...will evolve as various stakeholders and experts are consulted. 1. 1. Table of Contents Preface ...................................................................................................................................................... 1 Introduction ................................................................................................................................... 2 1.1 1.2 The merits of GST ................................................................................................................................ 2 Urgency .................................................................................................................................................... 2 Desirable features of Goods & Service Tax Network (GSTN)........................................... 3 Stakeholders .......................................................................................................................................... 4 Workflows ............................................................................................................................................... 5 A common GST portal ....................................................................................................................... 6 Basic solution architecture ............................................................................................................. 7 Information...
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...Main Features of Goods and Services Tax (GST) Our Prime Minister, Datuk Seri Najib Razak announced the introduction of the Goods and Services Tax (GST) in Budget 2014 on 25th October 2013. GST will be effective on April, 2015 and replace the current sales and services tax. GST also known as value-added concept, which is multi-stage tax. GST will be charged on all taxable supplies of goods and services trading in Malaysia by a taxable resident. GST is tax neutral to businesses. GST charged to all intermediaries in the production and distribution chain. Businesses which have registered for GST are allowed to claim input tax credit. GST also is a broad-based tax since all supplies of goods and services will involve GST. Exemption is given to zero-rated supplies and exempt supplies, or those fall within particular special schemes. Besides that, imported services will be subject to GST. Standard-rated Supplies Standard rate supply those goods and services that are charged GST at a fixed rate. GST is collected by the seller and paid back to government. They can recover back the difference between the input and output tax when their input tax is higher than their output tax. Zero-rated Supplies Businesses can claim input tax credit in purchasing these supplies. Customer will be charged at zero rate of GST. Most basic food items such as meats, fish, cooking oil, rice, sugar, salt, vegetables and first 200 units of electricity supply used monthly for domestic consumers...
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...What is GST? Goods and Services Tax is a comprehensive tax levy on manufacture, sale and consumption of goods and services at a national level. Through a tax credit mechanism, this tax is collected on value-added goods and services at each stage of sale or purchase in the supply chain .The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax as he is the last person in the supply chain. What are the benefits of GST? 1. Credit Scheme: GST will be levied on supply of goods and services and the supplier will be allowed credit for the GST paid on purchases. The credit would be seamless except that the credit of CGST paid will not be allowed for set-off against SGST payable and vice versa. This will eliminate the he cascading effect and reduce the price. 2. Subsuming all Taxes: GST should subsume all major indirect taxes levied by the Central Government i.e. central excise, customs and service tax and majority of the taxes levied by the State Government i.e. VAT, luxury tax, entertainment tax, etc. In this regard, tax on petroleum products and alcohol are intended to be kept either outside or tax additionally under GST. 3. Export-oriented industries -internationally more competitive as entire taxes in supply chain would be refunded (zero-rating) 4. Import-substituting industries would also become competitive as prices of Indian ...
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...concerning the individuals and sole-proprietor business have been introduced in 2015 budget. The first issue is about individual tax. The first change is that the income tax rate is reduced by 1 to 3% for resident individuals depending on different levels of chargeable income since Year of Assessment (YA) 2015 (KPMG, 2014). This results in that tax payers with family and income of Rm4,000 per month will not have tax liability. Besides, the income tax rate for non-resident individuals is reduced by 1% from 26% to 25% (KPMG, 2014) Chargeable Income(RM) | Current Tax Rate (%) | Proposed Tax Rate (%) | Reduction(%) | 1—5,000 | 0 | 0 | - | 5,000—20,000 | 2 | 1 | 1 | 20,001—35,000 | 6 | 5 | 1 | 35,001—50,000 | 11 | 10 | 1 | 50,001—70,000 | 19 | 16 | 3 | 70,001—100,000 | 24 | 21 | 3 | 100,001—250,000 | 26 | 24 | 2 | 250,001—400,000 | 26 | 24.5 | 1.5 | Exceeding 400,000 | 26 | 25 | 1 | This tax brackets illustrates the chargeable income is raised from RM100,000 to RM400,000 and the rate for chargeable income band exceeding RM100,000 is structured into three bands with reduced rates of 24%, 24.5% and 25%, which results in existing taxpayers receiving a saving of at least 5.3% (Reuters, 2014). It is significant to note that the deduction in tax rates is expected to provide tax saving for individuals This significant change in income tax rate aims to increase the disposable income of individuals and in line with GST implementation. Secondly, Malaysian government also...
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...What is GST? The Goods and service tax is an initiative towards a reform in which this tax will replace all the indirect taxes in the Centre as well as the State, which can be levied in case of a sale being made or a service being provided. It is especially necessary in the current scenario, due to the degrading effects of the present tax system of CENVAT and State Vat system and the other complexities that prevail in the tax system of India. Some of the taxes that will be replaced under the central taxes are Service Tax, Surcharges, Central Excise Duty, Customs Duties and other Excise Duties. Some of the taxes that will be replaced under the state taxes are Luxury Tax, Entertainment Taxes, Tax on gambling and betting, Lottery Taxes, surcharges etc., as long as they are related to entry tax and the supply of goods and services. Due to reasons, which are social, environment related as well as those related to import dependence, certain products like high-speed diesel, alcohol (human consumption) is not included. Also, the direct taxes will be exempted from the GST, including capital gains, corporate and income tax. To better understand GST, consider the following: There exists a manufacturer, retailer and dealer (wholesaler). Goods and Service Tax is 10%. Now assume that the manufacturer buys the raw materials worth Rs 100 for Rs 140. Therefore, the total GST he will pay is Rs 4 by getting a tax credit of Rs 10 on the raw materials he had purchased. Now, the...
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...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...
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...1) Product: Shoes The raw material is plastic, then transformed into stylish shoes and sandals, that can be used day or night, for work or party time, each shoe has its own style and message to pass on. 2) Target Market: Age: 15 – 35 Gender: Female Income: 20.000 per year and above Marital Status: Any Sexual Orientation: Any Occupation: Student, worker, stay at home mum Social Activities: Shopping, hang out with friends, drinking, dinning out, internet, movies and partying. 3) Benefits: • All shoes and sandals are made of plastic, therefore they are easy to be cleaned, and can be used in any weather. • With different styles, you can have one for each occasion, or you can use the same one to work and party, depending on your own style. 4) Brand Name: Melissa Logo: [pic] Slogan: Style at your feet Image: Fashionable Women [pic] 5) Packaging A carton box that will come in different colours and designs that can be used for storage, each shoe will come in a stylish plastic bag inside the box. [pic] 6) Promotional Deals: ...
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...Science; Vol. 9, No. 11; 2013 ISSN 1911-2017 E-ISSN 1911-2025 Published by Canadian Center of Science and Education Elements of Compliance Costs: Lesson from Malaysian Companies towards Goods and Services Tax (GST) Mohd Rizal Palil1, Rosiati Ramli1, Ahmad Fariq Mustapha1 & Norul Syuhada Abu Hassan1 1 School of Accounting, University Kebangsaan Malaysia, Malaysia Correspondence: Mohd Rizal Palil, School of Accounting, Faculty of Economics and Management, University Kebangsaan Malaysia, 43600 Bangi, Selangor, Malaysia. E-mail: mr_palil@ukm.my Received: May 6, 2013 Accepted: June 20, 2013 Online Published: August 30, 2013 doi:10.5539/ass.v9n11p135 Abstract URL: http://dx.doi.org/10.5539/ass.v9n11p135 Various parties including academics, professionals and the society (the potential GST payers) are arguing about the introduction of GST in Malaysia. Goods and Services Tax (GST) or Value Added Tax (VAT) is a consumption tax imposed on the sale of goods and services. The Malaysian government introduce this potential tax mechanism, in order to increase the existing tax bracket and replacing the long-implemented service and sales taxes. With the introduction of GST, the Malaysian government felt it would provide them with the prospect to reduce the rates of individual and corporate income tax. However, do all companies particularly small and medium enterprises (Companies) ready to adopt the systems efficiently? If they could adopt the system, how much their compliance costs...
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...Business and Management Studies - IJEBMS ISSN: 2226-4809; EISSN: 2304- 6945 Vol. 2, No.1 (January, 2013) 12-19 Indexing and Abstracting: Ulrich's - Global Serials Directory Goods and Services Tax (GST): A New Tax Reform in Malaysia Nor Hafizah Abdul Mansor Faculty of Accountancy Universiti Teknologi MARA (UiTM), Malaysia Email: norha058@johor.uitm.edu.my Azleen Ilias College of Business and Accounting, Universiti Tenaga Nasional (UNITEN), Malaysia Email: Azleens@uniten.edu.my Abstract The Goods and Services Tax (GST) is becoming one of the most prominent topics in Malaysia. The announcement by the Malaysian Ministry of Finance (MOF) in the Budget 2010 on the implementation of GST had created various reactions from practitioners, academicians, general public and most important businesses. GST is one of the tools that are proposed by the Government to reduce continuous deficit budget in Malaysia. This paper discusses the GST as a new tax reform in Malaysia, and covers several issues in order to enhance the understanding and readiness among Malaysian in adopting GST. Keywords: Tax reform; GST; budget deficit. 1. Introduction The introduction of Goods and Services Tax (GST) was first announced in the Budget 2005 in order to replace the existing sales and services tax structure in Malaysia. This new tax reform is projected to be implemented in January 2007. However, the Government has announced on 22 February 2006 that the implementation would be postponed to a later date. Recently...
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... 4 1.2 What is GST 6 1.3 Why is GST implemented 8 1.4 Difference between GST and SST 9 1.5 General operations of GST 10 1.5.1 Goods and Services Tax (Zero-rated supply) Order 2014 11 1.5.2 Goods and Services Tax (Exempt supply) Order 2014 132. Content 14 2.1 Effect of implementation of Goods Services Taxes (GST) in Malaysia 14 2.1.1 GST are regressive tax or progressive tax? 14 2.1.2 Effect of implementation of GST on inflation based on CPI 16 2.1.3 Effect of implementation of GST on the household income 19 2.2. Impact of GST on sub regions of Malaysia 24 2.2.1 How GST improve the standard of living 29 2...
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...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...
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...Tutorial 1 Dr. Nakha Ratnam Somasundaram Sales tax and service tax Question 1 What do you understand by sales tax? Answer 1 It is form of indirect tax imposed on consumers and collected by enterprises. It is accounted by the enterprises to the Royal Malaysian Customs and Excise Department. Question 2 What is the scope of charge of the sales tax under the Sales tax Act of 1972 (as amended)? Answer 2 Section 6 imposes the tax. Under that section, sales tax shall be charged and levied on all taxable goods: a) Manufactured in Malaysia or acquired under the provisions of section 9 by a taxable person and sold used or disposed of by him, otherwise than by sale or disposal to a licenses manufacturer authorized by the Director General to acquire such goods without payment of tax b) Imported into Malaysia by any person for home consumption It is a single stage tax. A single stage tax means it is imposed only once. And it is imposed upon acquiring manufactured products from manufacturers or by Customs when the goods are imported from outside Malaysia into Malaysia. At the manufacturing stage, the tax is imposed at the output level. The taxes are collected and paid over to the Customs by the manufacture. In the case of import the importer would pay the tax to the Customs. However a manufacturer acquiring a product form another manufacturer for additional processing would not be liable for sales tax and where such taxes are paid, it could be recovered...
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...Consumption Tax TABLE OF CONTENTS Page Introduction Part 2: Registration Registration for GCT purposes How and when to apply Post-registration Procedures Part 3: Charging GCT Taxable supply Place of Supply Time of Supply Value of Supply Rates of GCT GCT on Imported Goods and Supply Part 4: Keeping Records and Accounts Legal requirements Records and Books to be Kept Tax Invoice Records of Sales and Purchases Input Tax Accounting Bases Simplified Accounting Methods Part 5: GCT Returns 31- 39 19 - 30 14 - 18 3-6 7 - 13 Basic Information Standard Return, Normal Accounting Methods (Form 4A) Simplified Return, Simplified Accounting Method (Form 4B) 3rd Edition “A Guide to Understanding GCT” Reprinted 2006. 1 Furnishing the Return Penalty and Surcharge Part 6: Assessments, Objections, Appeals, Penalties 40 - 42 Assessment on Registered Taxpayers, Registered Persons Amendment of an Assessment Notices and Time Limits for Assessments Objections Appeals Penalties 3rd Edition “A Guide to Understanding GCT” Reprinted 2006. 2 Introduction The General Consumption Tax (GCT), which commenced on October 22, 1991, has simplified and modernized the Jamaican indirect tax system. The GCT replaced eight (8) taxes. Those were Excise Duty CARICOM Duty Retail Sales Tax Telephone Service Tax Entertainment Duty Hotel Accommodation Tax Consumption Duty (other than on alcoholic beverages, tobacco products and petroleum products which is covered under the Special Consumption Tax) Additional...
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........................ 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...
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...Goods and Services Tax 1 GOODS AND SERVICES TAX BILL 2014 ARRANGEMENT OF CLAUSES Part I PRELIMINARY Clause 1. Short title and commencement 2. Interpretation 3. Meaning of “business” 4. Meaning of “supply” Part II ADMINISTRATION 5. Director General and other officers and their responsibilities 6. Recognition of office 7. Public servants 8. Confidentiality of information Part III IMPOSITION AND SCOPE OF TAX 9. Imposition and scope of goods and services tax, etc. 10. Rate of tax 11. Time of supply 12. Place of supply 13. Supply of imported services 14. Place where supplier of services belongs 15. Value of supply of goods or services 16. Value of goods imported 17. Zero-rated supply 18. Exempt supply 2 Bill Part IV REGISTRATION Clause 19. Registration of taxable person 20. Liability to be registered 21. Notification of liability and registration 22. Cessation of liability to be registered 23. Direction to treat persons as a single taxable person 24. Voluntary registration 25. Notification of cessation of liability or voluntary registration 26. Cancellation of registration 27. Group registration 28. Registration of partnership 29. Registration of societies or similar organisation 30. Registration of branches or divisions 31. Personal representatives deemed to be taxable persons 32. Exemption from registration for persons making or intending to make zero-rated supply Part V ACCOUNTING, ASSESSMENT, RECOVERY, ETC. 33. Issuance of tax invoice 34. Production of tax invoices by computer...
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