Goods and Service Tax

Learning outcome

• Assess the role of new taxation regime in India.

Features of Indirect Taxes
Taxation Powers
 What do you think GST in
India is a good move or not??
Let’s find out the
answer…..
GST-Meaning
• Goods and Services Tax (GST) is an indirect tax levied
in India on the sale of goods and services.
• The ultimate burden to pay GST is on consumer.
• 101th amendment in the constitution.
Pre-GST tax structure in India
Post GST Tax Structure in India
Definition of GST
• Article 366(12A) “Goods and services tax” means any tax on
supply of goods, or services or both except taxes on the
supply of the alcoholic liquor for human consumption
GST Journey
Taxes Subsumed Under GST

At the Central level, the following taxes are being subsumed:

1. Central Excise Duty,
2. Additional Excise Duty,
3. Service Tax,
4. Additional Customs Duty commonly known as
Countervailing Duty, and
5. Special Additional Duty of Customs.
At the State level, the following taxes are being subsumed:

1. Subsuming of State Value Added Tax/Sales Tax,

2. Entertainment Tax (other than the tax levied by the local bodies),
Central Sales Tax (levied by the Centre and collected by the States),
3. Octroi and Entry tax,
4. Purchase Tax,
5. Luxury tax, and
6. Taxes on lottery, betting and gambling.
Types of GST
Legislations Governing GST
For Levy of CGST There is a single legislation CGST
Act, 2017
(a) For Levy of UTGST in those Union Governed by UTGST Act, 2017
Territories which do not have their These UT are:
state legislatives (1)Andaman and Nicobar
(2)Lakshadweep
Note: the erstwhile UT’s Namely (3)Dadra and Nagar Haveli, Daman
Dadra & Nagar Haveli and Daman & and Diu
Diu have been merged and now (4)Chandigarh
they have become a single UT (5)Ladakh
(b) For UT has its own legislatives Their own GST Act (SGST)
(1)Delhi
(2)Puducherry
(3)Jammu & Kashmir
(c) SGST in 28 States Their own GST legislations
All the states given in 2.2 except
for J&K which has been
reorganised into 2 Uts w.e.f.
31.10.2019.
Applicability of GST
“ One Nation, One Tax”
It was introduced in India on 1 July 2017 and was applicable
throughout India including Jammu & Kashmir
Scope of GST
• GST applies to the supply of goods and services.
• GST is not levied (initially) on:
• Petroleum crude
• High-speed diesel
• Motor spirit(petrol)
• Natural gas
• Aviation Turbine fuel
• Alcoholic liquor for human consumption is exempted
from GST.
• Tobacco and tobacco products will be subjected to GST.
The center may apply excise duty on tobacco.
Eligibility of taxpayer
 GST Registration of taxpayer
A person who carries out any business at any place in India and
who is registered or required to be registered under the GST
Act. Amongst others, GST registration is mandatory for:
• Any business whose turnover in a financial year exceeds Rs 40
lakhs (Rs 20 lakhs for North Eastern and hill states)
• An input service distributor
• An E-commerce operator or aggregator
• A person who supplies via e-commerce aggregator
• Non-Resident taxable person
• Agents of a supplier
• Casual taxable person
• Those paying tax under the reverse charge mechanism
• Person supplying online information and database access or
retrieval services from a place outside India to a person in India,
other than a registered taxable person
Which of the following taxes are applicable in
case of supply of goods from Bihar to Andhra
Pradesh
a) CGST
b) SGST
c) UTGST
d) IGST
Which of the following taxes are applicable in
case of supply of goods from West Bengal to
Chandigarh
a) CGST
b) SGST
c) UTGST
d) IGST
Which of the following taxes are applicable in
case of supply of goods from Chandigarh to
Pondicherry
a) CGST
b) SGST
c) UTGST
d) IGST
Which of the following taxes are applicable in
case of supply of goods from Lucknow to
Allahabad
a) CGST
b) SGST
c) UTGST
d) IGST
• State 1 to state1---- CGST SGST
• UT1 to UT1-----CGST UTGST
• State1 to Sate 2---- IGST
• UT1 to UT2 ----- IGST
In respect of the following independent cases, determine the
type of transaction and GST leviable on the supply of goods or
services-
i.Mr. Shiv of Delhi supplied Goods to Mr. Vinod of Delhi
ii.Raman of Kashmir Provided Services to Mr. Gopal of Pune
iii.Janki of Goa supplied Goods to Mr. Cruz of Goa
iv.Pankaj Supplied goods from his place of Business in
Chandigarh to Surender of Dehradun.
v.Ms. Kajol Sold Goods to Rani. They both live in Rajasthan.
Case Type Of Type of GST to be levied
supply IGST CGST SGST UTGST

I
Ii
Iii
Iv
v
 SOLUTION
Case Type Of supply Type of GST to be levied

IGST CGST SGST UTGST

I Intra- State

Ii Inter-State

Iii Intra-State

Iv Inter-State

v Intra-State
Who will ultimately
pay GST???
 GST Rates
• Goods and services are divided into five tax slabs for collection of
tax
Impact of GST Rates on
Various Sectors
 Consider the following details in the following cases of taxable
supplies by a registered person-
Case Particulars Amount (Rs.)
1 Local Intra-state supply in Delhi 40,000
2 Local Intra-state Supply in Punjab 60,000
3 Supply from Assam to Punjab 25,000
4 Supply from Delhi to Goa 30,000
5 Supply from Delhi to Puducherry 50,000
6 Local Supply in Chandigarh 20,000

The rates of GST are to be followed as 18%. Find out the

amount of taxes for the above cases. The above values are
exclusive of taxes. Attempt your answer in a tabular form.
Case Particulars Calculation CGST SGST UTGST IGST
 SOLUTION
Case Particulars Calculation CGST SGST UTGST IGST

1 Intra-state Supply 40,000@9% 3600 - - -

(UT with state legislative)
40,000@9% - 3600 - -
2 Intra-state Supply 60,000@9% 5400 - - -

60,000@9% - 5400 - -
3 Inter-state supply 25,000@18% - - - 4500

4 Inter-state supply 35,000@18% - - - 5400

5 Inter-state supply 50,000@18% - - - 9000

6 Intra-state Supply 20,000@9% 1800 - - -

(UT without state
legislative) 40,000@9% - - 1800 -
Basic Terms
• Aggregate Turnover
• Business
• Consideration
• India
• A person
• Taxable Person
• Taxable Territory
• Supplier
• E-commerce operator
• Export of goods and services
• Import of goods and services
Can you answer this?
Ms. Anita runs two different businesses under the same PAN number:
1.Business X is a retail shop selling home appliances located in Bangalore,
Karnataka. In the financial year, Business X has:
1. Taxable supplies worth ₹30 lakhs
2. Exempt supplies worth ₹2 lakhs
2.Business Y is an online consultancy service providing marketing advice to
clients across India. The consultancy operates from Bangalore but provides
services to clients in various states. In the same financial year, Business Y has:
1. Taxable supplies worth ₹20 lakhs
2. Exempt supplies worth ₹1 lakh
Questions:
1.What GST will apply to transactions within the same state for Business X?
2.What GST will apply to transactions between Business Y and clients in
other states?
3.Is there any special tax treatment for supplies made from Business Y to
clients in Special Economic Zones (SEZs)?
Can you answer this?
Mr. Raj owns two businesses, each located in different states of India but
operating under the same PAN number.
1.Business A is located in Delhi and deals in electronic goods. In the financial
year, Business A had:
1. Taxable supplies worth ₹15 lakhs
2. Exempt supplies worth ₹5 lakhs
2.Business B is located in Maharashtra and operates a furniture store. In the
same financial year, Business B had:
1. Taxable supplies worth ₹8 lakhs
2. Exempt supplies worth ₹2 lakhs
3.Both businesses do not have any inward supplies on which tax is payable on
a reverse charge basis, nor do they have any exports or inter-state supplies.

Question:
1.What is the aggregate turnover for Mr. Raj's businesses?
2.Based on the aggregate turnover, is Mr. Raj required to register for GST?
Can you answer this?
Mr. Arun operates two businesses under the same PAN number:
1.Business E is located in Gujarat and deals in stationary supplies. In the
financial year, Business E had:
1. Taxable supplies worth ₹6 lakhs
2. Exempt supplies worth ₹1 lakh
2.Business F is located in Rajasthan and provides consultancy services. In the
same financial year, Business F had:
1. Taxable supplies worth ₹5 lakhs
2. Exempt supplies worth ₹2 lakhs
3.Both businesses do not have any inward supplies on which tax is payable on
a reverse charge basis, nor do they have any exports or inter-state supplies.

Question:
1.What is the aggregate turnover for Mr. Arun's businesses?
2.Based on the aggregate turnover, is Mr. Arun required to register for GST?
Can you answer this?
Mr. Suresh is a businessman who operates two different types of businesses
under the same PAN number:
1.Business A is a retail store selling electronic gadgets. In the financial year,
Business A had:
1. Taxable supplies worth ₹25 lakhs
2. Exempt supplies worth ₹1 lakh
2.Business B is a consultancy firm providing marketing services. In the same
financial year, Business B had:
1. Taxable supplies worth ₹15 lakhs
2. Exempt supplies worth ₹2 lakhs
Both businesses are located in the same state and are operated by Mr. Suresh.

Questions:
1.Is Mr. Suresh considered a taxable person under GST for his businesses?
2.Is Mr. Suresh required to register under GST for his businesses?
Features of GST
I. Applicable on Goods and Services
Can You answer this??
Who is liable to pay GST?
a)Only manufacturers
b)Only retailers
c)Any person engaged in the supply of goods or
services
d)Only Individuals
Can You answer this??
What is the threshold turnover limit for GST
registration for businesses in most states in
India?
a)Rs. 10 lakhs
b)Rs. 40 lakhs
c)Rs. 50 lakhs
d)Rs. 1 crore
Features of GST
II. Dual GST :
It would be a dual GST with the Centre and the States/Union
territories simultaneously levying it on a common base.
Can You answer this??
What is meant by "dual GST" in India?
a)A tax system that applies to both goods and services
b)A tax system with two different tax rates for the same goods
and services
c)A tax system where both the central and state governments
have the authority to levy and collect GST
d)A tax system that only applies to imported goods
Can You answer this??
Under the dual GST system, which level of government (central
or state) is responsible for taxing the supply of goods and
services within its jurisdiction?
a)Central government
b) State government
c)Local municipalities
d)Both central and state governments
Features of GST
III. Inter-State Transactions and the IGST
Mechanism:

The Centre would levy and collect the

Integrated Goods and Services Tax (IGST) on all
inter-State supply of goods and services.
Features of GST
Features of GST
V. Computation of GST based on invoice credit
method
Can you answer this???
What is the primary objective of GST being
destination-based?
a)To encourage production in certain regions
b)To simplify tax administration for businesses
c)To ensure that tax revenue goes to the
consuming state
d)To increase the tax burden on manufacturers
Can you answer this???
What is the primary benefit of a destination-based GST system
in promoting economic growth and reducing tax cascading?
a)It encourages manufacturers to produce more.
b)It allows businesses to claim input tax credits.
c)It increases the tax rates for consumers.
d)It simplifies tax calculations for businesses.
Goods and Services Tax Network (GSTN)
GST on Imports & Exports
• Maintenance of Records : A taxpayer or exporter would have
to maintain separate details in books of account for utilization
or refund of Input Tax Credit of CGST, SGST and IGST.
Benefits/Rationale of GST
The ultimate positive effects of GST were manifold.
All stakeholders are being benefitted including
Industry, Government and even the consumer.
Advantages to the Citizens
The advantages to the Citizens are listed as:
a. Simpler tax system.
b. It would eliminate various indirect taxes and therefore the
compliance cost would fall
d) Elimination of cascading effect.
e) Reduction in Prices of Goods and services under
GST
Advantages to the Trade/ industry
The advantages accruing to the Trade/ industry are listed as:
a. Reduction in multiplicity of taxes.
b. Mitigation of cascading/double taxation.
c. Development of common national market.
d. Simpler tax regime-fewer rates and exemptions.
 Advantages to the Central/State
Government
The advantages accruing to the Central/State Government are
listed as:

a. A unified common national market to boost Foreign

Investment and “Make in India” campaign.
b. Boost to export/manufacturing activity, generation of more
employment, leading to reduced poverty and increased GDP
growth.
c. Improving the overall investment climate in the country
which will benefit the development of states.
Can you answer this???
What type of tax is GST (Goods and Services
Tax)?
a)Source-based tax
b)Destination-based tax
c)Income tax
d)Property tax
GST COUNCIL
The following are the members of GST Council-
•Union Finance Minister (Chairperson)
•The Union Minister of state in charge of Revenue or Finance
(Member)
•The Minister in charge of Finance or taxation or any other
Minister nominated by each state Government (Member)
Present status of number of members in GST Council
Representation of No.of Members
Central Government 2
28 States 28
3 UTs with legislature 3
6UTs without separate legislature Nil
Total Members 33
Recommendations of GST
council
• The taxes, cess, and surcharges levied by the Union, the states, and the local
bodies may be subsumed in GST.
• The goods and services that may be subject to, or exempted from the goods
and services tax.
• Model Goods and Services tax laws, principles of levy, apportionment of
Goods and Services tax levied on supplies during inter-state trade or
commerce under article 269A and the principles that govern the place of
supply.
• The threshold limit of turnover below which goods and services may be
exempted from goods and services tax.
• The rates including floor rates with bands of goods and services tax.
• Any special rates for a specified period to raise additional resources during
natural disasters.
• Special provision to special states
• Any other provision related to GST