SAP GST India Forum

Neel Ratan
Executive Director
PricewaterhouseCoopers,
e-Governance in India
www.pwc.in

India on Brink of GST

Some unanswered questions…
Content

Section 1 Enactment Timelines

Section 2 GSTN Processes

Section 3 Rate debate

Section 4 Place of supply rules and credit

Section 5 Transition provisions

March 2015
PwC Slide 3
Content

Section 1 Enactment Timelines

Section 2 GSTN Processes

Section 3 Rate debate

Section 4 Place of supply rules and credit

Section 5 Transition provisions

March 2015
PwC Slide 4
Enactment Timelines

Milestones Timeline
Lok Sabha passes GST bill √
Rajya Sabha passes GST bill Aug, 2015
Ratification by not less than 15 states Dec, 2015
Formation of GST council Jan, 2016
Enactment of GST laws Mar– Dec, 2016

February 2015
PwC Slide 5
Content

Section 1 Enactment Timelines

Section 2 GSTN Processes

Section 3 Rate Debate

Section 4 Place of supply rules and credit

Section 4 Transition provisions

March 2015
PwC Slide 6
GSTN Process - Registration
GST Registration Process
• PAN based single
registration for CGST, SGST &
IGST
• Per State registration -
Different verticals of one
business may obtain separate
registration
• Existing Taxpayers – Transition
system for migration
• Registration for each premises
in a State not required
• Addition of place of business
under each registration allowed
• Transfer of credit to another
unit in a different State not
allowed
PwC
GSTN Common Portal
• Common interface between
Taxpayers & Tax Authorities where
Taxpayers can fill up the online
GST Registration form
• Upon submission of the GST
registration application online at
the portal, information would be
shared with the State & Central
Tax Authority for their approval
• Once the registration application is
approved by both Registration
Certificate (GSTIN) will be
issued online at the GST
Common Portal
Slide 7
GSTN Process - Returns
GST Returns Process
• Unified return form for all
States/ One Return for CGST,
SGST & IGST
• All returns to be electronic
• Return expected to be Monthly
(Quarterly for compounding
dealers)/ Annual
• All details of sale (invoice wise)
to be submitted, purchase
details to be populated from
sales of counterparty dealers
• State specific return as State
unit is an independent unit
• IGST assessment by State where
return is filed
PwC
GSTN Common Portal
• Interface for GST registered
taxpayers to upload their invoice
level sales details by a specified
cut-off date
• Based on the sales details
uploaded by the supplier, GSTN
Common Portal would auto-draft
the purchase statement of the
counterparty purchaser on a near
real time basis
• Draft return of a taxpayer to be
generated at the Common Portal
after sales-purchase details are
captured
Slide 8
GSTN Process - Payments
GST Payments Process
• Standardized single challan
for CGST, SGST and IGST
• Different accounting codes
for various types of transactions
• Mode of payment of tax can be
online or offline (OTC)
• Tax to be paid prior to filing
GST return
• Tax to be paid wherever supply
takes place
• SGST to go automatically to the
State of taxpayer as per
registration
• Frequency of tax payment as
per return
PwC
GSTN Common Portal
• Taxpayers would be able to
calculate their tax liability and
make online payments
• Based on draft return, taxpayer
can prepare challan at the common
portal, pay due tax online through
banking system before filing the
GST return
• Electronic challan generation
at the portal mandatory in case
of manual payments (OTC) as well
• All Banks authorized by RBI to
be available on GSTN Common
Portal
Slide 9
GSTN Process - ITC Mechanism & IGST Settlement
GST Cross Credit Utilization
• CGST/ SGST/ IGST credit can
be utilized for offsetting
liability against same heads
in that order
• CGST/ SGST credit available
after offsetting respective
liability to offset IGST liability
• Credit of CGST cannot be used
to offset SGST liability vice-
versa
• Credit of IGST available after
offsetting IGST liability to offset
CGST/ SGST liability (in order)
• IGST on Imports: as per
return (not like customs duty)
PwC
GSTN Common Portal
• To provide Dealer Ledger to
view consolidated summary of
their tax liability, payment history,
ITC entitlement and utilization (set
off against tax liability), refunds –
anytime on any device
• Invoice matching &
communication on discrepancy
• Credit Reversal of unmatched
transactions in the next return
• Calculation of IGST Settlement
amount based on cross-utilization
of credit by dealers
• Intimation of successful
settlement to tax authorities
Slide 10
GSTN Ecosystem
Integration of existing IT systems with GSTN

CTD GSTN IT
Tax Authority Taxpayer
Officer System

Interface File/ API

Centre/ GSTN
State
Common
Tax
System Portal

Interface File/ API

Centre/
State Tax GSTN
Database Database
Accounting Network
Agencies & Interface File/ API of Banks
Treasuries & RBI

PwC Slide 11
Content

Section 1 Enactment Timelines

Section 2 GSTN Processes

Section 3 Rate debate

Section 4 Place of supply rules and credit

Section 5 Transition provisions

March 2015
PwC Slide 12
Rate of GST- Across the Globe

• Rates of GST in other countries are:

FM has assure that the rate of GST will be less

than the speculated rate of 27% Comment:
The present indirect tax levy
on goods is: 12.5% (Excise
Duty) + 14% (VAT)

May 2015
PwC Slide 13
Rate of GST – Concessions/incentives

What would happen to current incentives:

• State incentives:
- Area based exemptions
- VAT deferment schemes

• Central incentives:
- Product specific concessions
- Area based incentives

May 2015
PwC Slide 14
Content

Section 1 Enactment Timelines

Section 2 GSTN Processes

Section 3 Rate debate

Section 4 Place of supply rules and credit

Section 5 Transition provisions

March 2015
PwC Slide 15
Place of supply rules and credit

Distribution of accumulated credit at

corporate office?
• Head office would incur standard costs and
accumulate input credit
• HO might have Nil or marginal output tax
liability
Credit utilization dependent on seller
declaration?
• Auto-drafting of purchase statement of a dealer
from the invoice based sales details uploaded by
the counterparty dealers
Credit on Businesses’ indirect spends by
employees?

May 2015
PwC Slide 16
Content

Section 1 Enactment Timelines

Section 2 Rate debate

Section 3 Place of supply rules and credit

Section 4 Transition provisions

March 2015
PwC Slide 17
Transition provisions

• Refund, not credit – Accumulated credit at the

cut off date cannot be carried forward
- Input and input services - CENAVT
- Capital goods – CENVAT and VAT
- VAT credit
• Defer capital expenditure/purchases
• Treatment of Way-Bill/ C-Form/
Checkposts
• Treatment of Existing Area based
Exemptions/ Benefits under State
Industrial Policy
• Dual Assessment for the Taxpayer?

May 2015
PwC Slide 18
Thank You

© 2015 PricewaterhouseCoopers Private Ltd. All rights reserved. “PwC”, a registered

trademark, refers to PricewaterhouseCoopers Private Limited (a limited company in India) or,
as the context requires, other member firms of PwC International Limited, each of which is a
separate and independent legal entity.
Panel Discussion: GST Regime:
Are we ready?

Dr J N Singh
Additional Chief Secretary, Finance Dept., with
Shashank Priya, Vimal Goel additional charge of post of Revenue Dept.,
Commissioner, CBEC EVP, GSTN Commissioner of Land Reforms in Gujarat

Dr H P Kumar,
Chairman-cum-Managing Director,
Arun Subramanian
National Small Industries
VP, Globalization Services, SAP Labs India
Corporation