GOODS & SERVICES

TAX
(GST) IN INDIA

By:

Prasoon Shrivastava
Ph.D Scholar
TAX, SOCIETY, COUNTRY
 CIVILIZED SOCIETY PAYS TAX
 HONEST TAX PAYERS ARE ASSEST OF

NATION.
 PAYMENT OF TAX – GRATEFULNESS

TOWARDS SOCIETY, SOLIDERS, FARMERS,

COUNTRY, ETC.
 PAYMENT OF TAX MEANS WEALTH FROM

“HAVES” TO “HAVE NOTS”.

 Pre-gst Tax structure in India

Tax Structure

Direct Tax Indirect Tax

Income Tax Wealth Tax Central Tax State Tax

Entry Tax, luxury

Excise Service Tax Custome VAT tax, Lottery Tax,
etc.
Subsuming of Existing
Taxes • Central Excise
• Additional duties of Custom (CVD)
• Service Tax
CGST • Surcharges and all cesses

• VAT/sales tax
• Entertainment Tax
• Luxury Tax
• Lottery Tax
• Entry Tax
• Purchase Tax

SGST

• CST
IGST
Why GST ?
 Distinction between goods & services or mix
thereof was a big problem in earlier
laws/regime.

 Especially in respect of Works Contract

Service where both material and service is
involved, things become more complex
becoz of RCM.
IMPORTANCE OF GST
 GST IS APPLICABLE TO ALL GOODS &
SERVICES, EXCEPT FEW.

 EXCEPT AGRI, MEDICAL SERVICES AND

EDUCATION, EVERYTHING IS TAXABLE
UNDER GST.
WHY GST BETTER THAN
EARLIER LAWS ?
GST may not be a very ideal for many
people & for many reasons
 but in fact things in earlier taxation system

had gone to such low & complex level, so

further worsening of things was almost
impossible, so hopefully things will only get
better day by day.
Limitations of current Tax
regime :
3. Different Points of
Taxation

Limitations of current Tax regime :

Central Excise Service Tax VAT

(On (On provision of ( On sale of
Manufacturing) Service) Goods)
JOURNEY OF GST IN INDIA
Vijay Kelkar committee recommended it in
2004 during Atal Bihari Vajpaee Govt.
 First Discussion paper was published in

2009, 90% of provisions of today from that

paper.
 07-05-2015 Loksabha passed it, 03-08-2016

Rajya sabha passed, even J&K passed it.

 GST now permanent, roll back impossible

even if present political parties gets

defeated in next elections.
What u r required to know for
GST
 CGST, IGST and Cess Act
 Rules, notifications, (rate and non rate),

circulars, etc.
 criminal procedure code,1973, Companies

Act, 2013, Indian Evidence Act, 1872,

Indian Penal code, Information
Technology Act, 2000, Motor Vehicles
Act, 1988, Transfer of Property Act,
1882, Special Economic Zone Act, 2005,
Income Tax Act, 1961.
 Twitter, PIB, etc
Purpose of GST as per
constitution
 What constitutional amendment says as
purpose
 (1) to avoid cascading effect
 (2) to have common national market.
Unique Concepts/Features:-
 IGST/(contribution of India in GST).
 DESTINATION BASED TAX
 CONSUMPTION BASED TAX
 COMPLIANCE RATING
 RARE EXAMPLE OF STATE & CENTRAL GOVT

CO-OPERATION.
 GST COUNCIL- NEW POWER CENTRE
 ALL DECISIONS UNANIMOUS, NEVER

VOTING.
 END OF INSPECOR RAJ ?
 What is GST?

One Tax For

Manufacturi
ng

Trading

Services ONE NATION: ONE TAX

WHY GST IS MUST ?
 Earlier tax on tax
 Exports can not be made tax free.
 Under GST:- self police mechanism.
 All transactions recorded in book, tax collection will
go up.
 Pararrel economy ratio expected to go down.
 What is easy to print a currency note or cenvat
invoice ? .
 Matching basis-soul of GST.
 Earlier taxation under excise, vat was restricted to
those transactions, now 360degree angle is
required
IMPACT OF GST AS OF
NOW
 AS PER ECONOMIC SURVEY :-
 Upon implementation of GST, indirect tax

base has increased by 50%, 34 lakhs new

businesses added to tax base.
 Highest registration in Maharashtra, next is

UP, Tamil Nadu and Gujrat.

 But large increase in registrations in west

Bengal.
Impact of GST 2/2
 Though turnover is below Rs 20 lakhs, there
are 17 Lakhs who have obtained voluntary
registrations.
 In pre-GST era, revenue collection of center

and state was Rs 9.7 Lakhs crore p.a.

 It was expected to be Rs.10.9 lakh cr p.a.
 In the first year of GST implementation,

revenue grew by 11.09%

Impact of GST 3/3
 In October,18, 67.45 Lakhs filed GST returns
and revenue pm crossed Rs 1,00,710 crore
as taxes.
 As a result this is going to increase the

demand for professionals in future also.

Definition of supply
 Section 7(1) for the purposes of this Act the
expression “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 of
or furtherance of business;
 (b) import of services for a consideration
whether or not in the course or furtherance
of business…continue
SCHEDULE I Activities to be treated as
supply even if made WITHOUT
CONSIDERATION
 Permanent transfer or disposal of business where,
ITC has been availed on such assets.
 Supply between related persons OR between
distinct persons as specified in section 25.
 Gifts up to Rs 50,000 in a financial year by
employer to an employee shall not be treated as
supply.
 Supply of goods by principal to agent & vice versa
 Import of services by a taxable person from
related person or from his establishment in
foreign country in furtherance of business.
Schedule II-to be treated as
supply
 Transfer of title.
 Transfer of goods without transfer of title.
 Transfer of title in goods under agreement which
stipulates that on payment of full consideration
property shall pass at a future date is supply of
goods.(hire purchase)
 Any lease, tenancy, easement, licence to occupy
land is supply of service.
 Lease of building or part of it is supply.
 Any treatment or process which is applied to
another’s goods is supply of goods.
 Transfer of business assets.
Continue schedule ii
 Renting of immovable property
 Construction of complex, building etc

intended for sale to a buyer, where part of

consideration is received before completion
certificate.
 Works contract
 Supply of food, drinks, etc for consideration
 Supply of goods by any unincorporated

association or body of person to a member

Schedule III following not
supply
 Employee to employer.
 Services by court or tribunal
 Functions by MP, Corporations, and local

bodies.
 Funeral, burial etc.
 Sale of land or building
 Actionable claims.
Imp definitions

 (6) Aggregate turnover : Total of

 Taxable supply
 Exempt supply
 Export of goods/services
 Inter state supplies
 BUT NOT
 Taxes,
 Value on which RCM payable
 The said total will be for all India basis for each PAN
No.
 (exempt supply includes non-taxable supply)

Diff. between composite &
mixed supply
 (30) Composite supply :-supply consisting of two or
more taxable supplies of goods and/or services-
naturally bundled-one of them is principal supply.
 Ex :- Supply of goods, packing material, transport and
insurance is a composite supply and supply of goods is
a principal supply.

 (74) Mixed supply means two or more individuals
supplies of goods or services or any combination
thereof made in conjunction with each other by a
taxable person for a single price where such supply
does not constitute composite supply.
 (ex aerated water, canned foods, cakes, dry fruits etc)
What is meant by exempt
supply ?
 Exempt supply :- means supply of any
goods or services or both which attracts nil
rate of tax or which may be wholly exempt
from tax under Section 11 or under section
6 of the IGST Act and includes non-
taxable supply.
What is meant by job work
?
 (68) Job Work :- any treatment or process
undertaken by a person on the goods
belonging to another Registered person
Outward supply
 (83) “outward supply” in relation to a
taxable person, means supply of goods or
services or both, whether by sale, transfer,
barter, exchange, licence, rental, lease or
disposal or any other mode, made or agreed
to be made by such person in the course or
furtherance of business;
R C M means ?
 (98) “reverse charge” means the liability to
pay tax by the recipient of supply of goods
or services or both instead of the supplier of
such goods or services or both under sub-
section (3) or sub-section (4) of section 9, or
under sub-section (3) or subsection (4) of
section 5 of the Integrated Goods and
Services Tax Act;
Valid return ?
 (117) “valid return” means a return
furnished under sub-section (1) of section
39 on which self-assessed tax has been paid
in full;
Registration threshold
limit
 As per Section 22 of CGST Act, 2017
 Every supplier shall be liable to be

registered in the state from where he makes

taxable supply of goods/services/both
 If his aggregate turn over exceeds Rs. 20

Lakhs.
 Exemption from registration in CGST

Act,2017:- (a) Exclusive supply of exempted

goods/services (b) agriculturist.
Limitations of current Tax
regime :
2. Multiple Registrations

Centra
l
Excise
REGISTRATION COMPULSORY IN FOLLOWING CASES:-

 Persons making inter-state supplies.

 Casual taxable persons
 Any person who pays tax under reverse charge
mechanism.
 E commerce operator.
 Non resident taxable persons
 Any person who is required to deduct tax at
source U/s.51.(especially Govt departments &
local bodies,)
 Any person who supplies goods or services on
behalf of others as agent or otherwise.
Regn-continue
 Any person who is required to collect tax under
section 52.( by e commerce operator)
 Every person supplying on line information and
data base retrieval service from a place outside
India to a person in India, other than a registered
person.
 Input service distributor
 Every electronic commerce operator.
 Any other person as notified by Govt.
 Grant of Unique Identity Number shall be
considered as deemed registration meant for
Consulates, Govt Departments, etc.
Process of registration
 If liable for registration, required to obtain
registration within 30 days from the date he
becomes liable to registration 25(1).
 PAN is must for GST Registration-25(6)
 Other details/documents soft copy required

such as adhar, light bill,rent agreement,bank

details etc
 Online application, verification thru

registered mobile phone, email, OTP &

verification of PAN. Then electronic
submission of application.
Registration -continue
 How to read registration no of GST ? 15
digits first two characters state code, next
10 digit PAN No, two characters for entity
code and last, check sum character.
 Proper officer may get physical verification

of premises etc done and shall be required

to upload photos, report on GSTN in REG-29
format.
Registration-continue
 Every registered person is required to
display GST Certificate prominently at
principal and additional places of business.
 Even if not liable you may get voluntary

registered. (Section 22 or 24).

 Registration can be amended.
 Registration can be cancelled if person does

not conduct any business from the declared

place or business or issues invoices or bill
without supply of goods or service .
Composition scheme of
GST
 Also referred in the act as person registered
under section 10 of the Act.
 This Scheme is available to those whose

turnover of supply of goods in a financial

year does not exceed Rs. 1.5 cr.
 PAN based :-Applicable on all transaction on

a single PAN whether registered as separate

business vertical or registered in separate
State/UT
Composition scheme-
continue
 Scheme is optional.
 Option lapses on the day his aggregate

turnover exceeds specified limit.

 Least compliances.
 Quarterly payment-
 No ITC
 No levy or collection of GST.
RCM for composition
scheme
 He shall be liable to pay tax under Reverse
Charge Mechanism both under Sec.9(3) and
Sec.9(4) at regular rate of tax and NOT at
composition rate.
Examples of RCM under
GST
 Import of service
 Goods transport agency
 Advocate
 Long lease of land ( 30 yrs or more)
 Services supplied by Govt to business

entity( if amount above Rs 5k & turn over of

the entity is above 20 Lakhs.
 Services by director to company.
 Supply of security personnel.
Composition :-applicability
 Manufacturer @ 1%
 Restaurant @ 5% & turn over of 5 lakhs

allowed of other than restaurant.

 Traders 1% of aggregate turn over.
 No other category is allowed for this

scheme.
 Tobacco, pan masala, ice cream not covered

under this scheme.

.

Composition scheme
 Bill of supply in place of invoice.
 Quarter return & annual return to be filed.
 Inter-state sale or supply not allowed
 But can purchase from outside state.
 In case of purchase, rejection quite difficult.
Concept of R C M
 Receiver of supply has to pay GST in Cash
 RCM applies on notified goods & services.
 ITC of GST paid under RCM available as

credit.
 Two types of RCM one for specified goods &

services. GTA & Advocate most common.

 Another for receipt of goods & services from

unregistered person.
 RCM of URD as of now not activated, new

version awaited once GST is settled.

Job work under GST
 Allowed, can send RM on challans.
 No GST on sending RM to job workers.
 But GST applicable on job work charges, if

exceeds limit of Rs 20 Lakhs turn over.

 Goods sent for job work to be returned

within 180 days, if not GST applies with

interest.
 Job work challan to have diff series of

challan
 Good can be sent directly to job worker.
 E-way Bill required if value exceeds

specified limit.
Input tax credit under GST
 ITC of goods, services purchased/used
available.
 ITC not available on motor, foods, supply for

personal use etc.

 ITC on vehicle allowed, if used for transport

of goods, for driving school, transportation

of passanger or vehicle dealers etc.
 ITC to be availed on copy of invoice, withiin

specified period.
ITC- continue
 ITC not allowed on rent a cab, beauty
treatment, health insurance,
 ITC not allowed on goods stones, theft,

caught fire etc.

 Three types of ITC- credit of SGST, CGST,

IGST.
 ITC gets curtailed if utilised for taxable and

exempted supply both.

SEQUENCE OF UTILIZATION OF
ITC
Payment for First set off Then set off
SGST IGST SGST
CGST IGST CGST
IGST IGST CGST & SGST
Refund of GST
 On Export of goods/services, GST paid on
Raw Material/Input services refundable OR
IGST paid on exports.
 Inadvertent duty structure
 GST for RM is high and GST on FG is low,

then refund allowed.

 Excess paid GST.
 Refund of pre-deposit for appeal
 Online application required.
Valuation of supply under
GST
 As per section 15 of CGST Act, 2017
 Sole consideration
 Unrelated parties.
 Valuation Rules also play important role,

have to be referred in many cases.

 Crux of valuation :- Story of horse, cat and

donation.
E way bill
 In Maharashtra upto 1 lakh not required.
 For inter state, e way bill required once you

cross transportation of Rs 50000

 There are some items which are exempted

from having e way bill

 It has to be generated online.
 Eway bill has to accompany the goods in

transit.
GST DETAILS RELATING TO
CS
 CS CAN BE GST PRACTITIONER, OF COURSE
HE HAS TO APPLY ON LINE AND GET GST
PRACTITIONER NUMBER.
 CS ALSO CAN APPEAR BEFORE

ADJUDICATING AUTHORITY FOR PERSONAL

HEARING.
 BUT CS CAN NOT CERTIFY ANNUAL

ACCOUNTS/ AUDIT REPORT REQUIRED

UNDER GST LAW.
COMPANY SECRETARY
CONTINUE
 GST PAYABLE @ 18% ON CS SERVICES.
 SERVICES BY COMPANY SECRETAY

CLASSIFIABBLE UNDER following codes:-

 998214 :- Legal documentation &

certification services concerning other

documents.
 998212 :- in case CS appeared for personal

hearing.
 998216 other legal services n.e.c.
 N.e.c.:-not elsewhere classified/residual.
SERVICE ACCOUNTING CODES

Heading no. Legal and accounting services

9982

Group 99821 Legal services

998211 Legal advisory and representation services concerning

criminal law.

998212 Legal advisory and representation services concerning

other fields of law.

998213 Legal documentation and certification services

concerning patents, copyrights and other intellectual
property rights.

998214 Legal documentation and certification services

concerning other documents.

998215 Arbitration and conciliation services

998216 Other legal services n.e.c.

Group 99823 Tax consultancy and preparation services

998231 Corporate tax consulting and preparation services

998232 Individual tax preparation and planning services

Group 99822 Accounting, auditing and bookkeeping services

998221 Financial auditing services

998222 Accounting and bookkeeping services

998223 Payroll services

998224 Other similar services n.e.c

Group 99715 Services auxiliary to financial services (other
than to insurance and pensions)

997151 Services related to investment banking such as

mergers and acquisition services corporate finance
and venture capital services

997156 Financial consultancy services

997159 Other services auxiliary to financial services

Heading 9983 Other professional, technical and business
services
Group 99831 Management consulting and management
services; information technology services

998311 Management consulting and management services

including financial, strategic, human resources,
marketing, operations and supply chain management

998312 Business consulting services including public relations

services

998313 Information technology consulting and support

services