INTRODUCTION TO GST

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INTRODUCTION TO THE GST:
The ds and GooServices Tax (GST), implemented on July1, 2017,
is regarded as a major Taxation reform till date implemented in
India since independence. The primary objective behind
development of GST is to subsume all sorts of indirect taxes in
India like Central Excise Tax, VAT/SalesTax, Service tax, etc. and
implement one taxation system in India.

SALIENT FEATURES OF GST:

 GST is an indirect tax.
 For the words manufacture, sale, service, etc. The only
‘Supply’ is used.
 GST is levied on supply of goods or service or both.
 It is a consumption-based tax.
 GST is levied both by Central Government and State
Government/Union territory.
 Tax paid on inward supplies is available as input tax credit
against tax on outward.
 Supplies subject to fulfilment of certain conditions.
 GST law is applicable all over India.
OBJECTIVES OF GST:
 To Develop national Market- One Nation, one Tax.
 To reduce multiplicity of indirect taxes.
 To Eliminate classification dispute between goods
& services.
 To remove barriers in inter-State movement of goods.
 To ease the administrative control.
 Uniformity of tax rates and automated compliances.
ADVANTAGES OF GST:
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  GST eliminates the cascading effect of tax.
 Higher threshold for registration.
 Composition scheme for small businesses.
 Simple and easy online procedure.
 The number of compliances is lesser.
 Defined treatment for E-commerce operators.
DISADVANTAGES OF GST:
 Increased costs due to software purchase.
 Being GST- compliant.
 GST will mean an increase in operational costs.
 GST came into effect in the middle of the financial year.
 GST is an online taxation system.
 SMEs will have a higher tax burden.
STRUCTURE OF GST:
Dual model GST is applicable in India i.e. two varieties of GST
will be charged on same bill i.e. CGST(Central goods and service
tax) and SGST(State goods and service tax). On an Intra State

Supply,
both CGST and SGST shall be applicable. Amount of CGST is
revenue of the Central Government and the amount of SGST is
revenue of State Government.
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TYPES OF GST:

 Central Goods and Services Tax (CGST).

 State Goods and Services Tax (SGST).
 Integrated Goods and Services Tax (IGST).
 Union Territory Goods and Services Tax (UTGST).

CENTRAL TAXES SUBSUMED IN GST:

 Central Excise Tax.

 Service Tax.
 Additional Custom duty, commonly known as
Countervailing Tax (CVD).

STATE TAXES SUBSUMED IN GST:

 VAT/Sales tax.
 Luxury tax.
 Purchase tax.
 Entry tax/Octroi.
 Central Sales Tax.

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 TAXES NOT SUBSUMED IN GST:
 Custom duty, Stamp duty, Securities transaction tax,
 Central Excise on Petroleum products, Tobacco
 VAT on Petroleum Products and Alcohol.

RATE OF GST:

Rate of GST varies from product to product. There are 4 popular

rates of GST i.e,
(a) 5% (2.5%CGST+2.5%SGST)
(b) 12% (6%CGST+6%SGST)
(c) 18% (9%CGST+9%SGST)
and (d) 28%
(14%CGST+14%SGST) Note:
(a) Special Rate of GST on Jewellery: It is 3% in case of
Gold, Silver, Platinum etc.
(b) In case of rough diamond rate of GST is 0.25%
GST COUNCIL:

Goods & Services Tax (GST) Council is a constitutional body for

making recommendations to the Union and State Government
on issues related to Goods and Service Tax. The GST Council is
chaired by the Union Finance Minister and other members are
the Union State Minister of Revenue or Finance and Ministers
in-charge of Finance or Taxation of all the States.

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 THE TAXABLE EVENT IN GST:

The taxable event in GST is supply of goods or services or both.

The liability to pay tax arises at the ‘time of supply of goods or
services.’ Thus, determining whether a transaction fall under
the meaning of supply, is important to decide GST’s
applicability.

SUPPLY:

The scope of term supply is given under Section 7(1) of CGST Act
which provides the inclusive definition of term supply. As per
the provision of supply, supply includes:
(a) all forms of supply of goods or services or both such as sale,
transfer, barter, exchange, licence, rental, lease or disposal
made or agreed to be made for a consideration by a person in
the course or furtherance of business.
(b) import of services for a consideration whether in the
course or furtherance of business and.
(c) the activities specified in Schedule 1, made, or agreed to
be made without a consideration and.
(d) the activities to be treated as supply of goods or supply of
services as referred to in Schedule 11.

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DATA FINDING &
ANALYSIS OF GST

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 IMPACT OF GST ON RETAIL INDUSTRY:

Sources: wordpress.com

After the implementation of the GST, we can see both its

positive and negative effects on different industries. Many
sectors like manufacturing, electronics, telecom, FMCG,
education, banking, jewellery, tourism, logistics, IT etc. are the
important part of the Indian economy. The positive impact of
the GST on such sectors is seen in the form of economic
development of the country.

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 IMPACT OF GST ON RETAIL INDUSTRY:

Sources: https://holisollogistics.com
Below five factors will significantly change the dynamics of the
retail sector in India:
a. Reduced taxes-The main impact of GST on retailers will be a
significant reduction of the tax burden on the retailers.
b. Seamless Input tax credit- GST will make an impact by
eliminating the cascading effect of taxes there by reducing the
total tax burden on the retail sector.
c. Increased Supply chain efficiency- The impact of GST will be
evident on supply chains, as their designs would be efficiency-
oriented and not in alignment with the taxation system.
d. Tax on gifts and promotional items– As per the model
GST law, any supply without any consideration will attract
tax.
e. Better Opportunities & Growth of Retail Market– Upon
implementation of GST, analysts predict unification of
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markets.

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 IMPACT OF GST ON COMMON PEOPLE’s
SPENDING:

www.equitymaster.com Sources: cleartax.in

Finally, India's biggest tax reform- Goods and service Tax (GST) is
a reality. Yes, after a lot of speculation around the timely
implementation, GST has been rolled out. As we have saying,
GST is a much- needed economic reform. It should eventually
expand India's narrow tax base and increase government
revenues. That said, every coin has two sides. GST is no
exception. It will have its fair share of chaos in the coming
months. There could be protests across the country over tax
rates and compliance burdens and it could affect the smooth
functioning of the economy. While GST will impact businesses
and industries in a big way, it won't directly affect the salaried
class and self-employed personnel (Aam Aadmi). Since it is an
indirect tax, it does not change the way they pay their personal
taxes. The only impact they will see would be due to the change
in rates of the goods and services they avail.
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 COMPONENT ANALYSIS OF GST GROSS
COLLECTION IN NDIA:

Sources: https://startuptalky.com

Analysis–
 Average monthly gross collection since the GST introduced
up-till month of June 2019 is INR 96,048 crores, with
improving average over the year.
 From August 2017 to March 2018, average monthly gross
collection was INR 89,705 crores.
 During 2018-19 average monthly gross collection was
recorded at 98,114 crores, which was 9.37% higher than
2017-18 (From August 2017).
 For ongoing fiscal year 2019-20, till month of June average
monthly gross collection is 1,04,698 crores, which is 6.71%
higher than monthly average of 2018-19 and 16.71% higher
than 2017-18 (From August 2017).

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 TREND OF GST COLLECTION IN NDIA:

Sources: https://taxguru.in
Analysis–
The total gross GST revenue collected in the month of July, 2019
is ₹1,02,083 crore of which CGST is ₹17,912 crore, SGST is
₹25,008 crore, IGST is ₹ 50,612 crore (including ₹24,246 crore
collected on imports) and Cess is ₹8,551 crore (including ₹797
crore collected on imports). The total number of GSTR 3B
Returns filed for the month of June up to 31st July,2019 is 75.79
lakh. The revenue in July,2018 was ₹96,483 crore and the
revenue during July,2019 is a growth of 5.80% over the revenue
in the same month last year. During April-July 2019 vis-à-vis
2018, the domestic component has grown by 9.2% while the
GST on imports has come down by 0.2% and the total collection
has grown by 6.83%. Rs.17,789 crore has been released to the
States as GST compensation for the months of April-May,2019.

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 CONCLUSION &
RECOMMENDATION

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 CONCLUSION
Primarily, the concept of GST was introduced and proposed in
India a few years back, but implementation has been done by
the current BJP government under the able leadership of Prime
Minister Shri Narendra Modi on July1,2017.

The new government was in strong favour for the

implementation of GST in India by seeing many positive
implications as discussed above in the paper. All sectors in India-
manufacturing, service, telecom, automobile, and small SMEs
will bear the impact of GST.

One of the biggest taxation reform- GST will bind the entire
nation under a single taxation system rate.

As forecasted by experts, GST will improvise tax collections and

boost up India's economic development and break all tax
barriers between Central and State Governments.

No doubt, GST will give India a clear and transparent taxation

system, but it is also surrounded by various challenges. There is
need for more analytical based research for successful
implementation.

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 RECOMMENDATIONS
Goods and Service Tax was an epitome of the ideal tax
mechanism at the time of its implementation. The assumption is
somewhere proved right as the GST system has reduced
effective tax rates and boosted supply chain efficiencies of
businesses. On the other hand, it is also prevalent that the
system is not at all simple and has burdened the taxpayer even
more with tax-filing complexities.

Now it is invariably needed to introduce a set of amendments

contributing towards the certainty of the GST system.

Steps to Make GST More Compliant:

 Reduction in Number of Tax Slabs Rates

 Effortless Input Tax Credit Claims
 Spreading the GST Net
 Renovating ITC System
 Practical Targets for GST Collection
 Including Some Exempted Goods in GST Regime:
 Let E-way bill Go Away

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BIBLIOGRAPHY

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 BIBLIOGRAPHY

 Central Board of Excise and Customs, Ministry of Finance

(2017).
 Goods and Services Tax Council (2017).
 https://wordpress.com
 https://holisollogistics.com
 https://startuptalky.com
 https://taxguru.in
 Wikipedia, the free content encyclopaedia.

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QUESTIONNAIRE

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