-3%.
The taxes continues to be nil for basic food articles like cereals, milk,
eggs, meat and fish, fruits and vegetables.
Within services, the transport services continues to be around 5%
while recreation & amusement and personal care services will be taxed
at 28% (26% earlier) .
Health and education are being kept out from the purview of GST.
 GROSS DOMESTIC PRODUCT (GDP)

Under reporting of goods and services produced by the small &

unorganized players.
Businesses of informal segment would move to the formal
segment in order to claim the input tax credits.
However, as this would only bring those who were at the fringes
into the formal tax system, the increases on this account too
could be limited.
 Revenue Collection of the Government

An increase in tax revenues of the government is to the extent of

growth in GDP.
Given the limited increase in GDP on account of the new tax system,
the GST would be largely revenue neutral for the government.
Widening of tax base with the implementation of GST.
 Impact of GST on BFSI Banking
Substantial increase in compliance
Determining place of supply could be critical
Taxability of interest
Interbank taxes
Actionable claims
Account linked financial services
Non account linked financial services
 Insurance
Tax on risk element as well as investment element
Different category
 Tax on life insurance portion making it costlier

Tax on subsequent premiums

FAST MOVING CONSUMER GOODS
GST IMPLICATIONS ON FMCG INDUSTRY
PRODUCTS PRE GST POST GST
Wheat 2.5% 0%
Rice 2.75% 0%
Mineral Water 27% 18%
Milk Powder 6% 5%
Sugar 6% 5%
Toothpaste 27% 18%
Soaps 27% 18%
GST IMPLICATIONS ON FMCG INDUSTRY
Positive impact on Supply chain.
Interstate movement of goods.
Reduced tax rates.
Raw materials required in food processing industry exempted from tax.
Prices of products.
Increase in revenue.
AUTOMOBILE
GOOD NEWS FOR THE IMPORTERS/DEALERS AS THEY WOULD BE ABLE TO CLAIM
THE GST PAID ON GOODS IMPORTED/SOLD WHEREAS EARLIER, THEY WERE
INELIGIBLE TO CLAIM THE EXCISE DUTY AND VAT PAID.
GST WOULD HELP THE MANUFACTURERS IN PROCURING AUTO PARTS AT A CHEAPER
COST DUE TO AN IMPROVED SUPPLY CHAIN MECHANISM UNDER GST.
BOTH TAX SLAB AND BURDEN WILL COME DOWN.
INCREASE IN DEMAND.
REDUCTION IN COST UPTO 10%.
COST OF LOGISTICS WILL CURTAIL BY ALMOST 30%-40%.
UNIFORM PRICING ACROSS COUNTRY
AUTOMOBILE
TELECOM
Sector is among the top 5 income generators in India.
18% GST charged on the telecom sector.
Bharti Airtel, Vodafone and Reliance Jio disappointed,
Appealed for 12%.
State wise registration.
Singapore telecom GST(7%). Telecom giants
in India argue based on that.
THANK YOU