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# 24, 10th Cross
Wilson Garden
Bangalore - 560 027

We at Balakrishna Consulting LLP, GST Experts, and GST Consultants in Bangalore would be happy to help you align your finance systems to the GST regime. We would be happy to address any question that you may have.

Introduction to Goods and Service Tax

After nearly a decade since its idea was born, the Goods and Service Tax (GST) Law would finally be brought into force within a few months from now. The Government has proposed April 1, 2017 as the D-day. There are 6 months to go and we, at BCL believe the time is opportune for businesses like yourself to assess how GST would impact you. GST is touted to be a game changer and would significantly alter the way businesses are run.

Let's help you with a few basic concepts so that you are able to properly evaluate the impact of GST on your operations.

 

What is GST all about?


India is transitioning to a new indirect tax regime called GST. The regime proposes to bring within its scope both goods and services and aims to reduce the cascading effect of taxes. The regime also desires to reduce compliance cost and eliminate multiple taxes levied at different points along the supply chain.

 

What are the taxes proposed under GST?


There are three taxes proposed under the new law - Central GST, State GST and Integrated GST. CGST shall subsume all central indirect taxes (like CVD, CST and service tax); SGST will subsume all state indirect taxes (VAT, luxury tax etc.) and IGST primarily deals with inter-state supply of goods & services.

 

Tax credit & payment mechanism


An assessee can take tax credit of all input goods & services that are used for the 'furtherance of business'. There is a restriction of usage of credit vis-a-vis CGST and SGST in that they cannot be offset against one another. IGST however, can be offset against CGST and SGST.

An assessee shall be liable to collect and pay GST after setting off any input credit in accordance with the prescribed rules. Every assessee has to upload details of sales made by the 10th of the succeeding month. These details would form the basis for claiming input credit, which should happen by 15th.Any additional tax (i.e. output GST - input GST credit) will have to be paid in cash by 20th.

 

Current position & rollout date


The Government is targeting April 1, 2017 for the rollout of the GST law. As of now, the law exists in the form of a Model GST Law (MGL). There are several amendments that are taking place routinely. Further, the rate of tax and classification of goods would be clear by that date.

As of now, the Government is proposing a revenue neutral rate of about 20%. While this may, prima facie, seem high, the enhanced ability to claim input credit should offset the impact of the increased rate.



BALAKRISHNA CONSULTING LLP
24, Comfort Towers, Wilson Garden 10th Cross. 
Opp. Wilson Garden Post Office, Above SBI, Wilson Garden Branch
Bengaluru 560027

080-22221493 / +91 98808 36019 / +91 89519 62639
prakash@balakrishnaconsulting.com