Recommend GST Pann

The Commodity and Services Tax Board is scheduled to trade a proposal to include a new 31D base in CGST rules, 2017, to provide the RSP) RSP evaluation from Pan Masala, Gutkha, Sigarettes and Embacing Tobacco. This step aims to reduce tax evasion on a large scale in these commodities exposed to evasion.

Currently, under Article 15 (1) of the CGST law, taxable supplies are estimated on the basis of “the value of the transaction”, that is, the actual price paid where the buyer and the seller are not linked, and the price is the only consideration. However, Article 15 (5 (5) enables the government to describe special evaluation methods for specified goods, despite the general rule.

The installation committee, a committee of officials from both the center and the states, recommended that the Pan Masala, Gutkha, Sigarettes and Phecking Tobacco are attached to the printed on the package, rather than the value of the transaction. This is in line with the provisions under the GST (compensation to countries) for the year 2017, which already allows CESS to impose on the basis of value, quantity or RSP.

The shift to the RSP assessment is expected to tighten tax compliance, but it may also increase the prices of Pan Masala, Gutkha, Sigarettes, and Proteting Tobacco. Nowadays, many manufacturers reduce the values ​​of transactions to reduce their tax commitment. With the taxes are now associated with the maximum printed retail price on the packages, the effective tax burden will rise. Although companies may choose to absorb a portion of this cost, the increasing tax is probably transferred to consumers, which makes these products more expensive in the retail market, according to a few analysts.