The much awaited Goods and Services Tax (GST) will bring about a sweeping change in the regulatory and tax areas in India. This is a One Nation, One Market, One Tax initiative that has been implemented by the Government. GST has been implemented in one way or the other in several countries, bringing about a ease of doing business and ensuring better controls.
India’s most awaited tax reform Goods and Services Tax (GST) was enacted with effect from July 1, 2017. GST in India is a destination based taxation system. This is because revenue will belong to the states where the goods are finally consumed and not to the State where the goods are produced.
The Goods and Services Tax seeks to strengthen the taxation regime with respect to trade in goods and services which would reduce numerous internal processes and will improve ease of doing business in India. With the process of implementation of the GST law, many significant changes have been set out vis-à-vis the old law which mandates us to unlearn certain concepts and relearn the same in the context of GST law.
Taxes which are not subsumed are – basic custom duty, export duty, stamp duty, taxes on alcohol, crude, petroleum, high speed diesel, natural gas, spirit, aviation turbine fuel.
Under the GST, assessment focuses on self-assessment by the taxpayers themselves. So the taxpayer is required to self-assess the taxes payable, and furnish a tax return as prescribed. The compliance verification is done by the department through scrutiny of returns, audit and/or investigation. Thus, the compliance verification is to be done through documentary checks rather than physical controls. The obligation is on the taxpayer for keeping and maintaining accounts and records. The GST Act and “Accounts and Records” Rules provide that every registered person shall keep and maintain all records at his principal place of business. It also provides that every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant.
August Consulting offers assistance with compliances under these regulations.