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Goods and Services Tax
Goods and Services Tax
DIRECT TAX
The person paying the tax to the Government directly bears the
incidence of the tax.
INDIRECT TAX
The person paying the tax to the Government collects the same from
the ultimate consumer. Thus, incidnece of the tax is shifted to the
other person.
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
Following are the major taxes being levied in the supply chain of services
by State/Central Government:
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
7. VAT rates and regulations differ from state to state. On the other
hand, GST brings in uniform tax system across all the states.
Here, the taxes would be divided between the Central and State
government.
7. No tax on tax.
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
GST benefits in India will assist the Government as well as the consumers in
the long run in creating a win-win situation for both. Some of the advantages of
GST in India are enlisted as follows:
Previously, the management of indirect taxes was a complicated task for the
Government. However, under the GST establishment, the integrated tax rate,
simple input of tax credit mechanism and a merged GST Network, where
information is available, and administration of resources are well-organised and
straightforward for the Government.
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
There are various benefits of GST in India as listed above. However, a tax
reform of such magnitude comes with its teething problems.
Disadvantages of GST :
• IT Infrastructure: since GST is an IT-driven law, it cannot be sure whether
all the states in India are currently equipped with infrastructure and workforce
availability to embrace this law. Only a few states have implemented this E-
Governance model. Even today some states use the manual VAT returns
system.
• Higher Tax Burden of SME’s: earlier the small and medium enterprises had
to pay excise duty only on a turnover that exceeded Rs. 1.5 crore every
financial year. However, under the GST administration, businesses whose
turnover exceeds Rs 40 lacs are liable to pay GST.
• Petroleum Products don’t fall under the GST Slab: petrol and petroleum
products have not been included in the scope of GST until now. States levy
their taxes on this sector. Tax credit for inputs will not be available to these
industries or those related industries.
GST in India was a sweeping reform and benefits of GST and has changed the
way businesses are conducted. Businesses are being included in the formal
economy through GST implementation. GST and its benefits have provided long
term returns for the Indian economy on a large scale which have been
welcomed as a new change by all the stakeholders.
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
Benefits of GST:
· Will prevent cascading of taxes as Input Tax Credit will be available across
goods and services at every stage of supply.
· More efficient neutralization of taxes especially for exports thereby making
our products more competitive in the international market and give boost to
Indian Exports.
· Improve the overall investment climate in the country which will naturally
benefit the development in the states.
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
GST is levied on all goods and services, except alcoholic liquor for human
consumption and petroleum crude, diesel, petrol, ATF and natural gas.
2. Dual GST
India has adopted a Dual GST model in view of the federal structure of the
country. Consequently, Centre and States simultaneously levy GST on taxable
supply of goods or services or both, which takes place within a State or Union
Territory. Thus, tax is imposed concurrently by the Centre and States, i.e.
Centre and States simultaneously tax goods and services. Now, the Centre also
has the power to tax intra-State sales & States are also empowered to tax
services. GST extends to whole of India including the State of Jammu and
Kashmir.
3. CGST/SGST/UTGST/IGST
4. LAGISLATIVE FRAMEWORK
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
6. Composition Scheme
7. Registration
8. Exemptions
Apart from providing relief to small-scale business, the law also contains provisions for
granting exemption from payment of tax on essential goods and/or services.
The inter-State supplier in the exporting State is allowed to set off the available
credit of IGST, CGST and SGST/UTGST (in that order) against the IGST payable
on inter-State supply made by him.
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
Following Central Indirect
Taxes and Levies would be
subsumed in GST:
Central Excise Duty Following State Indirect Taxes and
Additional Excise Duties Levies would be subsumed in GST:
The understanding of GST by regarding its provisions and its impact on their
business is still at emerging stage, and still many are findings the locations and
places they need to be registered in.
Provisions for anti-profiteering, as well as the now deferred e-way bill, which
tracks consignments across states, are unclear.
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)
GST - Basics…………………………………………………………………………………………………
Various businesses are not yet map the accounting software and IT systems in
concern with the new tax provisions, to create a invoices of GST , and abstract
required reports
Staff with perfect required skill with efficient GST knowledge and their training
subject are not easily available.
This has located that an Businesses will requires to file manifold returns, a
minimum of 37 in most cases for assesses, and this can increase multifold with
business models.
Conclusion
GST will allow India to better negotiate its terms in the international trade
forums.GST aimed at increasing the taxpayer base by bringing SMEs and the
unorganized sector under its compliance. This will make the Indian market
more stable than before and Indian companies can compete wit
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CA Sagar Thorat (M.com, FCA, DISA - ICAI,SET, NET)