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GOODS AND SERVICES TAX GST -CONCEPT, MODEL EMERGING CONSENSUS -

31 August 2012. 2. PRESENTATION PLAN. BackgroundMilestonesFormat of discussionsEconomics of GSTBasic conceptsKey features (Tax base, taxes to be subsumed, credit mechanism) Why GSTPolitics of GSTConstitutional provisionsAdministrative structure. 31 August 2012. 3. ROAD TO GST- MILESTO

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GOODS AND SERVICES TAX GST -CONCEPT, MODEL EMERGING CONSENSUS -

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    1. 1 September 2012 1 GOODS AND SERVICES TAX (GST) -CONCEPT, MODEL & EMERGING CONSENSUS - VIVEK JOHRI JOINT SECRETARY (TRU)

    2. 1 September 2012 2 PRESENTATION PLAN Background Milestones Format of discussions Economics of GST Basic concepts Key features (Tax base, taxes to be subsumed, credit mechanism) Why GST Politics of GST Constitutional provisions Administrative structure

    3. 1 September 2012 3 ROAD TO GST- MILESTONES Budget 2006-07 – announcement of the intent to introduce GST by 1st April,2010 Preparation of roadmap and design- assigned to the Empowered Committee of State Finance Ministers April 2008 – EC submits its report to the Central Government October & December 2008- Central Government offers its views/ comments January 2009- Discussions on the revised report resume

    4. 1 September 2012 4 ROAD TO GST- contd. Three Working Groups set up to examine List of exemptions & threshold Modalities for taxation of services Inter-State movement of goods and services Budget 2009-10 : FM reaffirms the Government’s intent to launch GST by 1.4.2010 10th November, 2009 – Empowered Committee releases its ‘First Discussion Paper on Goods and Services Tax in India’ Likely to release the Second Discussion Paper by mid- December, 2009

    5. FORMAT OF DISCUSSIONS Dramatis personae Empowered Committee of State Finance Ministers Finance Ministers of all State Governments Chairperson- Dr. Asim K Dasgupta, Finance Minister of West Bengal Secretariat at New Delhi Government of India Department of Revenue CBEC Stakeholders 1 September 2012 5

    6. BASIC CONCEPTS Origin vs. Destination principle Consumption type VAT vs. Production or Income type Invoice method vs. Subtraction method Cash basis vs. accrual basis 1 September 2012 6

    7. BASIC CONCEPTS – contd. Concept of ‘supply’ Any transaction involving exchange of value? Supply of goods –transfer of the right to dispose of tangible property as owner? Supply of services -Any transaction that does not constitute a supply of goods Linked to consideration – treatment of consignment sales, stock transfers, job work etc. 1 September 2012 7

    8. 1 September 2012 8 FEATURES OF PROPOSED GST Dual GST having two concurrent components – Central GST levied and collected by the Centre State GST levied and collected by the States CGST and SGST would be applicable to supply of goods and services in India Also applicable to import of goods and services Would apply to all stages of the value chain – primary, secondary and tertiary including retail

    9. TAX TREATMENT BY ACTIVITY 1 September 2012 9

    10. FEATURES OF GST – contd. Taxes to be subsumed within GST: Barring few exemptions, the coverage would be comprehensive and it would apply to all goods and services 1 September 2012 10

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