Railway Accounts Department Examinations

Showing posts with label GST. Show all posts
Showing posts with label GST. Show all posts

Tuesday, October 8, 2024

RCM - Reverse Charge Mechanism (GST - Goods & Services Tax)

 RCM - Reverse Charge Mechanism (GST - Goods & Services Tax) 

  • Forward Mechanism: Typically, the supplier of goods or services pays the tax on supply. That is, the Purchaser makes payment (with GST) to the Supplier and the Supplier will deposit the GST with the Government. 


  • In RCM, The recipient (i.e., purchaser) of goods or services becomes liable to pay the tax, i.e., the chargeability gets reversed. Here, the Purchaser makes payment (without GST) to the Supplier and it is the responsibility of the Purchaser to deposit the GST with the Government on behalf of the Supplier.

In Indian Railways - GST


  • Forward mechanism: Services relating to passenger and freight service and any other service rendered to unregistered persons only 


  • IR registered under GST as Central Government though it is a business entity. IR has 36 registrations and each State and UT has been assigned with a Nodal Officer. 


  • Transportation of passengers & Goods are the two principal outward supplies of Services. Railways as a Supplier is responsible to deposit GST with the Government. 


Taxable: Non AC First Class and AC classes - GST Rate is 5%


Non Taxable:  1. Sleeper class (Non AC) 2. General Class 3. Relief materials 4. Newspapers 5. Railway materials 6. Agricultural products, Milk, Salt, Food grains & organic manure. 


RCM - Reverse Charge Mechanism: Railway as a Receiver is responsible to deposit GST with the Government. Examples are: Land licensing, Parking Contracts, renting out of immovable properties, way leave charges.


Thursday, October 10, 2019

Article on GST - by Shri Keshav Kaplush, IRAS

Shri Keshav Kaplush is a blogger and a dynamic IRAS officer with innovative ideas.  He worked as Sr.AFA/Accounting Reforms and GST. He is a faculty at Ctara - Centralized Training Academy for Railway Accounts, Secunderabad on the GST subject. At present, he is working as DFM/Secunderabad Division.  


Please click the below link for accessing his article on
“GST – Compliance in Railways is a story of vision and mission”.




Note: Thank you Keshav Kaplush sir, for permitting me to post your article. 

Tuesday, December 25, 2018

Composition Scheme in GST


Composition Scheme

ü  Opted by any Taxpayer whose turnover is less than Rs. 1.5 Crores  (Rs.75 Lakhs in case of North Eastern States).

ü  A simple and easy scheme under GST for taxpayers.

ü  Taxpayers who opted Composition scheme can get rid of tedious GST formalities

ü  Pay GST at a fixed rate of turnover.

ü  Service Providers are not eligible for Composition Scheme.  But Restaurants are eligible.

ü  GST rates under Composition scheme are as follows.

Type of Business
CGST
SGST
Total
Manufacturer and Trader
0.5 %
0.5%
1 %
Restaurants
2.5%
2.5%
5 %

Who cannot opt for Composition Scheme

ü  Supplier of services
ü  Manufacturer of ice cream, pan masala, or tobacco
ü  Businesses which supply goods through an e-commerce operator
ü  A dealer, who carrying out Inter-State transactions.

Advantages:

ü  Lesser compliance i.e., returns, maintaining books of record, Issuance of invoices.
ü  Limited tax liability.
ü  High liquidity as taxes are at a lower rate i.e., 5% or 1%.

Disadvantages:

ü  A limited territory of business. The dealer is barred from carrying out inter-state transactions
ü  No Input Tax Credit available to composition dealers
ü  The taxpayer will not be eligible to supply exempt goods or  goods through an e-commerce portal.
&&&&

ITC - Input Tax Credit


Input Tax Credit
·         What is Input Tax Credit ? 

Ans:  Input Tax Credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs and pay the balance amount.

Example: A is a manufacturer.  Tax payable on the manufactured product is Rs. 200 /-.  However he already paid tax Rs. 75/- at the time of purchase of Raw materials.  So he can pay balance tax Rs. 125/- (i.e., Rs. 200 - Rs.75/-). duly availing the Input Tax Credit to the extent of Rs. 75/-.  Otherwise, he would be liable to pay the tax two times i.e., at the time of purchasing Raw Materials and Selling of manufactured product.

Event
Tax
Remarks
On manufacture of goods
Rs.200/-
Tax liability
On purchase of Raw materials
Rs. 75 /-
Already paid.
Balance Tax to be paid
Rs. 125/-
To be paid (duly availing Rs.75/- as ITC)

·         ITC is one of the fundamental features of GST

·         Seamless flow of input credit across the chain (from the manufacture of goods till it is consumed) and across the country.

·         A person registered under composition scheme in GST cannot claim ITC.


ü  ITC can be claimed only for business purposes. ITC will not be available for goods or services exclusively used for: a. Personal use b. Exempt supplies c. Supplies for which ITC is specifically not available
ü   
*****

Tuesday, December 18, 2018

GST - Goods & Service Tax


GST - Goods & Service Tax
·         W.e.f  01.07.2017

·         Biggest reform in the Indirect tax regime.

·         One Nation  - One Tax  - One Market

·         Formulae is IGST(5%) = CGST (2.5%) + SGST/UTGST (2.5%)

·         Single Tax - Right from the Manufacturer to consumer.

·         Transaction based tax.

·         Five tax slabs  - 0%, 5%, 12%, 18% and 28%

·         GST - governed by GST council which consists of Finance Ministers of Union Government and All states.

·         Changed  from Origin based tax to Destination based Tax.

CGST
Levied by the Central Govt

SGST
Levied by the State Govt

UTGST
Levied by the UT Govt

IGST
Levied by the Central Govt on interstate supplies and on Imports of Goods


·         The following Central and State taxes are subsumed/included/merged into GST:
a)      Central Excise Duty (including additional duties of Excise)
b)      Service tax
c)      CVD (Levied on imports in lieu of Excise Duty)
d)      SACD (Levied on imports in lieu of VAT)
e)      Central Sales Tax(CST)
f)       Surcharges and Cesses.
g)      Octroi/Entry tax
h)      Purchase tax
i)        VAT
j)        Entertainment tax
k)      Luxury tax
l)        Tax on lottery, betting and gambling


·         The following taxes are not subsumed/ not included into GST
1.      Income Tax
2.      Customs duty
3.      Export duty
4.      Property tax
5.      Stamp duty
6.      Seniorage charges
GST is not applicable  on Petroleum products, Electricity and Alcohol.

·         The list of exempted Goods and Services are kept to a minimum and harmonised for Centre and States as far as possible.
·         The credit permitted to be utilised in the following manner:
a)      ITC of CGST allowed for payment of CGST & IGST in that Order.
b)      ITC of SGST allowed for payment of SGST & IGST in that Order.
c)      ITC of IGST allowed for payment of IGST, CGST & SGST.
GSTIN
ü  Full form : Goods & Service Tax Identification Number

ü  Assigned to every GST dealer.

ü  15 digit GSTIN based on State wise PAN (Permanent Account Number)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
State Code
PAN number of the Tax payer
No of registration within the state
Z
Check Code

Advantages:
·         Create unified common national market for India.
·         Giving a boost to Foreign Investment and “Make in India Campaign”
·         Boost export and Manufacturing activity and leading to substantive economic growth.
·         Help in poverty eradication by generating more employment.
·         Uniform SGST and IGST rates reduce the incentive for tax evasion.
·         Simple tax based system online
·         Uniform prices followed throughout the country.
·         Transparency prevails in taxation system.
·         Higher threshold achieved for registration.
·         Composition scheme for small business
·         The number of compliance is lesser.
·         Defined treatment for E-commerce operations
·         Improved efficiency of logistics
·         Unorganised sector is regulated under GST
****

Saturday, November 24, 2018

GST

GST AND SALIENT FEATURES
(By Shri Joseph Selvakumar, SSO(A)/Trichy )

GST represents Goods and Service Tax implemented on July 01, 2017 through the 101 Amendment of Constitution of India by the Government.

GST is a single tax on supply of Goods and Services, right from the manufacturer to the consumer.

The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set off benefits at all the previous stages.

GST has been envisaged as a more efficient tax system neutral in its application and distributional attractive.

GST are divided into five tax labs for collection of tax i.e., 0%, 5%, 12%, 18% and 28%.

The tax rates, rules and regulations are governed by GST council which consists of finance ministers of Centre and all the States.

SALIENT FEATURES OF GST

The introduction of GST would be a very significant step in the field of indirect tax reforms in India.

By amalgamating a large number of taxes, it would mitigate cascading or double taxation in a major way and pave the way for a common natural market.

The overall tax burden is reduced and Indian product become competitive in domestic and international markets.

GST is applicable on sale of Goods and Services as against the present concept of tax on the manufacture of goods.

GST would be destination based Tax as against the present Concept of Origin based tax.

The GST levied by the Centre is called CGST and that to be levied by State is SGST.

An integrated GST (IGST) would be levied on interstate supply of Goods or Services.  This is collected by Central Government.

Import of Goods or Services would be treated as interstate supplies and would be subject to IGST in addition to applicable custom duties.

GST has replaced the following taxes which were collected by Central Government:

Central Excise Duty (including additional duties of Excise)

Service tax

CVD (Levied on imports in lieu of Excise Duty)

SACD (Levied on imports in lieu of VAT)

Central Sales Tax(CST)

Excise Duty levied on medicine & toiletry preparations

Surcharges and Cesses.

State taxes that would be subsumed within GST are:

VAT / Sales Tax

Entertainment Tax

Luxury Tax

Taxes on lottery, betting and gambling

Surcharges and Cesses.

The list of exempted Goods and Services are kept to a minimum and harmonised for Centre and States as far as possible.

The credit permitted to be utilised in the following manner:

ITC of CGST allowed for payment of CGST & IGST in that Order.

ITC of SGST allowed for payment of SGST & IGST in that Order.

ITC of IGST allowed for payment of IGST, CGST & SGST.

Create unified common national market for India, giving a boost to Foreign Investment and “Make in India Campaign”

Boost export and Manufacturing activity and leading to substantive economic growth.

Help in poverty eradication by generating more employment.

Uniform SGST and IGST rates reduce the incentive for tax evasion.

Simple tax based system online

Uniform prices followed throughout the country.

Transparency prevails in taxation system.

Higher threshold achieved for registration.

Composition scheme for small business

The number of compliance is lesser.

Defined treatment for E-commerce operations

Improved efficiency of logistics

Unorganised sector is regulated under GST

GST would apply to all Goods and Services except alcohol for human consumption.

GST on five specified petroleum products (Crude, Petrol, Diesel, ATF & Natural Gas) would be applicable from a date to be recommended by the GST council.

Exports would be zero rated.

A common threshold exemption would apply to both CGST & SGST tax payers with an annual turnover of Rs.20 Lakhs (Rs.10 Lakhs for special category States as specified in article 279A of the constitution) would be exempt from GST.

Delay in implementing GST

Increased costs due to software purchase.

Being GST compliant.

Increase in operational costs due to GST implementation may affect existing costs.

GST was introduced in the middle of financial year.

GST is an online taxation system.

SME’s will have a higher tax burden.

GSTIN

GSTIN refers to GST Identification Number assigned to every GST dealer.

Before GST was implemented, all dealers registered under the State VAT law were assigned a Unique TIN Number by the respective State Tax Authorities.

Similarly, service providers were assigned a service tax registration number by the Central Board of Excise and Custom (CBEC)

Going forward in the new GST regime all registered tax payers will get consolidated into one single platform for compliance and administration purposes and will be assigned registration under a single authority.

It is expected that 8 million tax payers will be migrated from various platforms to GST.

All of these businesses will be assigned a unique Goods and Services Tax Identification Number (GSTIN)

Each tax payer is assigned a State wise PAN based 15 digit GSTIN.

The first 2 digit represents the State Code as per Indian Census 2011.  The next 10 digit will be PAN number of the tax payer. The thirteenth digit will be assigned based on the number of registration within a state.  The fourteenth digit will be Z by default. The last digit will be for check code. It may be an alphabet or number.