PREFACE

This project report on has been prepared in partial fulfillment of the requirement for the subject: The Research
Report on the topic “Goods and Service Tax” in BRINJAN TECH in E-M.B.A 4th Semester in the academic
year 2018-2019

Goods and Service Tax G.S.T is all set to be a game changer for the Indian economy. The tax is expected to
reduce the concept of Tax on Tax, increase the gross domestic product of the economy and reduce price. In
India, there are different indirect taxes applied on goods and services by central and state government.GST is
intended to include all these taxes into one tax with seamless ITC and charged on both goods and services.
For the introduction of GST, the Government needs to get the Constitution Amendment Bill passed so that the
proposed objective of subsuming all taxes and allowing states to tax subjects in Union list and vice versa is
achieved. Without these powers, it is not legally possible to move towards GST. Conceptually GST is
expected to have numerous benefits like reduction in compliances in the long run since multiple taxes will be
replaced with one tax. It is expected to bring down prices and hence the inflation since it will remove the
impact of tax on tax and enable seamless credit. It is expected to generate revenue for the country as the tax
base will increase as the GST rate will be somewhere around 27% with both goods and services covered. It is
also expected to make exports from India competitive and India a preferred destination for foreign investment
since GST is a globally accepted tax. Unless the issues relating to GST has been overcome, the GST would
become a bare wall without any scripts to describe in future.
 Table of Contents

S. Particulars Page No.

No
1 INTRODUCTION
CONCEPT OF GST
IMPACT OF GST VARIOUS SECTOR
2 RESEARCH METHODOLOGY
3 CONCEPTUAL DISCUSSION
4 DATA ANALYSIS
5 FINDINGS AND RECOMMENDATIONS
6 CONCLUSIONS AND SUGGESTIONS
BIBLOGRAPHY
REFRENCES
 Chapter-1

INTRODUCTION

A. Company Profile

Type - Public company

Nature of Business- Manufacturer

Additional Business- Exporter, Trader, Importer , Supplier

Original Equipment Manufacturer – Yes

Warehousing Facility - Yes

Year of Establishment – 2003

No of Employees- 11 to 25 People

Legal Status of Firm – Sole Proprietorship (Individual)

C.E.O - Om Prakash

Quality Measures / Testing Facilities- Yes

DGFT/ IE Code – 514065281

Banker- IDBI BANK

GST NO- 07APVPK6292E1ZD

Customized Packing – Yes

Payment Mode- Cash , Cheque , DD

Shipment Mode- By Road

 Products - Electrolytic Marking Machine

 Hand Metal Punches

  Roll Marking Machine
 Label Printer, Hand Signomat
 Impact Press, Metal Marking Machine
 Electrolytic marker, Laser Marking Machine
 Customized Machine, Pneumatic Machine Attachment
 Electrolytic Marking Products

OEM Service Provided - No

Website - www.brinjantech.in

Corporate office-
H3/105, 2nd Floor , Sector -18 Rohini
Near Mount Abu Public School
New Delhi-110085

Manufacturing Units-

C-36 Gali No-4 Suraj Park

Near Mount Abu Public School
New Delhi-110085

Brinjan Tech, one of the most eminent Manufacturers, Suppliers and Traders of an

inclusive range of Metal Marking Machines. Established in the year 2003, our organization has
touched many milestones like pioneering a custom range of marking machinery to serve the top
corporate houses like L&T, TATA and many more. Our repute in the market is an outcome of
our premium quality range of Electrolytic marking machine, Electrolytic marker, Hand metal
punches, etc. Acknowledging the various diverse demands of our patrons, we devise these
machinery on per unit construction solution basis for efficient and effective marking even of
large series. The entire range is proven to be at par in electrolytic marking of any surface
bearing letters, graphics, trademarks or extreme color tones. Owing to complex use of our
patron, we provide our machines with various control devices for managing operations swiftly.
We are also lauded for abundant room for enchanting the degree of automation in the
machinery from a simple hand device full automation. Our success
is majorly attributable because of the able supervision of our mentor, Mr. Om Prakash, who
posses immense domain knowledge. It was his dedication that, we arable to provide custom
solutions within 24 hours and also provide custom stencil manufacturing facility directly from a
 remote device. 

B-History

We Brinjan Tech have established in 2003 as a most prominent and reliable organization

involved in Manufacturer, Trader, Importer, Exporter and Supplier a broad assortment
of Electrolytic Marking Machine, Laser Marking Machine, Metal Marking Machine, Roll
Marking Machine, Impact Press, Customized Machine, Electrolytic Marking Chemicals, CO2
Laser Marking Machine, CO2 Laser Cutting Machine, Pad Printing Machine, Metal Etching
Making Machines, Electrolytic Marking Accessories and Electrolytic Marking Products. These
products are developed using optimum quality material taken from the authentic suppliers of
the industry. Our provided products are highly appreciated for their durability, crack resistance
and dimensional accuracy.
 
We have developed an advanced infrastructure unit at our premise to manufacture the offered
range as per the industry set standards. We have installed modern tools and machines at our
facility. Also to keep place with the on /going technological advancements, we regularly
upgrade our facility. With the support of our well qualified and experienced professionals, we
have been able to offering a broad assortment of machines. Moreover, our team personals work
in close coordination with each other. We offer to our team regular training sessions and
seminars to enhance and polish their knowledge timely.
With the valuable supervision of our mentor Mr. Om Prakash, we are growing day by day in
this domain. Owing to his vast industry experience and deep knowledge, we have been able to
achieve high level success in limited period of time.

Why Us?

Abide by a fleet of highly skilled workforce and latest machinery, we act as an

prominent institution in our domain. The entire product range is subjected to different
quality checks for ensuring that offered products are in devised in accordance with
industries benchmark standards. Some of our major strengths:

 Efficient production plant for catering to bulk demands

 Strict time deliverance
 Ethical dealing practices
  Quality centric organization
 Team of highly skilled professionals

About Us

Since 2006

Manufacturer, Supplier and Trader of an unparalleled range of Metal Marking Machines

12000 client base in a decade

Brought unique features in marking machines (100% damage protection)

Professionally managed organization

Quality and on time services are our strength

Our Infrastructure

Banking to our state-of-the-art infrastructure unit, we have been able to offering a broad
assortment of marking and cutting machine. This facility enable us to come up with new ideas
and to offer best-in-class products regularly.

We have following units:

a) Manufacturing unit
b) Quality controlling unit
c) Administrative department
d) Warehousing and packaging department
Quality Assurance

Before final release of our products, we first pass these products under numerous quality checks,
which are executed under experienced team of professionals who have huge information of their
dominion. These professionals have ability to apply and know clients demand in a specific
manner. Apart from this, our units make use of fine quality raw material and most up-to-date
technology to design quality components in agreement with set quality norms and standards.

Our Vendor Base

The exclusive prestige and standing that our company has added in the industry is owing
to our huge network of reliable vendors. Our vendors have been nominated by our professionals
after deep study of their market standing and financial stability. Having best corporate
associations with truthful vendors, we are able to source the best range of product. As a result,
our industry experts are able to deliver to the customers’ quality assured products within
guaranteed time frame.

Brands We Deal In :

 Fujikura
 SPI etc

Our Clientele Include:

 GI
 AVTEC
 TITAN
 BERGER
 SIEMENS
 PARI Etc…

Major Market

 Nepal
 Canada Etc…
Primary Competitive Advantages

 Premium durability, our stencils can do markings effectively up-to 5000 times
 Ease of use, our elementary range of marking machines can also be used by connecting a
PC to it.
 Timely solutions, we can fabricate highly durable specific stencils within 24 hours

Quality :Our Strength

We are engaged in offering quality products, for meeting our patrons expectations. The entire
range, prior to be offered to our patrons, is approved by our quality auditors, who conduct
stringent quality control procedures and evaluation against different merits. Our organization
produces entire range in harmony with global quality merits. A highly skilled team of personnel,
seeks to achieve perfection for extinguishing any chances of any discrepancies. Owing to our
patron's abundant demand, we have erected a large storehouse for keeping finished products safe
for deliverance.  Some of quality attributes of our range:
a) Best designs
b) Longer serviceable life
c) Optimum finish.
d) Harmony with set quality norms and international standards

Product Range

We offer an wide assortment of marking machinery, used at large by different patrons indulged
in different industries for rendering different functions. Our large manufacturing base allows us
to meet bulk and immediate orders. Our range:

a) Electrolytic Marking Machine

b) Electrolytic marker
c) Hand Metal Punches
d) Roll Marking Machine
e) Label Printer
f) Hand Signomatic
g) Impact Press

Our Team

Being led by a passion of emerging as a domain leader globally, we have made tremendous
amount of efforts and in our surge we are very well supported by a team of ingenious
professionals and other skilled persons. Their every effort is directed in designing an premium
range of products, with supreme quality standards. Our team functions according to a well
planned and stipulated channel of responsibilities and operations. Every member of the our team
acknowledges their responsibilities for a seamless execution of functions and creating a perfect
working culture.

C. Vision
“Be the leader in the delivery of marking experiences.”

D. Mission
“To be one of the leading manufacturer of the marking and branding machines. Using our
engineer’s skills, we seek to design most creative, innovative and quality marking machine for
client.”

E. Team and Work Groups

1. Teams
The results and quality of team work is easily measurable by analyzing the effectiveness of
collaboration in the following ways:
a) Communications
b)Coordination
c) Balance of contributions
d)Mutual support
e) Efforts

2. Work Groups
a) Groups of two or more individuals who work together.
b) They work temporarily until some goal is achieved.
c) They routinely function like a team but they are interdependent in achievement of a common
goal and may or may not work in the same department or same locations.
d) External knowledge sharing is one of the major task of work groups which essentially means
the exchange of information, a proper know-how about, and feedback from customers,
organization experts and others outside a group
e) All teams are work groups but not all work groups are teams.
F. Functional Levels Of Work Groups

1 Dependent-Level Work Groups

a) This is the most traditional work unit.

b) It has a supervisor who plays the role of a boss.

c) In this work group each person is assigned a job and is closely supervised by a boss.

d) The boss approves if one can help another.

e) Problem solving, work assignments and decision making is done by boss or supervisor.

f) Rarely the group creates improvements, increase in productivity or leveraging resources to

support one another.

2 Independent - Level Work Groups

a) This is the most common type of work group.

b) Each person responsible for their own area of operation.

c) The manager does not function like controlling boss.

d) Staff members work on assigned jobs with minimal supervision.

Example: Sales Rep, Research Scientists, Accountants, Lawyers etc

3 Interdependent -Level Work Groups

a) People rely on each other to get the work done.

b) At times they have their own roles and at other times they share other responsibilities.

c) But in either of the cases, they have to coordinate with one another in order to produce a final
product or outcome.

Team Building Interventions

a) Team building intervention can be defined as a process of getting either a new or poor
performing group on track
b) Example of team building intervention can be analyzed by taking two extreme categories of
teams such as teams for ‘fun’ and teams for ‘development’
c) At fun end, there are icebreakers, ropes courses, camping trips etc and at the developmental
end there are workshops and intensive team building exercises that are goal specific and
suited to a group of professionals

Stages of Team Development

a) There are various team building models in management science

b) Although the models vary from each other, they usually agree on two basic elements.
c) First, that there are quite number of predictable stages before the team becomes highly
productive and efficient and secondly, the leaders and team members who are already aware
of these stages can work towards improving the quality of their team’s interaction during
each stage.

Goals of Team Building Interventions

a) To improve effectiveness of a group in achieving results

b) Work group should be engaged in a continuous process of self examination
c) Provide opportunity to the team to analyze its functioning, performance, strengths and
weaknesses
d) Identifying the areas of problem for team members and taking corrective measures for the
same
e) Developing a model of team effectiveness specifically designed to help the work unit

Role Analysis Technique Intervention

a) RAT in OD intervention has been adapted for use as an experiential learning activity in
academics.
b) The primary functions of RAT are assisting groups in clarifying and understanding roles
and role expectations in organization
 c) RAT is also sometimes better used to help employees get a grasp on their role in an
organization.
d) In the first step of a RAT intervention, the perception of one’s role and contribution in an
organization is defined by people in front of a group of co-workers.
e) Then the group members give a feedback to define and clarify the role more
f) In the second phase, the individual and the group examine ways in the which the
employee relies on others in the company
g) RAT intervention also help in reduction of role confusion in people

Role Negotiation Technique

Advantages Of Role Negotiation Technique

a) RNT makes things explicit

b) The facilitator helps everyone understand that each participant has some degree of power
from the positive rewarding good behavior in others during the contracting process.
c) This avoids guesswork about expectations and thus helps in understanding well how to
influence others in the group.

Negotiation

a) After each person has clarified the messages he or she has received, issues are selected
for negotiation.
b) At this stage everyone should be prepared to make some sort of changes to get what he or
she wants

c) Responsibility charting

Responsibility charting is identification of functional areas which include ambiguities in

a process, bringing the difference out in the open and resolving them using cross
functional collaborative measures
 This helps managers to actively participate in a focused and systematic discussion about
process related descriptions of the actions that must be accomplished in order to deliver a
successful end product or service from same or different organizational level.

d) THEORY OF RESPONSIBILITY CHARTING

Accountability is a prime thing that is ensured by RCT

It creates accountability for actions that is moved down from the top to bottom of an
organization
It helps to know role perceptions and role ambiguities and the changes in role perceptions
by passage of time.
There are three basic assumptions in any role. They are:.

ROLE CONCEPTION

How or what a person thinks his/her job is completely dependent on how the person has
been taught to do it.
His/her thinking will be influenced by many false assumptions

ROLE EXPECTATIONS

Role expectation is defined as what others in the organization think the person is
responsible for, and how he/she should carry out those responsibilities
These ideas also may be influenced by incorrect information
The role expectation is based on output of results expected from the role

ROLE BEHAVIOUR

Role Behavior is defined as what a person actually does in carrying out the job.
RC reconciles role conception with the role expectation and thus, role behavior becomes
more predictable and productive

Third party or intermediary is the person or team of people who become involved in a
conflict to resolve it.
 Third parties may act as consultants either by helping one side or both the sides
They may act as facilitators, arranging meetings, setting agendas and guiding productive
discussions also.

Partnering
Partnership can exists inside as well as outside the organization

Partnership Inside The Organization

This involves partnership with direct reports, partnering with co-workers and
partnering with managers.

Partnering With Direct Reports

One of the greatest challenges of leaders of the future will be breaking down
boundaries of hierarchy
The effective leader will be able to share people, capital and ideas across the
organization.
The success depends upon stronger partnership with co-workers
Biggest challenge will be patterning with co-workers than partnering with direct reports

Partnering With Mangers

The relation between managers and direct reports will have to change in both directions
Not only managers need to change, direct reports will need to change.
Many future leaders have to operate like an MD of a consulting firm than the operator of an
independent small business

Partnership Outside The Organization

Partnering with customers
This is needed for creating economies of scale
The basic objective should be to create long term customer relationship than short
term so that partnering becomes more effective and profitable.
This implies that suppliers need to develop a much deeper understanding of the
customer’s total business
 Concept of Goods And Service Tax (GST)

A-About GST

The Good and service tax (GST) is the biggest and substantial indirect tax reform since
1947.The main idea of GST is to replace existing taxes like value –added tax , excise duty,
service tax and sales tax.GST as it known is all set to be a game changer for the Indian
economy. India as world ‘s one of the biggest democratic country follow the federal tax
system for levy and collection of various taxes. Different types of indirect taxes are levied
and collected at different point in the supply chain. The centre and states are empowered to
levy respective taxes as per the Constitution of India. The Value Added Tax (VAT) when
introduced was considered to be a major improvement over the pre-existing Central excise duty
at the national level and the sales tax system at the State level. Now the Goods and Services tax
(GST) will be a further significant break through-the next logical step –towards a
comprehensive indirect tax reform in the country

Goods and Services Tax (GST) is an indirect tax which was launched at midnight on 1July
2017 by the President of India Pranab Mukherjee and Prime Minister of India , Narendra
Modi. The launch was marked by a historic midnight (30 June- 1 July ) session of both houses
of the Parliament convened at the Central Hall of the Parliament.

GST is applicable throughout India which replace multiple cascading taxes levied by the central
and state governments. It was introduced as the Constitution (One Hundred and First
Amendment Act) Act 2017 , following the passage of Constitution 122nd Amendment Act Bill.
B-Key features of GST

1-Dual Goods and Services Tax : CGST and SGST

2-Destination-Based Consumption Tax:- GST will be a destination -based tax. This implies that
all SGST collected will ordinarily accrue to the State where the consumer of the goods or
services sold resides.

3-Computation of GST on the basis of invoices credit method :- The liability under the GST
will be invoice credit method i.e. cenvat credit will be allowed on the basis of invoice issued by
the suppliers.

4-Payment of GST: The CGST and SGST are to be paid to the accounts of the central and states
respectively.

5-Goods and Services Tax Network (GSTN): A not-for-profit , Non Government Company
called Goods and Service Tax Network (GSTN) , jointly set up by the Central and State
Governments provide shared IT infrastructure and services to the Central and State
Governments tax prayers and other stakeholders.

6-GST on Imports: Centre will levy IGST on inter-state supply of goods and services. Import of
goods will be subject to basic customs duty and IGST,

7-Maintenance of Records:- A taxpayer or exporter would have to maintain separate details in

books of account for availment, utilization or refund of Input Tax Credit of CGST , SGST, and
IGST.

8-Administration of GST – Administration of GST will be responsibility of the GST Council

which will be the apex policy making body of the GST. Members of GST Council Comprised
of the Central and State ministers in charge of the Finance portfolio.
9-Goods and Service Tax Council:-The GST Council will be a joint forum of the Central and
the States. The Council will make recommendations to the Union and the States on important
issues like tax rates ,exemption list, threshold limits etc. One –half of the total number of
Members of the Council will constitute the quorum of GST Council

Present taxation System

Indirect Taxation system
C-Dual GST Model

India is a Federal country where both the centre and the States have been assigned the powers
to levy and collect taxes through appropriate legislation. It has been proposed that there would
be a “Dual GST” model in India , taxes will be levied by both centre (Central GST ) and state
(State GST) on Goods and Services. Hence , a dual GST would be according to the
Constitutional requirement of fiscal federalism.

D-Commodities not subsumed in GST

Alcohol for human consumption

Petrol Products- Crude, Petrol, High SSpeed Diesel, Natural

E-Taxes not subsumed in GST

Stamp Duty & Property Tax, Toll Tax, Electricity Duty

.
F-GST Rates in India

 Exempted categories-0

 Commonly used Goods and Services-5%

 Standard Goods and Services fall under 1st slab-12%

 Standard Goods and Services fall under 2nd slab-18%

 Special category of Goods and Services including luxury-28%

G-GST Council

 It is set up by president under article 279-A. It is chaired by union finance minister.

 It will constitute union minister of state in charge of revenue and minister in charge of
finance or taxation or of any other field nominated by state governments. The 2/3rd
representatives in council are form states and 1/3 rd from union.

 It will make recommendations on:

a) Taxes, surcharge , cess of central and states which will be integrated GST.

b) Goods and Services which may be exempted from GST

c) Interstate commerce-IGST-proportion of distribution between state and center.

d) Registration threshold limit of GST.

e) GST floor rates

 f) Special rates during calamities.

g) Provision with respect to special category states north east states.

 It may also work as Dispute Settlement Authority for GST.

 The council would consist of 2/3rd representation of states and 1/3rd representation of the
Centre. The GST Council will take all decisions regarding tax rates, dispute resolution
exemptions and so on. Recommendations of the GST Council (75%votes) will be
binding on the centre and the States.

H-Goods and Service Tax Network (GSTN)

Goods and Services Tax Network has been set up by the Government as a private company
under erstwhile Section 25 of the Company Act. 1956. GSTN would provide three front end
services, namely Registration, Payment and Return to taxpayers. It will also assist some State
with the development of back end modules.

I-GSTIN

Goods and Services Identification Number is a 15 digit applicable number.

First two digit shows the State code.

Another ten digit shows the Permanent Account Number (PAN).

Next number shows the entity number of the same PAN holder in a state.

Next is alphabet Z by default.

Next is the check sum digit.

J-SWOT Analysis

Strengths

 GST provides a comprehensive and a wider coverage of input credit set off service tax
credit could be used for the payment of tax on the sale of goods etc.

 A single GST could be used instead of other indirect taxes at the state and central level.

 It would be uniformity of tax rates across the states.

 It ensures better compliance as the aggregate tax reduces.

 It help in the reduction of prices of the goods and services to the consumer with the
reduction of tax.

 It would reduce transaction costs and unnecessary wastage to both government and
individuals.

 It encourages transparency and unbiased tax structure.

 It brings efficiency in the indirect tax mechanism.

Weaknesses

 It doesn’t include alcohol and petroleum products which would lead to incurring of huge
losses.

 It requires strong IT infrastructure which is not highly developed in India.

 Single GST rate would be high compared to individual indirect tax rate.

 In reality, it might result in a dual tax system in which both state and the Centre would
collect tax separately.

 Sudden implementation of GST might create to the common man.

Opportunities

 Reduction in tax burden will increase the competitiveness of Indian products in the
international market.

 There would be a gradual increase in the revenues of state and the union.

 Helps reducing corruption as the implementation of GST would result in a gradual

decrease of procedures and formalities.

Threats

 It is entirely dependent on the efficiency and effectiveness of the system.

 Beneficiaries of the system are uncertain. It could be either state or the Centre. This
would create a chaos while preparing budgets and financing policies.

 Lack of co-ordination between the Centre and the state might after the system and also
the revenues generated.

Interpretation of the SWOT Analysis

From the above SWOT analysis it is clear that GST would create uniformity of taxes and also
reduce tax burden. This is turn would increase revenues of the state and the union at the country
level and increase competition at the international level But this in reality might appear to be a
dual tax system and would also require a strong IT infrastructure. Besides this, it is entirely
dependent on the efficiency of the system. Co-ordination between the Centre and the state only
can help in its implementation and execution of the proposed plan. Therefore before
implementation of such a tax regime , it should be carefully examined at every levels to benefits
all the stakeholders.
 Impact of GST on various Sector

Manufacturers, Distributor, and Retailers

GST is a boost competitiveness and performance in India’s manufacturing sector. Declining

exports and high infrastructure spending are just some of the concerns of this sector. Multiple
indirect taxes had also increased the administrative costs for manufacturers and distributors and
with GST in place, the compliance burden has eased and this sector will grow more strongly.
But due to GST business which was not under the tax bracket previously will now have to
register. This will lead to lesser tax evasion.

Service Providers
As of March 2014, there were 12, 76,861 service tax assessees in the country out of which only
the top 50 paid more than 50% of the tax collected nationwide. Most of the tax burden is borne
by domains such as IT services, telecommunication services, the Insurance industry, business
support services, Banking and Financial services, etc. These pan-India businesses already work
in a unified market and will see compliance burden becoming lesser. But they will have to
separately register every place of business in each state.

IT

Currently IT sector is paying 14 percent of tax to the authority and subjected to18-20 percent
after the imposition of GST. Also an important point to notice here, that the long disputed issue
of canned software taxation will also come to end as their will no difference arise between
goods and services after the GST. Overall impact could be suggested here is neutral or slightly
negative.

Telecom

In the current stage, the Telecom sector is paying 14 percent of tax to the government body, but
the scenario takes the shift after the imposition of GST. The rate arise to 18 percent and the
companies expect to pass the burden on the post-paid customers. There is also a lower input tax
credit in this sectors capex cost. Overall it seems that this regime will be negative to the
industry and the sector will be in state where they cant pass the entire tax burden to the
customers especially their prepaid segment.
Automobiles

Currently, automobile sector pays around 30 to 47 percent tax to the Government which is now
expected to range between 20-22 percent after the implementation of GST. And the overall cost
cutting can be expected for the end user by around 10 percent . Transportation time should also
be reduced as the check points and octroi is cleared hands before. Overall GST will bring a
smile into the automatic sector.

Cement

In the current scenario cement sector is presenting 27 to 32 percent of their share to the tax
authority. After the rolling out of GST, this will improve the sector growth in various terms,
like transportation by 20-25 percent and in the warehouse scheme as the rationalization would
be easy in terms of state wise fragmentation and also in the transportation cost as reduced
transit time.

Pharmacy

Here, the impact could be neutral as the sector only shares 6 percent of his shares to the tax
authority. The sector also avails the incentives in tax benefits of location wise. There are
various concessional benefits and exemptions held for this sector and will extend till the expiry
of the period. The implications of GST would also try to reduce the logistics cost and would
also try to see in to the matter of inverted duty structure.

Banking and Financial Institutions

The sector is passing 14 percent right now, but not on the interest part of transaction. After the
GST implied, the tax horizon can expand up to 18 to 20 percent on the free based transactions.
Overall input expense of operations will likely to increase and also hike in the transactions of
financial in nature such as loan processing fees, debit/credit charges, insurance premium etc.

Startups

With increased limits for registration, a DIY compliance model, tax credit on purchases, and a
free flow of goods and services, the GST regime truly augurs well for the Indian startup scene.
Previously, many Indian states had different VAT laws which were confusing for companies
that have a pan-India presence, especially the e-com sector. All of this has changed under GST.
Freelancers

Freelancing in India is still a nascent industry and the rules and regulations for this chaotic
industry are still up in the air. But with GST, it will become much easier for freelancers to file
their taxes as they can easily do it online. They are taxed as service providers, and the new tax
structure has brought about coherence and accountability in this sector.

Result Analysis

Basic Concept of GST

Impact of GST on Indian Economy

Reduce tax burden on producers and foster growth through more production. The double
taxation prevents manufactures from producing to their optimum capacity and retards growth
GST would take care of this problem by providing tax credit to the manufacturer.

 Various tax barriers such as check posts and toll playas lead to a lot of wastage for
perishable terms being transported a loss that translated into major costs through higher
need of buffer stocks and warehousing costs as well. A single taxations system could
eliminate the roadblock for them.

 A single taxation on producers would also translate into a lower final selling price for
the consumer.

 Also, there will be more transparency in the system as the customers would know
exactly how much taxes they are being charged on what base.

 GST would add to government revenues by widening the tax base.

 GST provides credits for the taxes paid by producers earlier in the goods / services
chain. This would encourage these producers to buy raw material from different
registered dealers and would bring in more and more vendors and suppliers under the
purview of taxation.

 GST also removes the custom duties applicable on exports. Our competitiveness in
foreign markets would increase on account of lower cost of transaction.

 The proposed GST regime, which will subsume most central and state-level taxes, is
expected to have a single unified list of concessions/exemptions as against the current
mammoth exemptions and concessions available across goods and services.

The introduction of Goods and Services Tax would be a very noteworthy step in the
field of indirect tax reforms in India. By amalgamating a large number of Central and
State taxes into a single tax, it would alleviate cascading or double taxation in a major
way and pave the way for a common national market.
 Chapter-2

RESEARCH METHODOLOGY

Introduction of Research Methodology

Research is a logical and systematic search for new and useful information on a particular topic.
Research methodology is a systematic way to solve a problem. It is a science of studying how
research is to be carried out. Essentially, the procedures by which researchers go about their
work of describing, explaining and predicting phenomenon are called research methodology.

About my Research Problem

The present Research is exploratory in nature. Since GST is a new phenomenon in India, there
are hardly any studies in this area. Specially there is a huge gap of empirical and behavior
studies on GST in India. The study tries to find the significance of popular perception regarding
GST.

Problem statement

The title of Project Report- GST in Brinjan Tech

Manufacturer to wholesaler taxing on total bill for the product sold Y wholesaler to distributor
taxing on total bill for the product sold Y. Distributor to Retailer taxing on total bill for the
product sold Y Retailer of Consumer itemized / total bill taxing for the product bought.

Need of study

The Need of study have to fill the gap that has identified in the previous researchers. Under this
study We know that how much level of understanding the GST and Perception towards GST as
well as traders, taxpayers, concerned by GST.

Scope of Study

This study is conducted to find out the views of consumers in Brinjan and to know about their
expenditure pattern and the variation. The respondents selected are of mixed group which will
give wider difference in understanding. The scope of the study is limited only to the concerned
area of study which cannot be justified for any other place.

Objectives of study

 To asses customers view regarding important of GST in Brinjan

 How GST will affect Indian Economy
 To find out the perception and their views on new implemented taxation system.
 To analysis manufacturer perception regarding Goods and Service Tax GST)

Research Design

A good research design has characteristics viz , problem definition, time required for research
project and estimate of expenses to be incurred the function of research design is to ensure that
the required data are collected and they are collected accurately and economically. A research
design is purely and simply the framework for a study that guide the collection and analysis
data. In this project the two basic types of research design are used⁚

 Exploratory Research

All research projects must start with exploratory research. This is a preliminary phase
and is absolutely essential in order to obtain a proper definition of problem in hand. The
major emphasis on the discovery if ideas and insights. The exploratory study is
particularly helpful in breaking broad and vague problems in to similar, more precise
sub product statements. Exploratory research is also used to increase the familiarity with
the problem under investigation.

 Descriptive Research

It is the design that one simply describe something such as demographic characteristics
of people. The descriptive study is typically concerned with determining frequency with
which something occurs or how two variables vary together. A descriptive study
requires a clear specification of who, what, when, and why apex of the research. It
requires formulation of more specific hypothesis and the testing these through statically
inference technique.

This is the research design of the study and then it comes to develop the research plan,
which means that what to do before going for the actual interpretation and it is discussed
below.
  Developing a Research Plan:

The Present research is exploratory in nature. Since GST is a new Phenomenon in India,
there are hardly any studies in this area. Specially there is a huge gap of empirical and
behavior studies on GST in India . The study tries to find the significance of popular
perception regarding GST.

The data for this research project has been collected through self Administration. Due to
time limitation and other constraints direct personal interview study method is used. A
structured questionnaire was farmed as it consumers less time duration and is very
important from the point of view of information easier to tabulate and interpret. More ever
respondents prefer to give direct answer.

Development of research plan has the following steps:

 Sample Design

 Sample Unit

 Sample Size

 Sample Technique

Universe of study:

For the present study purpose about the Perception of new implemented system of Goods and
Service Tax.

Sample Design:

The complete study of all items in the population is known as a census inquiry. Sample is a
group of few items , which represents the population is on universe from where it is taken.

The process of Selecting sample have been Multi Stratified in Nature. At the first stage 2 blocks
of region / area have been selected with the help of convenient sampling. At the
2nd Stage 25 respondent have been selected from these blocks with the help of Simple Random
sampling. The size of sample is 50 respondents.
Sampling Size:

The sample size of study was 50.The response were captured from respondents on a 5 point
Likert scale. The area of study was Delhi Region

Sampling Method:

The sampling method was Judgment sampling (only those respondents were chosen who had
some knowledge about GST)

Data Collection

Data collection is the process to gather information about the relevant topic research ,
which is be Data Collection usually takes place early is an improvement project and is
often formalized through data collection plan which often contains the following
activity

 Pre –collection activity on goals, target data , definitions and methods.

 Collection of Data

 Presenting findings involving some form of sorting analysis.

For accomplishing the objective of study , both primary and secondary data
have been used data collection through the primary data as well as secondary
data sources

Classification of Data:

The correct information is the key to success. Data information is of two types : Primary Data
and Secondary Data. Primary data is information collected by researcher or person himself
where is secondary data is collected by other but utilized or used by researcher. Data can be
classified under two categories depending upon source utilized. These categories are:

 PRIMARY DATA

 SECONDARY DATA
 Primary Data:

The study is largely based on the primary data which has been collected through
structure Questionnaire Method.

 Using Primary Data Collection Tool

Questionnaire

The data has been collected by administering a structured schedule for questions. The Questions
are generally framed by 5 point likert scale and answers by respondent in form of agree,
disagree, neutral, strongly agree , and strongly disagree

The questionnaire have been prepared for study Goods and Services In Brinjan Tech.

For the present study purpose questionnaire method is used to collect the primary data. This
questionnaire is self administrated questionnaire.

Secondary Data

The secondary data is the already existing data from the other sources. This data is cheaper and
is easily available. This type of data is used to save time. The Secondary data comprises of
information from internal records of the organization , presentation reports on various topics ,
standing orders. This is the data which is already available, publisher or unpublished and is
collected from the company records and manuals which are maintained by it.

This type of data has been collected from the following resources

 Sources of collection of secondary data

 Internet

 Books

 Journal

 Thesis

 Newspaper

 Govt. Gazettes

 Magazines Etc.
 For this study primary and secondary data both has been used for research topic.

Tools Used

Comparative analysis is done between indirect tax regime and Goods and Service Regime,
 Chapter-3

CONCEPTUAL DISCUSSION

Literature Review

The proposed GST is likely to change the whole scenario of current indirect tax system. It is
considered as biggest tax reform since 1947.Currently, in India complicated indirect tax system
is followed with imbrication of taxes imposed by unions and states separately. GST will unify
all the indirect taxes under as umbrella and will create a smooth national market. Expert says
that GST will help the economy to grow in more efficient manner by improving the tax
collection is it will disrupt all the tax barriers between states and integrate country by single tax
rate.

GST was first introduced by France in 1954 and now it is followed by 140 countries.

Jha Diwakar (2017) describe in the article on 1 July 2017. It’s been more decade now since we
have been listening the buzz about Goods and Services Tax (GST), but now we have seen
implementation of GST turning into reality as the Govt. has launched GST on 01/07/2017.
The GST is a value added tax replace all indirect taxes levied on goods and services by the
Government both Central and States. Amalgamating several central and state taxes into a single
tax would mitigate cascading of double taxation , facilitating a common nation market . This is
the biggest taxation reform since independence that is going to take place in India,

Girish Garg, (2014) Studied “Basic Concepts and Features of Good and Service Tax in India”,
and found that GST is very appropriate step in Indian taxation system after independence. GST
will create a single, unified Indian market to make the economy stronger. Many of tax experts
are of the view point that GST will boost the Indian economy and more taxes will be collected
as barriers between States and integrating India through a uniform tax rate will be established.
Under GST, the taxation burden will be reduced to some extent by increasing the tax base and
minimizing exemptions.

Dr. R. Vasanthagopal, (2011) Studied “GST in India: A Big Leap in the Indirect Taxation
System”, and found that where the economy is free from interests of stakeholders and the good
effects and positive results are based on the system of national political commitment. GST is a
good step towards the growth of Indian economy as it is already proven as success in 140
countries and it has been first choice of Asia Pacific region.
.

Benedict, (2011) The author studies the law provisions dealing with financial services under
the Australian GST law with the intention to verify whether the provisions have been construed
correctly in light of the original purpose of the legislation and how the concerns identified may
be rectified.

Bikas, (2013) The authors have studied the VAT rate and the EU economy and also the link
between the VAT and macroeconomic indicators and their influence on the VAT rate. The
authors conclude that there is a positive relation between macroeconomic indicators like GDP,
per capita income and consumption, export, import etc and the VAT rate applicable.

Borec, (2013) The authors have discussed how assessees may comply with the VAT laws given
that the GST is a destination based tax. The authors mainly deal with B2C cases where the VAT
compliances would need to be done in the state where the customer is located. The authors have
discussed the difficulties in this compliance especially in the e commerce transactions.

Bovenberg, (1992) The author uses a general equilibrium model to assess different instruments
of indirect taxation in middle income countries. The author has specifically studied Thailand
and concluded giving various methods to increase the effectiveness of indirect taxes.

Brew, (2012) The authors have studied the relation between the mode of collection of VAT
revenues with the target of VAT collection for the municipality of Tarkwa – Nsuaem in West
Ghana. The authors have used questionnaires and interviews to collect the data and then
analysed it using the regression analysis and established that the method of VAT collection in
the said municipality was above average. The study is important because VAT is one of the
primary revenue generators for any Government.

Ciobanasu (2012) The authors trace the correlation between the types of taxes and their role in
the budgeted revenues and the fiscal development of Romania. Indirect tax by its very nature is
easier to govern, is neutral to status of tax payer, and increases revenue but leads to inflation.
On the other hand direct taxes depend on the tax payer and are difficult to govern. Further,
indirect tax helps the government to an extent to direct consumption of the public. The authors
conclude that both the taxes are important for overall growth of the economy.
.
Cnossen, (1992) VAT is operative in a number of countries and primarily in countries where
federal government is not in existence. The author has studied the various VAT systems
existing in the world and tried to arrive at an appropriate VAT for Central and East Europe
countries. The author has laid down various requirements to ensure that the said VAT is
completely effective like it should be destination based, the input credit mechanism should be
seamless, the law should be easy to understand, cost of conformity should be low etc.

Crossley, (2009) In 2009, the United Kingdom Government decided to reduce the VAT rate by
a marginal amount in order to boost the consumer spending. The authors have studied the said
relation in his paper and concluded that if the VAT rate is reduced, the spending by general
consumers increases resulting in overall buoyancy in the economy.

Emmanuel, (2013) The author has examined the link between VAT, the increase in VAT rates
and the economic growth and tax revenue in Nigeria. For this study the author has set out 2
Null hypothesis which are post the research accepted. The author concludes that given the
strong relation between the above, the Government and authorities should actively educate the
public on the benefits of VAT so that they accept changes in VAT rates more easily.

Eugen, (2011) The authors have examined the various methods adopted by assessees to evade
VAT especially in intra country transactions in Romania. The authors have also recommended
the documentation and returns which could be relied upon by both the authorities and the
assessees to ensure that there is no tax evasion.

Eva, (2008) The author in his paper has examined the cost of complying with the indirect tax
laws in the Slovak Republic by doing research of small, medium and large businesses through a
questionnaire and concludes that businesses especially the small ones are not able to and do not
make efforts to quantify the cost of compliance which is quite high due to the complex laws.

Fathi, (2012) The authors have explored the connection between the rate of VAT and the
evasion of VAT by the public using varied experimental methods. They conclude that there is
no connection between the two because in many countries where the VAT rate is high the
compliance is also high and where it is low the evasion is high.

Firth, (2012) GST on financial services as always been a subject matter of great debate. There
is a problem in taxing financial services due to their intangible nature, the confusion around the
location of service provider and service recipient and the value of the service. The authors in
their paper are trying to address these issues specially for the country of Canada. In Canada,
there is an exemption for financial services, intermediary services in relation to financial
services etc. The authors in their paper have discussed the existing laws and suggested changes
to the existing laws for better efficiency in taxing financial services

Grigore, (2012) The authors study the chief features of VAT in the EU member states, the
differences in them and the changes in VAT laws required across EU member states in order to
assist intra EU trade and concludes that certain tax reforms are required to be undertaken by all
member EU states to ensure optimum efficiency of VAT as a fiscal tool.

Halakhandi, (2007) GST was supposed to be introduced in India way back in 2010. It has
been getting postponed due to various reasons major one being getting to a consensus between
the various states and the centre for compensation. The author in the paper has discussed the
existing laws in India for indirect taxes, the VAT laws in various states with their advantages
and disadvantages, the impact of the proposed GST, the compliances under the proposed GST
etc. The author has also used various numerical examples to demonstrate how GST is cost
effective.

Herekar, (2012) The Ministry of Finance had set up the Task Force with Mr. V. Kelkar as the
chairman of the Task Force. The main task of the Task Force was to evaluate the impact of the
proposed GST on the Indian economy. The author in the paper has studied the different parts of
GST and their impact on the common man, the business and the economy. The author has
concluded based on secondary data that if GST is introduced in India, it would have a positive
impact on the overall economy.
Huang, (2013) The authors examine the relation between the newly introduced GST in
Australia in 2000 and the mortgage costs between 1999 and 2001. The study concludes that
given that in Australia financial services industry is taxed on input taxation basis i.e. the output
mortgage service is not liable to GST and GST paid on input services to provide these mortgage
services are also not allowed. This extra cost of sunk input tax is passed in the form of
increased mortgage costs to customers making housing costly post introduction of GST in
Australia.

Ilaboya, (2012) The authors have studied the relation between indirect tax and economic
growth specifically in Nigeria and concluded that the relation is inverse and focus from indirect
tax should be shifted in Nigeria. This is also because the study reveals that there is a direct
relation between direct taxes and economic growth.

Keating, (2010) GST is operative in both Australia and New Zealand with anti
evasion/avoidance provisions under the GST law framed in both the countries. The author
compares the said anti evasion provisions in both countries, examines their effectiveness and
also whether tax payers have successfully evaded the law. The author concludes that if the law
interpretations based on the New Zealand Court decisions are referred to, it implies that
assessees will find it difficult to evade the law.

Keho, (2011) The author examines the connection between the tax rates and economic growth
using the ARDL bounds testing approach, for Cote d’Ivoire in the period 1960 to 2006. The
author has concluded that there is a strong link between taxes and economic growth especially
direct tax and growth, and he further concludes that switching from direct to indirect taxes has a
positive impact on the economic growth and general economy.

Mansor, (2013) GST has always been considered as a tool in the hands of any Government to
increase revenue. The Malaysian Government introduced the said tax in Malaysia in order to
reduce its budget deficit. The authors in the paper have discussed the readiness of the Malaysian
economy in adopting the said newly introduced GST along with the reactions of various
sections of the society.

Mansor, (2012) The authors have in the paper studied the link between strategic planning and
decision making process and competence of the tax administration in indirect taxes in Malaysia.
For this the author has compared the planning system in Malaysia with other economies and
concluded that in Malaysia the main problem is around deficiency of resources and will of
employees in the tax department.

Muntean, (2010) The EU consists of 17 states (27 unofficially) in the geographical area of
Europe who have adopted Euro as their common currency. The monetary policy of the EU is
administered by the European Central Bank. VAT is adopted by the individual states at
different rates. There is trade between the member states and of each individual state with non
EU states. The author has studied the various systems/measures adopted by the European
Commission to reduce the evasion of VAT applicable on imports/exports on goods and services
transacted within the EU and/or from outside EU states.

New Zealand Government, (2012) The author has traced the GST and import duties
applicable on the various imports into New Zealand. The paper discusses not only the goods on
which duty is payable but also whether further GST is payable on the same goods. The paper
also discusses the applicability of the taxes on the goods ordered and delivered through internet.
The paper also discusses various exemptions available like personal effects to the import
taxation.

Newton, (2011) VAT is applied on financial services transactions in the EU region. The authors
in their paper have discussed the applicability of VAT on financial services transactions, and
the cost of VAT to financial services industry. The authors have first discussed the proposal to
introduce Financial Transactions Tax and Financial Activities Tax by IMF in the EU region and
then compared the same with the cost of VAT to the financial services industry.

Pena, (2010) In 2001, in Mexico, it was proposed to introduce a flat 15% VAT rate on certain
items like food etc. which are items of basic consumption, instead of subsidizing the masses.
The author using the General Equilibrium Model studies the impact of the proposed
introduction of flat VAT rate and concludes that it is better to introduce such flat rate on basic
items which will generate revenue, and a part of this revenue can be used for the betterment of
masses than subsidizing the masses.

Ramona, (2012) The author has explored the relation between a value added tax on financial
services sector and the revenue generated and regulatory impact of the same especially with
reference to Romania. The author also studies the difficulties in taxing the financial sector
which is intangible.

Saeed, (2012) VAT as a tax to generate revenue and improve returns ratio was introduced in
different SAARC countries at different points of time. The authors have in the paper examined
the effectiveness of VAT as a tax to generate tax revenue and to improve the tax to GDP ratio
in SAARC countries. The authors for this purpose have The authors have concluded that VAT
is effective on both counts.

Stroe, (2011) The author has in the paper analyzed the various VAT systems existing and
operative in various parts of the world. The author further states that VAT majorly impacts the
economies of every country specially developing countries, and hence is very important. The
author then has compared the VAT tax system in USA and Europe and has concluded that VAT
as a tax is a burden for the economy. The author further based on this study tries to create an
ideal model of indirect taxes which could be adopted by countries.
Sundar, (2013) Value Added Tax is a tax which is all-pervading in goods and services and thus
affects every individual and business. The authors have studied the significance of VAT in the
context of the Indian economy and effect of VAT on the common man and industry in India
using secondary data made available by the Government. One of the recommendations of the
authors is to achieve more transparency in VAT compliances in India.

Tamizi, (2013) The authors examine the advantages and complexities of the VAT system
implemented in Iran during 2009- 2012. The study is split into two parts; the first examines the
difficulties in implementing VAT in Iran given the political scenario there. The second part
examines the benefits/disadvantages of the said implemented VAT system. The study is
conducted using T Value on data collected using a questionnaire.

Tripathi, (2011) The authors have discussed the concerns faced in India post the
implementation of VAT, the learning we could take from it, the effects on the social order in
India. All this is discussed in the background of the impending GST in India. The authors have
discussed the various issues around VAT, how it impacts the different sections of society. VAT
is present in all goods produced and GST would be present in all goods and services produced
making it a tax payable by all sections of the society. Thus it is a tax which though good to
increase the revenue impacts even the poorer sections of society.

Watrin, (2008) The authors have examined the relation between the level of compliance by
people especially in terms of payment of tax, with the type of tax i.e. direct and indirect taxes.
The authors conclude that based on studies carried out that individuals react more to changes in
detection methods under indirect taxes than direct taxes but are more compliant with direct
taxes than indirect taxes. The authors suggest that this behavior pattern of individuals should be
borne in mind by policy makers who make the tax policies.

Williams, (1996) The author has studied contemporary indirect tax systems in the world and
compared them with the indirect tax or VAT system in Republic of Fiscally. The author has
discussed the various advantages and disadvantages of the various VAT/GST systems in the
world in light of adopting the best practice in the Republic of Fiscally. The author also
discusses whether the creation of an International body on the lines of United Nations would
help make VAT a seamless tax across countries.

Zyl, (2011) The author deals with whether people having illegal businesses need to register
under VAT and whether the standard VAT rate would apply for their business. He concludes
that even illegal transactions should be liable to VAT so that they do not benefit due to lower
costs on account of no VAT. The author has analyzed the applicability of indirect taxes on
illegal transactions from various perspectives.

 Empowered Committee of Finance Ministers (2009) introduced their First Discussion

Paper on Goods and Services Tax in India which analyzed the structure and loopholes
if any in GST.

 Indirect Taxes Committee of Institute of Chartered Accountants of India (ICAI) (2015)

submitted a PPT naming Goods and Service Tax (GST) which stated in brief details of
the GST and its positive impact on economy and various stakeholders

 The Institute of Companies Secretaries of India (ICSI) (2015) published a Reference on

Goods and Service Tax to provide the information on the concept of GST in details.
  Sijbren (2013): Sijbren and others suggested, A modern goods and services to alleviate
the problems of India’s current indirect tax system.

Current Issues

The post-GST era has so far witnessed exporter numerous strikes, error and mismatch in returns
filed as well as the World Bank calling GST a very complex Taxation system. But, several
months ago, on July 1st, 2017, India as a nation had taken a giant leap towards a new order in its
Taxation History. GST was touted as India’s second tryst with destiny. However, more than 8
months down the line and after multiple policy updates, it seems that not everything has unfolded
as planned. This was, however, a possibility and the Government was prepared to incur short-
term losses in exchange for large future gains. GST in India not only boasts of one of the highest
tax rates but also consists of the largest number of tax slabs. Add to this the growing compliance
burdens, technical as well as compliance issues.
Among Asian countries, India has the highest standard GST rate. On the planet, it is second only
to Chile. The non-zero rated products ( 5, 12, 18 and 28 percent) combined with the remaining
zero-rated products and the 3 percent GST rated Gold are a sharp deviation from the one Nation
one GST Tax dream. Petroleum products, power, and real estate are still outside the GST ambit.
GST is still in its teething period and has entered its second fiscal year on April 1st. In this blog,
we try to throw light on the issues that currently plague the newly levied GST taxation system in
India as well as the taxpayer’s grievances

Technical GST Issues for Indian Taxpayers

Goods and services tax is currently going under tremendous pressure to go through some of the
burning and solution seeking problems of the year-old implemented indirect tax regime. The
finance ministry, as well as the GST council, needs to take care of the GST return filing issues
and forms related consequences which have to be faced by the taxpayers alike.
Let us discuss and find those priority topics of GST on which the GST council and the finance
ministry must work immediately

September 2018 Return Due Dates

It might be wrong to the taxpayers as they cannot claim the ITC before matching the invoice,
for the date being shortened of October 20th, 2018. Also, the credit of ITC claimed or
unclaimed is to be claimed or reversed according to the filing dates, sot eh dates must be
extended till 31st December for error-free filing.

Purchase Reporting in Composition Scheme

 Composition scheme dealers are required to give the details of purchase done in the filing
return date of GSTR 4 for the September 2018 but the dealers are not allowed to claim the
ITC credit so it is complex to manage the detailed record.

Annual GSTR Form Utility

There is no utility for the GSTR 9 annual return form which is due for 31st December 2018 and
with no solutions such as Invoice Addition, modification, etc. it is hard for the taxpayers to file
the return. One must note that the due date also coincides with the MVAT Audit Report due
date i.,e Jan 2019, which may need the due date to be extended.

Credit Reversal

The credit claimed on the purchases in which the payment has not been given to the suppliers
within the 180 days must be reversed. And to keep note of this things may indulge an extra
burden on the organization.

No Option for Extra Tax Paid and Refund Challan

If in case the taxpayer had paid excess taxes there is no option to correct the paid challan and
problems coming in the claim of refund.

GSTR 2A Availability

As the annual GSTR 2A cant be downloaded and has to be filed monthly, this has created
difficulties to match the returns with the books of accounts with 2A returns.

Agricultural Commission Agent & Joint Development Agreement Agreement

Issues
The tax liability has to be paid on the commission according to the taxable goods but when the
goods are rated NIL and the commission is not taxable therefore making it an issue for builders
and landlord taxation liability.

GSTR 3B Issues

Under this return type, there is no modification or amendment facility available and in case the
changes are to be made then there is a lengthy one month period time for the amendment
making it interest liability issue.
GSTR 1 Issues

It is worthy to note that the credit note/debit note or B2C sales made cannot be modified again in
the GSTR 1 making it a serious task while filing.

Issues in TRAN 1 form

There will be issues in the Trans 1 notice in Form 603 as it is now sent by the department to
everyone making it a trouble for the real taxpayers. As the notice requires all the previous
records to be available making it a tiresome issue for the taxpayer to provide the details again.

Some Other Important GST Issues

Some Pertinent Issues for Small Traders

GST implies additional operational costs for Small businesses. In a developing country like
ours, not all SMEs will be able to afford the cost of computers and accountants required to
implement GST (make bills and file tax returns). 28% GST rate on some products like
plywood, automobile parts, and electronic items forces potential buyers to opt for unregistered
dealers.
It is too difficult to assign MRP to handmade products like local shoes, Banarasi Sarees, etc.
Most small artisans are illiterate and therefore unable to write MRP on their products and/or do
any paperwork. Dealers are confused how to rates of such products.
Small businesses that have a small turnover and need not pay GST face trust issues. Buyers
demand bills from even those sellers who are exempted from GST. Without proof of certificate
of GST exemption, small shop owners find themselves stranded and immobile.

Issues for E-commerce Companies

E-commerce giants like Flipkart, Amazon also have not escaped the aftereffects of GST rollout.
TCS has to be collected by the e-commerce companies from the sellers at the time of payment.
The capital blockage will hamper day to day operational cost due to TCS provisions. The GST
council has fixed the 1 percent TCS over the deduction made while payment to the sellers.
E-way Bill and Interstate Trade

E-way bill had the potential to liberate interstate trade from all sorts of obstructions. The
excitement could be felt among the slightly nervous business community. But on the day when
the Finance Budget 2018 was being introduced to the Lower House, the lethargic GST network
turned to be a major spoilsport and February 1 turned out to be a watershed moment for the
upbeat government. The inability of the network to handle large volume e-way bill requests was
at the forefront of public jokes and disappointment. Immediately e-way bill was rolled back. In
the aftermath of the failure, goods carrying vehicles were left stranded and highways enjoyed
pin drop silence for a few hours. The crumbling GST network has been in the spotlight from the
very beginning and it continues to garner unwanted criticism and public grievances.

The GST Council need to find permanent scalable solutions rather than interim ones like
the GSTR-3B. The sloppy GSTN Network raises serious concerns over the Government’s claim
of a digital powered economy. GSTN is managed by Infosys, a premier IT services company.
The e-way bill network was managed by the venerated NIC.

The GST E-way bill is a major concern for most of the companies which are regularly into the
business of transporting goods and sending material over the locations, the transport company is
also trying to figure out how it would deal with the GST E-way bill provisions. As soon the bill
expires the transport company or the trucker himself has to generate the GST E-way bill on his
own. The GST Council must have taken all these concerns into strict consideration and
ensured easy and simple e-way bill generation procedure which has been effective from April 1,
2018.

Evaders Bonanza

The consistent policy rollbacks and amendments, powered by the glitch GSTN Network, have
enabled massive tax evasion. The benevolent composition scheme, as well as windows for
filing quarterly returns, raise concerns about the intention and execution prowess of the
government at the centre. The increased pool of registered taxpayers has had little but no impact
on Revenue generation. Only 70% of taxpayers file returns regularly. A major headache is,
however, the mismatch between initial and final returns filed by taxpayers. There is an
estimated mismatch of Rs 34,000 core tax liabilities reported in GSTR-1 and GSTR-3B. The
present GST structure has no mechanism for checking discrepancies found between GST
Returns for July-Dec and Final Returns. About 84 % of the taxpayers were unable to correctly
report revenue statements. The discrepancies and e-way bill failure demand that the GST
Council now needs to take rigorous measures to tackle the menace of tax evasion through
under-invoicing.

GST and Fiscal Fractures

The GST revenue shortfall promises large dents in the Centre and states’ fiscal applecart. The
Center and State budgets will be pegged down by the gap in Tax revenue. The common man
will find himself on the receiving end if such gap in revenue continues. To bring states on the
same wavelength and approve GST, the government had offered state compensations to the
tune of Rs 60,000 crore for July to March in FY18. In order to stay true to its pre-GST
promises, it is estimated the Central Government will have to make payment to the tune of Rs
90,000 crore further in FY19.
Understandably, the Budget 2018 unleashed record taxation of over Rs 90,000 crore in the form
of capital gains tax, increase in customs duty, cess and surcharge. The fall in revenue has
further made states apprehensive about bringing petroleum products and real estate under the
GST ambit.

Adapting to IT Ecosystem is Hard

Indian economy is majorly driven by small business units i.e SMEs. It will be unfair to expect
small-scale business firms to make the transition to an online IT platform and expect no errors
in return filing. It is an uphill task for the majority of our working population which has little
hands-on experience with IT solutions. The cost of SRP deployment is a major concern for
micro-small-medium scale enterprises.
 Chapter-4

DATA ANAYSIS

The study involves collection of both primary and secondary data. Primary data is being
collected by using the interview schedule and structured questionnaire. The questionnaire before
actual use is put through pilot testing. The difficulties identified in pilot testing are removed
before finalizing the final questionnaire. This questionnaire will be distributed to the selected
sample.

Secondary data is collected through existing legislations, proposed legislations on GST floated in
public domain, published/unpublished reports on the GST impact in India and globally, various
websites on GST and financial services,

Primary Data

Primary data are the data which are accumulated from the field under the control and
superintendence of an investigator. Primary data means original data that have been collected
specially for the purpose in mind. This type of data is generally a fresh and collected for the first
time. It is useful for current studies as well as for future studies. The collection data tool that has
been chosen in this study is questionnaire. Most of the previous researchers use the questionnaire
as their data collection tool in the survey. The collections of answer will gain through the
questionnaire that had been answered by the developer, consultant and also contractor which
means construction industry.

The questionnaire was administered to a random company through Google form and email to the
company. The used of questionnaire in this study does not meddle with the daily routine at the
respondent’s since it took them only several minutes to answer the questionnaire. A
questionnaire has a list of enquiries whether in an open ended or close ended for which
respondents will give an answer according to their cognition. For this survey, the questionnaire is
using the closed-ended question format, in which case the respondent is asked to select an
answer from among a list provided and fill in the answer on the response scale provided.

Secondary Data
 Secondary data are the data that have been already collected by and readily available from other
sources. Such data are cheaper and more quickly obtainable than the primary data and also may
be available when primary data cannot be obtained at all. The researchers will find the secondary
data when it is not possible to collect the primary data. We can acquire secondary data based on
the research that can be gained after go through certain sources such as indicted sources that have
been printed or not. Basically, secondary data provide sthe research to understand more about the
topic and give clearer perspective and view on the current study.

Table: 1 Awareness of implementation of GST

Basis Number of respondents % of Respondent

Aware 15 60%
Highly aware 5 20%
Somewhat aware 5 20%
Not known 0 0%
Total 25 100%

Source: Field Survey

Chart: 1

INTERPRETATION:
The above chart shows that awareness of implementation of GST. Out of 25
respondents, 60% of the people are aware about GST. 20% of people are
highly aware.
20% of the people are somewhat aware about the GST. So all the people are
aware about the GST and it is necessary also.
Chart: 2 Helpfulness of GST

INTERPRETATION:

The above chart shows that comparison between GST and earlier tax system. Out of 25
respondents, 36% of the people believes that it is partially effective than earlier tax system.
32% of the people believes that it is effective, 20% of the people believes that GST is more
effective than earlier tax system and 12% of the people believe that GST is not at all effective
compare to earlier tax system.
Chart: 3 Effects of GST

INTERPRETATION:
The above chart shows that, effects of GST on different areas of a nation. Out of 25
respondents, 60% of the respondents are hope that it mainly effects on industries, 40% of the
respondents hope that it effects on common man. And there is no effect of GST on farmers.

Chart: 4 GST affects on revenue of a nation

INTERPRETATION:

The above chart shows that effect of GST on revenue of a nation. Out of 25 respondents,48%
of respondents are believes that GST is affects the revenue of a nation either negatively or
positively, 12% of the respondents are believes that there is no effect of GST on revenue of a
nation and 40% of the respondents believe that GST partially effects on revenue of a nation.

Chart: 5 GST price of necessary goods.

INTERPRETATION:

The chart shows that, relationship between GST and price of necessary goods. 68% of the
people Believes that GST moderately affects on the price of necessary goods. 20% of people
believes that price of the goods increases because of GST, and 12% of the people believes that
price of the goods will be decreases because of implementation of GST. And nobody believes
that the price of the necessary goods remains constant because of GST.
Table: 6 GST and Export-Import of a nation

INTERPRETATION:

The above chart shows that, how GST affects on export and import of a nation. Out of 25
respondents, 72% of the respondents believes that export will be increases because of
increasing the production, 16% of the people believes that import increases, 12% of the people
believe that export will be decreases. And nobody believes that Import will be decreases.

Chart: 7 GST and earlier tax system.

INTERPRETATION:
The above chart shows that comparison between GST and earlier tax system. Out of 25
respondents, 36% of the people believes that it is partially effective than earlier tax system.
32% of the people believes that it is effective, 20% of the people believes that GST is more
effective than earlier tax system and 12% of the people believe that GST is not at all effective
compare to earlier tax system.

Chapter-5
 FINDINGS AND RECOMMENDATIONS

KEY FINDINGS

1. One significant design feature of a GST is that many entities registered for GST purposes
will either occasionally, and in many cases regularly, claim refunds of GST.

2. It is crucial that the Tax Office has a robust system in place to process GST refunds
promptly. There are three main reasons for this. Firstly, GST refunds generally reimburse
GST registered entities for a tax which they should not be bearing. Secondly, any delay in
paying those refunds will cause cash flow issues for these entities. Thirdly, entities that
are entitled to GST refunds may face a competitive disadvantage if those refunds are not
paid promptly.

3. It is also crucial that, where the Tax Office is not able to make a prompt payment of a
refund, it has systems in place to notify affected taxpayers that their refund has been
delayed.

4. In 2003-04, some 1.89 million GST returns (known as Business Activity Statements
(BASs)) were lodged which claimed a total refund of about $22 billion. Most of these
refunds are automatically computer-processed, unless they are identified for manual
checking.

5. The Tax Office states that, during 2003-04, it processed 94.4 per cent of all activity
statement refunds within 14 days of all relevant information being provided. The Tax
Office’s performance compares favourably with other OECD countries

6. Activity statement refunds are not just made up of GST refunds. They also consist of
refunds of other types of tax, including refunds of income tax to entities that are not
registered for GST. The Tax Office does not have management information systems
which state how many activity statement refunds that include GST refunds are processed
within 14 days of lodgment, or within 14 days of all information being provided.

7. The Tax Office has information which shows that, during 2003-04, 4.3 per cent of all
BAS refunds were stopped for manual checking. These stopped refunds amounted to
approximately $20 billion in dollar value and represent about 90 per cent of the total
value of BAS refunds claimed.

8. The Tax Office has systematically stopped these 4.3 per cent of BAS refunds to
determine, in a manual intervention, whether they should be further checked or otherwise
reviewed prior to release of the refund.
9. Refunds to Government organisations and large ongoing businesses have been delayed
for manual checking under these procedures.

10. After checking, most refunds are ultimately paid by the Tax Office. In some cases the
amount of the refund is reduced. If paid after 14 days of all relevant information being
provided, the Tax Office is required to pay delayed refund interest to the taxpayer.

11. The processes involved in checking stopped refunds have not resulted in the
identification of a significant number of GST refund fraud cases.

12. As well, the Tax Office has indicated that, for large business taxpayers, during 2003-04
only $14.5 million in additional tax was recovered as a result of stopping and checking
$7.35 billion of GST refunds. For Government and community sector taxpayers, only
$0.1 million in additional tax was recovered after stopping $7.16 billion of GST refunds.
For small business taxpayers, the Tax Office indicated that $178.5 million of GST
adjustments was achieved from pre-issue reviews of around $5 billion of GST refunds. A
further $82 million of GST adjustments was recovered from small business taxpayers as a
result of more detailed audit activity on refunds stopped for checking.

13. In all, some $275 million (approximately) has been recovered from pre-issue reviews of
$20 billion of GST refunds. The additional tax recovered as a result of the practice of
stopping and checking refunds was 1 per cent of all stopped refunds.

14. The majority of refunds stopped for manual checking are subsequently released and are
refunded within 14 days of lodgment
15. .
16. The Tax Office does not have management information to show the time it takes to
process all GST refunds from the date of lodgment to the time of payment. It also has no
information to show the time it has taken to process particular kinds of refunds (such as
those which have been stopped for manual checking).

17. The Tax Office’s management information systems currently only operate to monitor the
length of time a GST refund spends within particular areas of the Tax Office. This
monitoring starts from the time the refund has reached the particular area. However, there
is no monitoring of the time that a GST refund spends in the area of the Tax Office which
processes GST refunds after they have been cleared for payment.

18. The Tax Office states that BAS refunds not issued within 14 days are issued within a
median time of approximately 30 days, where the refund is not subject to a detailed field
audit.

19. The Tax Office has had a program which is chiefly aimed at stopping for manual
checking all large refunds and refunds claimed by businesses and other entities lodging a
BAS for the first time. Although the Tax Office has developed and is implementing
improvements to this program, the Inspector-General considers that further improvements
 are required.

20. Overseas experience highlights that in the early stages of a GST there will be a
propensity for some persons to fraudulently claim GST refunds.

21. Certainty in receiving refunds in a reasonable time is often critical for business and other
entities in funding their working capital needs to run their enterprise. The Inspector-
General believes that the Tax Office needs to better understand the risk profile associated
with specific GST refunds and to move to a post-issue review of refunds where
appropriate. The Inspector-General does not believe that the adjustments currently being
recovered by the Tax Office justify current delays in holding up of the dollar value of
refunds.

22. The Tax Office has advised that it agrees with the general thrust of the Inspector-
General’s approach and is currently changing procedures in certain of its business line
areas. Through these changes it is seeking to better respond to the risk profile of GST
refunds. These changes include changes to improve the processes under which it advises
taxpayers of the status of their GST refunds, including cases where the refunds may be
offset against other tax debts.

KEY RECOMMENDATIONS

1. The following key recommendations are made to address unresolved problems

identified by this report:

2. The Inspector-General recommends that the Tax Office improve its systems to better
match the risk issues associated with paying GST refunds. These systems need to
achieve a better balance between paying GST refunds in a timely manner and
preventing fraudulent or incorrect refunds from issuing.

3. The Inspector-General recommends that the Tax Office establish ‘whole of office’
systems which measure the total elapsed time for the payment of GST refunds.

Chapter-6
 CONCLUSIONS AND SUGGESTIONS

CONCLUSIONS

India has many taxes in place like excise, sales tax, service tax, entertainment tax, VAT etc.
These taxes are divided at Central as well as state level. These bundle amount of taxes are
difficult to manage and sometimes causes inconvenience to businesses and customers. GST aims
to solve it with single indirect taxation system.

GST has been the buzzword in the country for the last few days and finally the bill has passed,
leading to the realization of “One country, one tax”, at least on papers for now.

Goods and Services Tax Network (GSTN) is a nonprofit organization formed to create a
platform for all the concerned parties i.e. stakeholders, government, taxpayers to collaborate on a
single portal. The portal will be accessible to the central government which will track down
every transaction on its end while the taxpayers will be having a vast service to return file their
taxes and maintain the details. The IT network will be developed by private firms which are
being in tie up with the central government and will be having stakes accordingly.

While overall the industry is looking forward to the introduction of GST, more will be clear only
when the actual tax rate under the new Bill has been decided. The exclusion of petrol and diesel
from the GST umbrella may be another concern as otherwise prices would have come down.
However, as states have correctly pointed out, petroleum related products (and alcohol) as the
biggest source of revenue for state governments, maybe this is for the better.

Nevertheless, automobile industry is looking forward to introduction of GST. However, there are
quite a few concerns in the draft Model GST 22 law, including some of the key aspects
highlighted above, which need to be addressed. Restrictions and conditions on eligibility to tax
credits on assets used for business is also a major area of concern, and the credit mechanism
should be more liberal.

Proper GST administration and dispute resolution (more importantly on inter-state transactions)
is very critical apart from the competitive GST rate. So, GST will act as boon for manufacturing
industry.

Implementation of GST is one of the best decision taken by the Indian government. For the same
reason, July 1 was celebrated as Financial Independence day in India when all the Members of
Parliament attended the function in Parliament House. The transition to the GST regime which is
accepted by 159 countries would not be easy. Confusions and complexities were expected and
will happen. India, at some point, had to comply with such regime. Though the structure might
not be a perfect one but once in place, such a tax structure will make India a better economy
favorable for foreign investments. Until now India was a union of 29 small tax economies and 7
union territories with different levies unique to each state. It is a much accepted and appreciated
regime because it does away with multiple tax rates by Centre and States. And if you are doing
any kind of business then you should register for GST as it is not only going to help Indian
government but will help you also to track your business weekly as in GST you have to make
your business activity statement each week.

Suggestions

 Exempt Supply must be excluded from the Aggregate Turnover for taking registration in
the GST – Exempt supplies must not form part of ‘aggregate turnover’ to determine
threshold limit for taking registration in GST. This will enable a small taxpayer having
majorly exempt supplies with only a small portion of taxable supplies to remain out of
the net of GST. In other words, it will make the threshold limit of 20 Lakhs more
significant for SME/MSME sector.

 Removing subjectivity and inclusivity in definition of ‘supply’ – The definition of term

“Supply” starts with “Supply includes” is too wider a definition and with subjectivity,
followed by inclusive definition. As this is taxable event in GST, it must be defined
concretely so as to avoid any disputes & litigation, as we have past history for the term
“Manufacture’ for the chargeability of Central Excise Duty.

 Clarification as to separate consideration – It is suggested that suitable clarification be

provided that if separate considerations are charged for various goods and services
supplied in conjunction with each other in ordinary course of business, the same shall
also amount to composite supply.

 Suitable clarification be issued to provide certainty for determining whether a bundle of

supply is a composite supply and also to determine principal supply therein.

 Extending benefit of composition scheme to other service providers  – Like

manufacturers, traders and restaurant service providers, benefit of composition scheme
must be extended to other service providers also.

 Providing some ceiling for inter-state outward supplies of goods by a composition

supplier – Presently, a person opting for composition scheme is not allowed to make any
inter-state outward supply of goods. This is creating a bottle neck for small sector. It is
suggested here also that certain percentage of turnover may be allowed for inter-state
supply of goods for the benefit of SME/MSME sector in true sense.

 No hefty penalties – Penalties in respect of wrongly opted composition scheme,

cancellation of registration, etc., must be limited to recovery of differential taxes only
without levying hefty penalties / interest considering that the tax payer under a
composition scheme would be a small player.
 Reverse Charge under Section 9(4) of the CGST Act to be abandoned completely –
Operation of Section 9(4) in its present form, if notified for a particular class of persons is
 not conducive as the registered recipient requires to raise self-invoice, capturing
individual HSN/ SAC codes for procurement of taxable goods or services, which is
operationally not easing business and should be done away completely.

 Clarification to the effect that Compulsory Registration for ‘agents’ is restricted to only
consignment agents – Though definition of ‘agent’ under Section 2(5) as well as clause
(vii) of Section 24 covers only those persons who supply taxable goods on behalf of
another i.e. consignment agents, but debate is going on as to whether the commission
agents or brokers who merely facilitate a transaction between two parties like procuring
orders etc. are also debarred from the benefit of threshold limits of registration i.e. Rs. 20
Lac. It is suggested to issue a suitable clarification in this regard.

 Amending Section 129 of the CGST Act to restrict levying of penalties only in cases
where there is intent to evade taxes – Section 129 of the CGST Act must be amended to
restrict levying of penalties only in cases where there is intent to evade taxes. Further,
suitable provision must be incorporated which allows releasing of goods without levying
penalty once the proof of payment of appropriate tax is shown or a mere technical breach
is shown.

 Making E-Way Bill compliance easier for SME/MSME – E-Way Bill compliance must
be made little easy for small taxpayers upto specified turnover by prescribing simple
form with lesser details. Alternatively, threshold of consignment value exceeding INR
50,000/- requiring generating of E-Way Bill may be increased to INR 2 Lakh per
consignment basis for small taxpayers.

 System of uniformity and synchronization to be adhered for brining simplicity and ease
of business.

 It is suggested that an alternative way of reporting rate-wise supplies be established in

new formats of returns to give relief to small traders who are otherwise not required to
mention the digits of HSN codes in a tax invoice issued by them.

 It is suggested that both the processes being interlinked with each other, should be made
quarterly for SME/MSME sector instead of following two different systems for payment
and returns filing.

 Maximum ceiling should be 10 crores – Under Excise and Service tax, pre-deposit @
7.5% of tax in dispute at first level and 2.5% at second level was applicable subject to
maximum of Rs. 10 Crores. Keeping such high pre-deposit amount of 10%/20% with
maximum ceiling as high as Rs. 25 crores/ 50 crores will cause undue hardship on
innocent assesses having genuine case and not easing business for SME/ MSME Sectors.

It is suggested that, pre-deposit amount under GST also should be 7.5% at first level of appeal
and 2.5% at second level, totalling together 10% of disputed tax amount subject to maximum of
Rs. 10 Crores
 IGST credit to be restricted only on import of raw materials – Manufacturers of India
must be boosted in comparison to their position with traders of imported finished goods.
IGST credit on imports should be restricted only to the manufacturer of imported raw
materials. Import of Finished goods must not be allowed par benefit of credit of IGST to
the trader of imported finished goods. This will make the position of manufacturers wiser
and encouraging as compared to importers. This will boost Make in India and promote
domestic manufacturers.

 Considering the rigorous procedure involved in Advance Ruling provisions, filing of

application on behalf of association representing its members in a State may be permitted.
This will benefit small taxpayers not being able to adopt this route for seeking certainty
of their GST issues. Such application can be accompanied with list of all the members
with their GSTIN on whom such ruling shall be applicable..

 Facility on GSTN portal should be enabled to allow monthly  and/ or quarterly refund –
As of now Form RFD – 01A allows only monthly claim of refunds. Thus, proper GSTN
functionality must be ensured for proper execution of proposed change.

 Removing anomaly of no refund on unutilized ITC on capital goods as against Rebate

Mechanism of export made on payment of IGST  – The CGST Rules do not allow refund
of ITC on capital goods when zero-rated supplies are made against LUT without payment
of IGST, but in case of supplies made on payment of IGST, refund of ITC on capital
goods is allowed. It is suggested that such anomaly must be removed for creating par
situations for both rebate and refund mechanisms.

 Non-GST supply Vs. Non-taxable supply – Form GSTR-3B has used the term Non-GST
supply which is nowhere defined in GST law. GST law only discussed the term ‘non-
taxable supply’ to mean a supply of goods or services or both which is not leviable to tax
under GST Act [Section 2(78) of the CGST Act]. Like, supply of five specified
petroleum products and alcoholic liquor for human consumption may be termed as non-
taxable supply. Then, what constitutes non-GST supply? Whether Schedule III items are
being taken as non-GST supply? Clarity in this regard is required.

 Clarification on meaning of ‘non-taxable supply’ – A concrete list of activities

constituting non-taxable supplies in GST be provided to avoid any confusion as to its
inclusion in aggregate turnover and reversal of common credit.

 Two crores limit must be computed per registration wise – Anomaly of word ‘turnover’
in Section 35(5) viz-a-viz word ‘aggregate turnover’ in Rule 80(3) be removed. Further,
clarity must be provided that two crores limit for GST audit shall be determined per State
wise turnover rather than taking aggregate turnover on PAN India basis of an assessee.
Considering aggregate turnover of an assessee will create a situation where one unit of
such assessee having only Rs. 1,00,000 (assumed) turnover shall be required to conduct
GST Audit just because aggregate of its all units are crossing two crore limit.
BIBLIOGRAPHY
Websites

 https://www.gst.gov.in/

 https://cbec-gst.gov.in/

 http://www.gstn.org/

 http://www.gstindia.com/types-of-invoices-in-gst/

 http://www.gstindiaonline.com/

 https://www.gstindiaonline.com/

 http://www.gstindia.com/about/

 http://www.customs.gov/

 http://www.legalraasta.com/

 http://www.kalmanagement,com/

 http://www.slideshare.net./

 https://www.relakhs.com/

 https://www.reachaccountant.com/

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