GOODS AND SERVICE TAX TRANSITION

Posted by AkmGlobal on May 15th, 2017

Goods and Service Tax is a comprehensive indirect tax on the production, sale and consumption of goods and services throughout India (Except for the state of Jammu and Kashmir), to replace all the indirect taxes levied by the central and state governments.It is governed by Goods and Service Tax Council whose Chairman is the Union Finance Minister of India i.e. Mr. Arun Jaitley. Simply, GST will subsume various indirect taxes into a single taxation system and will help in promoting a common market for all.It is expected that once all these taxes are removed, the cascading effect will be removed, goods will become slightly cheaper".

Every company is waiting and further, preparing itself to make transition to new GST  provisions. All the taxpayers that are already registered under VAT/Service tax/excise duty, also, need to register themselves under GST. Further, every business should have a fully computerized office with required softwares for the successful Goods and Service Tax Transition. Every businesshaving registrations under the central excise, value added tax, central sales tax, service tax would be granted a provisional registration under the GST law. 

The model law on GST consists of transition provisions that would help businesses to shift into new tax regime without any loss of revenue. The transition process allows an existing user to avail the input tax credit which represents the CENVAT credit carried forward in returns filed under the previous law. However, under cases where the taxes has been paid to the providers of input or input services under the earlier laws but the actual supplies are to be received on or after the appointed day, the receiver of such inputs or input services will not be able to take the credit of taxes paid under earlier regime.Further, the Transition Process allows an Input Service Distributor to distribute input tax credit under GST regime subject to fulfillment of certain conditions.