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Tax layers under proposed GST Model with Examples

Tax layers under proposed GST Model with Examples, 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”

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:

Tax layers under proposed GST Model

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

TransactionCurrent Scenario (Rs.)GST Scenario (Rs.)
Cost of Raw Materials to Input Manufacturer100100
Profit Margin @ 25%2525
Assessable Value125125
Add: Excise Duty @12%   |   CGST @ 12%1515
Add: VAT@12.5%    |    SGST@12%1815
    Invoice Value (Input Manufacturer to Output Manufacturer)158155
Cost of Goods to Output Manufacturer (Net of ITC)100100
Add: Value Addition @ 40% on Cost (incl. of Profit Margin)4040
Assessable Value (Manufacturer to Wholesaler)140140
Add: Excise Duty @12%  |  CGST @ 12%16.8016.80
Add: VAT@12.5%   |     SGST@12%19.6016.80
Invoice Value (Manufacturer to Wholesaler)176.40173.60
Cost of Goods to Wholesaler (Net of ITC)156.80140.00
Add: Profit Margin of Wholesaler @10%15.6814.00
Add: Excise Duty @12%   |  CGST @ 12%0.0018.48
Add: VAT@12.5%   |     SGST@12%21.5618.48
Invoice Value (Wholesaler to Retailer)194.04190.96
Cost of Goods to Retailer (Net of ITC)172.48154.00
Add: Profit Margin of Retailer @10%17.2515.40
Add: Excise Duty @12%   |  CGST @ 12%0.0020.33
Add: VAT@12.5%   |    SGST@12%23.7220.33
Final Price to be paid by Consumer213.44210.06
Cost Saving to Consumer3.39

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

TransactionCurrent Scenario (Rs)GST Scenario(Rs)
Cost of Raw Materials to Input Manufacturer9090
Profit Margin Rs.101010
Assessable Value100100
Add: Excise Duty @12%  I   CGST @ 12%1212
Add: Vat 12.5%   I     SGST@12%1412
Invoice Value (Input to Output Manufacturer)126.00124
Cost of Goods to Output Manufacturer (Net of ITC)100100
Add: Value Addition @ 40% on Cost (incl. of Profit Margin)4040
Assessable Value (Manufacturer to Wholesaler)140140
Add: Excise Duty @12%  I   CGST @ 12%16.800
Add: CST@2%  I      IGST@24%3.1433.60
Add: Additional Tax @1%01.40
Invoice Value (Manufacturer to Wholesaler)159.94175.00
Cost of Goods to Wholesaler (Net of Input Credit)159.94141.4
Add: Profit Margin of Retailer @10%15.9914.14
Add: Excise Duty @12% I   CGST @ 12%018.66
Add:  VAT@12.5%    I     SGST@12%21.9918.66
Invoice Value (Wholesaler to Retailer)181.93178.73
Cost of Goods to Retailer (Net of Input Credit)175.93155.54
Add: Profit Margin of Retailer @10%17.5915.55
Add: Excise Duty @12% I   CGST @ 12%020.53
Add: VAT@12.5%  I     SGST@12%24.1920.53
Final Price to be paid by Consumer217.71212.16
Cost Saving to Consumer5.56

Must Read – GST Definition, Objective, Framework, Action Plan & Scope

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

ParticularsBasisAmt. (in Rs.)
Purchase of Raw & Packing Materials 20000 Kgs. @ Rs.501000000
18000 Kgs. (Intra-state)A900000
2000 Kgs.  (Inter-State)B100000
 
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 )G15000
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))J1105000
Excise Duty Payable @ 12%K=J x 12%132600
VAT Payable @ 12.5% on Local Sales by DepotL=J x 12.5%159375
Reversal of ITC of VAT (ITC x 3/12.5)M= D x 3/12.530240
 
FG Inter-State Sales to State -C (2800 Kgs. @ Rs.75 )N210000
Excise Duty Payable @ 12%O=N x 12%25200
CST @ 2%P=N x 2%4704
 
Net Excise Duty Payable after Cenvat CreditQ=(H+K+O-C)39600
Net VAT Payable after Vat Input CreditR=(I+L+M-D)65715
Net CST Payable after CST Input CreditS=(P-F)2464
Net Liability of Duties & TaxesT=(Q+R+S)107779

Must Read – Introduction, Meaning and Purpose of GST

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

ParticularsBasisAmt. (in Rs.)
Purchase of Raw & Packing Materials 20000 Kgs. @ Rs.501000000
18000 Kgs. (Intra-state)A900000
2000 Kgs. (Inter-State)B100000
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 PurchaseF = B x 1%1000
Total Credit of GST Available to Unit-AG = (C+D+E)240000
 
FG sold within State-A (200 Kgs. @ Rs.75 ) H15000
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))K1105000
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 )N210000
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 PayableQ= C – I106200
Balance of SGST Input Credit to be  adjusted against IGST PayableR= D – J106200
 
Net IGST Payable against  Stock transfers and Interstate TradeS=(I+J+L+O-G)79200
Non-Vatable Add. Tax to be retained by respective State GovernmentsT14150
Total of Duties and Taxes PayableU=S+T93350
Savings in Net Tax Payable(1,07,779-93,350)14,429

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