Tax layers under proposed GST Model

Tax layers under proposed GST Model, Tax Structure of New GST Model, It is a Dual-GST structure proposal wherein the Central Government and State Government will simultaneously charge GST on the same economic supply. Recently we provide complete details for GST – Current Tax Structure and proposed GST Regime. Now you can scroll down below and check more details for “Tax layers under proposed GST Model”

Inter-state transactions or supplies to be charged an Integrated GST (IGST) which is a combination of Central-GST (CGST) and State-GST (SGST) rates

Unique input tax credit mechanism; as illustrated below:

Comparative Analysis (Intra-State Trade)
(Assumed Rates for Excise Duty, CGST & SGST @12%, VAT @12.5%)

Transaction	Current Scenario (Amt. in Rs.)	GST Scenario (Amt. in Rs.)
Cost of Raw Materials to Input Manufacturer	100	100
Profit Margin @ 25%	25	25
Assessable Value	125	125
Add: Excise Duty @12%   |   CGST @ 12%	15	15
Add: VAT@12.5%    |    SGST@12%	18	15
Invoice Value (Input Manufacturer to Output Manufacturer)	158	155
Cost of Goods to Output Manufacturer (Net of ITC)	100	100
Add: Value Addition @ 40% on Cost (incl. of Profit Margin)	40	40
Assessable Value (Manufacturer to Wholesaler)	140	140
Add: Excise Duty @12%  |  CGST @ 12%	16.80	16.80
Add: VAT@12.5%   |     SGST@12%	19.60	16.80
Invoice Value (Manufacturer to Wholesaler)	176.40	173.60
Cost of Goods to Wholesaler (Net of ITC)	156.80	140.00
Add: Profit Margin of Wholesaler @10%	15.68	14.00
Add: Excise Duty @12%   |  CGST @ 12%	0.00	18.48
Add: VAT@12.5%   |     SGST@12%	21.56	18.48
Invoice Value (Wholesaler to Retailer)	194.04	190.96
Cost of Goods to Retailer (Net of ITC)	172.48	154.00
Add: Profit Margin of Retailer @10%	17.25	15.40
Add: Excise Duty @12%   |  CGST @ 12%	0.00	20.33
Add: VAT@12.5%   |    SGST@12%	23.72	20.33
Final Price to be paid by Consumer	213.44	210.06
Cost Saving to Consumer		3.39

Comparative Analysis (Inter-State Trade)
(Assumed Rates for Excise Duty, CGST & SGST @12%, CST @ 2% each)

Transaction	Current Scenario (Amt. in Rs.)	GST Scenario (Amt. in Rs.)
Cost of Raw Materials to Input Manufacturer	90	90
Profit Margin Rs.10	10	10
Assessable Value	100	100
Add: Excise Duty @12%  I   CGST @ 12%	12	12
Add: Vat 12.5%   I     SGST@12%	14	12
Invoice Value (Input to Output Manufacturer)	126.00	124
Cost of Goods to Output Manufacturer (Net of ITC)	100	100
Add: Value Addition @ 40% on Cost (incl. of Profit Margin)	40	40
Assessable Value (Manufacturer to Wholesaler)	140	140
Add: Excise Duty @12%  I   CGST @ 12%	16.80	0
Add: CST@2%  I      IGST@24%	3.14	33.60
Add: Additional Tax @1%	0	1.40
Invoice Value (Manufacturer to Wholesaler)	159.94	175.00
Cost of Goods to Wholesaler (Net of Input Credit)	159.94	141.4
Add: Profit Margin of Retailer @10%	15.99	14.14
Add: Excise Duty @12% I   CGST @ 12%	0	18.66
Add:  VAT@12.5%    I     SGST@12%	21.99	18.66
Invoice Value (Wholesaler to Retailer)	181.93	178.73
Cost of Goods to Retailer (Net of Input Credit)	175.93	155.54
Add: Profit Margin of Retailer @10%	17.59	15.55
Add: Excise Duty @12% I   CGST @ 12%	0	20.53
Add: VAT@12.5%  I     SGST@12%	24.19	20.53
Final Price to be paid by Consumer	217.71	212.16
Cost Saving to Consumer		5.56

Current Scenario – Tax Implications against Sales and Stock Transfers by an MNC
(Assumed Rates for Excise Duty @12%, VAT@12.5%, CST @ 2% each)

Particulars	Basis	Amt. (in Rs.)
Purchase of Raw & Packing Materials 20000 Kgs. @ Rs.50		1000000
18000 Kgs. (Intra-state)	A	900000
2000 Kgs.  (Inter-State)	B	100000
Input Credit of Excise on Intra-State Purchase @ 12%	C=A x 12%	108000
Input Credit of VAT on Intra-State Purchase @ 12.5%	D=A x 12.5%	126000
Input Credit of Excise on Interstate Purchase @ 12%	E=B x 12%	12000
Input Credit of CST on Inter-state Purchase 2%	F=B x 12%	2240
FG sold within State-A (200 Kgs. @ Rs.75 )	G	15000
Excise Duty Payable @ 12%	H=G x 12%	1800
VAT Payable @ 12.5%	I =G x 12.5%	2100
FG Stock Transfer to State -B (17000 Kgs. @ Rs.65 (TDR))	J	1105000
Excise Duty Payable @ 12%	K=J x 12%	132600
VAT Payable @ 12.5% on Local Sales by Depot	L=J x 12.5%	159375
Reversal of ITC of VAT (ITC x 3/12.5)	M= D x 3/12.5	30240
FG Inter-State Sales to State -C (2800 Kgs. @ Rs.75 )	N	210000
Excise Duty Payable @ 12%	O=N x 12%	25200
CST @ 2%	P=N x 2%	4704
Net Excise Duty Payable after Cenvat Credit	Q=(H+K+O-C)	39600
Net VAT Payable after Vat Input Credit	R=(I+L+M-D)	65715
Net CST Payable after CST Input Credit	S=(P-F)	2464
Net Liability of Duties & Taxes	T=(Q+R+S)	107779

GST Scenario – Tax Implications against Sales and Stock Transfers by an MNC
(Assumed Rates for SGST & CGST @12%, IGST @ 24%, Add. Tax @ 1%)

Particulars	Basis	Amt. (in Rs.)
Purchase of Raw & Packing Materials 20000 Kgs. @ Rs.50		1000000
18000 Kgs. (Intra-state)	A	900000
2000 Kgs. (Inter-State)	B	100000
Input Credit of CGST on Intra-State Purchase @ 12%	C = A x 12%	108000
Input Credit of SGST on Intra-State Purchase @ 12%	D=A x 12%	108000
Input Credit of IGST on Inter-State Purchase@ 24%	E = B x 24%	24000
Additional Tax @1% on Inter-State Purchase	F = B x 1%	1000
Total Credit of GST Available to Unit-A	G = (C+D+E)	240000
FG sold within State-A (200 Kgs. @ Rs.75 )	H	15000
CGST Payable @ 12%	I=(H x 12%)	1800
SGST Payable @ 12%	J=(H x 12%)	1800
FG Stock Transfer to State -B (17000 Kgs. @ Rs.65 (TDR))	K	1105000
IGST Payable @ 24%	L =K x 24%	265200
Additional Tax@1%	M= K x 1%	11050
FG Inter-State Sales to State -C (2800 Kgs. @ Rs.75 )	N	210000
IGST Payable @ 24%	O=N x 24%	50400
Additional Tax@1%	P=N x 1%	2100
Balance of CGST Input Credit to be  adjusted against IGST Payable	Q= C – I	106200
Balance of SGST Input Credit to be  adjusted against IGST Payable	R= D – J	106200
Net IGST Payable against  Stock transfers and Interstate Trade	S=(I+J+L+O-G)	79200
Non-Vatable Add. Tax to be retained by respective State Governments	T	14150
Total of Duties and Taxes Payable	U=S+T	93350
Savings in Net Tax Payable	(1,07,779-93,350)	14,429