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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)

Author Bio

CA Deepak Jauhari - B.Com, FCA • Sr. General Manager, Power Grid Corporation of India Limited (A Maharatna PSU). • 30+Years of experience in various capacities including Direct and Indirect Tax Matters. • Author of Three Books (Two in GST and recently one on Investment and Financial Pla View Full Profile

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