Deepak Hotwani.docx

A PROJECT ON BACHELOR OF COMMERCE ACCOUNTING & FINANCE SEMESTER-VI ACADEMIC YEAR 2018-19 SUBMITED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF DEGREE OF BACHELOR OF COMMERCE- ACCOUNTING & FINANCE

BY MR.DEEPAK HOTWANI UNDER THE GUIDANCE OF PROF. PRANIT SEAT NO: TBAF24 JAI HIND COLLEGE ‘A’ ROAD, CHURCHGATE, MUMBAI 400020 DECLARATION I MR DEEPAK HOTWANI Student of BCOM ACCOUNTING AND FINANCE hereby declare that the project for the “A STUDY OF GST AFTER ITS IMPLEMENTATION ON THE BULLION MARKET” titled. Submitted by me for Semester-VI during the academic year 20182019, is based on actual work carried out by me under the supervision of Prof. PRANIT I further state that this work is original and not submitted anywhere else for any examination.

Signature of student 1

JAI HIND COLLEGE ‘A’ ROAD, CHURCHGATE, MUMBAI 400020

EVALUATION CERTIFICATE This is to certify that the undersigned have assessed and evaluated the project on,

“A STUDY OF GST AFTER ITS IMPLEMENTATION ON THE BULLION MARKET” Submitted by DEEPAK HOTWANI student of BCom Accounting & Finance This project is original to the best of our knowledge and has been accepted for Assessment ________________ ______________________

Course Coordinator

Principal

________________ ______________________

Internal Examiner:

External Examiner

______________________

College seal

2

ACKNOWLEDGEMENT The successful completion of project involved the contribution of time and efforts. The project would never have been completed without the valuable help extended to us by the subject teacher and project guide Prof. Pranit

I would also like to thank all my friends to help me in this project work and giving their precious time to me. Last but not the least I would like to thank our parents for making us capable in doing this project and giving their continuous support and guidance.

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SR NO.

TOPIC

PAGE NO.

1

INTRODUCTION

6-9

2

CONCEPTUAL FRAMEWORK

10

3

LITERATURE REVIEW

62-65

4

RESEARCH METHODOLOGY

66-70

5

DATA ANALYSIS,INTERPRETATION AND 71-82 PRESENTATION

6

SUMMARY,

FINDINGS

AND 83-86

RECOMMENDATIONS 7

CONCLUSION

87-88

8

BIBLIOGRAPHY

88

9

ANNEXURE

89-90

4

CHAPTER NO-1.INTRODUCTION What is Bullion Bullion is gold and silver that is officially recognized as being at least 99.5% pure and is in the form of bars or ingots.To create bullion, gold first must be discovered by mining companies and removed from the earth in the form of gold ore, a combination of gold and mineralized rock. The gold is then extracted from the ore with the use of chemicals or extreme heat. The resulting pure bullion is also called "parted bullion." Bullion that contains more than one type of metal is called "unparted bullion." Bullion is legal tender that held in reserves by central banks or used by instuitional investors to hedge against inflationary effects on their portfolios. Approximately 20% of mined gold is held by central banks worldwide. This gold is held as bullions in reserves which the bank uses to settle international debt or stimulate the economy through gold lending. The central bank lends gold from their bullion reserves to bullion banks at a rate of approximately 1% to help it raise money.

Bullion banks are involved in one activity or another in the precious metals markets. Some of these activities includeclearing,risk mnanagement,hedging, trading, vaulting, acting as intermediaries between lenders and borrowers, etc. Nearly all bullion banks are members of the London Bullion Market Association (LBMA), an over-the-counter (OTC) market which offers little to no transparency in its dealings. LBMA members include banks such as TD Bank, Bank of Nova Scotia (BNS), UBS, Citibank, JP Morgan, Morgan Stanley, Royal Bank of Canada (RBC), Merrill Lynch, Goldman Sachs, Bank of Montreal (BMO), BNP Paribas, HSBC, Standard Chartered Bank, etc.

When the central bank lends gold to bullion banks for a specified period, say three months, it receives the cash equivalent of the gold lent to the bullion bank. The central 5

bank lends this money on the market at a lease rate known as the Gold Forward Offered Rates (GOFO) which is published daily by the LBMA. The higher the lease rate, the more incentive a central bank has to lend gold from its reserves. The bullion banks who borrow the gold can sell the gold or lend it to mining companies.

If the bullion bank sells the gold on thespot market, it will receive cash for the transaction. An increase in the supply of gold in the market reduces its price. The bullion bank hopes that by the time it’s scheduled to repurchase the gold from the spot market, its price will still be suppressed, or at least the same as what it sold the bullion for. At the end of the loan period, the bank buys back the gold and returns it to the central bank. Bullion banks that lend gold to mining companies would usually do so to finance a project being run by the company. A mining firms would also borrow gold if it entered into a forward hedge contract in which gold, that has not yet been mined or extracted from the earth, is pre-sold to buyers. If some or all of its buyers expect a physical delivery of the gold bullion, the mining firm would opt to borrow the gold from the bank, which would subsequently be delivered to the buyers on the other end of the forward agreement. The gold lent to mining companies is usually repaid from the companies’ future mining output.

A bullion market is a market through which buyers and sellers trade gold and silver as well as associated derivatives. The bullion market is generally known as the market for gold and silver trading. The bullion market is the primary source for gold and silver trading quotes throughout the day. Multiple bullion markets exist across the globe. These bullion markets are typically characterized as over the counter markets. Bullion markets exist in New York, Zurich and Tokyo with London serving as the location for the largest global bullion market. Bullion market trading is known to have a high turnover rate with transactions conducted electronically or by phone. The industrial uses of gold and silver are the primary market drivers for the pricing of the precious metals. Gold and silver traded in the bullion market can sometimes be used as a safe-haven investment or hedge against inflaton which may also affect its trading value.

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The bullion market is just one of several ways to invest in gold and silver. Other options include exchange trade funds and mutual funds. These options can be more appealing to investors, because they offer greater flexibility. Physical bullion offers less trading flexibility than other gold and silver investments, because it is a tangible object that comes in bars and coins of established sizes, which can be difficult to buy or sell in specific amounts. Bullion is also expensive to store and insure. The bullion reserve of a country is the indicator of the amount of wealth a country possesses. Bullion is defined as a bulk quantity of precious metals consisting of gold, silver and others that can be assessed by weight and cast as a lump. Bullion is valued by its purity and mass rather than its face value which is applicable in the case of money. India Bullion Market is a recognizable index that highlights the economic growth of the nation.

In 2009, the government of India purchased 200 metric ton of gold from the International Monetary Fund (IMF) at $6.7 billion. This purchase has propelled the India Bullion Market to the tenth position among the top global gold holders. This purchase signals that the economy of the country has come full circle and is also a way of spreading its assets. The current foreign exchange or forex reserve of India is nearly $285 billion. The share of foreign currency in the forex is $268.3 billion, followed by gold at $10.3 billion, IMFs special drawing rights accounts for $5.2 billion while the reserve position in the IMF accounts for $1.59 billion. Trading of gold is known as bullion trading. India is the leading consumer and importer of gold in the world. Due to this, the potential of the India bullion market is very promising. Owing to the weak price of Dollar in the global market, the price of bullion is soaring. The gem and jewelry industry of India is one of the fastest growing sectors of the economy at an approximate rate of 15%. The India Bullion market is under the strict supervision of the Government as bullion is one of the major indicators

of

the

wealth

of

the

country.

India is the largest investor in gold jewelry as a large number of people believe that investing in gold is beneficial. The domestic consumption of gold depends on factors 7

like the wedding season, festive season, the performance of the harvest and the monsoon of the country.

The versatile uses of silver and gold in many areas especially its industrial applications decide the prices of the precious metal. Bullions are considered as a safe bet

to

hedge

against

inflation

or

as

a

safe

haven

for

investment.

There are other avenues to invest in these markets such as exchange-traded funds (ETFs), which allow greater flexibility as far as safety and storage issues are concerned. There are a significant number of Gold ETFs available in the market, and the SPDR Gold Trust (GLD) is the most significant gold exchange-traded fund as of November 30, 2017.

The primary disadvantage of trading in physical bullion is that it is difficult to store the metal, as there is always a risk of theft associated with it. A bullion market has a lot of active players like banks, fabricators, refiners, vault operators, jewelers, hedgers, arbitrageurs, and speculators, etc. The brokers also facilitate the transactions between parties of two different countries or places. Investing in gold has always been a traditional route for investing. The simple market mechanism for investing in gold is to invest when the price is low and sell the investment when the market is at high.

Bullions tend to move at an erratic pace and have different behavioral patterns when compared to the other market securities like equities and funds. This makes it a better bet for hedging and makes it a worthy asset.

The bullion market is also subject to market fluctuations like any another market related security. Investors view bullion trading as a safe haven to hedge against inflation. The bullion market plays a pivotal role in the pricing of gold and silver ornaments all around the world.

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CHAPTER NO2.CONCEPTUALFRAMEWORK

2.1 ABOUT GST GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July 2017; Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. In simple words, Goods and Service tax (GST) is an indirect tax levied on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India. GST is one indirect tax for the entire country. So, before Goods and Service Tax, the pattern of tax levy was as follows:

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Under the GST regime, the tax is levied at every point of sale. In the case of intrastate sales, Central GST and State GST are charged. Inter-state sales are chargeable to Integrated GST. Now let us try to understand the definition of Goods and Service Tax – “GST is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.”

Multi-stage There are multiple change-of-hands an item goes through along its supply chain: from manufacture to final sale to the consumer. Let us consider the following case: • Purchase of raw materials • Production or manufacture • Warehousing of finished goods • Sale to wholesaler • Sale of the product to the retailer • Sale to the end consumer

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Goods and Services Tax is levied on each of these stages which makes it a multi-stage tax.

Value Addition

The manufacturer who makes biscuits buys flour, sugar and other material. The value of the inputs increases when the sugar and flour are mixed and baked into biscuits. The manufacturer then sells the biscuits to the warehousing agent who packs large quantities of biscuits and labels it. That is another addition of value after which the warehouse sells it to the retailer. 11

The retailer packages the biscuits in smaller quantities and invests in the marketing of the biscuits thus increasing its value. GST is levied on these value additions i.e. the monetary value added at each stage to achieve the final sale to the end customer.

2.2-GST AROUND THE WORLD 1.

France

There are 4 rates of VAT in France: 2.1 per cent, 5.5 per cent, 10 per cent and 20 per cent since its first implementation in 1954

2.

United Kingdom

Since 2011, UK's VAT is set at 20 per cent

12

3.

Ukraine

There are two VAT slabs in Ukraine, which are 20 per cent for most goods and services and 7 per cent mostly for medicines

4.

New Zealand

GST was introduced in New Zealand in 1986 at a rate of 10 per cent which was later increased to 15 per cent in 2010

5.

Australia

Introduced in 2000, the rate has been set at 10 per cent

6.

Vietnam

Three VAT rates of 0 per cent, 5 per cent and 10 per cent are applied to most goods and services in Vietnam unless stated otherwise

7.

Singapore

Implemented at 3 per cent in 1994, GST was increased to 7 per cent in 2007

8.

Malaysia

Introduced in 2015, Malaysia's GST is set at 6 per cent

9.

Canada

GST is set at 5 per cent on supplies of goods or services and includes most products. In some provinces of Canada, a Harmonised Sales Tax of 15 per cent is also charged 13

2.3-OVERVIEW OF GST The concept of GST was introduced keeping in consideration the trade practices prevalent worldwide. It aimed towards streamlining the flow of goods and services across borders. The baby steps were taken in the initial decade of 2000 where it was discussed for the first time in the parliament. After intensive and intense debates and discussions and crossing many hurdles, it finally saw the dawn in year 2017. The main objective of GST is to replace the numerous central and state taxes. The important taxes that were subsumed in GST are Excise and Service tax at the Central level and State VAT/Sales tax, Central sales tax and entry tax at the state level along with other duties and cess and surcharges. Taxation of textile sector 14

is opaque and non-neutral across its various segments. Most of the textile outputs are either exempt under the central and state tax regimes or are subjected to relatively low tax rates. Most of the indirect taxes fall on inputs, both goods and services, and therefore remain hidden. On the whole, the textile sector is lightly taxed and extensively subsidized. Textile exports are supported through payments of unrebated taxes (duty drawback) on textile inputs and other subsidies. With the introduction of GST on Textile industries the whole industry is being affected as the sector was majorly dependent on non-taxation and subsidies which were the first things to be removed under GST. Now, because the sector was unorganized and not used to indirect taxation, the basic infrastructure needed for implementation of a new and large scale taxation was absent. As a result, the industry initially couldn’t sustain the impact and as a result faced a shut down for about a month. The issues faced by the industry in the intervening period have been discussed in detail hereunder.

2.4-GST Return GST is the single indirect tax that is levied on the supply of goods and services between different entities. GST returns are the tax return forms that are required to be filed by these entities with the Income Tax authorities of India.

Return form GSTR-1

Who should file the return and what should be filed?

Registered taxable supplier should file details of outward supplies of

15

Due date for filing returns

10th of the subsequent month.

taxable goods and services as effected.

GSTR-2

Registered taxable recipient should file details of inward supplies of taxable goods and services claiming input tax credit.

15th of the subsequent month.

Registered taxable person should file monthly return on the basis of GSTR-3

finalization of details of outward supplies and inward supplies plus

20th of the subsequent month.

the payment of amount of tax. GSTR-4

Composition supplier should file quarterly return.

18th of the month succeeding quarter.

GSTR-5

Return for non-resident taxable person.

20th of the subsequent month.

GSTR-6

Return for input service distributor.

13th of the subsequent month.

GSTR-7

Return for authorities carrying out tax deduction at source.

10th of the subsequent month.

GSTR-8

E-commerce operator or tax collector should file details of supplies effected and the amount of tax collected.

10th of the subsequent month.

GSTR-9

Registered taxable person should file annual return.

31 December of the next fiscal year.

GSTR-

Taxable person whose registration has been cancelled or surrendered

Within 3 months of date of cancel

10

should file final return.

cancellation order, whichever is later.

GSTR-

Person having UIN claiming refund should file details of inward

28th of the month, following the mo

11

supplies.

statement was filed.

Goods and Services Tax is a single indirect tax levied on the supply of goods and services from the manufacturer to the consumer. Input tax credits paid at each stage will be made available in the following stage of value addition. GST is basically a tax levied on value addition at each stage. Therefore, the consumer has to pay only the GST charged by the last dealer or supplier in the supply chain. All individuals registered under the GST Act has to furnish the details of the sales and purchases of goods and services along with the tax collected and paid. This can be 16

done by filing online returns. GST Returns are the Goods and Services Tax Return forms that taxpayers of all types have to file with the income tax authorities of India under the new GST rules. Implementation of a comprehensive Income Tax system like GST in India will ensure that taxpayer services such as registration, returns, and compliance are transparent and straightforward. Individual taxpayers will be using 4 forms for filing their returns such as the return for supplies, return for purchases, monthly returns, and annual return. Small taxpayers who have opted for composition scheme will have to file quarterly returns. All filing of returns will be done online.

Different Types of Returns applicable under the new GST Law How to File GST Returns Online? From manufacturers and suppliers to dealers and consumers, all taxpayers have to file their tax returns with the GST department every year. Under the new GST regime, filing tax returns has become automated. GST returns can be filed online using the software or apps provided by Goods and Service Tax Network (GSTN) which will auto-populate the details on each GSTR forms. Listed below are the steps for filing GST returns online: Visit the GST portal (www.gst.gov.in). A 15-digit GST identification number will be issued based on your state code and PAN number. Upload invoices on the GST portal or the software. An invoice reference number will be issued against each invoice. After uploading invoices, outward return, inward return, and cumulative monthly return have to be filed online. If there are any errors, you have the option to correct it and refile the returns. File the outward supply returns in GSTR-1 form through the information section at the GST Common Portal (GSTN) on or before 10th of the following month. Details of outward supplies furnished by the supplier will be made available in GSTR-2A to the recipient. 17

Recipient has to verify, validate, and modify the details of outward supplies, and also file details of credit or debit notes. Recipient has to furnish the details of inward supplies of taxable goods and services in GSTR-2 form. The supplier can either accept or reject the modifications of the details of inward supplies made available by the recipient in GSTR-1A.

File GST return with GSTN The Goods and Service Tax Network will store information of all GST registered sellers and buyers, combine the submitted details, and maintain registers for future reference. Companies have to file 3 monthly returns every 3 months and one annual return in a financial year (37 returns in total). GSTN has launched a simple excel based template to make filing of returns easier for businesses. This excel workbook can be downloaded from the GST common portal free of charge. Taxpayers can use this template to collate invoice data on a regular basis. The details of inward and outward supplies can be uploaded on the GST portal on or before the due date. The data preparation can be done offline. Only while uploading the prepared file on the GST portal will the taxpayer need Internet.

Penalty for late filing of returns: A penalty will be levied on the taxpayer in case he/she fails to file the returns on time. This penalty is called the late fee. As per the GST Law, the late fee is Rs.100 for each day for each Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST). Thus, the total fine amount will be Rs.200 per day. However, this rate is subject to changes which will be announced through notifications. The maximum amount of fine that can be levied is Rs.5,000. Integrated GST or IGST does not attract any late fee in case the return filing is delayed. The taxpayer will also be required to pay an interest at the rate of 18% p.a. in addition to the late fee. This interest has to be calculated by the taxpayer on the amount of tax that is to be paid. The time period will be calculated from the day following the filing deadline till the date when the actual payment is made.

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Various kinds of GST return Forms GST return can be filed using different forms depending on the type of transaction and registration of the taxpayer. Return forms for normal taxpayers are: GSTR-1 GSTR-1 return form has to be filed by a registered taxable supplier with details of the outward supplies of goods and services. This form is filled by the supplier. The buyer has to validate the auto-populated purchase information on the form and make modifications if required. The form will contain the following details: Business name, period for which the return is filed, Goods and Services Taxpayer Identification Number (GSTIN). Invoices issued in the previous month and the corresponding taxes collected. Advances received against a supply order that has to be delivered in the future. Revision in outward sales invoices from the previous tax periods. GSTR-1 has to be filed by 10th of the following month. GSTR-2 GSTR-2 return form has to be filed by a registered taxable recipient with details of the inward supplies of goods and services. The form will contain the following details: Business name, period for which the return is filed, Goods and Services Tax Identification Number (GSTIN). Invoices issued in the previous month and the corresponding taxes collected. Advances received against a supply order that has to be delivered in the future. Revision in outward sales invoices from the previous tax periods. GSTR-2 has to be filed by 15th of the following month. GSTR-3 GSTR-3 return form has to be filed by a registered taxpayer with details that are automatically populated by from GSTR-1 and GSTR-2 returns forms. The taxpayer has to verify and make modifications, if any. GSTR-3 return form will contain the following details: Details about Input Tax Credit, liability, and cash ledger. Details of tax paid under CGST, SGST, and IGST. 19

Claim a refund of excess payment or request to carry forward the credit. GSTR-3 has to be filed by 20th of the following month. GSTR-4 GSTR-4 return form has to be filed by taxpayers who have opted for the Composition Scheme. Taxpayers with small business or a turnover of up to Rs.75 lakh can opt for the Composition Scheme wherein he or she have to pay tax at a fixed rate based on the type of business. Taxpayers under this scheme will not have input tax credit facility. GSTR-4 quarterly return form will contain the following details: The total value of consolidated supply made during the period of return. Details of tax paid. Invoice-level purchase information. GSTR-4 has to be filed by 18th of the following month. GSTR-5 GSTR-5 return form has to be filed by all registered non-resident taxpayers. This form will contain the following: Name and address of the taxpayer, GSTIN, and period of return. Details of outward supplies and inward supplies. Details of goods imported, any amendments in goods imported during the previous tax periods. Import of services, amendments in import of services Details of credit or debit notes, closing stock of goods, and refund claimed from cash ledger. GSTR-5 has to be filed by 20th of the following month. GSTR-6 GSTR-6 return form has to be filed by all taxpayers who are registered as an Input Service Distributor. This form will contain the following: Name and address of the taxpayer, GSTIN, and period of return. Details of input credit distributed. Supplies received from registered persons. The amount of input credit availed under the current tax period. 20

Details of inward supplies will be auto-populated from GSTR-1 and GSTR-5 return forms. Details of the receiver of input credit corresponding to his or her GSTIN. Details of credit or debit notes. Input tax credit received, input tax credit reverted, and input tax credit distributed as SGST, CGST, and IGST. GSTR-6 has to be filed by 13th of the following month. GSTR-7 GSTR-7 return form has to be filed by all registered taxpayers who are required to deduct tax at source under the GST rule. This form will contain the following: Name and address of the taxpayer, GSTIN, and period of return. TDS details and amendments in invoice amount, TDS amount or contract details. TDS liability will be auto-populated. Details of fees for late filing of return and interest on delayed payment of TDS. Refund received from Electronic Cash Ledger will be auto-populated. GSTR-7 has to be filed by 10th of the following month. GSTR-8 GSTR-8 return form has to be filed by all e-Commerce operators who are required to collect tax at source under the GST rule. This form will contain details of supplies effected and the amount of tax collected under Sub-section (1) of Section 43C of Model GST Law. Other details include: Name and address of the taxpayer, GSTIN, and period of return. Details of supplies made to registered taxable person and amendments, if any. Details of supplies made to unregistered persons. Details of Tax Collected at Source. TDS liability will be auto-populated. Details of fees for late filing of return and interest on delayed payment of TDS. GSTR-8 has to be filed by 10th of the following month. GSTR-9

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GSTR-9 return form is filed by normal taxpayers with details of all income and expenditure for the year. This detail will be regrouped in accordance with the monthly returns. The taxpayer will have the opportunity to make modifications in the information provided if required. GSTR-9 has to be filed by 31st December of the following financial year along with the audited copies of the annual accounts. GSTR-10 GSTR-10 return form has to be filed by any taxpayer who opts for cancellation of GST registration. This form will contain the following: Application Reference Number (ARN). Date of cancellation of GST registration. Unique ID of cancellation order. Date of cancellation order. Details of closing stock including amount of tax payable on closing stock.

2.5-SAILENT FEATURES OF GST It would be applicable on the supply of goods or services which replaces the existing system of manufacture of goods or sales of goods or provision of services. It is based on the principle of destination based consumption rather than origin based taxation. It is a dual based GST with the centre and states simultaneously. Based on the federal structure of India, GST will be levied concurrently to the Central government (CGST) and the state government (SGST). It is expected that the design and the base structure of both GST to be similar. The inter-state supplying of goods attracted towards Integrated GST (IGST), which is a combination of CGST and SGST. Union territories without legislature will levy the union called as (UTGST). An integrated DST (IGST) will be levied by the centre, so that supply chain will not be disrupted. Import of goods and services will come under IGST, with addition to applicable custom duties. CGST, SGST, IGST, UTGST mutually agreed upon by the centre and state governments under the aegis of the GSTC. GST would be applicable to all the goods and services except alcohol (human consumption). GST on the five petroleum products like diesel, petrol, natural gas, crude, ATF would be applicable from the date which is to be recommended by the GSTC. GST would replace the levied taxes which is collected by the centre Central Excise Duty Medicinal and toilet preparation. Textile and textile products. Duties of customs also known as CVD. 22

Special additional duties of customs (SAD). Cesses, surcharges in so far as they related to supply of goods or services. Service tax. State tax that would be included in the GST are: Central Sales Tax. Purchase Tax Luxury Tax State VAT. Entry Tax. Entertainment Tax. Taxes on advertisements. Taxes on betting, lotteries and gambling. State cesses and surcharges insofar related to the supply of goods or services. Tobacco and tobacco products will be subjected to GST. In addition the central would continue to impose central excise duty. A threshold exemption would be applicable to both the CGST and SGST. The taxpayers with an annual turnover of Rs.20lac (10 lac for special category states which are specified in the constitution) will be exempt from the GST. Another one is compounding scheme ( pay tax at a flat rate without any credits) for small tax payers (including special category of manufacturers and service providers) having annual turnover of Rs.50 lac. The compounding scheme and the threshold exemption would be optional. The list of exempted goods and services would be kept minimum as far as possible in order to harmonise centre and the state and the across the states. Credit of CGST paid on inputs would only be used to pay CGST on outputs. Credits of UGST and SGST paid on inputs only are used to pay UGST/SGST on outputs. The two streams of Input Tax Credits (ITC) would not be cross utilized (except in some circumstance that the inter-state supplies of goods for the payment of IGST). The credits will be utilised in the following order: ITC of CGST would be allowed for the payment of IGST and CGST. ITC of SGST would be allowed for the payment of IGST and SGST. ITC of UTGST would be allowed for the payment of IGST and UTGST. ITC of IGST would be allowed for the payment of IGST, SGST, CGST and UTGST. ITC of CGST cannot be allowed for the payment of SGST and UGST and vice versa. Electronic filing of returns will be for different class of persons at different cut-off dates. Obligations can be made on certain people who are in government departments, government agencies, and local authorities who are recipients of supply can deduct the tax by 1% from the payment made or credited to the supplier where the total value of supply exceeds two lakhs and fifty thousand rupees. Refund of tax can be sought by the tax payer or any person who has borne the tax incidence within two years from the relevant date. Various modes of payment will be available for the tax payers (internet banking, credit/debit card, National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS). A system will be there to do self-assessment for the taxes which are payable by the registered person. Audit will be conducted to the registered persons in order to verify compliance with the provisions of the act. Officers would have restrictive powers to search, seizure, inspection and arrest. 23

Arrear of taxes would be recovered from detaining the sales of goods and property of the defaulting taxable persons. Obligations on electronic commerce operators for collecting the “tax at source” at such rate not exceeding the tax of 1% for taxable supplies.

2.6- Four Tier Rate Structure A four tier rate GST tax Structure of 5%, 12%, 18% and 28% with lower rates for essential items and the highest for luxury and de-merits goods that would also attract an additional cess, have been decided by the GST Council i.e.  5% - Essential Goods 12% - Standard slab rate  18% - Standard Slab rate  28% - De-merit and Luxury goods

2.7 INPUT TAX CREDIT One of the major changes under the GST is the concept of Input Tax Credit (ITC). As a vendor you may have purchased some input goods and services from another vendor. When doing so you have already paid some amount as GST. Under the ITC system, when you then go on to sell your product, you can deduct the GST already paid from the GST value for the final product. For example, you sell a product for Rs 1000, which attracts a GST of Rs 180. But you have paid Rs 100 as GST when buying raw materials. This amount can be claimed as ITC (based on proper documentation) and the GST on your product will go down to Rs 80.

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The meaning of ITC can be easily understood when we take the words ‘input’ and ‘tax credit’. Inputs are materials or services that a manufacturer purchase in order to manufacture his product or services which is his output. Tax credit means the tax a producer was able to reduce while paying his tax on output. Input tax credit means that when a manufacturer pays the tax on his output, he can deduct the tax he previously paid on the input he purchased. Here, while paying the tax on his output, he can deduct or take credit for the tax he paid while purchasing inputs. Example: An example will make things much clear. Suppose that a readymade garment firm buys polyester (input) from a supplier (of input) at Rs 100 and a CGST of Rs 10 is also has to be paid (CGST rate of 10%). The price of polyester input will be Rs 110. Now the garment manufacturer sells the product at Rs 200 plus tax (means his value addition is Rs 100). Imagine that the GST rate of readymade shirt is 12%. Here, the manufacturer must pay a tax of Rs 24. But he has previously paid a tax of Rs 10 while purchasing the input of polyester. Hence, he can claim this Rs 10 and has to pay only the remaining Rs 14 (of the total Rs 24). The Rs 10 that the manufacturer claimed is the input tax credit.

How to claim input credit under GST? To claim input credit under GST – 

You must have a tax invoice(of purchase) or debit note issued by registered dealer

Note: Where goods are received in lots/installments, credit will be available against the tax invoice upon receipt of last lot or installment. 

You should have received the goods/services

Note: Where recipient does not pay the value of service or tax thereon within 3 months of issue of invoice and he has already availed input credit based on the invoice, the said credit will be added to his output tax liability along with interest. 

The tax

charged

on

your

purchases has

been deposited/paid to

government by the supplier in cash or via claiming input credit 

Supplier has filed GST returns 25

the

Possibly the most path breaking reform of GST is that input credit is ONLY allowed if your supplier has deposited the tax he collected from you. So every input credit you are claiming shall be matched and validated before you can claim it. Therefore, to allow you to claim input credit on Purchases all your suppliers must be GST compliant as well.

2.8- GOODS EXEMPTED UNDER GST The government has kept some items outside the scope of GST. This means that any sale of these products, no matter what the value, is not taxable under GST. A few of these items are – cereals, unprocessed fruits and vegetables, unprocessed meats, handloom items, books, raw silk and jute, agricultural implements, postal services, stamp paper, hearing aids, contraceptives, certain cultural programmes, highway tolls, etc. Some items, like petroleum and alcohol, are neither under GST nor exempt. These are taxable exactly as before with no change so far. The exempted items are considered to be of mass consumption and are basic needs, therefore have been kept outside GST

2.9-Destination-Based Consider goods manufactured in Maharashtra and are sold to the final consumer in Karnataka. Since Goods & Service Tax is levied at the point of consumption. So, the entire tax revenue will go to Karnataka and not Maharashtra.

2.10What are the components of GST? There are 3 taxes applicable under this system: CGST,SGST,IGST 26

• CGST: Collected by the Central Government on an intra-state sale (Eg: transaction happening within Maharashtra) • SGST: Collected by the State Government on an intra-state sale (Eg: transaction happening within Maharashtra) • IGST: Collected by the Central Government for inter-state sale (Eg: Maharashtra to Tamil Nadu) In most cases, the tax structure under the new regime will be as follows:

2.11Tax Laws before GST In the earlier indirect tax regime, there were many indirect taxes levied by both state and centre. States mainly collected taxes in the form of Value Added Tax (VAT). Every state had a different set of rules and regulations. Interstate sale of goods was taxed by the Centre. CST (Central State Tax) was applicable in case of interstate sale of goods. Other than above there were many indirect taxes like entertainment tax, octroi and local tax that was levied by state and centre. This led to a lot of overlapping of taxes levied by both state and centre. For example, when goods were manufactured and sold, excise duty was charged by the centre. Over and above Excise Duty, VAT was also charged by the State. This lead to a tax on tax also known as the cascading effect of taxes. The following is the list of indirect taxes in the pre-GST regime: 

Central Excise Duty



Duties of Excise



Additional Duties of Excise



Additional Duties of Customs



Special Additional Duty of Customs



Cess



State VAT



Central Sales Tax



Purchase Tax 27



Luxury Tax



Entertainment Tax



Entry Tax



Taxes on advertisements



Taxes on lotteries, betting, and gambling

2.12-What changes has GST brought in? In the pre-GST regime, every purchaser including the final consumer paid tax on tax. This tax on tax is called Cascading Effect of Taxes. GST has removed this cascading effect as the tax is calculated only on the valueaddition at each stage of the transfer of ownership.

2.13-GST ON BULLIONS India will tax gold at a rate of 3 percent under a new nationwide sales tax that comes into effect on July 1, the government said on Saturday. The Goods and Services Tax (GST) on gold, which was lower than industry expectations of around 5 percent, will replace a number of federal and state levies. Gold jewellery, silver and processed diamonds will also be taxed at 3 percent, while the tax on rough diamonds will be 0.25 percent

"Currently, the industry pays taxes around 2 to 2.5 percent, so 3 percent is almost as good as no impact,"

Anticipating a higher tax rate, Indian jewellers have been restocking inventory, a move that was expected to hit imports of the metal in the second half of the year when gold demand is higher due to festive season buying.

28

The India head of the World Gold Council said the government's decision on gold was an encouraging step and would help stabilise an industry in which millions are employed. But with customs duty of 10 percent, the total tax on gold is still high and will continue to have an impact on the jewellery industry, Gold jewllery will attract 3% goods and service tax (GST). Though it is higher than the current applicable taxes, including 1% excise duty and 1.5% VAT, it is below the anticipated GST of 5%. Customs duty will continue to be 10% and processing charges will be taxed at 5%. Approximate industry average processing charges are around 12% of gold price. Prior to GST, total tax and duties are nearly 12.4%. After the implementation of GST, it will marginally increase to approximately 14%. Larger players such as Titan, owner of brand ‘Tanishq’, would be the biggest beneficiaries as the cost gap between the organised and unorganised players will come down.

29

30

2.14- PRE-GST REGIME

STATES

VAT RATE

Andhra Pradesh

1%

Arunachal Pradesh

1%

Assam

1%

Bihar

1%

Chhattisgarh

1%

Goa

1%

Gujarat

1%

Haryana

1%

Himachal Pradesh

1%

Jammu and Kashmir

1%

Jharkhand

1% 31

Karnataka

1%

Kerala

1%

Madhya Pradesh

1%

Maharashtra

1.2%

Manipur

1%

Meghalaya

1%

Mizoram

1%

Nagaland

1%

Odisha (Orissa)

1%

Punjab

1%

Rajasthan

1%

Sikkim

1%

32

Tamil Nadu

1%

Telangana

1%

Tripura

2%

Uttar Pradesh

1%

Uttarakhand

1%

West Bengal

1%

33

2.15- VARIOUS GST SLABS IN INDIA

GST has been structured in a way that essential services and food items are placed in the lower tax brackets, while luxury services and products have been placed in the higher tax bracket. The GST council has fitted over 1300 goods and 500 services under four tax slabs of 5%, 12%, 18% and 28% under GST. This is aside the tax on gold that is kept at 3% and rough precious and semi-precious stones that are placed at a special rate of 0.25% under GST. A total of 81% of all the goods and services fall below or in the 18% tax slab. This means 7 % of the items come under the exempted list, 14% of the items attract a 5% tax, 17% of the items attract a 12% tax, and 43% of the items attract an 18 % tax slab, while only 19% of the items fall under the highest slab of 28% in the new regime. Below is a list of some of the products that will be a part of the respective slabs: 
Exempted GST Rate Slab (No Tax) 7% goods and services fall under this category. Some of these that are of regular consumption include fresh fruits and vegetables, milk, butter milk, curd, natural honey, flour, besan, bread, all kinds of salt, jaggery, hulled cereal grains, fresh meat, fish, chicken, eggs, along with bindi, sindoor, kajal, bangles, drawing and coloring books, stamps, judicial papers, printed books, newspapers, jute and handloom, hotels and lodges with tariff below INR 1000 and so on. 
5% GST Rate Slab 14% goods and services fall under this category. Some of these include apparel below INR 1000 and footwear below INR 500, packaged food items, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, cashew nut, cashew nut in shell, raisin, ice, fish fillet, kerosene, coal, 34

medicine, agarbatti (incense sticks), postage or revenue stamps, fertilizers, rail and economy class air tickets, small restaurants, and so on. 
12% GST Rate Slab Edibles like frozen meat products, butter, cheese, ghee, dry fruits in packaged form, animal fat, sausages, fruit juices, namkeen, ketchup & sauces, ayurvedic medicines, all diagnostic kits and reagents, cellphones, spoons, forks, tooth powder, umbrella, sewing machine, spectacles, indoor games like playing cards, chess board, carom board, ludo, apparels above INR 1000, non-AC restaurants, business class air ticket, state-run lottery, work contracts and so on attract a 12% GST. 17% of goods and services fall under this category. 
18% GST Rate Slab 43% of goods and services fall under this category. Pasta, biscuits, cornflakes, pastries and cakes, preserved vegetables, jams, soups, ice cream, mayonnaise, mixed condiments and seasonings, mineral water, footwear costing more than INR 500, camera, speakers, monitors, printers, electrical transformer, optical fiber, tissues, sanitary napkins, notebooks, steel products, headgear and its parts, aluminum foil, bamboo furniture, AC restaurants that serve liquor, restaurants in five-star and luxury hotels, telecom services, IT services, branded garments and financial services and so on attract an 18% GST. 
28% GST Rate Slab 19% of goods and services fall under this category. The rest of edibles like chewing gum, bidi, molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate, pan masala, aerated water, personal care items like deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen, paint, water heater, dishwasher, weighing machine, washing machine, vacuum cleaner, automobiles, motorcycles, 5star hotel stays, race club betting, private lottery and movie tickets above INR 100 etc. have been clubbed together under the 28% GST slab.

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2.16-POST GST The Goods and Services Tax (GST), which will be brought in on July 1st, 2017 will usher in a new era in taxation in India and investors, manufacturers as well as consumers have been waiting with bated breath for news regarding the new tax slabs. With GST set to replace taxes such as VAT (value Added Tax), Central Excise Duty and Customs Duty among other taxes, the government has proposed 3 tax slabs under the new tax regime.

Gold Rate After GST The price of gold following the adoption of the Goods and Services Tax (GST) regime has seen some fluctuations. Analysts were apprehensive that the tax would lead to a decline in demand for gold due to the high incidence of taxation. The GST for gold was fixed at 3%, with an additional 8% tax levied on making charges. The tax on the making charge was then reduced to 5% due to concerns raised by various groups. At present, gold prices are seeing a rise due to unstable markets in spite of the additional tax burden. While the overall price of gold has risen, this has been due to the import duty associated with the metal, which has been retained. As a result, gold continues to attract an import duty of 10%, in addition to the 3% GST and 5% making charges GST. The price of gold after GST has been steadily increasing due to higher demand for the yellow metal in overseas markets. The plunging U.S. dollar has led to higher volumes of trade in the metal, thereby increasing its value. Long-term outlooks regarding the gold rate in india after GST appear to be mostly positive. Fears of increased smuggling due to the high costs associated with buying the metal abound, but it remains to be seen if these will come to pass. For the moment, the jewellery sector appears to be content with the price of gold after GST, though consumers have a few complaints over the rising cost. GST on Gold Purchase

36

The tax slabs were announced on June 3rd, 2017 and gold will be taxed at a rate of 3%. In other words, all gold and gold-related jewellery would be taxed at a flat rate of 3%, which would be borne by the end consumer. GST on Gold Making In addition to this, the government has also levied a 5% tax on making charges. At present, there is no tax on making charges, which account for close to 12% of the actual cost of the gold. The tax on making charges was initially fixed at 18%, but appeals from Indian jewellery councils and bodies to reduce the rate resulted in the government fixing it at the present 5%. A higher tax on making charges would have increased the burden on consumers, since the added cost would have been passed on to them. The initial rate of 18% would have also resulted in consumers having to pay close to 4% as tax. Jewellery bodies and councils have lauded the change in rate and are confident that it will result in greater transparency in the gold manufacturing market. As the date for roll out of GST i.e. the Goods and Services Tax comes close, states, individuals and businesses alike are waiting to see the impact with bated breath. Among the industries that are expected to be most affected by the roll out of GST, the gold industry was expected to be one of the most affected. After the initial suggestions and confusions regarding implementation of an 18% GST for the industry, the final verdict is in and the rate has been fixed at 3% on gold purchases and 18% on jewelry making charges. In the following sections we will discuss how this new 3% GST rate will impact the gold price for customers, but first let’s understand the prevailing taxation procedure in the industry.

Pre-GST Tax Regime for the Gold Industry In the pre-gst regime , the gold industry witnessed a number of different taxes on gold throughout the value chain. For starters, gold being an imported product features a 10% customs duty on the price at which it is imported from the bullion dealer. Subsequently, a 1% excise duty was also charged on the total cost of bullion purchase along with customs duty. Furthermore, the jewelers also had to deal with a 1.2% VAT (value added tax) on the price including customs and excise. Thus the overall tax on gold before making charges featured an effective rate of 12.43%. Last but not the

37

least, the end user paying the retail gold price was also liable to pay “making charges” equal to 12% of the price of gold in addition to customs.

Taxation Rules and Rates under the GST Regime

Even though, the GST proposes to provide a uniform tax experience, in case of gold jewelry, there are two separate rates applicable to different stages of the value chain in jewelry making. As per the current regime, which is of course subject to change if the GST council so determines at a later date, the applicable rates are 3% on gold purchase by the jeweler and an 18% rate on the making charges for ornaments. This along with the 10% rate on customs remaining unchanged, the overall rate on gold price subsequent to GST implementation would be 15.67%. This translates into a 3.24% increase in the overall price of gold ornaments as compared to pre-GST levels. This higher overall taxation level along with better tracking of taxes is expected to help the government raise additional taxes to the tune of Rs. 6000 crores thus bringing down the overall government subsidy currently applicable to gold imports.

The Overall GST Impact for key Groups

The bullion dealers will have to pay extra 3% tax after GST implementation even though the customs duty remaining unchanged. However, they might be impacted if the increased tax rate for the end user and the resulting gold price lead to a decline in the overall demand for gold jewelry.

For jewelers, the first change is obviously the fact that there will a 3% extra cost of buying gold, hence their input cost will increase slightly. Then the big one is the 18% tax on making charges that will apply to the jewelers. This will also push up the overall input cost and by extension the gold price for the jewelers. Thus overall the total jewels would increase and these will be passed on the customers.

As mentioned earlier, for the end user, the gold prie is going to increase by approximately 3.24% after GST as compared to pre-GST. Thus even though gold 38

prices are witnessed to be crashing globally, the price of gold ornaments in India are projected to increase after implementation of GST.

After a lot of debate on the issue of tax reform in the gold price, finally, a rate of 3 per cent tax was fixed. While some believe that the GST tax rate on gold and jewellery is slightly higher than the previous tax rate, some are happy that at least it is much lower than what was feared initially.

Prior of GST, jewellers used to pay 10 per cent customs duty on gold and 1 per cent excise plus 1.2 per cent VAT over and above that. All of these taxes when summed up equals to 12.43 per cent when buying jewellery and 11.32 per cent when buying bars as there is no excise duty on bars.

With the implementation of GST at 3 per cent for gold and 18 per cent for making charges, the effective rate comes to 15.67 per cent including 10 per cent customs duty. When compared, the effective price increase on gold jewellery comes to 3.24 per cent and the gold bars will be dearer by 1.98 per cent. Thus, it is clear that gold is going to get a little expensive for consumers in India. But there is unlikely to be any negative impact of GST on gold price as the metal has been a favoured asset for Indians over several decades and will continue to do so.

The implementation of GST has a great impact on gold, soaring up the gold prices to a 2-month high. Although, physical demand for gold has been lower because of the 3% GST that is levied upon 10% of import duty. In other words, gold has become expensive, by about 0.75% post the introduction of GST. Earlier, the tax on gold was 1% service tax and 1% VAT, amounting to 2%. GST have hiked the tax rate of gold to 3%. Impact of GST on gold import It was reported in the media that gold traders are making the most of GST’s implementation, and sought of importing 25 tonnes of gold from South Korea in July and August. Gold importers are merely taking advantage of the recent tax change and

39

the Free Trade Agreement with South Korea, which allows importers to ship in gold without paying a 10% customs duty. Impact of GST on the organised gold sector It is believed that the implementation of GST will have dramatic affects on gold trade as only 30% of the gold trade is organised. Although GST is set to benefit the organised gold trade, as by having greater transparency and accountability, it may also prompt some jewellers to move to unorganised areas. This might happen by buying cheaper smuggled gold and selling without bills. Impact of GST on unorganised gold sector It is estimated that India imports 700-800 tonne of gold annually, out of which almost 30 is smuggled (mainly through Dubai). This gold comes under the unorganised sector. GST has spiked the gold rates by 13%, which may increase the chance of smuggled gold making its way to the Indian shores, more than usual.

Many gold and silver merchant associations in India are requesting the government to reduce the importing duty on gold to 6%, like in the past. Also, the GST framework requires businesses to report every transaction to claim input credit. This might hurt the unorganised gold market.

Has GST has any effect on gold making charges? Yes, gold now has a making charge of 5%. GST council had earlier decided 18% for gold making charges, however, when GST was implemented, they decided to keep it at 5% Conclusion: The Goods and Services Tax (GST) for gold was fixed at 3% and an additional 8% tax was fixed to be levied on making charges. This was condemned by many gold associations in India, and the tax on making charge was reduced to 5%.

40

The spike in the rate of gold can due to the import duty which has been retained. Currently, gold attracts an import duty of 10%, in addition to 3% GST, and 5% making charges (GST). GST the biggest tax reform in India founded on the notion of “one nation, one market, one tax” is finally here. The moment that the Indian government was waiting for a decade has finally arrived. The single biggest indirect tax regime has kicked into force, dismantling all the inter-state barriers with respect to trade. The GST rollout, with a single stroke, has converted India into a unified market of 1.3 billion citizens. Fundamentally, the $2.4-trillion economy is attempting to transform itself by doing away with the internal tariff barriers and subsuming central, state and local taxes into a unified GST. The rollout has renewed the hope of India’s fiscal reform program regaining momentum and widening the economy. Then again, there are fears of disruption, embedded in what’s perceived as a rushed transition which may not assist the interests of the country. Will the hopes triumph over uncertainty would be determined by how our government works towards making GST a “good and simple tax”. The idea behind implementing GST across the country in 29 states and 7 Union Territories is that it would offer a win-win situation for everyone. Manufacturers and traders would benefit from fewer tax filings, transparent rules, and easy book keeping; consumers would be paying less for the goods and services, and the government would generate more revenues as revenue leaks would be plugged. Ground realities, as we all know, vary. So, how has GST really impacted India? Let’s take a look.

GST: The Short-Term Impact From the viewpoint of the consumer, they would now have pay more tax for most of the goods and services they consume. The majority of everyday consumables now draw the same or a slightly higher rate of tax Furthermore, the GST implementation has a cost of compliance attached to it. It seems that this cost of compliance will be prohibitive and high for the small scale manufacturers and traders, who have also protested against the same. They may end up pricing their goods at higher rates. 41

Talking about the long-term benefits, it is expected that GST would not just mean a lower rate of taxes, but also minimum tax slabs. Countries where the Goods and Service Tax has helped in reforming the economy, apply only 2 or 3 rates – one being the mean rate, a lower rate for essential commodities, and a higher tax rate for the luxurious commodities. Currently, in India, we have 5 slabs, with as many as 3 rates – an integrated rate, a central rate, and a state rate. In addition to these, cess is also levied. The fear of losing out on revenue has kept the government from gambling on fewer or lower rates. This is very unlikely to see a shift anytime soon; though the government has said that rates may be revisited once the RNR(renewal neutral rate) is reached. The impact of GST on macroeconomic indicators is likely to be very positive in the medium-term. Inflation would be reduced as the cascading (tax on tax) effect of taxes would be eliminated. The revenue from the taxes for the government is very likely to increase with an extended tax net, and the fiscal deficit is expected to remain under the checks. Moreover, exports would grow, while FDI (Foreign Direct Investment) would also increase. The industry leaders believe that the country would climb several ladders in the ease of doing business with the implementation of the most important tax reform ever in the history of the country. Most importantly, the government has allowed set-off for the sum paid to workers by jewellers “It is a win-win situation. We had requested the government to keep the same tax structure,” said Surendra Mehta, national secretary, India Bullion and jewelers Association (IBJA). Sanjeep Kulhalli, vice-president (marketing), Tanishq, said: “The industry wanted a lower rate. But the government’s decision on rates is reasonable.” The jewellery industry had suggested 1.25 per cent. The government has levied 0.25 per cent on rough diamond, which, according to Finance Minister Arun Jaitley, is meant for audit trail.

42

“The GST rate of 0.25 per cent on rough diamond would make no difference in terms of pricing of jewellery,”

Organised sector will grow as they have been transparent, although they will not be spared from a high tax burden, which will in turn lead to higher prices and impact consumer demand. Gold investments in financial instruments like sovereign gold bonds could be beneficial as they would not attract a GST levy, thereby, being avaiblable at cheaper rates. The government may rejoice at the last National Sample Survey Office (NSSO) survey that noted household expenditure on gold and jewellery items to account for 17 per cent of the total spendings on durable goods. If demand for jewellery is impacted, money could flow to other financial investments and reduce generation of ‘idle assets like gold.’ Experts suggest offering incentives for the gold monetisation scheme would help increase deposits up to a certain limit, thereby, enabling the productive use of idle gold

What is required If NITI Aayog's proposal, which recommends a 5 per cent GST rate for gold and another 7 per cent in customs duty (10 at present), is accepted by the GST Council, it will keep the overall burden of the sector at the same level and disincentivise unofficial imports. An 18 per cent levy from workers should be eligible for input credit, as 80-90 per cent of the jewellery-making process requires the services of skilled and unskilled workers. Even as consumers will face a slightly higher tax rate in gold after the Goods and Services Tax (GST) is rolled out this July, the overall impact on the gold industry will 43

be

positive, World

Gold

Councilsaid

on

Thursday.

"On 1st July, India's labyrinth of taxes will be replaced with a simple, nationwide GST. This is the biggest fiscal reform since India's liberalisation in the early 1990s," WGC said

in

a

report

here.

"While gold consumers will face a slightly higher tax rate and the industry will go through a period of adjustment, we see the net impact on the gold industry as being positive,"

it

added.

WGC said the gold supply chain will become more transparent and efficient and the tax reform could boost economic growth, which is likely to support gold demand.

The country's gold market is becoming more organised and transparent, and it is likely that GST will accelerate this process, which will be good for consumers, it said.

"They can have more faith in the gold products they are buying, and this in turn can support

gold

demand

in

the

years

to

come,"

added

WGC.

Industry also has reacted positively to the 3 per cent GST rate, it said adding there were fears that it could have been higher - perhaps 5 per cent or more.

"This would have had a damaging effect on consumer demand and, more importantly, would have meant many small, independent retailers would have done their best to avoid it. The 3 per cent rate is reviewed as being more manageable and will ensure greater compliance by small and independent retailers," the report said.

On the first day of stock market trading after the GST announcement, listed jewellers outperformed the broader equity market by an average of around 6 per cent, it pointed out.

The report also said the gold market is highly fragmented in the country and the jewellery retailing landscape is dominated by small businesses as regional and national chains only account for around 30 per cent of the market. 44

The picture in jewellery manufacturing is more extreme, with 95 per cent of the industry consisting of small-scale operations, it added. TOP COMMENT

However, this is changing and in recent years, large retailers and manufacturers have been gaining market share, it said.

Huge confusion prevails on the interpretation of rules regarding exchange of old gold ornaments for new ones and on ornament making charges from customers’ own gold, which could end up in their having to bear a burden higher than the 3 per cent GST rate fixed on gold and the 5 per cent rate on making charges, the All India Gem & Jewellery Federation (GJF) has said. This confusion, however, does not affect those wanting to buy new jewellery from any jeweller, which attracts 3 per cent.

While purchase of new ornaments will attract GST of 3 per cent, when a customer opts to exchange old jewellery for new, the jeweller at time of purchase has to pay a reverse charge of 3 per cent to the government, since the buyer is an unregistered dealer and GST is on supply. The jeweller will recover this from the customer.

Say, if a customer wants to exchange an old, 10 gm necklace worth Rs 30,000 for a new one, the jeweller will first deduct 3 per cent on that when purchasing it from the customer. This will have to be deposited with the government. Then, a new necklace is made and sold to the customer for say Rs 33,000, the jeweller will once again apply a 3 per cent (Rs 990) GST to that. So, the customer will be burdened by double tax. The industry body hopes that Customers exchanging old gold be exempt from GST.

In case a customer has gold bars and wants a necklace to be made from them, he will be charged only making charge. But GST rules say that job work undertaken by a registered dealer (jeweller) for a URD (customer) will attract 18 per cent tax. 45

Also, if a jeweller goes to a wholesale manufacturer for getting jewellery made, and the latter gets it done from a karigar, he pays 5 per cent as labour charges to the karigar. But, the tax on making charges for the jeweller will attract an 18 per cent levy. This also will be ultimately recovered from the customer. “Here the manufacturer is deemed to be agent and the jeweller principal and for this job work is taxed at 18 per cent, instead of the 5 per cent fixed on labour for jewellery. It needs to be clarified that there is no principalagent relationship here. Till then, the confusion persists and that 5 per cent should apply to the customer,” added Khandelwal. Making charges on jewellery are on average 10 per cent of the cost of gold

A hike in taxes on gold sales in India could stoke under-the-counter buying and drive up appetite for precious metal smuggled into the country, where millions of people store big chunks of their wealth in bullion and jewellery. As part of a new nationwide sales tax regime that kicked in on July 1, the Goods and Services Tax (GST) on gold has jumped to 3% from 1.2% previously, with traders and buyers saying the move will likely force more transactions into the black market. “Three percent is too much. I preferred to buy without receipts. The jeweller did not have any problem,” said a middle-aged buyer, who declined to be identified after making purchases on Monday at the country’s biggest bullion market, Zaveri Bazaar in Mumbai. Smaller shops could be more inclined to sell without receipts, potentially hitting sales at big jewellers that keep to the rules, said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city Kolkata. “Just to save 1%, some customers were earlier buying gold without receipts. With the 3-percent GST, now many more will be tempted to make unofficial purchases from small jewellers,” Ajmera said. The tax hike could also encourage more smuggling into the world’s second biggest gold consumer, which buys almost all its bullion abroad. 46

Gold smuggling has been rife since India raised import duties on the metal to 10% in a series of hikes to August 2013, looking to curb demand to narrow a gaping current account deficit. The World Gold Council estimates smuggling networks imported up to 120 tonnes of gold into India in 2016. “The GST rate has increased the incentive to bring in smuggled gold. The government should reduce import duty and make smuggling unviable,” said Aditya Pethe, a director at Waman Hari Pethe Jewellers in Mumbai. India’s legal imports typically stand at around 800 tonnes a year, with the metal used in everything from investment to religious donations and wedding gifts. “A lower import duty would increase legal imports and ultimately legal sales. Tax revenue would go up instead of going down,” said Daman Prakash Rathod, director at wholesaler MNC Bullion in the southern city of Chennai. The implementation of GST is expected to have two diametrically opposite effects on the gold trade. As is well known, much gold changes hands through unofficial channels - only 30 per cent of the trade is organised. Thus on the one hand, GST implementation is expected to benefit the organised segment by introducing greater transparency and accountability. "GST gives an advantage to gold jewellers," says Mukesh Mehta, President, India Bullion and Jewellers Association (IBJA). "The VAT they paid on purchases earlier was not refundable. But now, with GST, they can get input credit for their inter-state business.

The GST regime will also pressure many in the unorganised sector to move into the organised. Straddling both worlds - buying some smuggled gold and some legitimate, selling some items with proper receipts but many without - as many jewellery makers and traders do at present, will become extremely tough. "The GST framework requires businesses to report every transaction if the benefit of input credit is to be claimed," says Kalyanaraman of Kalyan Jewellers. "Without input credit, business is not likely to be viable. In this scenario, the unorganised segment is likely to find it very difficult to operate 47

2.17 Gold,Silver,Platinum There are many reasons why pension fund managers, private investors and even governments are beginning to add bullion to their portfolios. Perhaps the most important reason for this shift is that bullion provides superior insurance in times of financial uncertainty such as we are facing today. Until governments solve their debt problems and no longer need to debase their currencies through unbridled money creation, a fully diversified portfolio should include gold, silver andplatinum both for wealth protection and growth. Portfolios consisting of a mix of stocks, bonds and cash are not protected or fully diversified as correlations between these three asset classes have been increasing since 1969. Fortunately, as these three traditional classes become more correlated, one asset class, precious metals, grows more negatively correlated. When bonds, stocks and cash fall in value, precious metalsbullion tends to rise and vice versa. Therefore, a modern portfolio will gain protection as well as growth from an allocation of at least 5-15 percent to precious metals. Figure 1 shows how gold has outperformed all major asset classes during the past decade.

48

Currencies Fall While Gold Remains Stable I n truth, gold is not rising in value; currencies are losing purchasing power against gold. It is an inverse relationship and this implies the price of gold can rise as far as currencies can fall. In his insightful book, Hard Money: Taking Gold to a Higher Investment Level, pension fund manager Shayne McGuire makes an interesting point about this historic pattern Although there are only 30 recorded cases of hyperinflation (where goods rise at least 50 percent per month), all were caused by currency debasement to compensate for slowing growth. This debasement (a word derived from the Roman practice of hollowing out gold coins and filling them with base metals) is happening worldwide. Currency printing is the only tool central banks have to fight the deflationary consequences of outsourcing, high unemployment, an aging population, endless war and the interest payments on the debt they are creating. Hyperinflation is therefore a very real possibility. If this were to happen, how much will an ounce of gold cost when a wheelbarrow of dollars is required to buy a loaf of bread? Gold Bullion is No One’s Liability

Gold is money that banks and governments cannot expand. Precious metals bullion is one of the only forms of money that can exist outside of the world’s banking system and beyond the control of bankers and politicians. Buying gold is therefore portfolio insurance against the failure of the policies and practices of banks and governments. Buying gold provides an opportunity for individuals to regain a sense of control or sovereignty over their financial lives.Gold owned outright is one of the few assets that does not rely on an issuer’s promise to pay. This applies only to gold bullion or gold coins purchased and held in allocated storage or at home. Gold stocks, ETF shares, even bank certificates are paper proxies for real ownershipand will likely be difficult to redeem in kind at the time of financial crisis—the time we will need our gold the most. Supply and Production

49

Despite gold’s rising price, gold production over the past two decades has averaged an annual increase of only 0.7 percent. Even future growth shows little chance of increasing significantly. To quote a recent report by Standard Chartered: There are many reasons for this. The large, multi-million-ounce deposits, whose signature is visible from aerial magnetic mapping, have likely already been found. During the past two decades, only a handful of very large deposits have been discovered, and these are in the far north or in politically sensitive countries like Ecuador. To quote the same Standard Chartered report: Even when gold is discovered, there are many new hurdles to overcome on the road to production. Environmental restrictions, the threat of nationalization, heavy taxation andexorbitant infrastructure costs are but a few.

Silver is money, but it is also an irreplaceable industrial metal and, unlike gold, silver is used up in the many processes for which it is essential. Silver’s industrial applications are growing on a daily basis in order to keep pace with rapid developments in technology. Geologically, silver occurs in larger quantities than gold, and is therefore easier to mine: it remains where it is formed, whereas gold travels through water and seeps into deep veins.Silver also has a lower melting point than gold and is easier to refine. These are two reasonswhy silver has always been less valuable than gold; however, silver shortages are becoming greater than gold shortages because of a number of unique conditions it faces today. In 1980, even with the silver price at a historical high, 4 billion ounces of aboveground silver existed. Today, because of silver’s dual role, only 1 billion ounces exist. Silver has a Historic Role as a Monetary Metal

Silver, like gold, is a monetary metal and a safe haven, and it cannot be debased like modern fiat paper and electronic currencies. Throughout history, silver has been used as money in more regions and countries than gold. Like gold, silver meets the criteria for universal money: it can be easily divided into equal parts, it is found worldwide and it is extremely durable. In times of extreme economic crisis, silver is more functional as money than gold, because its lower value makes it more practical as a medium of exchange. 50

Silver is Undervalued

Silver remains historically undervalued, even more so than gold. In 1980, when record amounts of silver were stockpiled, the gold:silver ratio was 16:1. Currently the ratio is fluctuating between 30 and 55. At a 16:1 ratio, silver today would be $93 an ounce when compared to the price of gold. Silver’s Short Position One of silver’s most unique features is its disproportionately large short position on the COMEX that has yet to be covered. Although “commercial traders” in most markets are commercial producers who wish to guarantee a fixed price for their corn or their copper, in the precious metals markets, bullion banks hold the largest short positions. Currently, the COMEX short position of the eight largest traders represents one-third of the total one billion ounces of above-ground silver bullion in existence. Silver Demand Because of its dual role, silver has never faced greater demand than it does today. In 2010, total fabrication demand grew by 12.8 percent to a 10-year high of 878 million ounces, anduse in industrial applications grew by 20.7 percent to 487.4 million ounces. Compared with gold, we see the consequences of silver’s industrial use. From the beginning of recorded history, 2 billion ounces of the 5 billion ounces of gold mined remain in bullion form today. Only 1 billion of the 45 billion ounces of silver mined are currently in bullion. Assilver’s industrial role is more important than gold’s, a silver shortage would have more negative implications than a gold shortage. Silver Supply

Although silver mine supply rose by 2.5 percent to 735 million ounces in 2010, the yearly amount of mined silver has been less than its demand for the last 15 years. There are very few pure silver producers; most silver is mined as a by-product of other metals. This could be problematic in the event of an economic slowdown. Currently Mexico leads the world in silverproduction, followed by Peru. Why Platinum?

51

Including all three precious metals in an investment portfolio provides greater diversification within the precious metal asset group, and offers reduced volatility as each metal has unique economic properties. Platinum is Also Money In the bull market of the late 1970s, platinum matched the gains of both gold and silver, which suggests that platinum was acting as a monetary asset during this inflationary period/dollar crisis. Although platinum coins were used in Russia in the nineteenth century, the scarcity of platinum, combined with its much higher cost of production, make it a poor choice for this purpose. It has served as a store of economic value for 300 years, however. Rarest Precious Metal Platinum is the rarest of the precious metals and its price reflects this. It takes approximately 10 tonnes of ore and six months of mining to produce a single ounce of platinum. Platinum is 30 times rarer than gold. Unlike gold and silver, which are mined in almost all areas of the world, most of the world’s platinum comes from only two countries—Russia and South Africa. All the platinum ever mined would occupy as space of approximately 25 cubic feet. Record Price Even though platinum hit a record high of $2,252 per ounce in 2008, it still has some distance to go to reach its inflation-adjusted high of $2,630. Since demand for platinum applications keeps growing while mine supply remains relatively fixed, the price of platinum is likely to continue rising. Limited Source of Supply Since 1997, demand for platinum has exceeded mine production and global platinum demand continues to grow to record highs. Unlike gold, there are no large above-ground supplies of platinum. Currently, South Africa accounts for 80 percent of the world’s annual production of platinum and contains 88 percent of the world’s platinum reserves. This is one reason why platinum prices can be more volatile than either gold or silver prices – they are especially sensitive to political unrest in South Africa. Inelastic Demand Platinum has far more industrial uses than gold or silver. Unlike gold, over 50 percent of theplatinum produced is consumed (destroyed) in industrial applications. Platinum is indispensable for many industrial uses, such as catalytic converters in diesel 52

engines. As the oil price increases, demand for diesel engines increases, and so does demand for platinum.

Leading Inflation Indicator According to a study by Wainwright Economics, a Boston-based investment research andstrategy firm, platinum is the leading indicator of inflation. While gold and silver lead inflation by 12 months, platinum leads by 16 months. This was confirmed in the current bull market; the rise in platinum prices started in 1999, while gold and silver’s rise began in 2001.

Ultimate Portfolio Protection According to David Ranson, president of Wainwright Economics, “The only asset class that is better than gold as an inflation hedge is a basket that includes silver and platinum.”

2.18-Unorganised Markets Goods and Services Tax will benefit organised jewellers in the country, but not standalone stores, said brokerage house Credit Suisse. The impending indirect tax regime will pay the way for simpler tax payer for jewellers replacing multiple taxes and duties with a flat 3 percent tax. Advertising and rental costs will also be considered while calculating the input tax credit received by jewellers, a clear benefit for the organised sector. Credit Suisse expects the topline to improve by as much as 5-10 percent. The unorganised sector may face "regulatory headwinds" as the next tax regime will leave a trail of their purchases and transactions, starting from the bullion dealers. Nearly 30 to 35 percent of India's gold purchases happen with consumers exchanging their old jewellery with new ornaments. The brokerage house does warn that a 53

'reasonable share of sales' will continue to remain outside the purview as recycled and smuggled gold.

Credit Suisse On India's Jewellery Sector: 

GST on jewellery: Fixed at 3 percent, in line with the current blended rates of approximately 2.5 percent.



Service tax on advertising and rent: In the pre-GST regime, jewellery had a 1 percent excise duty which was with out any input tax credit.



Purchase tax on recycled gold: In the pre-GST regime, companies had to pay 1 percent as purchase tax when they bought back gold from consumers in exchange. This 1 percent could not be offset against the final tax paid on jewellery. Thus, it was an additional cost.



Margins: For companies such as Titan, exchange is now 40-45 percent of the gold purchase and thus this can be a 40-45 basis points saving



Jewellery margins for Titan are close to 10 percent and this adds 10 percent to its EBITDA



Provision: GST has a provision for not registering if the turnover is below Rs 20 lakh a year

The unorganised sector that has been left out of the GST slabs so far is likely be to impacted. The sector comprises at least 300,000 jewellers, and artisans with direct and indirect employment run into millions. “Households with agricultural income in rural India spent 30 per cent of their income on durables goods, of which 30 pr cent was in gold jewellery High tax and other governance measures will hurt this demand significantly,” said Sanjeev Agarwal, Chairman, FICCI Gems & jewellery Committee. Total demand for gold and jewellery is estimated at around 200 tonnes in rural India.

54

2.19- GST RAIDS in November last year,the kerala state GST department had seized 14.5 kg of gold ornaments worth Rs 4.80 crore. In December, the department seized 3 kg of gold from a

Mumbai

native

in

Kochi.

So far, the government had been trying to lighten the compliance burden on businesses due to the complexity of the new tax regime. But the GST raids indicate that

the

government

is

no

longer

going

to

be

soft

on

compliance.

This is the first such raid carried out by the department in Mumbai ever since the implementation

of

the

GST

by

the

government.

Nationwide launch of the eway bill from February 1 is expected to check evasion by ensuring goods are tagged and tax paid. It could not be rolled out earlier as software and

nationwide

system

was

not

ready.

The government fears lack of monitoring of cargo movement could have allowed cash dealing across the entire value chain to evade taxes, which could have been reason for the sharp decline in GST collections in past two months.

According to government data, GST collection for the month of November slipped to a five-month low of Rs 80,808 crore. Nearly six lakh taxpayers availing the simple composition scheme under the GST have paid a tax of only about Rs 250 crore for July-August,

leading

the

government

to

suspect

large-scale

evasion.

The GST Council has decided to start eway bill for inter-state movement of goods from February 1. Eway bill is an electronic document that is required if goods worth more than Rs 50,000 is transported and carries the details of supplier, buyers and goods being transported. There have been fears the bill will lead to harassment as any cargo would be stopped for checking.

55

Gems and jewellers' body GJC on Monday condemned harassment of jewellers by government officials ahead of Diwali and demanded that the Centre should circulate standard norms to check goods in transit. The All India Gem and Jewellery Domestic Council (GJC) is a national trade federation for the promotion and growth of trade in gems and jewellery across India. Several incidents across states have come to light wherein the police, income tax officials and GST officials have conducted "illegal raids" on jewellers, especially the small and medium sized players, it said. This has caused mental torture and harassment at a time when jewellers are grappling with low sales during the festive season. "There have been complaints that the officials are indulging in nepotism and bribes," the GJC alleged. "As the gem and jewellery industry is trying to get organised and become compliant, small and medium sized jewellers are being deliberately targeted and we are witnessing no ease of business," GJC chairman Nitin Khandelwal said in a statement. Since officials cannot visit shops, they are harassing at different places during transit even though jewellers have been following due procedures, he alleged. "We request the government to issue a final standard operating procedures and process of of the goods in transit and circulate across all the departments such as GST, police, Railway Protection Force (RPF), Directorate General of Goods & Services Tax Intelligence (DGGSTI), Income Tax etc," Khandelwal said. GJC said small town jewellers from Nagpur, Bhusawal, Itarsi and Kandwa regions of Maharashtra amongst others, who buy from the wholesale markets such as Zaveri Bazaar in Mumbai, have complained that they have been harassed in trains enroute while they were heading to their respective towns. According to local jewellers, six raids have been conducted in Thane district of Maharashtra in the last few days. Khandelwal recalled that that the Union Finance Ministry had during the GST adoption process assured jewellers that under no circumstances will inspector raj be levied nor will jewellers be subjected to harassment of any kind.

56

2.20-People getting registered under GST Over 1.03 crore businesses have registered under the Goods and Services Tax (GST) regime and the implementation of the biggest indirect tax reform has been smooth so far,

Parliament

was

informed

today.

As on March 2, a total of 1,03,99,305 taxpayers are registered under GST, which include 64.42 lakh taxpayers who have migrated from the erstwhile tax regimes and 39.56 lakh who have taken new registration under GST, Minister of State for Finance Shiv

Pratap

Shukla

said.

"As a result of the sustained efforts made by the government to make GST trade friendly, the implementation of GST in the country has been smooth so far," Shukla said

in

a

written

reply

to

a

question

in

the

Lok

Sabha.

GST was rolled out from July 1, 2017, and based on the feedback received from stakeholders the GST Council, headed by Finance Minister Arun Jaitley and comprising state counterparts, has made a host of changes in GST norms and procedures.

GST has subsumed over a dozen local taxes, including excise duty, service tax and VAT.

The Central Board of Excise and Customs (CBEC) has set up a national call centre to reply to queries which is functional round the clock, Shukla said.

"The tax payer can raise a query via toll free phone number 18001200232 or by sending

an

email

to

[email protected],"

he

said.

In addition, GST Network has set up a help desk with phone number 0120-4888999 to answer

software

related

queries.

Shukla said the revenue collections from Central GST, State GST, Integrated GST 57

and compensation cess was Rs 93,590 crore for July, Rs 93,029 crore for August, Rs 95,132

crore

for

September

and

Rs

85,931

crore

for

October.

The mop up for November stood at Rs 83,716 crore, December (Rs 88,929 crore) and January (Rs 88,047 crore).

From the figures we can se that after GST 39.56 lakh new registerations have been taken so there is increase in registeration after GST

58

2.21-Bullion inter-state transaction GST Council had earlier decided on a staggered roll-out of the e-way bill starting with inter-state from April 1 and intra-state from April 15 Businesses and transporters moving goods worth over Rs 50,000 from one state to another will have to carry an electronic or e-way bill from April 1. Touted as an anti-evasion measure that would help boost tax collections by clamping down on trade that currently happens on a cash basis, the e-way bill provision of the goods and services tax (GST) was first introduced on February 1. technical glitches in generating permits. With several states also starting to generate intra-state e-way bills on the portal, the system developed a snag. To ensure a fool proof system, the Goods and Services Tax Network has activated only that facility on its portal where e-way bill can be generated when goods are transported from one state to another by either road, railways, airways or vessels. “We will block any attempt to generate e-way bill for intra-state movement of goods,” an official said. The GST Council, earlier this month, had decided on a staggered roll-out of the e-way bill starting with inter-state from April 1 and intra-state from April 15. The platform has been made more robust and as many as 75 lakh inter-state e-way bills could be generated daily without any glitch. The system has been designed and developed by the National Informatics Centre (NIC). “NIC has assured us that the system should work fine on April 1. NIC has conducted extensive tests so that it doesn’t develop snag at the last moment,” an official said. The official said that the GST Network had advised all transporters and businesses to enrol on the portal for a trial on how to generate e-way bills. Till earlier this week, 11 lakh entities had registered on the e-way bill portal. This compares to 1.05 crore registered businesses under the GST and about 70 lakh filing monthly returns.

59

2.22 E-WAY BILLS

1. What is an eWay Bill? EWay Bill is an Electronic Way bill for movement of goods to be generated on the eWay Bill Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs. 50,000 (Single Invoice/bill/delivery challan) without an e-way bill that is generated on ewaybillgst.gov.in Alternatively, Eway bill can also be generated or cancelled through SMS, Android App and by site-to-site integration through API. When an eway bill is generated, a unique Eway Bill Number (EBN) is allocated and is available to the supplier, recipient, and the transporter. 2.When Should eWay Bill be issued? eWay bill will be generated when there is a movement of goods in a vehicle/ conveyance of value more than Rs. 50,000( either each Invoice or in (aggregate of all Invoices in a vehicle/ Conveyance)# ) –   

In relation to a ‘supply’ For reasons other than a ‘supply’ ( say a return) Due to inward ‘supply’ from an unregistered person

For this purpose, a supply may be either of the following:   

A supply made for a consideration (payment) in the course of business A supply made for a consideration (payment) which may not be in the course of business A supply without consideration (without payment)In simpler terms, the term ‘supply’ usually means a:

1. Sale – sale of goods and payment made 2. Transfer – branch transfers for instance 3. Barter/Exchange – where the payment is by goods instead of in money Therefore, eWay Bills must be generated on the common portal for all these types of movements. For certain specified Goods, the eway bill needs to be generated mandatorily even if the Value of the consignment of Goods is less than Rs. 50,000: 1. Inter-State movement of Goods by the Principal to the Job-worker by Principal/ registered Job-worker***, 2. Inter-State Transport of Handicraft goods by a dealer exempted from GST registration

60

CHAPTER NO-3.Literature Review The proposed GST is likely to change the whole scenario of current indirect tax system. It is considered as biggest tax reform since 1947. Currently, in India complicated indirect tax system is followed with imbrication of taxes imposed by unions and states separately. GST will unify all the indirect taxes under as umbrella and will create a smooth national market. Expert says that GST will help the economy to grow in more efficient manner by improving the tax collection is it will disrupt all the tax barriers between states and integrate country by single tax rate. GST was first introduced by France in 1954 and now it is followed by 140 countries . Most of the countries followed unified GST while some countries like Brazil , Canada follow a dual GST system where tax imposed by central and state both. In India also dual system of GST is proposed including CGST and SGST . 1) Ms. Janitha M.L and Ms. Madhushree H.G (2017): Study titled “Impact of GST on Bullions”has explained that GST is also known as the Goods and Services Tax is defined as the indirect tax structure designed to support the economic growth of the country. More than 150 countries have implemented GST. There are mixed response, argument and opinion among the traders, manufactures and society about the GST to be implemented by the government of India from 1st July 2017. GST process is important event in Indian tax system. It changes the country into one united common market. It will reduce the existing complexity of taxes as it contain VAT, Excise duty, Service tax and Sales tax. Secondary data was collected. GST could Impact Jewelry sector could negatively impact jewelers working capital having to pay 3% GST on Gold. The performance of GST has a great impact on Gold, physical demand for gold have decreased because of the 3% GST that is imposedupon 10% of import duty. Earlier the gold tax was 1% service tax and 1% VAT, amounting to 2%. GST have increased the tax rate of gold to 3%. 2) Shefali Dani(2016)- GST also known as the Goods and Services Tax is defined as the giant indirect tax structure designed to support and enhance the economic growth of a country. More than 150 countries have implemented GST so far. However, the idea of GST in India was mooted by Vajpayee government in 2000 and the constitutional amendment for the same was passed by the Loksabha on 6th May 2015 but is yet to be ratified by the Rajyasabha. However, there is a huge hue and cry against its implementation. It would be interesting to understand why this proposed GST regime may hamper the growth and development of the country 61

3) Agogo mawuli(2014) – studied’ “Goods And Service Tax.A Appraisal” and found the GST is not good for low-income countries and does not provide broad based growth to poor countries. If still these countries want to implement GST then the rate of GST should be less than 10% for growth 4) Jaiprakash (2014) – in his research study mentioned that the GST at the Central and the State level are expected to give more relief to industry,trade,agriculture and consumer through a more comprehensive and wider coverage of input tax set-off and service tax setoff ,sybmitting of several taxes in GST and phasing out of GST responses of Industry and also trade have been indeed encouraging.Thus GST offers us the best option yo broaden our tax base and we should not miss this opportunities to introduce it when the circumstances are quite favourable and economy is enjoying steady growth with only mid inflation 5) Dr.R.vasanthgopal (2011)-

studied, ‘GST in India.’ A Big Leap in the

indirect Taxation system and concluded that switching to seamless GST from current complicated indirect tax system in India will be a positive step in booming Indian economy. Success of GST will lead to ts acceptance by more than 130 countries in world. 6)

AgogoMawuli (May 2014) studied , “ Goods and Service Tax An Appraisal “ and found that GST is not good that low income countries and does not provide broad based growth to poor countries. If still countries want to implement GST then the rate of GST should be less than 10 % for growth.

7)

Boonyarat et al. (2014), the researcher used Structure Equation Modelling (SEM) to examine the relationships between tax awareness and tax knowledge and the researcher found out that tax knowledge has positive relationship with tax awareness. Hence, taxpayers will be more aware about tax system when they have knowledge and understanding towards the tax system.

8)

NishithaGuptha (2014) in her study stated that implementation of GST in the Indian framework will lead to commercial benefits which were untouched by the VAT system and would essentially lead to economic development.

9)

Venkadasalam (2014) , has analyzed the post effect of the goods and service tax (GST) on the national growth on ASEAN States using Least Squares Dummy Variable Model (LSDVM) in his research paper. He stated that seven of the ten ASEAN nations are already implementing the GST. He also 62

suggested that the household final consumption expenditure and general government consumption expenditure are positively significantly related to the gross domestic product as required and support the economic theories. But the effect of the post GST differs in countries. 10) International Journal of Scientist research and management (2014)

,GirishGargh Assistant Professor from PGDAV College University of Delhi has published paper titled Basic Concepts and Features of good and service tax in India. In this paper he has given the outline of GST and what does this tax system wants to achieve with threats and challenges opportunities that the free market economy can bring. 11) Mohammad Ali Roshidi (2016) , conduct a study on “ Awareness and

perception of tax payers towards Goods and Service Tax implementation. The study attempts to find out what level of awareness and perception to GST taxpayers in Malaysia. This study only consist of 256 civil service servants of the secondary school teachers in the kaulakangsar, Perak. Data collected using questionnaire. The result shows that moderate and majority of respondents give a high negative perception to the GST. The eventually causes the majority of respondents did not accept implementation of GST in Malaysia. 12) . International Journal of innovative studies in sociology and humanities

(2016) , A study on impact of GST after implementation Milan-deep Kour and his co-authors Assistant Professor from Eternal University himachal Pradesh talks about the impact of GST and implementation of it, its benefit and challenges. He also emphasizes that GST is going to change things in current situation. 13) . Ahamd et al. (2016) , found that the level of awareness of the GST is still

not reached a satisfactory level. This is because the study involved only general questions that should be known by the respondents as end users. This cause the respondents gave high negative perception of the impact of implementation of GST. The respondents received less information and promotion of the authorities. Most of the respondents were unclear whether the goods and services are not subject to GST. Furthermore, due to the lack of information on GST, the respondents had a high negative perception. Therefore, the government must convince that GST will not have a lasting

63

impact on the public as particularly convincing end users that no increase in prices of goods and services 14) Times of India (26 July, 2017) , page no 1&17 it is stated that Sweet makers

are confused with fixing the tax for their products as the ingredients used in the sweets are taxed separately as raw material and as finished goods the products its taxing is different ex. Plain burfi is 5% taxed but chocolate burfi is fixed with 28%. Plain burfi mixed with other dry fruits is of 12%. This taxing system makes the Sweet makers to get confused on how much GST to be fixed for which product. 15) Times of India dated ( 27 July , 2017) , stated that the GST implication

across different places for the same product has wider differences which the consumers are unaware, resulting them in surprise. Ex A Rasamalai sold in counter at a shop is taxed with 5% but if it is served in the hotel it is taxed with 18% this has resulted in difference of consumers shopping to purchase the similar products 16) Pinkiet al. (2014) studied, “Goods and Service TaxPanacea For Indirect Tax

System in India” and concluded that the new NDA government in India is positive towards implementation of GST and it is beneficial for central government, state government and as well as for consumers in long run if its implementation is backed by strong IT infrastructure. 17) Kumar (2014) studied, “Goods and Service Tax - A way forward” and

concluded that after implementation of GST in India many indirect tax system will be finished and there will be only one tax i.e. GST which is expected to encourage unbiased tax structure. 18) Sehrawat and Dhanda (2015) studied, “GST in India: A Key Tax Reform”

and concluded that due to dissilent environment of India economy, it is demand of time to implement GST. 19) Anushuya and Narwal (2014) studied, “Application of CGE Modals In

GST” and concluded that both GST& CGE are very popular all over the world but GST is a powerful concept in the field of indirect taxes. 20) . Chaurasia et al. (2016) Studied, “Role of Goods and Services Tax in the

growth of Indian economy” and concluded that in overall GST will be helpful for the development of Indian economy and this will also help in improving the Gross Domestic Products of the country more than two percent. 64

CHAPTER NO-4.RESEARCH METHODOLOGY

Introduction of Research Methodology : Research is a logical and systematic search for new and useful information on a particular topic. Research methodology is a systematic way to solve a problem. It is a science of studying how research is to be carried out. Essentially, the procedures by which researchers go about their work of describing , explaining and predicting phenomenon are called research methodology.

About my Research Problem : The present research is exploratory in nature. Since GST is a new phenomenon in India, there are hardly any studies in this area. Specially there is a huge gap of empirical and behavior studies on GST in India. The study tries to find the significance of popular perception regarding GST amongst the Bullion market.

Need of Study : The Need of study have to fill the gap that has identified in the privious researchers. Under this study We know that how much level of understanding the GST and Perception towards GSTas well as traders , taxpayers concerned by GST.

Scope of the Study : This study is conducted to find out the views of Bullion market of Mumbai . The respondents selected are of mixed group which will give wider difference in understanding. The scope of the study is limited only to the concerned area of study which cannot be justified for any other place. OBJECTIVES The study has following objectives: I.

To examine the impact on Bullion market under GST regime.

II.

To study the key role of bullion market in the Indian economy.

III.

To study the pertinent issues in current taxation and GST under Bullion market.

IV.

To identify benefits and challenges of GST after implementation. 65

V.

To understand the key issues involved in the successful implementation GST.

Research Design : A good research design has characteristics viz, problem definition , time required for research project and estimate of expenses to be incurred the function of research design is to ensure that the required data are collected and they are collected accurately and economically. A research design is purely and simply the framework for a study that guide the collection and analysis data. In this project the two basic types of research design are used : ➢ Exploratory Research : All research projects must start with exploratory research . This is a preliminary phase and is absolutely essential in order to obtain a proper definition of problem in hand. The major emphasis on the discovery if ideas and insights . The exploratory study is particularly helpful in breaking broad and vague problems in to smaller, more precise sub problem statements . Exploratory research is also used to increase the familiarity with the problem under investigation. ➢ Descriptive Research : It is the design that one simply describe something such as demographic characteristics of people . The descriptive study is typically concerned with determining frequency with which something occurs or how two variables vary together. A descriptive study requires a clear specification of who, what, when and why apex of the research . It requires formulation of more specific hypothesis and the testing these through statically inference technique. This is the research design of the study and then it comes to develop the research plan , which means that what to do before going for the actual interpretation and it is discussed below . ➢ Developing a Research Plan :- The present research is exploratory in nature. Since GST is a new phenomenon in India, there are hardly any studies in this area. Specially there is a huge gap of empirical and behavior studies on GST in India. The study tries to find the significance of popular perception regarding GST. The data for this research project has been collected through self Administration . Due to time limitation and other constraints direct personal interview study method is used . A structured questionnaire was farmed as it consumes less time duration and is very important from the point of view of information , easier to tabulate and interpret . More ever respondents prefer to give direct answer. Development of research plan has the following steps : 66

➢ Sample Design ➢ Sample Unit ➢ Sample Size ➢ Sample Technique. Population :- Population means the whole universe of study in which the researcher does his study / research and the population for my research is people of Mumbai

Universe of Study :- For the present study purpose about the Perception of new implemented system of Goods and Service Tax.

SAMPLING SIZE The sample size of the study was 72. The area of study was Mumbai Region.

SAMPLING METHOD The sampling method was Judgment Sampling (only those respondents were chosen who had some knowledge about GST)

RESEARCH INSTRUMENTS ➢ QUESTIONNAIRE A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents . Although they are often designed for Statistical Analysis of the responses.

RESEARCH PLAN Data Source-Primary Data Research Approach-Survey Research Instrument-Questionnaire Method of Contact- Personal Sample Size-72 Respondents

DATA COLLECTION

67

Data collection is the process to gather information about the relevant topic research , which is be Data Collection usually takes place early in an improvement project , and is often formalized through data collection plan which often contains the following activity : ➢ Pre collection activity on goals , target data , definitions and methods. ➢ Collection of Data. ➢ Presenting findings involving some form of sorting analysis. For accomplishing the the objective of study, both Primary and Secondary data have been used.Data Collection through the Primary Data as well as Secondary Data Sources.

CLASSIFICATION OF DATA The correct information is the key to success. Data information is of two types ; Primary Data and Secondary Data. Primary data is information collected by researcher or person himself where is secondary data is collected by other but utilized or used by researcher . Data can be classified under two categories depending upon source utilized . These categories are : ➢ PRIMARY DATA ➢ SECONDARY DATA

Primary Data : The study is largely based on the primary data which has been collected through the structured Questionnaire Method. ➢ Using Primary Data Collection Tool : Questionnaire:The data has been collected by administering a structured schedule of questions. The questions are generally framed by 3 point Likert Scale and answers by respondents in form of Yes, no and maybe. The Questionnaire has been prepared for study the customer perception towards the Goods and Service Tax in Maharashtra. For the present study purpose questionnaire method is used to collect the primary data.

Secondary Data: 68

This type of data has already been collected by someone else and has already passed through statistical process. This type of data has been collected from the following resources : ➢ Sources of Collection of Secondary Data ➢ Internet ➢ Books ➢ Journal

LIMITATIONS OF THE STUDY

The following are the limitation of the study: 

GST is still in the maturity phase, so tax reforms can occur from time to time via GST council meetings regarding finalization of tax rates.



Imposition of new tax rates and deductions can also be made.



Final conclusion may vary considering different perceptions.



The sample size was small and cannot be applied to the entire population.



GST is new launched tax system so some complications are faced by the people in answering the questionnaire.

CHAPTER NO 569

DATA ANALYSIS, INTERPRETATION AND PRESENTATION Data Analysis Data

analysis is

a

process

of

inspecting, cleansing, transforming,

and modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, while being used in different business, science, and social science domains. In today's business, data analysis is playing a role in making decisions more scientific and helping the business achieve effective operation.

First of all collected data have been presented in tabular form and thereafter it is analysed with the help of percentage and pie charts A brief description of analysis and interpretation given below:

In Table No. 5.1

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An attempt has been made to classify the respondents perception towards the Goods and Service Tax.They were asked if they supported GST .The Perception level of the respondents has been divided in to Yes and No.

Table no 5.1 Classification of respondents on the basis of their perception towards the Goods and Service Tax.

Sr No.

Respons e

No. of Percentage Respondents (%)

1 2

Yes No

68 4

94.4 5.6

72

100

TOTAL

INTERPRETATION: Above chart depicted that majority of the respondents are satisfied with the statement this taxation reform in india is very good 94.4% respondents have agreed they support GST. While only 5.6% of the respondents are not happy with GST. Hence it is concluded that majority of the respondents i.e. 60 out of 70 have strongly agreed. In Table No. 5.2 71

An attempt has been made to classify the respondents on the basis of their response regarding the statement “Do you think GST should be implemented on bullions?” The Perception level of the respondents has been divided in to Yes No and maybe

Table no 5.2 Classification of respondents on the basis of their perception towards the above statement SR NO.

RESPONSE

1 Yes 2 no 3 Maybe TOTAL

NO. OF PERCENTAGE RESPONDENTS (%) 35 12 25 72

48.6 16.7 34.7 100

INTERPRETATION: From the above table and figures it is concluded that 35 out of 72 respondents found that GST should be implemented, while, 312respondents on the contradictory found that GST should not be implemented.

In Table No. 5.3 72

An Attempt has been made of classify the respondents on the basis of their response towards the statement that the newly implemented GST has confused the customers. The following description are given below.

Table no 5.3 Classification of respondents on the basis of response of the respondents regarding the Newly implemented GST confused Customers and business. SR NO.

RESPONSE

1 Yes 2 No TOTAL

NO. OF PERCENTAGE RESPONDENTS (%) 57 15 72

79.2 20.8 100

INTERPRETATION : Above Figure depicted that 57 respondents responded a yes regarding the statement that GST has confused customers and business. While only 15 respondents have been No about the statement. Hence it is concluded that customers and the business has no confusion for GST implementation and overall maximum result for this analysis is negative.

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In Table No. 5.4 An attempt has been made of classify the respondents on the basis of their statement Is GST a step in right direction to benefit . The Perception level of the respondents has been divided in to Yes and No.

Table no 5.4 Classification of respondents on the basis of their perception.

NO. OF RESPONSE RESPOND ENTS 1 Yes 60 2 No 12 TOTAL 72 SR NO.

PERCENTAGE (%) 83.3 16.7 100

INTERPRETATION :

From the above data table and figure show that maximum respondents are represents that GST has benefited so 60 respondents are Agree have agreed this statement but 12 respondents have Dis Agreed for this statement. Hence , it is concluded that maximum results are positive nature for this statement .

In Table No. 5.5 74

An attempt has been made to classify the respondents perception towards what according to them will be impact on investors The Perception level of the respondents has been divided in to positive,negative and neutral

Table no 5.5 Classification of respondents on the basis of their perception towards the Goods and Service Tax deadline. SR NO.

RESPONSE

1 Positive 2 Negative 3 Neutral TOTAL

NO. OF PERCENTAGE RESPONDENTS (%) 41 12 19 72

56.9 16.7 26.4 100

INTERPRETATION: Above Chart depicted that majority of the respondents think investorsts will have positive impact. 41 out of 71 respondents think positive impact. Only 12 respondents think it is negative impact and 19 think it’s neutral.

In Table No5.6 75

An attempt has been made to classify the respondents that Gold has been favoured assets for Indians so GST likely to impact negatively The Perception level of the respondents has been divided in to Yes and No.

Table no 5.6 Classification of respondents on the basis of their perception towards the Goods and Service Tax.

SR NO.

RESPONSE

1 Yes 2 No TOTAL

NO. OF PERCENTAGE RESPONDENTS (%) 44 28 72

61.1 38.9 100

INTERPRETATION: The above pie chart shows that 61% of the respondents have agreed that there will be negative impacr, while, 39% of the respondents have disagreed.

In Table No. 5.7 76

An attempt has been made to classify the respondents perception towards the Goods and Service Tax likely to impact demand initially. The Perception level of the respondents has been divided in to Yes and No.

Table no 5.7 Classification of respondents on the basis of their perception towards the Goods and Service Tax refund policy.

SR NO.

RESPONSE

1 Yes 2 No TOTAL

NO. OF PERCENTAGE RESPONDENTS (%) 62 10 72

86.1 13.9 100

Interpretation : Above chart depicted that majority of the respondents satisfied with the statement this taxation that GST is likely to impact demand 86% respondents have strongly agreed with this statement and 14% have not agreed.Hence it is concluded that majority of the respondents i.e. 60 have strongly agreed and 12 have disagreed with this statements. In Table No. 5.8

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An attempt has been made to classify the respondents perception towards the Goods and Service Tax trading on stock exchange. The Perception level of the respondents has been divided in to Yes and No.

Table no 5.8 SR NO.

RESPONSE

1 Yes 2 No TOTAL

NO. OF PERCENTAGE RESPONDENTS (%) 55 17 72

76.4 23.6 100

INTERPRETATION: The above chart depicts that majority of the respondents have agreed with the statement. This can be interpreted as76% of the respondents have clearly answered yes when asked that were they think trading on stock exchange will be affected and only 27% of the respondents stated that they didn’t think that it would be affected.

In Table No. 5.9 78

An Attempt has been made of classify the respondents on the basis of their response towards the statement that the newly implemented GST has increased without bill transactions. The following description are given below.

Table no 5.9 Classification of respondents on the basis of response of the respondents regarding the Newly implemented GST has increased without bill transactions SR NO.

RESPONSE

1 Increase 2 Decrease 3 No change TOTAL

NO. OF PERCENTAGE RESPONDENTS (%) 40 23 9 72

55.6 31.9 12.5 100

INTERPRETATION : Above Figure depicted that 40 respondents responded a increase regarding the statement. 23 have stated decrease regarding this and statement. While only 9 respondents have been stated No change about the statement. Hence it is concluded that customers think Bill transactions would be increase.

In Table No. 5.10 79

An Attempt has been made of classify the respondents on the basis of their response towards the statement that the Gold being a luxury in other countries and a social factor in India will it affect India’s balcance of payment.The following description are given below.

Table no 5.10

SR NO.

RESPONSE

1 Yes 2 No 3 Maybe TOTAL

NO. OF PERCENTAGE RESPONDENTS (%) 35 10 27 72

48.6 13.9 37.5 100

INTERPRETATION : Above Figure depicted that 35 respondents responded a Yes regarding the statement that GST will affect the balance of payment. 27 have stated maybe regarding this and statement. While only 10 respondents have been No about the statement.

In Table No.5.11 80

An attempt has been made of classify the respondents on the basis of their response regarding the statement “GST has increased the various legal formalities”. The Perception level of the respondents has been divided in to Yes and No.

Table no 5.11 Classification of respondents on the basis of their perception regarding the GST implementation.

SR NO.

RESPONSE

1 Yes 2 No TOTAL

NO. OF PERCENTAGE RESPONDENTS (%) 54 18 72

75 25 100

INTERPRETATION : Above Chart depicted that majority of the respondents are satisfied with the statement that after implementation of GST Benefits have increased. 75% respondents have agreed to the statement. So it is concluded that majority of the respondents satisfied this statement.

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CHAPTER NO 6SUMMARY, FINDINGS AND SUGGESTIONS

SUMMARY Summary of the study: This project report helped me to get deeply understanding the “Perception towards the Goods and Service Tax ( GST) in the textile industry of Mumbai city at Maharashtra .'' The main focus of this study was to asses the perception of businessman regarding the Goods and Service tax. The study is structured of five chapters namely

 Introduction  Conceptual framework  Literature review  Research methodology  Data analysis and interpretation  Summary and conclusion First chapter covers the introduction of the taxation system, background of GST in outside of India and within India . Concept of GST , Types of GST , Structure of GST , Impact of GST in different Sectors and How To file the GST return , GST slab and Benefits of GST.

The second chapter i.e. conceptual framework talks generally about the entire topic, it talks about the taxation system, how gst was implemented, the HSN codes and much more.

The Third Chapter i.e. Literature Review it includes more than 20 Studies of different researchers are analysis carefully .

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In the fourth Chapter i.e. research methodology highlights the problem statement , scope of study , need of study, objective of study , research design , universe of study , sampling design , sample technique and sample size and data collection methods and limitations of study.

The fifth chapter , i.e. Data analysis and interpretation, efforts have been made to analysis the data with the help of mathematical tools are used percentage method . Data are show in Tables form which includes response of respondents , total number of respondents and percentage share of respondents towards the various statements .Interpretation results are shown in Positive and Negative form .

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FINDINGS

After Analysis and Interpretation of the data these are followings findings were emerged:  A majority of the respondents have supported GST.  Most of the respondents feel that even due to the implementation of GST, the prices of raw materials have remained unaffected.  The Investors and manufacturers feel that GST has caused change in the buying behaviour of the consumers.  Majority of the peoples have found confusion regarding GST, but a few respondents’ perception is that they found that it is not confusing and opened that they discuss about GST with others.  With the survey taken we could find that many of the respondents are not happy with the deadlines given by the government authorities.  But the respondents don’t seem to be very happy with the refund policy of GST. They shared that they still feel a lot of issues while getting the refund from the government  94% respondents are in support with GST.  Most of the customers perception that GST is very beneficial in Long Term for economy of the country and also effect of GDP.  The most of respondents perception are very positive towards the GST and they are aware of 
GST through the mass media . 
  Most of the customers perception that GST is very beneficial in Long Term for economy of the country and also effect of GDP.  Majority of the peoples have perception that they still need more clarity on GST and opened 
that they discuss about GST with others . 
  Most of the customers opinion that GST is fair tax . And also GST is predominantly compliance tax.

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RECOMENDATIONS  The traders suggested that there should be a smooth , transparent and simple transition provisions which is easily understandable.  Special focus on awareness and training of all officers , professionals and assesses should be given on GST.  Since the public are very clear about GST , any disputes on GST introduction should be protectively addressed by way of speedy redress .  he issues being faced by the exporters should be dealt with and the refund procedure should be activated immediately.  Since GST is new and is not understood by a lot of traders and manufacturers, the government authorities should be lenient towards the penalty and late fees charged.  The deadlines given should also be extended

 The matter of the refund process should also be looked upon.

 The government should look into GST’s rational style, timely implementation and regular follow up  The Government to put in more effort to ensure that traders have a clear understanding and develop a positive perception towards GST , leading to its acceptance .  Good understanding among traders and manufacturers is important as it can generate a positive perception towards the taxation policy.

 Lastly,the government must ensure a good management of the income collected frome the GST

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CHAPTERNO.7-CONCLUSION Nowadays there are so many things heard about GST, little right and many wrong. GST, is like a book which has been hardly read but everybody is giving opinion about it. Here, i will try to explain the GST in the most unusual, simple and interesting way. For a common man GST stands for ' Goods and Services Tax", and is proposed to be a comprehensive indirect tax levied on manufacturing, sale and consumption of goods as well as services at the national level. It will replace all other indirect taxes levied on goods and services by the Indian Central and State governments. To understand it, let's assume there is a kid, named Pintu. Now, Pintu studies in the 2nd standard and has a little understanding of societal norms. One fine day there is Pintu's birthday and he very enthusiastically asking his father to get him the chocolates to distribute among his school friends. His father does so happily. Now, when Pintu is about to leave school, his classmate Pinku living in the neighborhood wishes him the happy birthday. Delighted Pintu gives two chocolates to Pinku being obliged for being wished Hearing this conversation, Pinku's mother also wishes Pintu and Pinto had to give her two chocolates too. Now, Pintu's father drops him at the school gate and wishes him again by promising to come early to pick him up. The school watchman listens to it and as a courtesy he also wishes Pinto a happy birthday which Pinto had to express his thanks through two chocolates again. After reaching to class, Pintu's class teacher announces about his birthday and encourages Pintu to distribute chocolates along with asking few chocolates for Principal of the school While distributing chocolates, Pinto comes in front of Pinku who has already been given two chocolates but here the courteous Pintu gives him one more chocolate just let Pinku not feel deprive. Moreover, Pintu also finds that his best friend Bablu is absent today (so two chocolates for Bablu is been kept separately). At the end, teacher realizes that Pintu is left with two more chocolates which teacher asks for her son. Poor Pintu give them away with a liability to give chocolates to Bablu the next day. Now, looking to this entire situation, symbolically if we see, Pinto is a common man; birthday is any service or products on which common man has to pay several taxes. Pinku and her mother are local taxes, school watchman is an entry tax, teacher & all other students are various statutory compliance's; School principal is a central tax and Bablu is a liability; where in chocolate for teacher's son is corruption So our current tax structure is like that where poor Pintu (a common man) is pissed of paving various taxes at various levels and depriving of getting so many benefits he is supposed to get. Now, suppose in school there would be a rule that whoever child is having a birthday has to give all chocolates to principal compulsorily and the principal is supposed to distribute chocolates to all students & others (specially the classmates or the same division from where the birthday boy belongs and not to others) rationally then Pintu might have saved from distributing chocolates to same persons again and again So this system is GST. Some people are opposing GST because after applying this law there are man Pinkus, Pinkus' mothers, school watchmen and teachers whose benefits (chocolates) are at stake that is why they are making this much noise and creating chaos. So awake, be rationale and help Pintu (yourself) to save from multi layer mugging called taxation.

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CHAPTERNO.8-BIBLIOGRAPHY  Http ://wittgenstein  Www.gstindia.com  Https://en.wikipedia.org  Www.gstn.org  Www.cbec.gov.in  Www.financialexpresss.com  www.gstcounsil.gov.in  www.slideshare.net  Http://texmin.nic.in  Https://cleartax.in/s/impact-gst-textile

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CHAPTERNO.9-QUESTIONAIRE 1. Do you support GST?  Yes  No

2. Do you think GST should be implemented on bullions?  Yes  No

3. Is the newly implemented GST confusing to the customers ?  YES  NO 4. Is GST a step in right direction to benefit both industry and consumer?  Yes  No

5. What according to you will be the impact on investors over a period of time  Positve  Negative  neutral 6.Gold has been favoured assets for Indians so GST likely to impact negatively?  Agree  Disagree

6. Will the Increase in taxes likely to impact demand initially?  Yes  No

7. Do bullion trading on stock exchange would be affected because of GST? 88

 Yes  No

8. GST have increased without bill trasactions or reduced the same?  Increase  Decrease  No change 9. Gold being luxury in other countries and a social factor in India will it affect balance of payment position?  Yes  No  Maybe

10. Has GST given any tax benefirs in this sector?  Yes  No

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