CHAPTER I

INTRODUCTION

In Developing countries like India, the taxation system is very crucial role in the
development of revenues of the country. But India tax system is difficult to understand
and in fact for calculation too in case of both direct tax as well as indirect tax. In order to
overcome the problems of the government of India tries to simply the direct tax as well as
indirect tax, the government made the proposal of introducing GST (goods and services
tax) instead of all indirect taxes and DTC (direct tax code) instead of direct tax. But
fortunately GST won the first place in the purview of implementation. The government of
India is committed to replace all the indirect taxes levied on the services and goods by
state and central government in the month of April 2017. This paper made an attempt to
explain the level of impact of this GST (goods and services tax) on the growth of the
economy, and benefits for the business and government and for the consumers.

Brief History of Taxation: Tax is today an important source of revenue for the
government in all the countries. More than 3000 years ago, the inhabitants of ancient
Egypt and Greece used to pay tax, consumption taxes and custom duties. Income tax was
first introduced in India in 1860 by James Wilson who become Indians First Finance
Member. In order to meet the losses sustained by the government on account of military
mutiny of 1857. In 1918 A New Income Tax bill was passed and which was further again
replace in 1922. Finally, The Ministry of Law and Finance the Income Tax was Passed in
1961 and brought came in force on 1st April 1962. and this is also known as the Financial
Year in Current Era. I e. (01.04.18 – 31.03.2019) Taxation System: Tax system of raising
money to finance Government. All governments require payment of money taxes from
people. Government use revenues to pay soldiers and police, to build dams and roads, to
operate schools and hospitals, to provide food to the poor and medical care facilities etc
and also hundreds of other purposes without taxes to fund its activities, govt could not
exist. So, taxation is the most important source of revenues for modern government
typically according for 90% or more of their income.

THE ARRIVAL OF GOODS AND SERVICES TAX the Constitution Bill, 2011 amends
the Constitution to give the central and state governments the concurrent power to make
laws on the taxation of goods and services. The amendment allows for the introduction of
a goods and services tax. If Vat is a significant improvement over the local sales tax
system, then the Goods and Services Tax will be a major breakthrough towards a
comprehensive indirect tax reform in the country. Despite the success of VAT, there are
still certain shortcomings in the structure of VAT both at the Central and at the State level.
The GST at the Central and at the State level will thus give more relief to industry, trade,
agriculture and consumers through a more comprehensive and wider coverage of input
tax set-off and service tax setoff, inclusion of several taxes in the GST and phasing out of
CST.

Goods and Services Tax (GST) Goods and Services Tax (GST) is an indirect taxation in
India merging most of the existing indirect taxes into single system of taxation. It was
introduced in India on 1st July 2017 by our new Financial Minister Mr. Arun Jaitley by
passing the GST bill in lok Sabah. GST in India was a collective effort of central and state
government which became operational since 1st july 2017, it took almost 20 years for it to
happen since it first came to India.

GST is a comprehensive indirect tax on manufacture, sale and consumption of goods and
services throughout India (Except state of Jammu and Kashmir), to replace taxes levied
by the central and state governments.

WHAT IS GST

• GST (Goods and Services Tax) is a indirect tax levied on goods and services.

• GST is a single tax on the supply of goods and services.

• GST improve overall economic growth of the nation.

• GST is a comprehensive indirect tax levy on manufacture, sale and consumption of

goods as well as services at the national level.

• It will replace all indirect taxes levied on goods and services by states and Central.

IMPACT OF GST

The most significant impact of the introduction of GST will be the removal of the
cascading effect of the various taxes, since in an ideal GST scenario; all indirect taxes will
be creditable against one another. The overall impact of taxes on businesses is reduced.
Besides, the artificial (tax) barriers to trade that currently exist should be fully removed.
All of these, coupled with the relative clarity that a GST regime offers, should result in
the reduction or rationalization of prices. Another equally significant offshoot of this
regime is streamlining of the administration and collection of the indirect levies, since
GST will attempt to tax the value added at each stage of the supply chain. The government
revenue is not boosted but brings to book many of the defaulters, and hence results in the
creation of a robust tax regime.

Proposed Tax Structure in India

Proposed tax
structure

Indirect Tax =
Direct Tax GST( Except
Customs)

Income Tax Wealth Tax Intra State Inter State

CGST SGST IGST

(Central) (State) (INTEGRATED)

Facts –

France, first country to introduce single GST(VAT) in 1954.

Brazil, Canada has dual GST.

160 countries have implemented GST/VAT in some form or other.

India will follow Canadian model of GST

GST has 4 tax slabs:-

 5% slab

 12% slab

 18% slab

 28% slab

BASIC SCHEME / COMPOSITION SCHEME OF GST

A. Intimation and effective date for composition levy • For persons already registered
under pre-GST regime • For persons who applied for fresh register under GST to opt
scheme • Registered under GST and person switches to composition scheme

B. Effective date for composition levy • Option to pay tax under composition scheme
shall be effective. • For persons who applied for fresh register under GST to opt scheme

C. Conditions and Restrictions for composition levy • Person opting for scheme must
neither be casual taxable person nor non- resident taxable person. • Goods must be inter-
state purchase, imported goods, branch situated outside the state. • Mandatory display of
invoices.

D. Validity of composition levy – fulfillment of conditions, filing application. E.

Composition scheme under GST – Compliance

F. Rate of tax

SUBSUMING OF TAXES / EXISTING TAXES

PRINCIPLES SUBSUMED THE TAXES UNDER GST

(i) Taxes to be subsumed should be primarily on indirect taxes, either on the supply of
goods or on the supply of services.

(ii) Taxes to be subsumed should be part of the transaction chain which commences with
import/ manufacture/ production of goods or provision of services at one end and the
consumption of goods and services at the other.

(iii) The subsumation should result in free flow of tax credit in intra and inter-State levels.

(iv) Revenue fairness for both the Union and the States individually would need to be
attempted.

OBJECTIVE OF STUDY:
 The general objective of the study, is to get practical insights of Goods and
Services tax.

The specific objectives are as follows:

1. To understand filing of GST, Return online and offline.

2. To study the impact of GST on export of Neelay Industries.
3. To understand the benefit of current GST over the previous Taxation System in
Neelay Industries.
4. To study reduction of tax burden due to GST in Neelay Industries.
5. To study Cascading Effect of tax on tax.

LIMITATION OF STUDY:

1. As time was the constrain, so two months of practical exposure for the subject
GST was limited.
2. Confidentiality is another factor to limit the study.
3. Companies fill the GST return on the last day so due to heavy traffic on the website
technical problem arise.
4. Some respondent did not give information because of their busy work schedule.

SCOPE OF STUDY:
  The study is confined to below details:

From these empirical analysis in the GST model, there will be multi-fold benefits to come
up with better policies and implementation of GST or taxation in general. Practitioners or
business owners, taxation authorities, both Central & State Govt and general public also
could benefit from these studies in dealing with their own taxation matters.

1. The Neelay industry will refer the following study to analyze their GST tax
working, based on which they will display their tax policies.
2. Findings from this study would contribute to more comprehensive understanding
on awareness towards GST and their impacts on traders.
3. The Study includes the analysis of few GST-Returns which are live on GST portal
i.e GSTR1, GSTR2, GSTR2A, GSTR3B.
4. The study also puts light on the Technical complications and system errors as
occurred on the GSTR filing.
 CHAPTER-2

ORGANIZATIONAL-PROFILE
 ORGANIZATIONAL PROFILE

Name of company Neelay Industries

Manufacturer
Nature of Business

Exporter

Service Provider
Additional Business
Supplier

Mr. Dilip Ambadas Girase

Mr. Pradip Ambadas Girase

Company CEO
Mr. Ratnadeep Ambadas Girase

ABB

Crompton Greaves

Key Customers Schneider Electric

C&S Efacec

L&T

Industry Electrical Industries

 Total Number of Employees 501 to 1000 People

Year of Establishment 1995

Legal Status of Firm Partnership

Annual Turnover Rs. 50 - 100 Crore

Trade & Market

Export Percentage 20-40%

Infrastructure

Size of Premises 320000 Sq Feet.

Team and Staff

No. of Research / QC Staff 6 - 25 People

No. of Engineers and Technicians 26 - 45 People

No. of Skilled Staff Above 100 People

No. of Semi-skilled Staff Above 100 People

No. of Consultants 6 - 25 People

  About Neelay Industries:

Neelay began its journey in 1995. The focus of work was as a supplier of Precision machined parts
and mechanical assemblies of customized machinery and components for customers who required
precision machining of exotic materials. During its existence of over 16 years in India, Neelay
Industries (Precision Machine Component Division) has been the pioneer in the field of Electrical
Switchgear panel parts and machined components as per specification of customer’s requirements
or drawings. Neelay opened a new facility in June 2005, with a new product line at Neelay Metal
industries (Panel Fabrication) dedicated to specialized Fabrication and Assembly of switchgear
and control panels and are successfully meeting the customer’s requirements. Recently Neelay
started another manufacturing set up at ENAM Castings Pvt. Ltd (Switchgear Division). with a
building of 50000 sq. ft. area, at D80 / 81 in MIDC area having facilities for machining, sheet
metal fabrication and assembly of Switchgear panels.

The whole purpose of this task is to provide all necessary state of the art facilities for manufacture
of Medium Voltage as well as Low Voltage switchgear panels under one roof including CNC
machining, CNC punching, CNC bending, Mig welding, Electro plating, Powder coating,
Assembly and Wiring facilities with highest level of reliability and flexibility. We offer our
customers with excellent quality products, finished and tested to their stringent quality
expectations. We are well positioned to offer our large OEM customers, complete manufacturing
of prototype and production volumes. Our dedication to Quality and Industry Standards are
reflected through recognized third party audited and approved certifications. These cement a
formal practice within our facilities, supported by documentation, procedures and principals.

At Neelay we put the customer on the Top of all. Our business, above all else, is about relations.
To that end, we will work closely with each customer to deliver mission critical business solutions
that meet or exceeds the specific product needs of their organizations. Our objective is to provide
the best value by delivering the most flexible and scalable solutions for companies on the move.
We are committed in making Neelay the team that will win the trust of business leaders for all
their product needs. Our qualified team of engineers and designers is eager to work closely with
you from concept to final product.

Location: - C-18, MIDC, Satpur, Nashik – 422007.

Vision

At Neelay we put the customer on the Top of all. Our business, above all else, is about relations.
To that end, we will work closely with each customer to deliver mission critical business solutions
that meet or exceeds the specific product needs of their organisations. Our objective is to provide
the best value by delivering the most flexible and scalable solutions for companies on the move.
We are committed in making Neelay the team that will win the trust of business leaders for all
their product needs. Our qualified team of engineers and designers is eager to work closely with
you from concept to final product.

Advantages of the location: -

1. The biggest advantages of the location of industry are easy availability of raw material.
2. Specific type of climatic conditions.
3. Low transportation cost.
4. The uses of products are more in day to day.
5. Adequate water supply is decisional factor for location of Neelay Industries.
6. Neelay Industries is in central location that provides the lowest distribution cost.
7. Availability of skilled labour is another advantage of location of Neelay Industries.
8. Good Environmental area.
9. In the location of Neelay Industries there is no competitor for them, therefore Neelay
Industries is to be established in such area.
INFORMATION ABOUT THE ENTREPRENEUR

Name: Mr. Ratnadeep Ambadas Girase.

Qualification:

HSC ARTS Faculty.

Cost Accounting.

Business Administration.

Experience:

Production Budgeting, Planning and Execution

Master Production Planner/Scheduler.

Background:

Automat Machine Operator at Desai Udyog.

Education: Sant Gadge Baba Amravati University

Mr. Ratnadeep Girase Skills & Expertise:

Manufacturing, Customer Service, Inventory Management, Production Planning ,ERP

Production, Budgeting Master Scheduling, Master Planning Extrusion.

 About Entrepreneur Mr. Ratnadeep A. Girase:

Mr. Ratnadeep Ambadas Girase has more than 23 years of manufacturing experience including
budget development, master production scheduling, and customer service. Their career
demonstrates proven proficiency in production planning, cost reduction, and problem
resolution. He has strong abilities in assessing problem areas and offering recommendations
resulting in increased productivity, streamlined operations, and decreased expenses. He has
been recognized as an experienced manager with the ability to inspire and guide staff and
build a solid team environment with excellent work ethic and a commitment to excellence.

Mr. Ratnadeep Ambadas Girase & Mr. Pradip Ambadas Girase joined M/s. Desai Udyog in 1988,
starting out as an Mr. Ratnadeep Ambadas Girase Automats Machine Operator & Pradip Ambadas
Girase as a Marketing & Production Head responsible for scheduling production lines and
managing the plant’s shipping department. Over a 20+ year career, He worked at numerous
corporate locations, progressing through positions of increasing responsibility including office
manager, shift supervisor, production control manager, master production scheduler, and master
production planner.
 COMPANY ACHIEVEMENTS AND AWARDS:
 Winner of competition for suggesting name and logo for new corporate magazine.

Hilex Poly Company

January 2007

 Operating Excellence Award.

ABB India Limited

April 2008

Received company’s “Operating Excellence” award as a team member that developed a new
automated Machine Technology, reducing labor costs by 50% and saving 1 Crore annual.

 Excellence Vendor Award

Siemens Limited (Global)

July 2010

 Ananya Sanman Award,

State Government of Maharashtra,

June 2013

 Best Vendor Conflict Award

Lucy Electric India Limited

January 2015
 CHAPTER 3

LITERATURE REVIEW
 Literature Review

Research Paper 1

Krishna Samaddar (2018) Volume 6, Issue(2 April 2018) Studied “A comprehensive study on the
concept of GST and its impact on Indian economy “In this research study mention that Goods and
Service Tax (GST) is a comprehensive tax on manufacture, sale and consumption of goods and
service at a national level. Goods and Service Tax (GST) is the biggest tax reforms in India after
the independence of India. Goods and Service Tax (GST) will boost the Indian economy by hike
of GDP. Before implementation of GST in India there are lots of indirect taxes such as Value
Added Tax (VAT), Service tax, Sales tax, Octroi, Luxury tax etc. But now all these indirect taxes
have come under an umbrella. Now in India after the implementation of GST only one tax,
monitored by the Central Government. At present different tax rates are applied to goods and
services. Under GST, there would be only one tax rate for both goods and services. GST is
expected to create business friendly environment. It will also improve the Government fiscal health
and come down the inflation.

Research paper 2

Shobha.V (19th November 2017) Studies, “BARRIERS IN FILING GST RETURN AND ITS
IMPACT ON ACCOUNTING” (19th November 2017) :This paper focuses mainly on the hurdles
experienced by the tax payers/practitioners in complying with GST provisions of return filing,
having special focus on technical glitches in online return filing and impact of GST filing on
accounting and documentation. India being a country of having less than one fourth of its
population as computer literates, it is not a smooth job to have at the most compliance with online
returns. This study attempts to bring forth certain issues faced by the taxpayers at the initial stage
and also attempts to provide a brief note on the long-standing issues with GSTR filing this study
is mainly carried on from the perspective of small and medium taxpayers.
Research paper 3

Dr Geetanjali Sharma, Mrs. Miriam George (Volume 19, Issue 4. Ver. I (Apr. 2017) Studies,
“GST-A Game Changer in Indian Tax Structure” The research paper focuses on the importance of
Goods and Services Tax(GST) embodied recently in the Indian Tax structure. The paper discusses
the genesis of Indian Taxation System with reference to the Arthasastra and Revenue Act of 1924.
The contents of the research paper include the evolution of GST in India. The research objectives
focus around the evolution of GST, the comparison of present and GST tax structure, How GST
will function in India, the economic implication of GST which unifies India and the basic
challenges faced in GST. The milestones of GST have been discussed to analyze how it impacts
India’s economic environment. The challenges and roadblocks faced in India have been depicted
in this research paper. The paper also illustrates how GST works in India.

Research paper 4

Nishita Gupta, Vol 5, Issue 3, (Year-2014) Studied, “Goods and Services Tax: it’s impact on Indian
Economy” The research paper focuses on the relevance of VAT and GST , how GST contributes
to the improvement of the tax structure in India toward a world class system. The paper included
intricate details of VAT. It indicated a significant improvement in the comprehensive indirect tax
reforms in the country. It discusses about the differences in treatment for the service and
manufacturing sector. It has also included the integration of taxation with an intend to harmonize
the consumption tax system.

Research paper 5

Amit Ilager, Vol 2, Issue 5, ( Jul-Aug 2018) Studies “ A review on GST Execution and its Effect”
in this Research study it is mention that GST is a comprehensive tax system that will subsume all
indirect taxes of State and central Governments and whole economy in seamless nation in national
market. It is expected to remove the burden of existing indirect tax system and play an important
role in growth of India. GST includes all Indirect Taxes which will help in growth of economy and
proves to be more beneficial existing tax system. GST will also help to accelerate the overall Gross
Domestic Product (GDP) of the country. GST is now accepted all over the world and countries are
using it for sales tax system. This paper will help to show that, what will be the impact of GST
after its implementation, difference between present Indirect Taxes and GST and what will be the
benefits and challenges of GST after implementation

Research paper 6

Vinayak Revji Gandal, Vol V, Issue 2(4),( April 2018) Studies “An Analytical Study on
Awareness Towards GST Amongst Traders” The Researcher stated that this study examines the
awareness of GST amongst traders. Based on literatures and previous studies, three factors have
been identified that posed the most impacts to traders towards the GST implementation. These
factors are the level of knowledge, subjective norm and demographic factors of traders. Findings
from this study would contribute to a more comprehensive understanding on awareness towards
GST and their impacts on traders. Also, it could be used by the relevant authorities to come up
with better policies on GST or taxation in general. Practitioners or business owners and general
public also could benefit from the findings in dealing with their own taxation matters.