CHANAKYA NATIONAL LAW UNIVERSITY

ROUGH DRAFT OF

LEGAL METHODS & RESEARCH METHODOLOGY

ON

GOODS AND SERVICES TAX(GST)

SUBMITTED TO
SUBMITTED BY
Mr. VIJAYANT
SHASHI BHUSHAN
BA,LL.B.(HONS.)
ROLL NO.-58
SEMESTER-1
SESSION- 2019-2024
 INTRODUCTION
The introduction of GST is a very significant step in the field of indirect taxreforms in
India. By amalgamating a large number of central and state taxes into a single tax ,GST will
mitigate ill effects of cascadingor double taxation in a mojor way and pave the way for a
common national market. From the consumer point of view ,the biggest advantage would be
in terms of reductionin the overall tax burden on goods, which is currenty estimated to be
around 25 % -30%. It would also imply that the actual burden of indirect taxes on goods
and services would be much more transparent to the consumer. Introduction of GST would
also make indian products comeyitive in domestic and international markets owing to the
full neutralization of input taxes across the value chain of products and distribution. Studies
show that this would have a boosting impact on economi c growth .Last but not least ,this
tax, brcause if its transparent and self-policing character,would be easier to administer. It
would encorae a shift from the informal to formal economy . The government proposed to
introduce the GST from 1st july 2017.

SALIENT FEATURE OF GST

(1) GST is applicable on ‘supply’ of goods or services as against the concept on the manufacture of
goods or on sales of goods or on provision of services.

(2) GST is based on the principle of destination – based comsumption taxation as against the
present principle of origin -based taxation.

(3) It is a dual GST with the centre and the states simultaneously levying tax on acommon base
.GST to be levied by the centre would be called central GST (CGST) and that to be levied by the
states would be called the state GST(SGST).

(4) An integrated GST (IGST) would be levied an inter-state supply of goods and services.This
shall ve levied and collected by the Government of India and such tax shall be apportioned between
the union and the states in the manner as may be provided by parliament by law on the
recommendation of the GST council.

(5) Import of goods or services would be treated as inter-state supplies and would be subject to
IGST in addition to the applicable customs duties.

(6) State taxes that would be susumed within the GST are :-
a) state VAT
b) central states tax
c) purchase tax
d)luxury tax
e) entry tax(all forms)
f) Entertainment tax and Amusement Tax (except those levied by the local bodies)
g) Taxes on advertisements
h)Taxes on lotteries,betting and gambling state cesses and surcharges in so far as they relate to the
supply of goods and services.
GENESIS

In the year 2000, the then PM introduced the concept of GST and set up a committee to design a
GST model for the country.In 2003,the central government formed a task force on Fiscal
Responsibility and Budget Management, which in 2004 recommended GST to replace the existing
regime by introducing a comprehensive tax on all goods and services replacing central level VAT
and state VATs. It recommended replacing all indirect tax except the customs duty with value added
tax on all goods and services with complete set off in all stages of the value chain.

The movement towards GST was articulated by the then union finance minister in his budget
speech for 2006-2007. Initially,it was proposed that GST would be introduced from 1 st April 2010.
The Empowered committee of state finance ministers(EC) which had formulated the disign of the
state VAT was requested to come up with a roadmap and structure for GST .Joint working groups of
officials having represntatives of the states as well as the centre were set to examine the various
aspects of GST and draw up reports specially on exemptions and thresholds,taxation of services and
taxation of inter-state supplies. Based on discussions within and between it and the central
government,the EC released its First discussion paper(FDP) on the GST in November,2009. This
spelt out features of the proposed GST and has formed the basis for discussion between the centre
and the state.

UNIVERSAL RELEVANCE OF GST

France was the first country to implement GST in 1954, and since then an estimated 160 contries
have adopted this tax system in some form or another . Some the country with GST include Canada,
Vietnam, Australia ,Singapore ,United Kingdom, Monaco , Spain, Italy, Nigeria ,Brazil,South
Korea, and,India.
Most countries with GST have a single uifiied GST system ,which means a single tax rate is applied
throughout the country .A country with a unified GST platform merges central taxes woth state-
level taxes and collects them as one single tax. These countries tax virtually evrything at a single
rate.
GST AND CENTRE -STATE FINANCIAL RELATION
Currently, fiscal powers between the centre and the states are clearly demarcated in the constitution
with allmost no overlap between the respective domains. The centre has the power to levy tax on
the manufacture of goods while the sates have the powers to levy tax on sales of goods. In case of
inter-states sales,the centre has the power to levy a tax but ,the tax is collected and retained entirely
by the originating states. Since the states are not empowered to levy any taxo sales and purchase of
goods in the course of thier importation into or exportation from India,the centre levies and collects
and collects this tax in addition to the Basic Custom Duty.
Introductionof GST required amendments in the costitution so as to empower the centre and the
sates concurrently to levy tand collect GST.To address all these and other issues,the
constitution(122nd Amendment Bill) was introducec in the lok sabha on 19.12.2014.

COMPOSITION
The GST council (GSTC)comprises of the Union Finance Minister,the Minister of state (Revenue)
and the Finance Ministers to recommentd on the GST rates ,exemptions and thresholds, taxesto be
subsumed and other matters . One -half of the total number of members of GSTCform quorum in
meetings of GSTC. Decision in GSTC are taken by a mojority of not less than three- fourth of
wighted votes cast. Centre has one-third of the total votes cast and all the states tkahen together
have two- third of weightage of the total votes cast.
SUGGESTIONS FOR IMPROVEMENT UNDER GST

1) The process must be reduced so that the business can operate efficiently in the best interest of
the people and economic growth.

2) Relief must be given to small scale operators and particularly reduced process should be
applicable to them.

3) The facility to file quarterly returns should be extended to assessees with upto 10 crore turnover.

4) Rates should be rationalised and reduced to make Indis competitive and in interest of compliance
and economic growth.

5) Technological glitches of the GSST network should be sorted out on a war footing basis.

CONCLUSION
Goods and services tax is likely to bring buoyancy to govrnment revenue. It is expected that the
malicious activity of tax theft will go away under GST regime in in order to benefit both
governments as well as the consumers. In reality ,that extra revenue that the government is
expecting to generate will not come from the consumers’s pocket but from the reduction of tax
theft.