Indirect Taxation

Indirect taxes are spread through in every area of an entity's business. Their impact on material and production costs, cash flow, profitability and, ultimately, on shareholder value is an important element to stay ahead in competition

The current Indirect tax regime in India is still in a state of evolution, despite the various reforms in recent years. The system is quite complex, with multi-layered levies both at the Central and State level. The Central Government levies tax on goods at the point of import (Customs duty), manufacture (Excise duty), inter-state sales (Central sales tax or CST), and on provision of services (Service tax). The states, on the other hand, have been vested with powers to levy tax on sale of goods within the state (Value Added Tax or VAT), and on the entry of goods into the state (Entry tax), under the respective state laws.

Further, as India is committed to move towards uniform Goods and Services Tax (GST) regime, this needs to be factored in any significant tax approach developed at present.

Value Added Tax (VAT)

We provide advisory services in respect of the state level VAT and Sales tax related matters. Our services would include the following:

  • Getting Sales Tax Registration under Central Sales Tax Act and VAT.
  • Consultancy on matters related to Sales Tax including Tax planning.
  • Preparation of VAT returns.
  • Filing of Electronic/ Manual VAT returns
  • Help in obtaining statutory forms.
  • Representation
  • Advisory services
  • MVAT audit
  • Setting up of accounting system and training
  • VAT Planning
  • Liaison with VAT authorities Getting Sales Tax Assessments done.
  • Filing and pleading appeals wherever necessary.

Service Tax

The role of service sector in the Indian economy is quite significant.. By the Finance Act, 2012, the Central Government has amended the taxation of services, from adopting "Selective approach" (where only specified services were taxed) to a "Comprehensive approach" (under which all services would be taxable unless any of the services is specifically excluded/ exempted).

We have a team of specialized professionals who take a risk-based approach to service tax audit with a view to help clients to comply with the service tax laws. We go beyond traditional fundamentals and add tangible value. We also provide advisory services and a full spectrum of highly efficient outsourcing and co-sourcing solutions for service tax. Broadly, our services would include the following:

  • Registration under Service tax.
  • Preparation and filing Returns.
  • Consultancy for maintenance of proper records.
  • Consultancy for proper accounting for Service tax.
  • Consultancy on various issues relating to Service Tax.
  • Compilation of data of CENVAT credit.
  • Representation
  • Advisory services
  • Setting up of system for accounting of service tax and training
  • Assistance in availment of notified Abatements.
  • Utilization and availment of service tax credit
  • Computation of Service tax payable.
  • Getting assessments done
  • Service Tax planning

Goods and Service Tax (GST)

The Goods and Services Tax (GST), the biggest reform in India's indirect tax structure since the economy began to be opened up 25 years ago, at last looks set to become reality. GST is one indirect tax for the whole nation, which will make India one unified common market.

GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage.

The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages. Most of the indirect taxes applicable throughout the country would now be a taxed as GST (i.e. subsumed).

At the Central level, the following taxes are being subsumed:

  • Central Excise Duty,
  • Additional Excise Duty,
  • Service Tax,
  • Additional Customs Duty commonly known as Countervailing Duty, and
  • Special Additional Duty of Customs.
At the State level, the following taxes are being subsumed
  • Subsuming of State Value Added Tax/Sales Tax,
  • Entertainment Tax (other than the tax levied by the local bodies),
  • Central Sales Tax,
  • Octroi and Entry tax,
  • Purchase Tax,
  • Luxury tax, and
  • Taxes on lottery, betting and gambling.
Advocacy

The mapping of 'as is' scenario and GST impact assessment will bring to light critical areas which could be of a concern to the Company in the new regime vis-a-vis the old regime. The illustrative examples in this connection are outlined below:

Rate under GST regime vis-a-vis concessional rate / exemption enjoyed in the erstwhile regime
Impact of additional 1% IGST on interstate movement of goods
Continuation of tax incentives (Excise, VAT) under the proposed new regime
Inverted duty structure
Transitional issues to ensure complete availability of balance credit for offset in the proposed new regime

Our professional services by indirect tax experts would be vital to help the Company to identify such issues, devise strategies to mitigate exposures and, if required, represent the concerns before the appropriate authority.

Re-modelling Business Structures

With the introduction of GST, the present indirect tax rate structure has been overhauled. The GST rates finalized by the GST council in their meeting on 3.11.2016 is 0%, 4%, 5%, 12%, 18% and 28% depending on the type of goods or services. Further, the credit mechanism has also been revamped. The IGST credit shall be completely fungible vis-a-vis IGST, CGST and SGST, whereas there would be no cross utilization of credit between CGST and SGST.

GST is proposed to be levied on supply vis-a-vis sale/ manufacture. Companies would, therefore, have to necessarily evaluate their supply pattern (and its frequency thereof) since the supply to warehouse or for job work basis would fall within the purview of GST. Supply chains will therefore see a radical change and the existing supply chains will need to be re-looked and re-structured.

Ergo, all the existing models would be required to be re-looked into, to fashion the most efficient business model. Our team of Indirect Tax professionals shall assist clients in evaluation and streamlining logistics supply chain, largely from a tax perspective.

Accounting and IT infrastructure

Today's businesses involve rampant use of software (ERP, SAP, Tally) both by the industry and service providing tax professionals. With the advent of GST, drastic revamping of existing IT infrastructure would be required. Further, the entire current accounting codes / treatment may undergo a change under the new legislation. With the knowledge of GST, our indirect tax professionals would be best suited to aid technicians in designing the software modules tailor made as per the client's organization.

Tax planning

With a new law, comes a new set of tax/ procedural issues and hence the professionals also need to evolve and devise new tax planning strategies. Our experienced team of professionals possess the capability to foresee the issues faced by the client before the industry faces them and accordingly carve out strategies to avoid the bottlenecks. Our focus would be on framing strategies which mitigates tax cost, within the legal framework.

Advisory services

The businesses would require regular services in areas such as determining place of supply, determining what is goods and what is services, availability of credits, maintenance of records, etc. We shall provide advisory services for dealing with unique issues such as inter-state supply of services, inter-state supply of intangibles and valuation of branch transfers. Further, we shall also assist in preparing the Standard Operating Procedures for business under the new regime.

Registration and procedural compliances

The clients would immediately require assistance in terms of registration under the new law, details and mechanics of records to be maintained. Needless to say regular services such as payment of taxes, filing of returns and audit-related services would continue.

Litigation support

As the new regime kicks in, litigation support would increasingly be required by the industry. Be it appearance before the Departmental officers, drafting (Replies, Appeals, and Petitions) or appearance before higher forums. We possess the experience, acumen and the manpower to represent our clients through assessments before the tax department including at the appellate levels.

Training

Introduction of GST will lead to rise in training requirements for our clients. Training would be required in first educating the owners and higher management of the organization on the likely impact of GST on their business and thereafter updating the company personnel with nuances of GST along with regular update sessions.

Professional Tax The firm renders the following services for Maharashtra Professional Tax:
  • Registration
    • The firm takes up the responsibility of registering the client's organization under the Professional Tax umbrella.
  • Filing of Returns
    • The firm provides advisory services and guides the clients in preparing and filing the Professional Tax returns.
  • Representation
    • The firm undertakes preparation of written submissions and appearing before the tax authorities.
  • Advisory Services
    • The firm gives advisory services and consultancy as per the requirements of the client.
 
 
 
     
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