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R Muralidharan
Executive Director
20th August 2008
Agenda
GST-Global Scenario
Present Structure
Rate of GST
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PricewaterhouseCoopers Slide 2
GST-Global Scenario
Typically it is a single rate system but two/three rate systems are also
prevalent depending upon the requirement of the implementing nation
The JWG had been entrusted with the task of studying global GST
models and identify alternate models for introduction in India
(III) CST
No set off: Always a cost
*I & II are parallel levies and cannot be set off against each other
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PricewaterhouseCoopers Slide 8
Features of proposed GST Model
Basic Structure
chain
Taxable event to be supplies - as against manufacture (excise) and sales
(VAT)
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PricewaterhouseCoopers Slide 9
Features of proposed GST Model
Classification
- HSN to form the basis of classification of goods under Central and
State GST
- classification of services based on global best practices and Indian
realities
Rates
- uniform rates for services
- multiple rates for goods
Imports to be charged to both Central and State GST
Excise Free Zones could continue for their life spans
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PricewaterhouseCoopers Slide 10
Features of proposed GST Model
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PricewaterhouseCoopers Slide 11
Features of proposed GST Model
Basic Structure
- stamp duty, toll tax, passenger tax and road tax not subsumed in GST
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PricewaterhouseCoopers Slide 12
Features of proposed GST Model
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PricewaterhouseCoopers Slide 14
Features of proposed GST Model
Treatment of services
border services
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PricewaterhouseCoopers Slide 15
Features of proposed GST model
services
Rules for place of supply of services to be framed
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PricewaterhouseCoopers Slide 16
Features of proposed GST Model
Thresholds
Exemptions
- common lists for Centre and States with little flexibility for States to
deviate
refund schemes
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PricewaterhouseCoopers Slide 17
GST Rate in Select Countries
EU
- UK 17.5%
- Germany 19%
- France 19.6%
- Belgium 21%
Australia 10%
New Zealand 12.5%
China 17%
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PricewaterhouseCoopers Slide 18
GST Rate in India
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PricewaterhouseCoopers Slide 19
Issues & Challenges
General
By far the most important indirect tax reform in the area of indirect taxes is
just around the corner
Huge issues and challenges which need utmost attention by the Government
Ideally GST model should be finalised at least 12 months prior to
implementation- by April 2009
Trade & Industry should be consulted before finalisation so that the
implementation does not fail
This will give certainty to the businesses and result in high compliance
Rates
- integration of a large number of Central & State Taxes and obtaining of
consensus amongst States to abolish multiple local taxes
- multiplicity of taxes and tax rates
Thresholds
- rationalization under Central & State GST
Integrating the origin based tax with the destination based GST
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PricewaterhouseCoopers Slide 22
Issues & Challenges
Training
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PricewaterhouseCoopers Slide 23
Issues & Challenges
Protecting and balancing the present and future revenues of the Centre
and the States
- commission on Centre-State Relations (CCSR)
- views from Trade & Industry
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PricewaterhouseCoopers Slide 24
Thank You
"The information contained in this presentation is for general guidance on matters of interest only. The application and impact of
laws can vary widely based on the specific facts involved. Before taking any action, please ensure that you obtain advice specific
to your circumstances from your usual PricewaterhouseCoopers client service team or your other tax advisers.
The materials contained in this presentation were assembled on 20 August 2008 and were based on the law enforceable and
information available at that time."
2007 PricewaterhouseCoopers. All rights reserved. PricewaterhouseCoopers refers to the network
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