03
Sep2017

Overview of GST

  • Goods and Services Tax (GST) is an indirect taxthroughoutIndia to replace various taxes levied by the central and state
  • Taxes Overrode by GST:- Commercial Tax, Value Added Tax (VAT), Food Tax, Central Sales Tax (CST), Octroi, Entertainment Tax, Entry Tax, Purchase Tax, Luxury Tax, Advertisement taxes, Taxes applicable on lotteries
  • GST is levied on all transactions such as Sale, Transfer, Purchase, Barter, Lease, or Import of goods and/or services.
  • India will adopt a dual GST model, administered by both the Union and State Governments.
  • Transactions made within a single state will be levied with Central GST (CGST) and State GST (SGST) both. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied.

LEGAL ASPECTS OF INPUT TAX CREDIT (ITC) OF EXCISE DUTY ON UNSOLD STOCKS

Claim of ITC of Excise Duty by existing Unregistered Persons by Registering under GST

Under the current excise tax, only manufacturers with a turnover above Rs. 1.5 Crores are required to register and pay excise duty. Under GST, this threshold is reduced to 20 lakhs. So, many previously unregistered persons will now be required to register under GST.  Hence, one of the most important questions entrepreneur needs an answer is whether unregistered persons can claim CENVAT credit under GST on their stock in hand.

A registered person under GST, who was not registered under the existing law, will be allowed to avail input tax credit on goods held in stock on the appointed day.

CASE I: If Proof of Payment of Excise Duty Is Available CASE II: If Proof of Payment of Excise Duty Is Not Available
100% ITC subject to fulfillment of certain conditions Þ    Credit shall be only after the output GST has been paid on the sale of goods.

Þ    If GST rate is less than 18% then 40% of the GST

Þ    If GST rate is 18% and above, then 60% of the GST applicable as ITC

Þ    If IGST is paid on the sale of such goods then ITC of 30% is available if IGST rate is 18% and above and 20% ITC for others

Þ    ITC is allowed subject to fulfillment of certain conditions

 

_____________________

Our Corporate Professional Team is ever willing to provide assistance on any issue concerning GST, Insolvency and Bankruptcy Law, Business Model Advisory in India and Abroad, Customs Law, Corporate & Commercial Advisory, IPRs. Secretarial Compliances, Agreement Drafting & Negotiations etc. you may write us on contact@legale-services.com

Leave your comment

Please enter your name.
Please enter comment.
 

Disclaimer

 

As per the rules of the Bar Council of India, we are not permitted to solicit work and advertise. By clicking “I agree” below, you acknowledge the following:

 

  • There has been no advertisement, personal communication, solicitation, invitation or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;

  • The user wishes to gain more information about us for his/her own information and use;

  • The information about us is provided to the user only on his/her specific request and any information obtained or materials downloaded from this website is completely at the user’s volition and any transmission, receipt or use of this site would not create any lawyer-client relationship.

The information provided under this website is solely available at your request for informational purposes only, should not be interpreted as soliciting or advertisement. We are not liable for any consequence of any action taken by the user relying on material/information provided under this website. In cases where the user has any legal issues, he/she in all cases must seek independent legal advice.