...1.Introduction Billed as India’s biggest indirect tax reform since independence- Goods and Service Tax once introduced has the potential to boost economic growth and according to analyst add around 0.9%-1.5% to our GDP. GST has been implemented by over 150 countries owing to its transparency and revenue increasing capabilities. The idea of GST is almost a decade old and was first proposed by a committee chaired by tax expert Vijay Kelkar in March 2004 after much deliberations and delays P.Chidambaram and Pranab Mukherjee formally introduced the legislation in Lok Sabha in March 2011. Thereafter the Bill has been stuck up in a quagmire of political opportunism and delay. The law, if finally passed by both houses of parliament will come into force from April 2016. 2.Nuanced understanding of GST As opposed to a single comprehensive tax which is a global norm India has decided to adopt the dual GST model where there are two components- central GST (CGST) and a state GST (SGST) hence the Centre and state will legislate and administer the taxes concurrently. GST will subsume various disparate taxes viz. Central excise duty, VAT, Service tax and also other taxes like luxury tax, entry tax thereby reducing the compliance cost and at the same time simplifying the tax structure. GST is primarily a destination based tax and requires that the SGST accrues to the destination state this caused dissent among some predominantly manufacturing states like Maharashtra, Gujarat and Tamil...
Words: 1055 - Pages: 5
...system in India India has a well-developed tax structure with clearly demarcated authority between Central and State Governments and local bodies. Central Government levies taxes on income (except tax on agricultural income, which the State Governments can levy), customs duties, central excise and service tax. Value Added Tax (VAT), (Sales tax in States where VAT is not yet in force), stamp duty, State Excise, land revenue and tax on professions are levied by the State Governments. Local bodies are empowered to levy tax on properties, octroi and for utilities like water supply, drainage etc. In last 10-15 years, Indian taxation system has undergone tremendous reforms. The tax rates have been rationalized and tax laws have been simplified resulting in better compliance, ease of tax payment and better enforcement. The process of rationalization of tax administration is ongoing in India. Since April 01, 2005, most of the State Governments in India have replaced sales tax with VAT. 1.Direct Taxes a. Taxes on Corporate Income Companies residents in India are taxed on their worldwide income arising from all sources in accordance with the provisions of the Income Tax Act. Non-resident corporations are essentially taxed on the income earned from a business connection in India or from other Indian sources. A corporation is deemed to be resident in India if it is incorporated in India or if it’s control and management is situated entirely in India. Domestic...
Words: 1298 - Pages: 6
...ro Goods and Services Tax (GST) in India: prospect for states by Mohd. Azam Khan1 and Nagma Shadab2 Department of Economics, Aligarh Muslim University, India Abstract: Goods and services tax (GST) is a broad based and a single comprehensive tax levied at every stage of the production and distribution chain with applicable set-off in respect of the tax remitted at previous stages. It is basically a tax on final consumption integrates the union excise duties, custom duties, services tax and state VAT. Presently around 140 countries have adopted the GST pattern, including India. The GST would be beneficial for the consumers as it reduces the final burden of taxation. For Government it leads the reduction of tax compliance efforts and administrative costs and for business units it leads transparency, complete set-off and removal of cascading effect of taxation. It is in this background that the present paper tries to explain the significance of GST in India and its prospects for states to generate revenue and ensure transparency in tax structure. This paper is organized into seven sections. Section two presents justification for dual structure of GST in India. The third part presents the rate structure under GST work in India. The fourth segment is concerned with the working of GST in India. The fifth part shows the international experiences of GST at state level in India. The seventh and final part is related to conclusion and policy recommendations. Keywords: Goods and service...
Words: 8698 - Pages: 35
... CHAPTER 1: INTRODUCTION The word tax is derived from a Latin word “Taxare “it means to estimate or value. The term tax to a common man means money paid to the Government out of compulsion without deriving any benefit directly by himself or his family members. As per taxation tax means statuary payment to be made b the public and imposed by the Government. Definition: As per Prof. Adams: ¾ From the Stand point of the state, a tax is source of derivate revenue ¾ From the point of the citizen, A tax is a coerced payment ¾ From the Administrative point of view, it is a demand for money by state in conformity to establish rules ¾ From the point view of a Theory, a tax is a contribution from the individual for common expenditure Characteristics of Tax: 1. Tax can be imposed by the Government only 2. Taxes are paid in the form cash only 3. the aim of levying tax is to promote the welfare of the people living in the country 4. the object of tax is to raise revenue to the Government 5. tax is a legal collection 6. payment of tax involves an element of sacrifice 7. it is levied by the Government by virtue of its power confirmed under the Constitution 8. Tax is not a payment for specific service rendered by the Government to tax payer 9. Tax is imposed on income or wealth or on a commodities i.e. either directly or indirectly, but tax is actuallypaid by the individuals. Objects of tax Every government has to discharge its...
Words: 19516 - Pages: 79
...CHAPTER 6 DIRECT AND INDIRECT TAXES A tax may be defined as a "pecuniary burden laid upon individuals or property owners to support the government, a payment exacted by legislative authority. A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority". Taxes consist of direct tax or indirect tax, and may be paid in money or as its labour equivalent (often but not always unpaid labour). India has a well developed taxation structure. The tax system in India is mainly a three tier system which is based between the Central, State Governments and the local government organizations. In most cases, these local bodies include the local councils and the municipalities. According to the Constitution of India, the government has the right to levy taxes on individuals and organizations. However, the constitution states that no one has the right to levy or charge taxes except the authority of law. Whatever tax is being charged has to be backed by the law passed by the legislature or the parliament. Article 246 (SEVENTH SCHEDULE) of the Indian Constitution, distributes legislative powers including taxation, between the Parliament and the State Legislature. Schedule VII enumerates these subject matters with the use of three lists; • List - I entailing the areas on which only the parliament is competent to makes laws, • List - II entailing the areas on which only the state legislature can make laws, and • List - III listing...
Words: 4564 - Pages: 19
...DRF 27: Entrepreneurship and Management of Small Business Name: Aswin J . R Enrolment No: A12N28165008 I. Critically examine the uses of Entrepreneurship Development Programmes (edps) in India. Entrepreneurship plays a very important role in the economic development. Entrepreneurs act as catalytic agents in the process of industrialization and economic growth. Joseph Schumpeter states that the rate of economic progress of a nation depends upon its rate of innovation which in turn depends upon the distribution of entrepreneurial talent in the population. Technological progress alone cannot lead to economic development unless technological breakthroughs are put to economic use by entrepreneurs. It is the entrepreneur who organizes and puts to use capital, labour and technology in the best possible manner for the setting up of his enterprise. Importance of entrepreneurship development programme (EDP) is to enable entrepreneurs initiating and sustaining the process of economic development in the following ways- 1. Creation of Employment Opportunities: Unemployment is one of the most important problems confronting developing and underdevelopment countries, EDP's enable prospective entrepreneurs in the setting up of their own units, thus enabling them to get self-employment. With the setting up of more and more units by entrepreneurs, both on small and large scale, numerous job opportunities are created for the others. Entrepreneur...
Words: 3123 - Pages: 13
... | | INDIRECT TAXATION CIA – II INDIAN TAX STRUCTURE TAXATION SYSTEM IN INDIA India has a well-developed tax structure with clearly demarcated authority between Central and State Governments and local bodies. Central Government levies taxes on income (except tax on agricultural income, which the State Governments can levy), customs duties, central excise and service tax. Value Added Tax (VAT), stamp duty, state excise, land revenue and profession tax are levied by the State Governments. Local bodies are empowered to levy tax on properties, octroi and for utilities like water supply, drainage etc. Indian taxation system has undergone tremendous reforms during the last decade. The tax rates have been rationalized and tax laws have been simplified resulting in better compliance, ease of tax payment and better enforcement. The process of rationalization of tax administration is ongoing in India. Direct Taxes In case of direct taxes (income tax, wealth tax, etc.), the burden directly falls on the taxpayer. Income tax According to Income Tax Act 1961, every person, who is an assessee and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the Finance Act. Such income tax shall be paid on the total income of the previous year in the relevant assessment year. Assessee means a person by whom (any tax) or any other sum of money is payable under the Income Tax Act, and includes - (a) Every person in respect...
Words: 3542 - Pages: 15
........................ 3 Objectives of Tax reforms ............................................................................................................................. 5 Implementation of the Existing System .................................................................................................. 11 Shortcomings of the Existing Tax Structure .......................................................................................... 13 Alternatives Available in the implementation ....................................................................................... 18 Tax base and Rates ........................................................................................................................................ 25 Implementation of GST in other countries......................................................................................... 37 Data Analysis and Interpretation........................................................................................................... 38 BIBLIOGRAPHY ............................................................................................................................................. 40 LEGAL ASPECTS OF BUSINESS | GST-the next big reform Page 2 INTRODUCTION Probably the biggest tax overhaul system, which independent India has seen could be the introduction of Goods and Services Tax, leave apart the Direct Tax Code (which could replace the Income Tax Act, 1961). Though the implementation...
Words: 14431 - Pages: 58
...Goods and Services Tax-What it is! Folks! Goods and Services Taxes or simply put GST is believed to solve many issues when it comes to the taxation policy in India. Before we jump into the technicalities of GST, let me set some pretext for those who have little idea about this topic. Our country, India, is a land of Taxes! Currently, we have numerous taxes like Sales Tax, Value Added Tax, Service Tax, Income Tax, Central Excise, Customs, Countervailing Duty, Special Additional Duty and what not. As a manufacturer, one need to pay these many taxes to government and the total amount that goes into taxes is fairly large. The reason being, the manufactured goods has to go through several stages (intermediate parties) before it finally reaches to the customer. And, the taxes are levied on the goods at each stage. That means same tax is levied on the product more that once before it reaches to the end customer. We call this scenario-Tax on Tax. In 2004, the government came up with an idea of VAT where in this problem of tax on tax was taken care of. In VAT the dealer only adds the tax on the value added on goods by him and does not pay the taxes on the values added on the goods by previous customers. But, as you can figure it out, VAT deals with the taxes only on goods. What about tax on services? Further, the VAT was implemented on the state level. Centre continued to charge the central taxes on the goods and services. To solve this problem, government came up with the idea were...
Words: 642 - Pages: 3
...M U M B AI SILICON VALLEY BANGA LORE SINGA P ORE MUMBA I BK C NE W DE L HI MUNICH The Indian Medical Device Industry Regulatory, Legal and Tax Overview March 2015 © Copyright 2015 Nishith Desai Associates www.nishithdesai.com The Indian Medical Device Industry Regulatory, Legal and Tax Overview About NDA Nishith Desai Associates (NDA) is a research based international law firm with offices in Mumbai, Bangalore, Silicon Valley, Singapore, New Delhi, Munich. We specialize in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner. We focus on niche areas in which we provide significant value and are invariably involved in select highly complex, innovative transactions. Our key clients include marquee repeat Fortune 500 clientele. Core practice areas include International Tax, International Tax Litigation, Litigation & Dispute Resolution, Fund Formation, Fund Investments, Capital Markets, Employment and HR, Intellectual Property, Corporate & Securities Law, Competition Law, Mergers & Acquisitions, JVs & Restructuring, General Commercial Law and Succession and Estate Planning. Our specialized industry niches include financial services, IT and telecom, education, pharma and life sciences, media and entertainment, real estate and infrastructure. Nishith Desai Associates has been ranked as the Most Innovative Indian Law Firm (2014) and the Second Most Innovative Asia - Pacific Law Firm (2014)...
Words: 19609 - Pages: 79
...financial advisory, risk management, and tax services to selected clients. These firms are members of Deloitte Touche Tohmatsu Limited (DTTL), a UK private company limited by guarantee. Each member firm provides services in a particular geographic area and is subject to the laws and professional regulations of the particular country or countries in which it operates. DTTL and each DTTL member firm is a separate and distinct legal entity. Each DTTL member firm is structured differently in accordance with national laws, regulations, customary practice, and other factors and may secure the provision of professional services in their territories through subsidiaries, affiliates, and/or other entities. In the United States, Deloitte LLP is the member firm of DTTL. Services are primarily provided by the subsidiaries of Deloitte LLP, including:• Deloitte & Touche LLP• Deloitte Consulting LLP• Deloitte Financial Advisory Services LLP• Deloitte Tax LLP In India, Deloitte LLP has the following indirect subsidiaries: Deloitte & Touche Assurance & Enterprise Risk Services India Private Limited, Deloitte Consulting India Private Limited, Deloitte Financial Advisory Services India Private Limited, Deloitte Tax Services India Private Limited, and Deloitte Support Services India Private Limited. These entities primarily render services to their respective U.S.-based parents. Deloitte & Touche Assurance & Enterprise Risk Services India Pvt. Ltd A collaborative venture between...
Words: 2464 - Pages: 10
...Tax Structure in India Dear reader here we are presenting a post on different types of taxes, which will be useful in your upcoming exam. About the Direct Tax :A tax that is paid directly by an individual or organization to the imposing entity. A taxpayer pays a direct tax to a government for different purposes, including real property tax, personal property tax, income tax or taxes on assets. Direct taxes are different from indirect taxes, where the tax is levied on one entity, such as a seller, and paid by another, such a sales tax paid by the buyer in a retail setting. A direct tax cannot be shifted to another individual or entity. The individual or organization upon which the tax is levied is responsible for the fulfillment of the tax payment. Indirect taxes, on the other hand, can be shifted from one taxpayer to another. Types of Direct taxes: a) Income tax Income tax is collected on all incomes received by private individuals after certain allowances are made. In most of the economies Income tax is a major source of Government revenue. b) Corporation tax This tax is levied on profits earned by companies. It is a proportional tax which is levied at the constant rate. c) Petroleum revenue tax It is a tax levied on the profits of companies involved in drilling of oil and gas. This tax may or may not exist in other countries. d) Capital gains tax Capital gains tax is charged on the profit realized on the sale of a non-inventory asset that was...
Words: 753 - Pages: 4
...Overview of GST GST (good and service tax), other words it also known as VAT (value added tax). It have implemented in many countries throughout the world. Currently there are 170 counties in the world that have implemented GST /VAT. NO REGION No of country 1 ASEAN 7 2 Asia 19 3 Europe 53 4 Oceania 7 5 Africa 44 6 South Africa 11 7 Caribbean, Central and North America 19 Table 1: No of countries implement GST/VAT Sources: Ministry of Finance GST is a multi-stage tax system, this is due to its nature which the tax is collected based on the supply of goods and services at each of the supply chain from the supplier to the retailer stage of the distribution. Even though GST is imposed at every stage of the supply chain, but the tax element will be not become a part of the cost of the product, because the GST paid on the business inputs is claimable as input tax. Where the business will pay the GST as output tax and claim for the input tax from the customs. In addition, it does not matter how many stages where a particular goods and services goes through the supply chain because the input tax incurred at the previous stage is always deductible by the businesses at the next in the supply chain. GST consider as a broad based consumption tax, which includes all sectors of the economy. In Malaysia the GST have been establish in a very clear manner, for example all goods and services made in Malaysia including...
Words: 15950 - Pages: 64
...97. STOCK BROKING SERVICES A. Date of introduction: 01.07.1994 vide Notification No.1/1994-ST dt.28.06.1994. A. Definition and scope of service: “Recognised stock exchange” has the meaning assigned to it in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956). (Section 65(90) of Finance Act, 1994 as amended) “Securities” has the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956). (Section 65(93) of Finance Act, 1994 as amended) “Stock-broker” means a person, who has either made an application for registration or is registered as a stock broker, in accordance with the rules and regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992). (Section 65(101) of Finance Act, 1994 as amended) “Taxable service” means any service provided or to be provided to any person, by a stock-broker in connection with the sale or purchase of securities listed on a recognized stock exchange. (Section 65(105)(a) of Finance Act, 1994 as amended) C. Rate of Tax & Accounting Code: Rate of Tax Service Tax 10% of the value of services Education Cess 2% of the service tax payable Secondary and H. 1% of the service tax payable. Education Cess Other – As levied or applicable Penalty/interest (Rate of tax is effective from 24.02.2009.) D. Classification of Taxable Services: Accounting Code 00440008 00440298 00440426 00440009 (1) The...
Words: 2715 - Pages: 11
...ASSIGNMENT TAXATION LAW SUBMITTED BY: KONIKA JAIN PRN:15010143061 All India Federation Of Tax Practioners (Petitioner) v/s Union Of India & others(Respondent) 21st August 2007 (Date Of Judgement) CITATION: (2007) 7 SCC 527 AIR 2007 SC-2990 NAME OF THE JUDGES: S.H. Kapadia & B. Sudershan Reddy FACTS: * On 1st June 1998 finance bill was introduced in which Clause 119 of the Notes sought to substitute Sec 65 ,66 and 68 and amend the Section 67 of the finance act which was related to service tax in which the tax will be levied on services rendered by a practicing chartered accountant ,cost accountant and architect to a client in professional capacity at the rate of 5% . * But on 3rd June 1998 , Bombay Chartered Accountant association made a representation to the central government objecting this bill but then also the bill was passed in August 1998 and mainly it came into force on 1st April 1998. * Then on 7th October 1998 ,Union of India issued a notification in which taxable services are exempted other than accounting and auditing and than within the period of ten days i.e on 16th October ,1998 issued another notification in which the scope of exemption was reduced. * And therefore, the All India Federation of Tax has filed a written petition in Bombay High Court challenging the validity of the levy of service tax. PROCEDURAL HISTORY: This is an appeal which was filed against the judgement given by...
Words: 3819 - Pages: 16
