Скачать или смотреть GST Council Proposal: Shifting Tobacco GST to a First-Point, MRP-Based System | Stop GST Evasion

The main topic is the government's proposal to shift the GST valuation for tobacco, pan masala, and related products from the transaction value to the Retail Sale Price (MRP). This would replace the current complex system (GST on transaction value + Cess on MRP) with a single, higher GST rate (proposed at 40%) levied directly on the MRP at the first point of sale (by the manufacturer).

Key Implications Discussed:

First-Point Taxation: The entire GST liability for the product, up to the final consumer, will be collected from the manufacturer. Subsequent sellers (distributors, retailers) will have an Input Tax Credit (ITC) that exactly matches their output tax liability on these specific products, resulting in zero net tax payment down the supply chain.

Curbing Tax Evasion: The primary reason for this change is to prevent manufacturers from under-reporting their transaction value to reduce their GST liability, a common method of tax evasion in this sector.

Accumulated ITC Problem: A major concern was raised:

Distributors who only sell these products will find their ITC from other business expenses (like rent, services) accumulating with no output tax to set it off against.

This accumulated credit will effectively become a business cost.

Simplified Enforcement: This move will allow tax authorities to focus their monitoring and enforcement efforts exclusively on the manufacturers, simplifying administration.

Transition and Cess Credit: The change is likely timed with the removal of the GST Compensation Cess. Businesses with large accumulated cess credits will face a challenge. The consensus was that they would need to zero out their stock before the new rule is implemented to utilize their existing credits, a strategy used during previous tax changes in the industry.

Analysis of MRP-Based GST Valuation for Tobacco and Pan Masala

GST Council Proposal: Shifting Tobacco Taxation to a First-Point, MRP-Based System

Implications of the Proposed GST Overhaul for the Tobacco Industry

Valuation Changes in GST: A Deep Dive into the New Rules for Pan Masala

Big Changes for Tobacco GST: What Distributors and Retailers Need to Know

The End of Transaction Value for Gutkha? Understanding the New MRP-Based Tax

How the New GST Rule Will Impact ITC and Profit Margins in the Tobacco Supply Chain

Navigating the Shift to First-Point Taxation in the Tobacco Sector

Will MRP-Based GST Finally Stop Tax Evasion in the Tobacco Industry?

A New GST System for Pan Masala: Simpler Compliance or Hidden Costs?

Your ITC Might Become a Cost: Are You Ready for the New Tobacco Tax Rules?

The GST Shake-Up for Tobacco and Pan Masala

Inside the New MRP-Based GST Rule

Why the Government is Changing How Tobacco is Taxed

Tobacco's Tax System Gets a Major Overhaul
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👉 ABOUT CS K K AGRAWAL
GST Expert | GST Consultant | Trainer | Speaker | Faculty

CS Kaushal Agrawal is a highly experienced practicing Company Secretary and GST consultant, trainer, speaker, and author with over two decades of industry expertise. His comprehensive knowledge base and skillset enable him to work on tax matters, tax strategy formulation, tax implementation, tax audits, and tax advisory. He also has extensive experience in handling tax notices and appeals.

He is a highly sought-after speaker and trainer. He has conducted seminars amongst chartered accountants and lawyers in numerous places, and he extends his heartfelt gratitude to all those who invited him, and for the positive feedback from participants for his practical and interactive presentation style.

He is a renowned author, with numerous works on taxation under his belt. Working with Puneet Agrawal, he co-authored the book Sabka Vishwas, published by Taxmann.

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He cordially invites all GST practitioners to join him for an informative and comprehensive exploration of GST, in discovering the intricacies of the GST structure and learn the very minute detail of GST.
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