CMA Harshad Deshpande
Goods and Services Tax (GST), India’s biggest tax reform, is launched at midnight by Prime Minister Narendra Modi at Parliament’s historic Central Hall, in the presence of President Pranab Mukherjee on 1st July 2017. It is the fourth time since Independence that an event will be held there at midnight. The last three celebrated India’s Independence. GST, which replaces various indirect taxes with a unified tax, is set to dramatically reshape the country’s 2 trillion dollar economy.
Advent of GST is bringing drastic changes in the indirect tax structure. Although GST is propogated as single indirect tax , it will be major indirect tax and other indirect tax will remain intact. Professional need to understand which taxes are getting subsumed and which taxes will remain post GST
Taxes which will get added :
1. Central Tax – earliest GST Model Law specified as CGST
2. State Tax– earliest GST Model Law specified as SGST
3. Integrated Tax– earliest GST Model Law specified as IGST
4. Union Territory Tax– earliest GST Model Law specified as UTGST
5. GST Compensation Cess
List of Taxes will continue in GST era:
1. Basic Customs Duty – BCD
2. Surcharge on Customs duty
Surcharge at the rate of 10% of the Basic Customs Duty is levied on imported goods under Section 90 of the Finance Act, 2000 (unless exempted by a notification).
3. Customs Cess –
4. Safeguard duty under Section 8B of the Customs Tariff Act, 1975
5. Anti-dumping duty under Section 9A, Customs Tariff Act 1975
6. State Excise
7. Stamp Duty
8. Property Tax levied by Local Bodies
9. Central Excise as respects goods included in entry 84 (Alcohol for human consumption) of the Union List of the Seventh Schedule to the Constitution
10. Central Excise on Petroleum Products – GST applicability date on petroleum products will be notified subsequently
11. VAT on Petroleum Products – GST applicability date on petroleum products (i.e. petroleum crude, high speed diesel, motor spirit(commonly known as petrol), natural gas and aviation turbine fuel) will be notified subsequently
12. Profession Tax
13. License fee on entry of vehicles under THE CANTONMENTS ACT, 2006
14. Securities Transaction Tax (STT)
Following taxes will be subsumed in Goods & Services Tax as mentioned above :
1. Central Excise
Central Excise Act, 1944 except as respects goods included in entry 84 (Alcohol for human consumption)ofthe Union List of the Seventh Schedule to the Constitution and Central Excise on Petroleum Products
2. Services Tax under Finance Act, 1994
3. Central Sales Tax – CST
4. Value Added Tax – VAT
5. Additional duty of customs -CVD
Additional duty of customs equal to the, excise duty leviable on like goods produced or manufactured in India. This is levied under Section 3 of Customs Tariff Act, 1975
6. Special Additional duty – SAD
Imported goods are also liable to a Special additional duty at a rate specified in Section 3A of the Customs Tariff Act, 1975.
7. Education Cess under Finance Act – EC
8. Higher Secondary education Cess under Finance Act –SHEC
9. Swachha Bharat Cess – SBC
10. KrishiKalyanCess – KKC
11. Cess collected by Central Govt under various heads like Automobile Cess, Tractor Cess, Textile Cessetc
12. Medicinal Excise
13. Entry Tax on Goods
Under Entry of Goods into Local Areas Act
14. Entry Tax on Motor Vehicles
Under Entry Tax of Motor Vehicles into Local Areas Act
15. Purchase Tax
16. Taxes on Lottery Betting gambling
Under Betting Tax Act of respective State
17. Luxury Tax
Under Luxuries Act of respective States
18. Entertainment Tax
Under Entertainment tax Act of respective States
19. State Cess / surchages
20. LBT – Local Body Tax
21. Octroi
22. Tax on sale of Forest Produce by Government or Forest Development Corporation
About Author : CMA HARSHAD S DESHPANDE, M.com, ACMA, CS, CISA (USA), CIMA (UK) is practicing Cost & Management accountant from Pune rendering professional services in the field of Finance, Indirect Tax and Cost & Management Accounting for more than 12 years of experience.
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