Why CA Services Are Important, and What Are Their Roles and Responsibilities?

As the Goods and Services Taxes (GST) are being implemented on July 1st, there remain several areas where it is difficult to be clear on the intricacies of GST. Several platforms provide CA services. While initial difficulties are likely to arise, GST is the direction in which the Indian economy must take to. Around the world, many nations have realized the advantages of having a united nationwide market and an all-in-one tax system that is much simpler than the chaotic maze of various state taxes. Here we will provide a quick overview of what you must know about GST before the official start date of July 1st.

Preamble

The most discussed change to indirect tax legislation, i.e., Goods & Services Tax ("GST"), is scheduled to take effect from the 1. July 2017. Chartered accountants, as service providers, are included in the scope of GST. 

Migration

All chartered accountants practicing and registered with the Service Tax legislation must be compelled to migrate to GST. (Section 22(2) of the Central Goods and Services Tax Act (CGST Act) If they don't expect their total turnover for the year 2017-18 to be greater than Rs. 20 lahks (or the equivalent of Rs. 10 lacs in states that are particular category) 

Total turnover comprises tax-exempt supplies as well as zero-rated products too. Generally, for a chartered accountant, most of his services will be tax-free. However, the export of services and services provided to SEZ units and developers must be considered when calculating the total turnover, even though they're zero tax-deductible supply.

The GST will result in the nation's market with an indirect tax, a single tax.

This is the most significant benefit that comes from the GST. Manufacturers and traders are not influenced by whether they sell their products within states or even outside of the state. It will apply a standard rate of GST, which will be imposed for the product, which will be the same regardless of the state in which it is offered. Thus GST will combine nearly all indirect taxes including import duties, except import taxes in one single tax at the national level. Therefore, excise tax, service tax, Central sales tax VAT (VAT) as well as octroi entry tax, and even SAD and CVD for the import of certain goods are included in the GST.

For instance, most food grains and essential items are placed in zero brackets or in bracket 5. Things smoking, such as cigarettes, high-end perfumes, and expensive cars, will be subject to the maximum 28% GST. There is also the additional GST tax bracket of 3%, which was explicitly designed specifically for gold. If a company is paying the GST that is due, there will be a central GST (CGST) which is to pay to central governments, as well as the states GST (SGST) that needs to be paid out to states, and a GST that is integrated GST (IGST) which has been paid out in the case of interstate sales.

Does the GST apply to all goods made in India?

Yes, but there is a slight distinction here. Certain items have been excluded from the remit of GST; however, The Finance Minister stated that they would also eventually be included. For instance, crude oil, High-Speed Diesel, petrol, electricity, natural gas, and alcohol for personal consumption are out of the scope of GST. They will continue to be subject to taxes under the current framework. Additionally, it is essential to note that the GST is not limited to items made in India but also to imports of products. You can opt for online CA services to get help with it. Although import duties aren't included in the GST and all imports will be regarded as an interstate sale and thus be subject to IGST in the manner described above.

What do you think the GST impact the services of India?

A few fundamental distinctions exist between how the tax system was implemented in India and how they are assessed under GST. In the past, the service tax was received by the central authorities, and there was no disagreement regarding which state should be the one to take the same tax. In the case of GST, the service tax is credited to the state where the service is rendered. For example, if a consultant in Maharashtra provides services to a customer in Karnataka, then the GST for that service will go to the State of Karnataka. Second, the current service tax is the same across most businesses, at 15 percent (14 percent service tax + 0.5 percent Swachh Bharat Tax plus 0.5 percent Krishi Kalyan Cess). In the context of GST, it will have four tax slabs for service tax. Essential services such as rail bookings and transport of goods and economy airline bookings will be subject to only 5 percent GST. If you are feeling confused, it is best to seek help from Online CA services. 

What happens to specific prices of products and overall inflation after the GST?

In the context of GST, Certain items will likely become more affordable, while others will be more costly. Examples include cigarettes, cars for business jewelry, and branded textiles. The majority of financial services may be more expensive. On the other hand, entry-level cars, car batteries paints, cement, two-wheelers, electrical appliances, and other items will likely become less expensive under GST. The jury isn't yet out about whether inflation will rise after GST's introduction; however, this is the case in countries such as Malaysia and Australia during the first year after GST implementation. However, GST Council has confirmed that GST Council has admitted that they've deliberately made sure to keep the GST on essential goods at a low level to keep inflation among consumers under control. For more detailed information one can consult CA services online, to get help with it.

Understanding the idea of the input tax credits (ITC)

The main benefit of GST isn't just the rate or the simplicity but also the ability to get an inexpensive input tax credit. Let's look at this a little more! If you're an entrepreneur providing services, you must pay GST on services offered. However, you must have utilized some inputs to offer these services and already paid GST. With the new tax regime, the input tax credits will be seamless and automatic. This is different from the current situation. The only thing businesses must remember is that CGST could be an input credit in the case of CGST, and SGST could be an input credit in the case of SGST. Cross credits aren't available under GST. This idea of an input tax credit (ITC) could affect the impact of GST significantly less than that described through the tax rates.

Then, who has to pay GST and file GST returns?

Businesses that have revenues of over Rs.20 lakhs (2 million) per annum must be subject to filing GST returns. In the case of states located in the North-Eastern regions, this threshold is decreased by 10 lakhs. Suppose you are selling interstate services and goods, in which case, the IGST must be paid regardless of sales. If you wish to claim input credits in connection with any taxes you've paid, then you have to be able to settle GST and submit returns. Certain types of businesses registered with the GST Council have offered a Composite Scheme in which an agreed-upon GST rate may be paid on the basis of turnover if your annual revenue is not more than Rs.75 lakhs. However, such companies are not eligible for any tax credit for inputs.

As India is getting ready to launch one of the most significant tax reforms it has ever seen, There are three things you should keep in mind. First, GST will create a nationwide market and streamline the taxation process in India. Additionally, it will improve efficiency in the business sector as their distribution and logistics are now geared to business needs instead of state-level tax structures. In addition, one can approach chartered accountants, GST will stop tax collection leakages and expand the range of businesses which will fall within the tax jurisdiction. This could be the most important lesson to be learned! What is likely to be cheaper or more costly following the GST change?