The applicability of various taxes (such as Excise, Custom, Service Tax, VAT and CST) in the present indirect tax system and in the coming GST regime has been explained through this article with the help of examples in each of the situations mentioned below:
1. Intra State Sale of goods
2. Inter State Sale of Goods
3. Intra State Supply of Service
4. Inter State supply of services
5. Import of Goods
6. Import of Services
7. Export of Goods
8. Export of services
| EXAMPLE – 1 INTRA & INTER STATE SUPPLY (GOODS) | ||||
| Particulars | Under Current Tax System | Under GST Regime | ||
| Rs. | Rs. | |||
| Manufacturer (Delhi) to Wholesaler(Delhi) – (Intra State) | ||||
| Cost of Production | 1,000.00 | 1,000.00 | ||
| Add: Profit Margin | 100.00 | 100.00 | ||
| Manufacturer Price | 1,100.00 | 1,100.00 | ||
| Add: Excise Duty @ 12.5% | 137.50* | – | ||
| Total Value (A) | 1,237.50 | 1,100.00 | ||
| Add: VAT @ 12.5% | 154.70 | – | ||
| Add: CGST @ 9% | – | 99.00 | ||
| Add: SGST @ 9% | – | 99.00 | ||
| Invoice Value | 1,392.20 | 1,298.00 | ||
| Wholesaler(Delhi) to Retailer(Haryana) – (Inter State) | ||||
| COG to Wholesaler(From A) | 1,237.50 | 1,100.00 | ||
| Add: Profit Margin@10% | 123.75 | 110.00 | ||
| Total Value (B) | 1,361.25 | 1,210.00 | ||
| Add: CST @ 2% (Not Cenvatable) | 27.25* | – | ||
| Add: IGST @ 18% | – | 217.80 | ||
| Invoice Value(C) | 1,388.50 | 1,427.80 | ||
| Retailer(Haryana) to Consumer(Haryana) – (Intra State) | ||||
| COG to Retailer (From C) | 1388.50 | 1210.00 | ||
| Add: Profit Margin@10% | 138.85 | 121.00 | ||
| Total Value(D) | 1,527.35 | 1,331.00 | ||
| Add: VAT @ 12.5% | 190.90 | – | ||
| Add: CGST @ 9% | – | 119.80 | ||
| Add: SGST @ 9% | – | 119.80 | ||
| Total Price to the Final consumer | 1718.25 | 1,570.60 | ||
| Availment of Input Tax Credit (ITC) | ||||
| Particulars | Under Current Tax System | Under GST System | ||
| ITC available to wholesaler (Delhi) | Rs. 154.00
(VAT) |
Rs. 198
(SGST 99 + CGST 99) |
||
| ITC available to retailer (Haryana) | – | Rs. 217.80
(IGST) |
||
| * (i) Excise Duty and CST becomes part of cost of supply for levy of further tax.
(ii) ITC is available subject to fulfillment of certain conditions. (iii) Rate of CGST+SGST is assumed at 9% each and IGST at 18%- |
||||
| EXAMPLE–2 INTRA & INTER STATE SUPPLY (SERVICES) | ||||
| Particulars | Under Current Tax System | Under GST System | ||
| Rs. | Rs. | |||
| Input Service Provider (Delhi) to Output Service Provider (Delhi) – Intra State | ||||
| Total Value of Service (A) | 1,000.00 | 1,000.00 | ||
| Add: SERVICE TAX @ 14% | 140.00 | – | ||
| Add: SBC @ 0.5% (Not Cenvatable) (B) | 5.00* | – | ||
| Add: KKC @ 0.5% | 5.00 | – | ||
| Add: CGST @ 9% | – | 90.00 | ||
| Add: SGST @ 9% | – | 90.00 | ||
| Invoice Value | 1,150.00 | 1,180.00 | ||
| Output Service Provider (Delhi) to Agent (Haryana) – Inter State | ||||
| Cost of Service to Wholesaler(C=A+B) | 1,005.00 | 1,000.00 | ||
| Add: Profit Margin@10% | 100.50 | 100.00 | ||
| Total Value of Service (D) | 1,105.50 | 1,100.00 | ||
| Add: SERVICE TAX @ 14% | 154.77 | – | ||
| Add: SBC @ 0.5% (Not Cenvatable) (E) | 5.53* | – | ||
| Add: KKC @ 0.5% | 5.53 | – | ||
| Add: IGST @ 18% | – | 198.00 | ||
| Invoice Value | 1,271.33 | 1,298.00 | ||
| Agent (Haryana) to Client (Haryana) – Intra State | ||||
| Cost of Service to Wholesaler(F=D+E) | 1,111.03 | 1,100.00 | ||
| Add: Profit Margin@10% | 111.10 | 110.00 | ||
| Total Value of Service (G) | 1,222.13 | 1,210.00 | ||
| Add: SERVICE TAX @ 14% | 171.10 | – | ||
| Add: SBC @ 0.5% (No Cenvatable) (H) | 6.11* | – | ||
| Add: KKC @ 0.5% | 6.11 | – | ||
| Add: CGST @ 9% | – | 108.90 | ||
| Add: SGST @ 9% | – | 108.90 | ||
| Invoice Value | 1,405.45 | 1,427.80 | ||
| Availment of Input Tax Credit (ITC) | ||||
| Particulars | Under Current Tax System | Under GST System | ||
| ITC available to Output Service Provider (Delhi) | Rs. 145.00
(S. Tax 140.00+KKC 5.00) |
Rs. 180
(CGST 90 + SGST 90) |
||
| ITC available to Agent (Haryana) | Rs. 160.30
(S. Tax 154.77+KKC 5.53) |
Rs. 198
(IGST) |
||
| * (i) SBC become part of cost of supply of Service for levy of further tax.
(ii) ITC will be available subject to fulfilment of certain conditions. |
||||
–
| EXAMPLE – 3 IMPORT AND EXPORTS (GOODS) | |||
| IMPORT OF GOODS | |||
| Particulars | Under Current Tax System | Under GST System | |
| Rs. | Rs. | ||
| (A) | Asses sable Value | 1,000.00 | 1,000.00 |
| (B) | Basic Customs Duty @ 10% | 100.00 | 100.00 |
| (C) | Assessable Value plus BCD‘(A+B)’ | 1,100.00 | 1,100.00 |
| (D) | CVD [‘C’ X Excise Duty @12.5%] | 137.50 | – |
| (E) | Sub-total for Education Cess on ‘B+D’ | 237.50 | – |
| (F) | Education Cess of Customs – 3% of ‘E’ | 7.13 | – |
| (G) | Sub-total for Special CVD‘A+B+D+F’ | 1244.63 | – |
| (H) | Special CVD u/s 3(5) @4% of ‘G’ | 49.78 | – |
| (I) | Total Customs Duty(B+D+F+H) | 294.41 | – |
| (J) | IGST @ 18% | – | 198.00* |
| (K) | Total Landed Value (A+I) | 1,294.41 | 1,298.00 |
| Availment of Input Tax Credit (ITC) | |||
| Particulars | Under Current Tax System | Under GST System | |
| Note:
1. Credit of CVD & Spl. CVD is available subject to fulfillment of certain conditions. (i) If Manufacturer, Credit of CVD and Special CVD available (ii) If Traders, Credit of CVD is not available but refund of Special CVD is available provided that he is liable for VAT. |
Rs. 187.28
Rs. 49.78 |
|
|
| 2. Credit of IGST is available subject to fulfillment of certain conditions. | Rs. 198.00 | ||
| 3.* IGST shall be levied on value including BCD. | |||
Export of Goods
(IF SAME IMPORTED GOODS ARE EXPORTED)
| Sale Value before tax (Assumed) | 2,000.00 | 2,000.00 |
| Add : Tax | No Tax | – |
| Add: CGST/SGST/IGST | Zero Rated | |
| Export Value | 2,000.00 | 2,000.00 |
–
| Availment of Input Tax Credit (ITC) | ||
| Particulars | Under Current Tax System | Under GST System |
| Note:
(i) Duty Drawback of BCD and Refund of CVD & Special CVD is available subject to fulfillment of certain conditions. (ii) Refund of IGST is available subject to fulfillment of certain conditions. |
Rs.294.41 |
Rs 198.00 |
–
| EXAMPLE – 4 IMPORT AND EXPORT (SERVICES) | |||
| Import of services | |||
| Particulars | Under Current Tax System | Under GST System | |
| Rs. | Rs. | ||
| (A) | Value | 1,000.00 | 1,000.00 |
| (B) | Service Tax @ 14% | 140.00 | – |
| (C) | Add: SBC @ .50% (Non Cenvatable) | 5.00 | – |
| (D) | Add: KKC @ .50% | 5.00 | |
| (E) | Add: IGST 18% | – | 180.00 |
| (D) | Exported Value | 1150.00 | 1180.00 |
| Availment of ITC | |||
| Particulars | Under Current Tax System | Under GST Regime | |
| Note: ITC available in the current and GST System subject to conditions. | |||
| Export Of Services | |||
| Particulars | Under Current Tax System | Under GST
Regime |
|
| Rs. | Rs. | ||
| (A) | Value | 2,000.00 | 2,000.00 |
| (B) | Service Tax | Not Taxable | – |
| (C ) | IGST | Zero Rated | |
| Total Invoice Value | 2,000.00 | 2,000.00 | |
| Note: Refund of ITC in the current and GST System subject to conditions. | |||
Hope you got the understanding of GST with the help of above examples.
(Author can be reaches at Deepakj051065@rediffmail.com)
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