Despite the various reforms carried out in the past few years, the prevailing Indirect tax regime in India is still in a state of evolution. The system is quite complex, with multi-layered levies both at the Central and State level. The Central government levies tax on goods at the point of import (Customs duty), manufacture (Excise duty), inter-state sales (Central sales tax or CST), and on provision of services (Service tax). The states, on the other hand, have been vested with powers to levy tax on sale of goods within the state (Sales tax/Value Added Tax or VAT), and on the entry of goods into the state (Entry tax), under the respective state laws.
The existing regime requires businesses to undertake careful upfront analysis of the tax costs involved in a transaction¸ ensure adequate backup documentation to support their tax positions and constantly explore opportunities for tax optimization. Further, as India is committed to move towards uniform Goods and Services Tax (GST) regime, this needs to be factored in any significant tax approach developed at present.
We provide advisory services in respect of the state level Value Added Tax (VAT)/Sales tax, Service tax, Custom and Excise duties and Foreign Trade Policy-related matters. This includes services in relation to setting up a green field venture including review of tax assumptions and analysis of tax exemptions/concessions which could be relevant for the project and tax modeling involving analysis of tax costs and credits impacting the business models.
We also assist our clients in making representations before the revenue authorities for obtaining tax concessions, relief and seeking clarifications at state as well as central level.