“A STUDY ON AWARENESS AMONGST COMMERCE

GRADUATE STUDENTS ABOUT USE OF GOODS & SERVICE

TAX”
A Project submitted to
University of Mumbai for partial fulfillment of the degree of

Master in Commerce

Under the faculty of

Commerce Submitted
By

Mr. Sachin Vishwakarma

M.Com-II Accountancy SEM IV Roll No 75

Under the Guidance of

Prof. Jayesh Sakpal

Dhirajlal Thalakchand Sankalchand Shah

College of Commerce Kurar Village, Malad (E)
Mumbai 400097
University of Mumbai

(2020-2021)

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 DECLARATION BY LEARNER

I the undersigned MR. SACHIN VISHWAKARMA here by, declare that the work
embodied in this project work titled “A STUDY ON AWARENESS AMONGST
COMMERCE GRADUATE STUDENTS ABOUT USE OF GOODS & SERVICE
TAX” forms my own contribution to the research work carried out under the guidance
of PROF. JAYESH SAKPAL is a result of my own research work and has not been
has been submitted previously for any Degree or Diploma of any University.

Wherever reference has been made to previous work of others, it has been clearly
indicated as such and included in the bibliography.

I, hereby declare that all information of this document has been obtained and presented
in accordance with academic rules and ethical conduct.

Signature of Learner
SACHIN VISHWAKARMA

Certified by
PROF. JAYESH SAKPAL

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FOR CERTIFICATE

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 ACKNOWLEDGEMENTS

To list who all have helped me is difficult they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.

I would like to thank you my Principal Dr. Sussmita Daxini for providing the
necessary facilitates required for completion of this project.
I take this opportunity to thank our Coordinator Prof. Shraddha Chavan for her
moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Prof.
Jayesh Sakpal whose guidance and care made the project successful.

I would also like to thank you my College Library, for having provided various
reference books and magazines related to my project.

Lastly, I would like to thank you each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers who
supported me.

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SR. NO. PARTICULAR PAGE NO.
I. Declaration by Learner i.
II. Certificate ii.
III. Acknowledgement iii.
IV. Content iv.
V. List of Image and Graphs v.
VI. List of Table vi.
VII. List of Charts/ Graphs vii.
1. Introduction of process costing 1 - 30
1.1 Introduction 2
1.2 Definition 21
1.3 Features 22
1.4 Terms and Concept 25
1.5 Type of Process cost 28
1.6 History of Process cost 30
2. Review of Literature 31 – 35
2.1 Introduction 32
2.2 Theoretical Framework for present study 32

3. Research Methodology 36 – 37
3.1 Introduction 37
3.2 Objective of the study 37
3.3 Hypothesis 37
3.4 Research Design 37
3.5 Sample Technique 37
3.6 Data Collection 37
4. Data Analysis and Interpretation 38 - 60
4.1 Frequency Distribution of Respondent Profile 39
5. Finding, Conclusion and Recommendation 61 - 64
5.1 Findings 62
5.2 Conclusion 63
5.3 Recommendation 64
Bibliography/ References 65
Appendix 66 - 68

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List of Image and graphs
1.1 Vat Process 5
1.2 Value Addition 5
1.3 Central and State level procedure 12
1.4 Tax rate 17

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List of Table Page No.
Table 4.1 Age group wise classification. 39
Table 4.2 Gender group wise classification 40
Table 4.3 Occupation wise classification 41
Table 4.4 what is the full form GST. 42

Table 4.5 GST was introduced in India with effect from. 43

Table 4.6 what are the taxes levied on an Intra- State Supply. 44
Table 4.7 what is the maximum rate of CGST prescribed under CGST act
2017 45
Table 4.8 GST is a _________ based tax on consumption of goods and
services 46
Table 4.9 How many types of taxes will be in Indian GST 47
Table 4.10 the full form of HSN code in gst is 48
Table 4.11 the Concept of goods and services tax (GST) originated 49
Table 4.12 which of the following tax was abolished by GST 50
Table 4.13 which of the following tax rates is not applicable 51
Table 4.14 GST is levied wise classification 52
Table 4.15 who is the head of gst wise classification 53
Table 4.16 what does I in IGST stands for. 54
Table 4.17 constitution amendment act, 2016 for GST wise classification 55
Table 4.18 under GST value addition refers to wise classification. 56
Table 4.19 Goods and services is a _____ tax System wise classification. 57
Table 4.20 Goods and service tax is. 58
Table 4.21 tax collected at source at the of 2% is applicable wise
classification 59
Table 4.22 SGST is applicable wise classification 60

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List of Graphs/ Charts Page No.
Pie Chart 4.1 Age group wise classification. 39
Pie Chart 4.2 Gender group wise classification 40
Pie Chart 4.3 Occupation wise classification 41
Pie Chart 4.4 what is the full form GST. 42
Pie Chart 4.5 GST was introduced in India with effect from. 43
Pie Chart 4.6 what are the taxes levied on an Intra- State Supply. 44
Pie Chart 4.7 what is the maximum rate of CGST prescribed under CGST act
2017 45
Pie Chart 4.8 GST is a _________ based tax on consumption of goods and
services 46
Pie Chart 4.9 How many types of taxes will be in Indian GST 47
Pie Chart 4.10 The full form of HSN code in gst is 48
Pie Chart 4.11 the Concept of goods and services tax (GST) originated 49
Pie Chart 4.12 which of the following tax was abolished by GST 50
Pie Chart 4.13 which of the following tax rates is not applicable 51
Pie Chart 4.14 GST is levied wise classification 52
Pie Chart 4.15 who is the head of gst wise classification 53
Pie Chart 4.16 what does I in IGST stands for. 54
Pie Chart 4.17 constitution amendment act, 2016 for GST wise classification 55
Pie Chart 4.18 under GST value addition refers to wise classification 56
Pie Chart 4.19 Goods and services is a _____ tax System wise classification 57
Pie Chart 4.20 Goods and service tax is. 58
Pie Chart 4.21 Tax collected at source at the of 2% is applicable wise
classification 59
Pie Chart 4.22 SGST is applicable wise classification 60

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 CHAPTER- 1 INTRODUCTION
1.1 INTRODUCTION
1.2 DEFINITION
1.3 FEATURES
1.4 TERMS AND CONCEPT
1.5 TYPE OF PROCESS COSTING
1.6 HISTORY OF PROCESS COSTING

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1.1 INTRODUCTION

Goods and Services Tax (GST) is an indirect taxation in India merging most of the existing indirect
taxes into single system of taxation. It was introduced as The Constitution (One Hundred and First
Amendment) Act 2016, following the passage of Constitution 122nd Amendment Bill. The GST is
governed by GST Council and its Chairman is Union Finance Minister of India, Mr. Arun Jaitley.

What is GST?

‘G’ – Goods
‘S’ – Services
‘T’ – Tax

“Goods and Service Tax (GST) is a comprehensive tax levy on manufacture, sale and
consumption of goods and service at a national level under which no distinction is made between
goods and services for levying of tax. It will mostly substitute all indirect taxes levied on goods and
services by the Central and State governments in India.

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

The Goods and Services Tax (GST), implemented on July 1, 2017, is regarded as a major taxation
reform till date implemented in India since independence in 1947. GST was planned to be
implemented in April 2010, but was postponed due to political issues and conflicting interest of
stakeholders. The primary objective behind development of GST is to subsume all sorts of indirect
taxes in India like Central Excise Tax, VAT/Sales Tax, Service tax, etc. and implement one taxation
system in India. The GST based taxation system brings more transparency in taxation system and
increases GDP rate from 1% to 2% and reduces tax theft and corruption in country. The paper
highlighted the background of the taxation system, the GST concept along with significant working,
comparison of Indian GST taxation system rates with other world economies, and also presented in-
depth coverage regarding advantages to various sectors of the Indian economy after levising GST and
outlined some challenges of GST implementation.

GST is the most ambitious and remarkable indirect tax reform in India’s post-Independence history.
Its objective is to levy a single national uniform tax across India on all goods and services. GST has
replaced a number of Central and State taxes, made India more of a national integrated market, and
brought more producers into the tax net. By improving efficiency, it can add substantially to growth
as well as government finances. Implementing a new tax, encompassing both goods and services, by
the Centre and the States in a large and complex federal system, is perhaps unprecedented in modern
global tax history.

GST is a tax on goods and services with comprehensive and continuous chain of set-off benefits up
to the retailer level. It is essentially a tax only on value addition at each stage, and a supplier at each
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stage is permitted to set-off, through a tax credit mechanism, the GST paid on the purchase of goods
and services. Ultimately, the burden of GST is borne by the end-user (i.e. final consumer) of the
commodity/service.

With the introduction of GST, a continuous chain of set-off from the original producer’s point and
service provider’s point up to the retailer’s level has been established, eliminating the burden of all
cascading or pyramiding effects of an indirect tax system. This is the essence of GST. GST taxes only
the final consumer. Hence the cascading of taxes (tax-on-tax) is avoided and production costs are cut
down.

As already noted, prior to the introduction of GST, the indirect tax system of India suffered from
various limitations. There was a burden of tax-on-tax in the pre-GST system of Central excise duty
and the sales tax system of the States. GST has taken under its wings a profusion of indirect taxes of
the Centre and the States. It has integrated taxes on goods and services for set-off relief. Further, it
has also captured certain value additions in the distributive trade. There is now a continuous chain of
set-offs which would eliminate the burden of all cascading effects.

Presently, services sector in India constitutes a tax base with vast potential which has not been
exploited as yet. It is in this context that GST is justified as it has subsumed under it almost all the
services for the purpose of taxation. Since major Central and State indirect taxes have got subsumed
under GST, the multiplicity of taxes has been substantially reduced which, in turn, would decrease
the operating costs of the country’s tax system. The uniformity in tax rates and procedures across the
country will go a long way in reducing compliance costs.

In a nutshell, GST is a comprehensive indirect tax levy on manufacture, sale and consumption of
goods as well as services at the national level. GST is an indirect tax for the whole of India to make
it one unified common market. GST is designed to give India a world class tax system and improve
tax collections. It would end the long-standing distortions of differential treatment of manufacturing
sector and services sector. GST will facilitate seamless credit across the entire supply chain and across
all States under a common tax base.

Central Goods and Services Tax (CGST)

GST levied by the Centre on intra-State supply of goods or services or both is called CGST. It is
levied under Central Goods and Services Tax (CGST) Act, 2017 which makes provisions for the levy
and collection of tax on intra-State supply of goods or services or both by the Central Government.
The Act is divided into 21 chapters which deal with matters connected with the levy, collection and
administration of GST.

As regards the levy and collection of the tax, Section 9 of the Act reads as follows:
(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and
services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic
liquor for human consumption, on the value determined under section 15 and at such rates, not

3
exceeding twenty per cent, as may be notified by the Government on the recommendations of the
Council and collected in such manner as may be prescribed and shall be paid by the taxable person.

(2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly
known as petrol), and natural gas and aviation turbine fuel shall be levied with effect from such date
as may be notified by the Government on the recommendations of the Council.

(3) The Government may, on the recommendations of the Council, by notification, specify categories
of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the
recipient of such goods or services or both and all the provisions of this Act shall apply to such
recipient as if he is the person liable for paying the tax in relation to the supply of such goods or
services or both.

(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is
not registered, to a registered person shall be paid by such person on reverse charge basis as the
recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for
paying the tax in relation to the supply of such goods or services or both.

(5) The Government may, on the recommendations of the Council, by notification, specify categories
of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator
if such services are supplied through it, and all the provisions of this Act shall apply to such electronic
commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such
services:

Provided that where an electronic commerce operator does not have a physical presence in the
taxable territory, any person representing such electronic commerce operator for any purpose in the
taxable territory shall be liable to pay tax:

Provided further that where an electronic commerce operator does not have a physical presence in
the taxable territory and also he does not have a representative in the said territory, such electronic
commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and
such person shall be liable to pay tax.”

State Goods and Services Tax (SGST)

GST levied by the States on intra-State supply of goods or services or both under their respective
SGST Acts is called SGST. Union territories with legislature (Delhi and Pondicherry) are covered.
One of the main objective of Goods & Service Tax (GST) would be to eliminate the doubly taxation
i.e. cascading effects of taxes on production and distribution cost of goods and services. The exclusion
of cascading effects i.e. tax on tax till the level of final consumers will significantly improve the
competitiveness of original goods and services in market which leads to beneficial impact to the GDP
growth of the country. Introduction of a GST to replace the existing multiple tax structures of Centre
and State taxes is not only desirable but imperative. Integration of various taxes into a GST system
would make it possible to give full credit for inputs taxes collected. GST, being a destination-based
consumption tax based on VAT principle.

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Real Estate Industry: Construction and Housing sector need to be included in the GST tax base
being high tax revenue generating sector and for reduction in no. of tax legislations involved.

FMCG Sector: Implementation of proposed GST and opening of Foreign Direct Investment (F.D.I.)
are expected to fuel the growth and raise industry’s size.

1.1 Vat Process

The Goods and Services Tax is levied on each of these stages making it a multi-stage tax.

1.2 Value Addition

A manufacturer who makes biscuits buys flour, sugar and other material. The value of the inputs
increases when the sugar and flour are mixed and baked into biscuits.
The manufacturer then sells these biscuits to the warehousing agent who packs large quantities of
biscuits in cartons and labels it. This is another addition of value to the biscuits. After this, the
warehousing agent sells it to the retailer.

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The retailer packages the biscuits in smaller quantities and invests in the marketing of the biscuits,
thus increasing its value. GST is levied on these value additions, i.e. the monetary value added at each
stage to achieve the final sale to the end customer.

GST has mainly removed the cascading effect on the sale of goods and services. Removal of the
cascading effect has impacted the cost of goods. Since the GST regime eliminates the tax on tax, the
cost of goods decreases.

Also, GST is mainly technologically driven. All the activities like registration, return filing,
application for refund and response to notice needs to be done online on the GST portal, which
accelerates the processes.

E-Way Bills
GST introduced a centralized system of waybills by the introduction of “E-way bills”. This system
was launched on 1st April 2018 for inter-state movement of goods and on 15th April 2018 for intra-
state movement of goods in a staggered manner.
Under the e-way bill system, manufacturers, traders and transporters can generate e-way bills for the
goods transported from the place of its origin to its destination on a common portal with ease. Tax
authorities are also benefited as this system has reduced time at check -posts and helps reduce tax
evasion.
E-invoicing
The e-invoicing system was made applicable from 1st October 2020 for businesses with an annual
aggregate turnover of more than Rs.500 crore in any preceding financial years (from 2017-18).
Further, from 1st January 2021, this system was extended to those with an annual aggregate turnover
of more than Rs.100 crore.
These businesses must obtain a unique invoice reference number for every business-to-business
invoice by uploading on the GSTN’s invoice registration portal. The portal verifies the correctness
and genuineness of the invoice. Thereafter, it authorizes using the digital signature along with a QR
code.
E-Invoicing allows interoperability of invoices and helps reduce data entry errors. It is designed to
pass the invoice information directly from the IRP to the GST portal and the e-way bill portal. It will,
therefore, eliminate the requirement for manual data entry while filing GSTR-1 and helps in the
generation of e-way bills too.

In the earlier indirect tax regime, there were many indirect taxes levied by both the state and the
Centre. States mainly collected taxes in the form of Value Added Tax (VAT). Every state had a
different set of rules and regulations.
Inter-state sale of goods was taxed by the Centre. CST (Central State Tax) was applicable in case of
inter-state sale of goods. The indirect taxes such as the entertainment tax, octroi and local tax were
levied together by state and Centre. These led to a lot of overlapping of taxes levied by both the state
and the Centre.
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For example, when goods were manufactured and sold, excise duty was charged by the Centre. Over
and above the excise duty, VAT was also charged by the state. It led to a tax on tax effect, also known
as the cascading effect of taxes.
While the Centre is empowered to tax services and goods upto the production stage, the States have
the power to tax sale of goods. The States do not have the powers to levy a tax on supply of services
while the Centre does not have power to levy tax on the sale of goods. Thus, the Constitution does
not vest express power either in the Central or State Government to levy a tax on the ‘supply of goods
and services’. Moreover, the Constitution also does not empower the States to impose tax on imports.
Therefore, it is essential to have Constitutional Amendments for empowering the Centre to levy tax
on sale of goods and States for levy of service tax and tax on imports and other consequential issue.

To address all these and other issues, the Constitution (122nd Amendment) Bill was introduced in the
16th Lok Sabha on 19.12.2014. The Bill provided for a levy of GST on supply of all goods or services
except for Alcohol for human consumption. The tax shall be levied as Dual GST separately but
concurrently by the Union (central tax - CGST) and the States [including Union Territories with
legislatures) (State tax - SGST)/ Union territories without legislatures (Union territory tax- UTGST)].
The Parliament would have exclusive power to levy GST (integrated tax - IGST) on inter-State trade
or commerce (including imports) in goods or services. The Central Government will have the power
to levy excise duty in addition to the GST on tobacco and tobacco products. The tax on supply of five
specified petroleum products namely crude, high speed diesel, petrol, Aviation Turbine Fuel (ATF)
and natural gas would be levied from a later date on the recommendation of GST Council.

A Goods and Services Tax Council (GSTC) shall be constituted comprising the Union Finance
Minister, the Minister of State (Revenue) and the State Finance Ministers to recommend on the GST
rate, exemption and thresholds, taxes to be subsumed and other features. This mechanism would
ensure some degree of harmonization on different aspects of GST between the Centre and the States
as well as across States. One half of the total number of members of GSTC would form quorum in
meetings of GSTC. Decision in GSTC would be taken by a majority of not less than three-fourth of
weighted votes cast. Centre and minimum of 20 States would be required for majority because Centre
would have one-third weightage of the total votes cast and all the States taken together would have
two-third of weightage of the total votes cast.

The Constitution Amendment Bill was passed by the Lok Sabha in May, 2015. The Bill was referred
to the Select Committee of Rajya Sabha on 12.05.2015. The Select Committee had submitted its
Report on the Bill on 22.07.2015. The Bill with certain amendments was finally passed in the Rajya
Sabha and thereafter by Lok Sabha in August, 2016. Further the bill had been ratified by required
number of States and received assent of the President on 8th September, 2016 and has since been
enacted as Constitution (101st Amendment) Act, 2016 w.e.f. 16th September, 2016.

The GSTC has been notified with effect from 12th September, 2016. GSTC is being assisted by a
Secretariat. The following major decisions have been taken by the GSTC in different meetings held
by them:
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 (i) The threshold exemption limit would be 20 lakh. For special category States enumerated in
article 279A of the Constitution, threshold exemption limit has been fixed at 10 lakh.
(ii) Composition threshold shall be 75 lakh. Composition scheme shall not be available to inter-
State suppliers, service providers (except restaurant service) and specified category of
manufacturers.
(iii) Existing tax incentive schemes of central or state governments may be continued by respective
government by way of reimbursement through budgetary route.
(iv) There would be four major tax rates namely 5%, 12%, 18% and 28%. The tax rates for
different goods and services have been finalized. Besides, some goods and services would be
under the list of exempt items. The exempted services has been finalized, except services
supplied by Goods and Services Tax Network which is the addition to the list of exempted
services under service tax regime. Rate for precious metals is an exception to ‘four-tax slab-
rule’ and the same has been fixed at 3%. A cess over the peak rate of GST @ 28% on certain
specified luxury and demerit goods, like tobacco and tobacco products, pan masala, aerated
waters, motor vehicles, would be imposed for a period of five years to compensate States for
any revenue loss on account of implementation of GST. The list of services in case of which
reverse charge would be applicable has also been finalized.
(v) The five laws namely CGST Law, UTGST Law, IGST Law, SGST Law and GST
Compensation Law have been recommended.
(vi) In order to ensure single interface, all administrative control over 90% of taxpayers having
turnover below 1.5 crore would vest with State tax administration and over 10% with the
Central tax administration. Further all administrative control over taxpayers having turnover
above 1.5 crore shall be divided equally in the ratio of 50% each for the Central and State tax
administration.
(vii) Powers under the IGST Act shall also be cross-empowered on the same basis as under CGST
and SGST Acts with few exceptions.
(viii) Power to collect GST in territorial waters shall be delegated by Central Government to the
States.
(ix) Formula and mechanism for GST Compensation Cess has been finalised.
(x) Nine rules on registration, composition levy, valuation, tax invoice, input tax credit, payment,
returns, refund and transitional provisions have been recommended.
(xi) www.gst.gov.in, managed by GSTN, shall be the Common Goods and Services Tax
Electronic Portal.
(xii) Rate of interest on delayed payments and delayed refund has been recommended.
(xiii) Rate of Tax Collection at Source (TCS) has been recommended.
Goods and Services Tax (GST) is a comprehensive tax on supply of goods or services or both. It
eliminates the cascading effect of taxes, as GST is imposed at every stage of supply chain and the
input credit is available in across the supply chain. The uninterrupted credit in the supply chain
ensures that the end consumer purchases goods and services at a lower price and to ensure this the
government has introduced the Anti-profiteering clause based on the experience in Malaysia where
GST was implemented from 1st April 2015.

Under GST, taxes are paid at all stages in the supply chain i.e. from manufacturing to the end sale to
the consumer. Taxes are levied at all the stages and input tax credit is available to the extent of the
8
tax paid during the purchase. The end consumer will not pay taxes directly to GST authorities; the
retailer pays the taxes on behalf of the end consumer. The overall idea of having GST in India is to
increase the tax base over a period, and this will result in lower tax rates over a period. Various
scholars estimate that the GDP is expected to go any number between 0.5% to 2%. And it is also
anticipated that it will promote the ease of doing business in India.

Another significant shift in the taxes under GST is the introduction of destination-based consumption
taxation in place of origin-based taxation. That means GST will be the tax revenue for the state where
ultimately the goods or services are consumed. GST moves with the movement of goods and services
and there is seamless movement of input tax credit also along with goods and services in the entire
value chain, except the cases where the credit chain breaks.

Supply: Tax incidence in case of GST is ‘supply’. Supply includes all forms of supply of goods or
services or both such as sale, exchange, transfer, license, barter, rental, lease or disposal made or
agreed to be made for consideration by a person in the course or furtherance of business.

The above definition is an inclusive definition means that any other form or transaction can also be
built in the definition of supply.

Time of Supply: time of supply refers to the tax point at which the tax liability has to be accounted,
and tax invoice has to be issued. Under GST there are two tax points one for the supply of goods and
another for the supply of services.

The significant change as per time of supply is that taxes have to be levied even on receipt of advance
from customers for the supply of goods or service or both, unlike the earlier taxation system where it
was applicable only for services.

Consideration: in relation to the supply of goods or services or both includes

(a) Any payment made or to be made, whether in money or otherwise, in respect of, in response to,
or for the inducement of, the supply of goods or services or both, whether by the recipient or by any
other person but shall not include any subsidy given by the Central Government or a State
Government;

(b) the monetary value of any act or forbearance, whether or not voluntary, in respect of, in response
to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by
any other person but shall not include any subsidy given by the Central Government or a State
Government:
Provided that a deposit, whether refundable or not, given in respect of the supply of goods or services
or both shall not be considered as payment made for such supply unless the supplier applies such
deposit as consideration for the said supply;

From the above definition, it is evident that even if the consideration for the supply of goods or
services or both is not received in cash, still it has to be treated as consideration for the supply.
9
Furtherance of Business: furtherance of business refers to the inward supply of goods or services
being used for carrying out the business or for business purpose. If any of the inward supplies are
used for nonbusiness purpose or for employee related activities or for personal consumption, then
input tax credit is not eligible under GST.

Goods: unlike in Central Excise, there is no concept of manufacture or input. Under GST, anything
has to be classified as goods or services. Goods according to GST means every kind of movable
property other than money and securities but includes actionable claim, growing crops, grass and
things attached to or forming part of the land which are agreed to be severed before supply or under
a contract of supply; Any physical item which has an Harmonised System of Nomenclature (HSN)
code is deemed to be goods under GST.

Service: This means anything other than goods, money and securities but includes activities relating
to the use of money or its conversion by cash or by any other mode, from one form, currency or
denomination, to another form, currency or denomination for which a separate consideration is
charged

Capital Goods: This means goods, the value of which is capitalized in the books of accounts of the
person claiming the credit and which are used or intended to be used in the course or furtherance of
business.

Composite Supply: This means a supply made by a taxable person to a recipient consisting of two
or more taxable supplies of goods or services or both, or any combination thereof, which are naturally
bundled and supplied in conjunction with each other in the ordinary course of business, one of which
is a principal supply;

Illustration: Where goods are packed and transported with insurance, the supply of goods, packing
materials, transport and insurance is a composite supply and supply of goods is a principal supply;

Mixed Supply: This means two or more individual supplies of goods or services, or any combination
thereof, made in conjunction with each other by a taxable person for a single price where such supply
does not constitute a composite supply.

Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits,
aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items
can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these
items are supplied separately;

Input Tax Credit: In GST input tax credit can be availed on inward supply of goods or service or
both if the same are used for furtherance of business. Since GST is charged on both goods and
services, input credit can be availed on both goods and services (except those which are on the
exempted/ negative list).
10
What items are not taxed or covered under GST?
There are a few products, which were not under the purview of GST till long after its launch.
 Alcohol for human consumption: On alcohol, the power to tax remains with the states.
 Petroleum products: GST was not imposed on five petroleum products — crude oil, diesel,
petrol, natural gas and ATF.
 Tobacco: Along with GST, the Central Government has the power to levy additional excise duty
on tobacco products.
 Entertainment tax: The power to decide on entertainment tax levied by local bodies remains with
the states.
Also, there are some exceptions on Indian Railways tickets, where instead of the destination, the
origin of the journey is taken into consideration. For example, if Rajdhani Express is registered in
Delhi, on the tickets from Delhi, CGST and SGST will be levied, while IGST will be charged when
the journey originates at a place other than Delhi.

 Reduces transaction costs and unnecessary wastages: A single registration and a single
compliance will suffice for both SGST and CGST provided government produces effective IT
infrastructure and integration of states level with the union.

 Eliminates the multiplicity of taxation: The reduction in the number of taxation applicable in a
chain of transaction will help to reduce the paper work and clean up the current mess that is
brought by existing indirect taxation laws.

 One Point Single Tax: They would be focus on business rather than worrying about their taxation
that may crop at later stages. This will help the business community to decide their supply chain,
pricing modalities and in the long run helps the consumers being goods competitive as price will
no longer be the function of tax components but function of sheer business intelligence and
innovation.

 Reduces average tax burdens: The cost of tax that consumers have to bear will be certain and it
is expected that GST would reduce the average tax burdens on the consumers.

 Reduces the corruption: As the no. of taxes reduces so does the no of visits to multiple
department reduces and hence the reduction in corruption.

 In all cases except a few products and states, there would be uniformity of tax rates across the
states.

11
General points on Various Business Sectors that arise after GST implementation:

 Real Estate Industry: Construction and Housing sector need to be included in the GST tax base
being high tax revenue generating sector and for reduction in no. of tax legislations involved.

 FMCG Sector: Implementation of proposed GST and opening of Foreign Direct Investment
(F.D.I.) are expected to fuel the growth and raise industry’s size.

 Rail Sector: There have been suggestions for including the rail sector under the GST umbrella to
bring about significant tax gains and widen the tax net so as to keep overall GST rate low. This
will have the added benefit of ensuring that all interstate transportation of goods can be tracked
through the proposed Information technology (IT) network.

 Information Technology enabled services: At present, if the software is transferred through

electronic form, it should be considered as Intellectual Property and regarded as a service and if
the software is transmitted on media or any other tangible property, then it should be treated as
goods and this classification is full of litigation. As GST will have uniform rate for Goods and
Services and no concept of state revenue being VAT or central revenue being service tax and
hence, the reduction in litigation.

 Transport Sector: Truck drivers spend more than half of their time while negotiating check post
and tolls. At present there are more than 600 check points and more than ton types of taxes in
road sector.

Taxes Subsumed by GST

GST incorporates the following taxes earlier levied at the center and state level. GST has replaced or
subsumed the following taxes.

1.3 Central and State level procedure

12
Taxes not to be subsumed by GST in India are:
● Basic Customs Duty ● Export Duty ● Toll Tax ● Road and Passenger Tax ● Electricity Duty ●
Stamp Duty ● Property Tax
Note: 1. Alcoholic beverages for human consumption are proposed to be kept out of the purview of
GST
2. GST on petroleum products would be levied from a notified date to be recommended by the GST
Council
*Need of GST in India:

The prevailing value added tax system had several deficiencies which were cured by the GST. These
deficiencies were as under:

Multi-tax Regime: In the earlier indirect tax regime, a manufacturer of excisable goods charged
excise duty and value added tax (VAT) on intra-State sale of goods. However, the VAT dealer on his
subsequent intra- State sale of goods charged VAT (as per prevalent VAT rate as applicable in the
respective State) on value comprising of (basic value + excise duty charged by manufacturer + profit
by dealer). Further, in respect of tax on services, service tax was payable on all ‘services’ other than
the Negative list of services or otherwise exempted.

Deficiencies and Diversities in Indirect taxes: The earlier indirect tax framework in India suffered
from various shortcomings. Under the earlier indirect tax structure, the various indirect taxes being
levied were not necessarily mutually exclusive.

To illustrate, when the goods were manufactured and sold, both central excise duty (CENVAT) and
State- Level VAT were levied. Though CENVAT and State- Level VAT were essentially value added
taxes, set off of one against the credit of another was not possible as CENVAT was a central levy and
State-Level VAT was a State levy.

Moreover, CENVAT was applicable only at manufacturing level and not at distribution levels.
The erstwhile sales tax regime in India was a combination of origin based (Central Sales Tax) and
destination based multipoint system of taxation (State-Level VAT).

Service tax was also a value added tax and credit across the service tax and the central excise
duty was integrated at the central level.

Despite the introduction of the principle of taxation of value added in India - at the Central
level in the form of CENVAT and at the State level in the form of State VAT - its application remained
piecemeal and fragmented on account of the several reasons. 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.
13
(i) Challenges in implementing GST:

While the desirability of the reform was undoubted, making a transition to GST involved not only
considerable work but also formidable challenges.

1. Understanding between Center and States: Unlike in many other countries where GST is a
centralized tax, in India it is to be executed by both central and state governments, according to the
proposals. This implies that both the structure and administration of the levy had to emerge after
detailed negotiations and bargaining between the Centre, 29 states and the two Union Territories with
legislatures. Given the sharp differences in the structure of the economy and sales tax revenue (as a
ratio of gross state domestic product, or GSDP) across states, the interests of the states did not always
coincide. Hence considerable effort was needed to persuade them to adopt a uniform or even a broadly
harmonized structure and administrative system for the tax.

2. Information Technology Platform: For ensuring seamless input tax credit, they had agreed on a
mechanism wherein the tax levied at the stage of interstate sale was to be collected and pooled
separately and transferred to the destination state through a clearing house. They had also established
the GST Network (GSTN), a special purpose vehicle with equity contributions from the technology
partner (NSDL), and central and state governments to erect the information technology (IT) platform
to administer GST.

3. Issue of compensation for the loss of revenue: The 13th Finance Commission’s recommendation
that states should levy “flawless” GST to be eligible to receive compensation for any loss of revenue
put the entire negotiation process on the back burner. The problem was compounded by the central
government’s refusal to pay compensation for the loss of revenue arising from the reduction in central
sales tax (CST). CST is the sales tax levied on inter-state transactions. The tax which was levied at
4% by the exporting state was reduced to 2% in 2007 in preparation for the introduction of GST. The
central government had agreed to pay compensation for the loss of revenue to the states until 2010,
when the GST was to be implemented. When the central government refused to compensate the states
after 2010, a huge trust deficit was created and the entire negotiation process virtually broke down.
The new finance minister has promised to clear the backlog of dues to the states and the states have
resumed the negotiation process. The finance minister has also announced that the Constitution
Amendment Bill will be placed in the winter session of Parliament. These developments bode well.

4. Contentious issues and negotiation process: There are a number of issues on which negotiations
are necessary to reach a consensus between the Centre and the states and among the states themselves.
The first issue relates to the inclusion of taxes within the ambit of GST. The bone of contention relates
to inclusion of purchase taxes on food grain, taxes on motor spirit and high-speed diesel (GSD), and
octroi or entry tax in lieu thereof. The food grain surplus states have been levying the purchase tax,
the burden of which is exported to non-residents. The states were reluctant to bring motor spirit and

14
high speed diesel within the ambit as presently the tax is levied at a floor rate of 20% and the states
derive about 35% of their sales tax collections from these petroleum products.

5. Determination of Revenue Neutral Rate: Another issue to be decided is the rates of central and
state GSTs to be levied. It was expected that the tax rates would be revenue neutral. This implies that
in the short term, there would not be any revenue loss or gain, but over time the revenue productivity
is expected to increase due to better compliance of the tax and increased productivity of the economy.
However, estimation of revenue-neutral rate required consensus on the exemption list, number of tax
rates to be levied and the list of goods and services to be included in different rate categories.
Revenue-neutral rates had to be estimated for the Centre and for each of the states. Furthermore, when
there was a preference for two rates one for essential goods and services consumed by common people
and another general rate the estimation of revenue-neutral rates becomes further complicated.

6. Setting up of an administrative system: Another area where a lot of work is needed is the setting
up of an administrative system for GST and working out the transitional arrangements. Ideally, from
the viewpoint of reducing compliance cost, a unified administration would be desirable. However,
that is not likely to happen as each state would like to control the administration of its GST. In this
situation, harmonization of administrative processes with uniform systems, forms and procedures
would be necessary. This would also require additional training of tax collectors in the administration
and enforcement of the tax. Equally important is the dissemination of information about the tax to
taxpayers.
(ii) For business and industry

1. Easy compliance: A robust and comprehensive IT system would be the foundation of the GST
regime in India. Therefore, all tax payer services such as registrations, returns, payments, etc.
would be available to the taxpayers online, which would make compliance easy and transparent.

2. Uniformity of tax rates and structures: GST will ensure that indirect tax rates and structures are
common across the country, thereby increasing certainty and 2 ease of doing business. In other
words, GST would make doing business in the country tax neutral, irrespective of the choice of
place of doing business.

3. Removal of cascading: A system of seamless tax-credits throughout the value-chain, and across
boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce
hidden costs of doing business.

4. Improved competitiveness: Reduction in transaction costs of doing business would eventually

lead to an improved competitiveness for the trade and industry.

5. Gain to manufacturers and exporters: The subsuming of major Central and State taxes in GST,
complete and comprehensive set-off of input goods and services and phasing out of Central Sales
Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase
15
 the competitiveness of Indian goods and services in the international market and give boost to
Indian exports. The uniformity in tax rates and procedures across the country will also go a long
way in reducing the compliance cost.
(ii) For Central and State Governments

(a) Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being
replaced by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier
to administer than all other indirect taxes of the Centre and State levied so far.

(b) Better controls on leakage: GST will result in better tax compliance due to a robust IT
infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the
chain of value addition, there is an inbuilt mechanism in the design of GST that would incentivize
tax compliance by traders.

(c) Higher revenue efficiency: GST is expected to decrease the cost of collection of tax revenues of
the 3 Government, and will therefore, lead to higher revenue efficiency.

GST would be levied on the basis of the destination principle. Exports would be zero-rated, and
imports would attract tax in the same manner as domestic goods and services. In addition to the IGST
in respect of supply of goods, an additional tax of up to 1% has been proposed to be levied by the
central government. The revenue from this tax is to be assigned to the origin states. This tax is
proposed to be levied for the first two years or a longer period, as recommended by the GST Council.

With GST, it is anticipated that the tax base will be comprehensive, as virtually all goods and services
will be taxable, with minimum exemptions. GST would bring in a modern tax system to ensure
efficient and effective tax administration. It will bring in greater transparency and strengthen
monitoring, thus making tax evasion difficult. While the process of implementation of GST unfolds
in the next few months, it is important for industry to understand the impact and opportunities offered
by this reform. GST will affect all industries, irrespective of the sector. It will impact the entire value
chain of operations, namely procurement, manufacturing, distribution, warehousing, sales and
pricing.

The following are the salient features of the proposed GST system

The power to make laws in respect of supplies in the course of inter-state trade or commerce will
remain with the central government. The states will have the right to levy GST on intrastate
transactions, including on services.

The administration of GST will be the responsibility of the GST Council, which will be the apex
policy-making body for GST. Members of GST Council will comprise central and state ministers in
charge of the finance portfolio.

16
The threshold for levy of GST is a turnover of Rs. 1 million. For a taxpayer who conducts business
in a northeastern state of India the threshold is Rs. 500,000.

The central government will levy IGST on inter-state supply of goods and services. Import of goods
will be subject to basic customs duty and IGST.

GST is defined as any tax on supply of goods and services (other than on alcohol for human
consumption).
Goods and Services Tax (GST) is a comprehensive tax on supply of goods or services or both. It
eliminates the cascading effect of taxes, as GST is imposed at every stage of supply chain and the
input credit is available in across the supply chain. The uninterrupted credit in the supply chain
ensures that the end consumer purchases goods and services at a lower price and to ensure this the
government has introduced the Anti-profiteering clause based on the experience in Malaysia where
GST was implemented from 1st April 2015.

Under GST, taxes are paid at all stages in the supply chain i.e. from manufacturing to the end sale to
the consumer. Taxes are levied at all the stages and input tax credit is available to the extent of the
tax paid during the purchase. The end consumer will not pay taxes directly to GST authorities; the
retailer pays the taxes on behalf of the end consumer. The overall idea of having GST in India is to
increase the tax base over a period, and this will result in lower tax rates over a period. Various
scholars estimate that the GDP is expected. And it is also anticipated that it will promote the ease of
doing business in India. Another significant shift in the taxes under GST is the introduction of
destination-based consumption taxation in place of origin-based taxation. That means GST will be
the tax revenue for the state where ultimately the goods or services are consumed. GST moves with
the movement of goods and services and there is seamless movement of input tax credit also along
with goods and services in the entire value chain, except the cases where the credit chain breaks.

Threshold limit for exemption to be Rs. 20 lac (Rs. 10 lac for special category States) Compounding
threshold limit to be Rs. 50 lac with –

1.4 Tax Rate

a) Government may convert existing Area based exemption schemes into reimbursement based
scheme
b) Four tax rates namely 5%, 12%, 18% and 28%
c) Some goods and services would be exempt
d) Separate tax rate for precious metals

Evaluate Of GST

17
 SCGT and CGST input credit cannot be cross utilized.
 Manufacturing states lose revenue on a bigger scale.
 High rate to tax to compensate the revenue collected now from multiple taxes i.e High Revenue
Neutral Rate.
 The reduction in the fiscal autonomy of the States.
 Concerns raised by banks and insurance companies over the need for multiple registrations
under GST.
 The levy of additional cess.
 The capacity of State tax authorities, so far used to taxing goods and not services, to deal with
the latter is an unknown quantity.
 The success of GST depends on political consensus, technology and the capacity of tax officials
to adapt to the new requirements.
 Custom duty will be still collected along with the levy of IGST on imported goods.
 Petroleum and tobacco products are currently exempted.
 Excise duty on liquor, stamp duty and electricity taxes are also exempted.
For the States

 Expansion of the tax base: As states will be able to tax the entire supply chain from
manufacturing to retail.

 More economical empowerment: Power to tax services, which was hitherto with the Central
Government only, will boost revenue and give States access to the fastest growing sector of the
economy.

 Enhancing Investments: GST being destination based consumption tax will favour consuming
States. Improve the overall investment climate in the country which will naturally benefit the
development in the States.

 Increase Compliance: Largely uniform SGST and IGST rates will reduce the incentive for
evasion by eliminating rate arbitrage between neighboring States and that between intra and
inter-state sales.

In the earlier indirect tax regime, there were many indirect taxes levied by both the state and the
centre. States mainly collected taxes in the form of Value Added Tax (VAT). Every state had a
different set of rules and regulations.
Inter-state sale of goods was taxed by the centre. CST (Central State Tax) was applicable in case of
inter-state sale of goods. The indirect taxes such as the entertainment tax, octroi and local tax were

18
levied together by state and centre. These led to a lot of overlapping of taxes levied by both the state
and the centre.

For example, when goods were manufactured and sold, excise duty was charged by the centre. Over
and above the excise duty, VAT was also charged by the state. It led to a tax on tax effect, also known
as the cascading effect of taxes.

19
The following is the list of indirect taxes in the pre-GST regime:

 Central Excise Duty

 Duties of Excise
 Additional Duties of Excise
 Additional Duties of Customs
 Special Additional Duty of Customs
 Cess
 State VAT
 Central Sales Tax
 Purchase Tax
 Luxury Tax
 Entertainment Tax
 Entry Tax
 Taxes on advertisements
 Taxes on lotteries, betting, and gambling

The e-invoicing system was made applicable from 1st October 2020 for businesses with an annual
aggregate turnover of more than Rs.500 crore in any preceding financial years (from 2017-18).
Further, from 1st January 2021, this system was extended to those with an annual aggregate turnover
of more than Rs.100 crore. These businesses must obtain a unique invoice reference number for every
business-to-business invoice by uploading on the GSTN’s invoice registration portal. The portal
verifies the correctness and genuineness of the invoice. Thereafter, it authorizes using the digital
signature along with a QR code.

E-Invoicing allows interoperability of invoices and helps reduce data entry errors. It is designed to
pass the invoice information directly from the IRP to the GST portal and the e-way bill portal. It will,
therefore, eliminate the requirement for manual data entry while filing GSTR-1 and helps in the
generation of e-way bills too.

GST introduced a centralized system of waybills by the introduction of “E-way bills”. This system
was launched on 1st April 2018 for inter-state movement of goods and on 15th April 2018 for intra-
state movement of goods in a staggered manner.

Under the e-way bill system, manufacturers, traders and transporters can generate e-way bills for the
goods transported from the place of its origin to its destination on a common portal with ease. Tax
authorities are also benefited as this system has reduced time at check -posts and helps reduce tax
evasion.

20
1.2 DEFINATION

“The goods and services tax (GST) is a value-added tax levied on most goods and services sold
for domestic consumption. The GST is paid by consumers, but it is remitted to the government by the
businesses selling the goods and services.”

21
1.3 FEATURE
Goods and Services Tax (GST) can be rightfully called as the largest Indirect Taxation Reform of
the country since 1947. The history of GST in India goes back to 2006 when the Finance Minister
proposed the idea of introducing it. The new tax regime of GST was finally implemented on 1st July
2017. The government proposed GST as a transparent and self-policing tax regime that is easier to
administer that further shall boost economic growth of the country. GSTN, short for Goods and
Service Tax Network, is a non-profit non-government company. It provides shared IT
infrastructure and service to both central and state governments including taxpayers and other
stakeholders. The registration Front end services, Returns, and payments to all taxpayers will be
provided by GSTN. In a nutshell, it will be acting as the interface between the government and the
taxpayers.

1. Single Indirect Tax

GST has been introduced as a single, unified tax reform. It has eliminated many existing indirect
centre and state taxes like Central Value Added Tax, Special Additional Duty of Customs, Service
Tax, and VAT and converted them into a single tax. The elimination of these indirect taxes has not
only made tax compliance easier for businesses but has also helped in making many of the goods and
services more affordable for the consumers.

2. Input Tax Credit System

One of the most prominent GST features in India is the input tax credit. If a manufacturer or service
provider has already paid input tax on a purchase, the same can be deducted from their total output
tax liability. The input and output invoices need to match to take advantage of the tax credit. This
helps in removing the cascading tax effect or the traditional ‘tax-on-tax’ regime. Moreover, it also
helps in reducing tax evasion.

3. GST Composition Scheme

SMEs with an annual turnover of up to Rs. 1 crore or Rs. 75 lakhs in specified states can also
voluntarily opt for the composition scheme. With this scheme, the businesses can pay a fixed GST
rate of 1% on their turnover. However, such businesses can then not use the input tax credit benefit.
A business needs to select between whether they want to use the composition scheme or the input tax
credit feature.

4. Four-Tier Tax Structure

GST has a 4-tier tax structure of 5%, 12%, 18%, and 28%. All the goods and services can only
ow9uordyioeebe taxed as per this tax structure. Many of the essential commodities such as food items
do not have any GST. Improved transparency and cheaper goods and services are two of the biggest
advantages of this 4-tier structure.

22
There are several GST features, and they are already working as a game-changer for the Indian
economy. While it still has a long way to go, industries, consumers, and the government has already
started experiencing the benefits which are expected to extend further in the future.

 The tax which was previously levied on manufacture or sale of goods and provision of
services would now be levied on ‘supply’ of goods and services
 As against the present principle of origin based taxation, GST would function on the
principle of taxation on destination based consumption
 The exemption limit is applicable on both SGST and CGST and holds good for taxpayers
having an annual turnover of Rs. 20 lakh. However, for some hilly and North Eastern states
specified under article 279A of the constitution, this annual turnover limit is Rs. 10 lakh
 Small taxpayers, including select categories of service providers and manufacturers having
annual turnover of up to Rs. 50 lakh have the option to pay tax at a flat rate without credits,
also known as compounding option. This compounding scheme and threshold exemption is
optional
 The number of exempted services and goods will be kept to a minimum
 All exports will be zero rated

a) 0% (No Tax Slab) No Tax on these products: Fresh meat, jute, fish chicken, milk, eggs, curd,
butter milk, fresh fruits and vegetables, natural honey, besan, flour, salt, bread, sindoor, prasad,
bindi, stamps, printed books, judicial papers, handloom, bones and horn cores, newspapers,
bangles, bone grist, etc.; hoof meal, cereal grains hulled, horn meal, salt-all types, palmyra jaggery,
kajal, etc.

b) 5% Tax Slab: 5% Tax would be applicable on goods such as apparel below Rs. 1,000, fish fillet
and footwear below Rs 500 and packaged food items, skimmed milk powder, cream, branded
paneer, coffee, tea, frozen vegetables, spices, rusk, pizza bread, kerosene, coal, sabudana,
lifeboats, medicines, stent, cashew nut, raisin, cashew nut in shell, ice and snow, insulin, bio gas,
kites, postage or revenue stamps, first-day covers Agarbatti, stamp-post marks etc.

c) 12% Tax Slab: Goods such as apparel above Rs 1,000, cheese, ghee, butter, frozen meat products,
packaged dry fruits animal fat, fruit juices, sausage, Ayurvedic medicines, bhujia, namkeen, tooth
powder, picture books, colouring books, exercise books and note books, sewing machine,
umbrella, ketchup & sauces, cellphones, diagnostic kits and reagents, fertilizers, fish knives,
spoons, forks, cake servers, ladles, skimmers, tongs, corrective, spectacles, chess board, playing
cards, carom board and other board games would be taxed at the rate of 12%. Also, services such
as non-AC hotels, state-run lotteries, business class air tickets will fall under 12% GST tax slab.

d) 18% Tax Slab: This slab has maximum goods under it, such as footwear costing more than Rs
500, biscuits (All categories), bidi patta, flavored refined sugar, cornflakes, pasta, preserved
vegetables, pastries and cakes, jams, soups, sauces, instant food mixes, ice cream, tissues, mineral
water, tampons, envelopes, steel products, printed circuits, note books, speakers and monitors,

23
 Kajal pencil sticks, camera, aluminum foil, weighing machinery, headgear and parts thereof,
CCTV, printers electrical transformer, bamboo furniture, optical fiber, mayonnaise and salad
dressings, swimming pools and padding pools, mixed condiments and mixed seasonings, curry
paste, etc.

e) 28% Tax Slab: Bidis, molasses, chewing gum, waffles and wafers coated with chocolate,
chocolate not containing cocoa, pan masala, paint, deodorants, aerated water, shaving creams, hair
shampoo, after shave, sunscreen, wallpaper, dye, water heater, ceramic tiles, weighing machine,
dishwasher, ATM, washing machine, vacuum cleaner, vending machines, shavers, hair clippers,
automobiles, aircraft for personal use, will be charged at the rate of 28%.

For services such as hotels with room tariffs above Rs 7,500, private-run lotteries authorized by
the states, 5-star hotels, cinema, race club betting, will attract 28% tax under GST.

f) The administration of the Central GST to the Centre and for State GST to the States would be
given. As per the recommendation of Task force report on GST, The Central Board of Excise and
Customs (CBEC) shall be responsible for implementation of CGST and state tax administrations
will be separately responsible for implementation for SGST.

24
1.4 TERMS/CONCEPT
India's Adoption of the Goods and Services Tax (GST)

India established a dual GST structure in 2017, which was the biggest reform in the country's tax
structure in decades. The main objective of incorporating the GST was to eliminate tax on tax,
or double taxation, which cascades from the manufacturing level to the consumption level.

For example, a manufacturer that makes notebooks obtains the raw materials for, say, Rs. 10, which
includes a 10% tax. This means that they pay Rs. 1 in tax for Rs. 9 worth of materials. In the process
of manufacturing the notebook, the manufacturer adds value to the original materials of Rs. 5, for a
total value of Rs. 10 + Rs. 5 = Rs. 15. The 10% tax due on the finished good will be Rs. 1.50. Under
a GST system, the previous tax paid can be applied against this additional tax to bring the effective
tax rate to Rs. 1.50 – Rs. 1.00 = Rs. 0.50.

In turn, the wholesaler purchases the notebook for Rs. 15 and sells it to the retailer at a Rs.
2.50 markup value for Rs. 17.50. The 10% tax on the gross value of the good will be Rs. 1.75, which
the wholesaler can apply against the tax on the original cost price from the manufacturer (i.e., Rs.
The wholesaler's effective tax rate will, thus, be Rs. 1.75 – Rs. 1.50 = Rs. 0.25.

Similarly, if the retailer's margin is Rs. 1.50, his effective tax rate will be (10% x Rs. 19) – Rs. 1.75 =
Rs. 0.15. Total tax that cascades from manufacturer to retailer will be Rs. 1 + Rs. 0.50 + Rs. 0.25 +
Rs. 0.15 = Rs. 1.90.
India has, since launching the GST on July 1, 2017, implemented the following tax rates:

 A 0% tax rate applied to certain foods, books, newspapers, homespun cotton cloth, and hotel
services.
 A rate of 0.25% applied to cut and semi-polished stones.
 A 5% tax on household necessities such as sugar, spices, tea, and coffee.
 A 12% tax on computers and processed food.
 An 18% tax on hair oil, toothpaste, soap, and industrial intermediaries.
 The final bracket, taxing goods at 28%, applies to luxury products, including refrigerators,
ceramic tiles, cigarettes, cars, and motorcycles.

The previous system with no GST implies that tax is paid on the value of goods and margin at every
stage of the production process. This would translate to a higher amount of total taxes paid, which is
carried down to the end consumer in the form of higher costs for goods and services. The
implementation of the GST system in India is, therefore, a measure that is used to reduce inflation in
the long run, as prices for goods will be lower.

i) Actionable claim will have the significance assigned to it in section 3 of the Transfer of
Property Act, 1882 (4 of 1882), which refers to a claim on any unsecured debt or any beneficial
interest in movable property of the claimant.
25
ii) Address of delivery refers to the address of the recipient of goods and/or services indicated on
the tax invoice issued by a taxable person for delivery of such goods and/or services.

iii) Address on record means the address of the recipient as noted in the files of the supplier. This
may or may not be the same as the address of delivery.

iv) Adjudicating authority means any authority competent to pass any order or decision relating
to the GST Act, but does not include the Central Board of Excise and Customs, the Revisional
authority, authority for the advance ruling and appellate authority for an advance ruling,
appellate authority, or the appellate tribunal.

v) Aggregate turnover means the total value of all taxable supplies, exempt supplies, exports of
goods and/or services, and interstate supplies of a person having the same PAN, computed on
the pan-India basis and excluding taxes. However, the value of inward supplies on which
taxation is based on reverse-charge mechanism shall not be admitted.

vi) Appellate tribunal means the Goods and Services Tax Appellate Tribunal set up under section
109.

vii) Application Service Providers (ASPs) are like GST Suvidha Providers (GSPs) but are more
wholesome than GSPs. The support provided by ASPs will address most taxpayer compliance
difficulties as they work as a liaison between the taxpayers and the GSPs.

viii) Appropriate government refers to the Central Government for IGST, UTGST and CGST, and
the State Government for SGST.

ix) Assessment means the determination of tax liability inclusive of self-assessment, re-
assessment, provisional assessment, summary assessment, and best judgment assessment.

x) Capital goods are goods that are capitalized in the books of accounts of the person claiming
the credit and are intended to be used during business.

xi) Casual taxable person is a person occasionally undertaking transactions involving the supply
of goods and/or services during business, whether as principal, agent or in any other capacity,
in a taxable territory where he has no fixed place of business.

xii) CGST is the tax levied under the Central Goods and Services Tax Act, 2016.

xiii) Common portal refers to the online GST portal approved by the Central and State
Governments, on the recommendation of the council.

26
xiv) Composite supply means a supply consisting of two or more goods and/or services, which are
naturally bundled and provided together, one being a principal supply.

xv) Consideration relates to the supply of goods or services involving:

o Any payment made or to be made, whether in money or kind
o Monetary value of any act or forbearance, whether or not voluntary

27
1.5 TYPE OF GOODS AND SERVICE TAX

Goods and Services Tax, GST is an indirect tax for the entire nation, which makes India a
common united market by ensuring indirect taxes are replaced in the country. Passed in the
Parliament on March 29, 2017, the Goods and Services Tax Act is a comprehensive and multi-
stage tax levied on every value addition. The GST Act came into effect on 1st July, 2017 and
holds a great significance as both the Central and State Government rely on the GST for their
indirect tax revenue.

1. The State Goods and Services Tax (SGST)

The State Goods and Services Tax or SGST is a tax under the GST regime which is applicable on
intrastate (within the same state) transactions. In case of intrastate supply of goods and/or services,
both State GST and Central GST are levied. However, the State GST or SGST is levied by the state
on the goods and/or services that are purchased or sold within the state. It is governed by the SGST
Act. The revenue earned through SGST is solely claimed by the respective state government. For
instance, if a trader from West Bengal has sold goods to a customer in West Bengal worth Rs.5,000,
then the GST applicable on the transaction will be partly CGST and partly SGST. If the rate of GST
charged is 18%, it will be divided equally in the form of 9% CGST and 9% SGST. The total amount
to be charged by the trader, in this case, will be Rs.5,900. Out of the revenue earned from GST under
the head of SGST, i.e. Rs.450, will go to the West Bengal state government in the form of SGST.

2. The Central Goods and Services Tax (CGST)

Just like State GST, the Central Goods and Services Tax of CGST is a tax under the GST regime
which is applicable on intrastate (within the same state) transactions. The CGST is governed by the
CGST Act. The revenue earned from CGST is collected by the Central Government. As mentioned
in the above instance, if a trader from West Bengal has sold goods to a customer in West Bengal
worth Rs.5,000, then the GST applicable on the transaction will be partly CGST and partly SGST. If
the rate of GST charged is 18%, it will be divided equally in the form of 9% CGST and 9% SGST.
The total amount to be charged by the trader, in this case, will be Rs.5,900. Out of the revenue earned
from GST under the head of CGST, i.e. Rs.450, will go to the Central Government in the form of
CGST.

3. The Integrated Goods and Services Tax (IGST)

The Integrated Goods and Services Tax or IGST is a tax under the GST regime that is applied on the
interstate (between 2 states) supply of goods and/or services as well as on imports and exports. The
IGST is governed by the IGST Act. Under IGST, the body responsible for collecting the taxes is the
Central Government. After the collection of taxes, it is further divided among the respective states by
the Central Government. For instance, if a trader from West Bengal has sold goods to a customer in
Karnataka worth Rs.5,000, then IGST will be applicable as the transaction is an interstate transaction.
If the rate of GST charged on the goods is 18%, the trader will charge Rs.5,900 for the goods. The
IGST collected is Rs.900, which will be going to the Central Government.
28
4. The Union Territory Goods and Services Tax (UTGST)

The Union Territory Goods and Services Tax or UTGST is the counterpart of State Goods and
Services Tax (SGST) which is levied on the supply of goods and/or services in the Union Territories
(UTs) of India. The UTGST is applicable on the supply of goods and/or services in Andaman and
Nicobar Islands, Chandigarh, Daman Diu, Dadra and Nagar Haveli, and Lakshadweep. The UTGST
is governed by the UTGST Act. The revenue earned from UTGST is collected by the Union Territory
government. The UTGST is a replacement for the SGST in Union Territories. Thus, the UTGST will
be levied in addition to the CGST in Union Territories.

The new indirect tax regime under the Goods and Services Tax (GST) which was rolled out on 1 July
2017, had witnessed a considerable amount of confusion over how the new taxation system will affect
businesses and the payment of taxes. The Goods and Services Tax (GST) has subsumed a number of
local taxes that were levied on goods and/or services.

Types of
Authority Priority of Who is it Transactions which are
GST which is Tax Credit collected by? applicable (Goods and
benefitted use Services)
Central Central Within a single state, i.e.
CGST CGST IGST
Government Government intrastate
State State Within a single state, i.e.
SGST SGST IGST
Government Government intrastate
Central
Between two different states
Government IGST CGST Central
IGST or a state and a Union
and State SGST Government
Territory, i.e. interstate
Government
Union Union Territory
UTGST/U UTGST Within a single Union
Territory (UT) (UT)
GST IGST Territory (UT)
Government Government

The taxes that were replaced by the GST

The implementation of the Goods and Services Tax (GST) replaced a number of taxes of both the
state and the Centre. The levies that were replaced are listed below:
 List of State taxes:
 Value Added Tax (VAT) or Sales Tax
 Octroi
 Entertainment Tax
 Tax on Lottery or Betting or Gambling
 Purchase Tax
 Luxury Tax
 List of Central taxes:
 Service Tax
 Additional Excise Duty
 Central Excise Duty and so on
29
1.6 HISTORY OF PROCESS COSTING

The history of the Goods and Services Tax (GST) in India dates back to the year 2000 and culminates
in 2017 with four bills relating to it becoming an Act. The GST Act aims to streamline taxes for
goods and services across India.

The implementation of the Goods and Services Tax (GST) in India was a historical move, as it marked
a significant indirect tax reform in the country. The amalgamation of a large number of taxes (levied
at a central and state level) into a single tax is expected to have big advantages. One of the most
important benefit of the move is the mitigation of double taxation or the elimination of the cascading
effect of taxation. The initiative is now paving the way for a common national market. Indian goods
are also expected to be more competitive in international and domestic markets post GST
implementation. From the viewpoint of the consumer, there would be a marked reduction in the
overall tax burden that is currently in the range of 25% to 30%. The GST, due to its self-policing and
transparent nature, is also easier to administer on an overall scale.

When did GST start? Several countries have already established the Goods and Services Tax. In
Australia, the system was introduced in 2000 to replace the Federal Wholesale Tax. GST was
implemented in New Zealand in 1986. A hidden Manufacturer’s Sales Tax was replaced by GST in
Canada, in the year 1991. In Singapore, GST was implemented in 1994. GST is a value-added tax in
Malaysia that came into effect in 2015.

 2000: In India, the idea of adopting GST was first suggested by the Atal Bihari Vajpayee
Government in 2000. The state finance ministers formed an Empowered Committee (EC) to create
a structure for GST, based on their experience in designing State VAT. Representatives from the
Centre and states were requested to examine various aspects of the GST proposal and create reports
on the thresholds, exemptions, taxation of inter-state supplies, and taxation of services. The
committee was headed by Asim Dasgupta, the finance minister of West Bengal. Dasgupta chaired
the committee till 2011.

 2004: A task force that was headed by Vijay L. Kelkar the advisor to the finance ministry, indicated
that the existing tax structure had many issues that would be mitigated by the GST system.

30
 CHAPTER-2 LITERATURE REVIEW
2.1 INTRODUCTION
2.2 THEOROTICAL FRAMEWORK FOR PRESENT STUDY

31
2.1 INTRODUCTION

GST has started in India by passing a long way. Most of the countries now in the world are under this
system. Again, there was a need for a new one-country tax system to free India from many taxes and
rate system. GST will greatly help overcome economic confusion caused by the complex tax structure
and help in the development of general national markets. It is expected that all sectors of economy
such as industry, business, government departments and services sectors have to bear its positive
impact. Taxation policy in ancient India was highly logical and based on the principles of economic
theory and equity in comparison with the current taxation policies of the government. The tax system
of our ancients was quite reasonable, rational, convenient, elastic, appealing and based on the
principles of maximum welfare with some exceptions.

1. G. Garg, 6 (2014):

In this “Research paper” academia. They have explained of Goods and Service Tax He tried to
highlight the objectives of the proposed GST plan along with the possible challenges and opportunity
that GST brings. He concluded that GST is the most logical steps towards the comprehensive indirect
tax reform in our country since independence. GST is leviable on all supply of goods and provision
of services as well combination thereof. All sectors of economy i.e the industry, business including
Govt. departments and service sector shall have to bear impact of GST. All sections of economy viz.,
big, medium, small scale units, intermediaries, importers, exporters, traders, professionals and
consumers shall be directly affected by GST. One of the biggest taxation reforms in India – the Goods
and Service Tax (GST) is all set to integrate State economies and boost overall growth. GST will
create a single, unified Indian market to make the economy stronger. Experts say that GST is likely
to improve tax collections and Boost India’s economic development by breaking tax barriers between
States and integrating India through a uniform tax rate. Under GST, the taxation burden will be
divided equitably between manufacturing and services, through a lower tax rate by increasing the tax
base and minimizing exemptions.

2. Pinki et al., 7 (2014)

In this “Research paper” academia. They have explained of Goods and Service Tax He tried need to
introduce it in India, the hurdles in introducing it in India and suggestions to overcome the same. The
paper also discusses the benefits of introducing GST at the earliest. The authors have discussed the
options to introduce the dual GST in India which could be Concurrent Dual GST, National GST or
State GST. Under the concurrent dual GST the better option was the one where GST is applied on
both goods and services. The other option explored was whether the Central GST would be on goods
and services but state GST would be only on goods since state to collect GST in services is difficult
to determine. This option also recommended one single return with both CGST and SGST details and
PAN based registration. The authors have also discussed the constitutional amendments required if
GST is ever to be introduced since without the amendment taxing both goods and services using one
tax is not possible. The paper also highlights the issues in the credit mechanism in the CGST/SGST

32
model since it is difficult to practically implement in terms of determination of place where service
is taxable. The other challenges to introduction of GST in India highlighted are the availability of
strong IT network, infrastructure and programs, agreement on other provisions like basic threshold,
exemption to goods/services, rates to be applied, etc.

3. Rashid et al., 8 (2014):

In this “Research paper” academia. They have explained of Goods and Service Tax He tried in
Malaysia since it is proposed to introduce GST in Malaysia in 2015. The GST is being introduced
mainly so as to increase the revenue collections of the government and reduce the deficit. The authors
have studied the impact of the introduction of this GST and its relation to certain indicators like the
consumer price index and the structural balance. For this the relation between these factors and the
GST are studied for Singapore, Thailand and Indonesia so that whilst implementing GST in Malaysia
the administration can adopt the best practice. The paper recommends transparency in implementing
GST and review of the rates/base of GST after 5 years and rectification based on the 5 year
experience.

4. Jaiprakash (2014):

In this “Research paper” academia. In his study mentioned that the GST at the Central and the State
level are expected to give more relief to industry, trade, agriculture and consumers through a more
comprehensive and wider coverage of input tax set-off and service tax setoff, subsuming of several
taxes in the GST and phasing out of CST.

5. Saravanan Venkadasalam, 10 (2014):

In this “Research paper” academia. They have explained of Goods and Service Tax analysed the post
effect of the goods and service tax (GST) on the national growth on ASEAN States using Least
Squares Dummy Variable Model (LSDVM) in his research paper. He stated that seven of the ten
ASEAN nations are already implementing the GST. He also suggested that the household final
consumption expenditure and general government consumption expenditure are positively
significantly related to the gross domestic product as required and support the economic theories. But
the effect of the post GST differs in countries.

6. Shaik et al , 11(2015):

In this “Research paper” academia. They have explained of Goods and Service Tax studied the
concept and impact of GST on Indian economy. The study also focused on some aspects of GST
models. This study also covered the advantages and working of GST. The study concluded that GST
in Indian framework will lead to commercial benefits which were untouched by VAT system and
would essentially leads to economic development.

7. Sehrawat & Dhanda, 12 (2015):

33
In this “Research paper” academia. They have explained of Goods and Service Tax conducted a study
focused on advantages and challenges of GST faced by India in execution. They concluded that a
simplified and transparent tax system was the need of Indian economy. Pointing out the various
advantages they said that GST will provide India a world class tax structure and a seamless tax system
but it will depend upon effectiveness of its implementation.

8. Khurana & Sharma, 13 (2016):

In this “Research paper” academia. They have explained of Goods and Service Tax conducted a study
with a view to explore various benefits and opportunities of GST by throwing a light on its’
background, objectives of proposed GST plan and its impact on Indian tax scenario. They concluded
that GST implementation will definitely benefit producers and consumers although its’
implementation requires concentrated efforts of all stake holders especially central and state
government.

9. Munde & chavan , 14 (2016):

In this “Research paper” academia. They have explained of Goods and Service Tax conducted a study
to discuss the pros and cons of GST and accordingly make suggestions to minimize loopholes and
make it more effective. They concluded that if the probable loopholes are dealt effectively, tax payers
will accept the change brought upon and if procedures in GST proves to be simple and assures the
involvement of interest of all stakeholders then definitely it will lead to economic development and
rationalization of prices.

10. Kumar, R., 15 (2016):

In this “Research paper” academia. They have explained of Goods and Service Tax ‘Comparison
between Goods and Services Tax and Current Taxation System – A Brief Study’ differentiate the
GST framework and previous taxation system and highlighted the impact of GST on Indian economy.

11. Khurana, A. And Sharma, A., 16 (2016):

In this “Research paper” academia. They have explained of Goods and Service Tax a Positive Reform
for Indirect Tax’ highlighted the objectives of GST and reforms in indirect taxation system in India.
And conclude after implementation of GST, manufacturer, wholesaler and retailer can be easily
recovered input taxes in form of tax credit.

12. Shefalidani, 17 (2016):

In this “Research paper” academia. They have explained of Goods and Service Tax stated impact of
GST on Indian economy in the study in which some benefits of GST such as one nation one tax, free
from cascading effect, increase consumption due to cascading effect, transparency and GDP growth
are studied. Petroleum products, real estate, and liquor are free from GST.

34
13. Dani, S., 18 (2016):

In this “Research paper” academia. They have explained of Goods and Service Tax in that GST being
a system replacing all indirect taxes might hamper the progress of the country as the attempt to
implement it is not being made whole heartedly.

14. Lourdunathan F and Xavier P., 19 (2016):

In this “Research paper” academia. They have explained of Goods and Service Tax studied inexplicit
opinion of manufacturers, traders and society. It also included challenges and prospectus of GST in
future in India. Centre and state level taxes also discussed in this paper. Various states are shown in
which GST is followed for growth of economy. Some issues such demonetization issue, inappropriate
time, political issues, rate for manufacturers and traders, impact on working and cash flow and
implementation in unorganized sectors became some main issues in path of GST.

15. B, MitraPriya, 27 (2017):

In this “Research paper” academia. They have explained of Goods and Service Tax showed that GST
reduced complexity of various taxes and also removed cascading effect. Tax structure shown in paper
in which various tax rates included. Impact on Tax incidence included various sectors such as
Telecom, E- Commerce, Automobile, real estate, banking and consumer goods. Impact on input tax
credit showed that there would be availability of cross credit utilization in CGST and SGST.

35
 CHAPTER-3 RESEARCH METHODOLOGY
3.1 INTRODUCTION
3.2 OBJECTIVE OF THE STUDY
3.3 HYPOTHESIS OF THE STUDY
3.4 RESEARCH DESIGN
3.5 SAMPLE TECHNIQUE
3.6 DATA COLLECTION

36
3.1 INTRODUCTION

This is a descriptive cum conceptual research paper, which studies the concept and framework of
GST based on past literature, books, journal, magazines, research papers and articles etc. The study
is based on secondary sources of data or information. Different books, newspapers and relevant
websites, Govt. Publications and research papers, have been consulted in order to make the study
effective one.

3.2 OBJECTIVE OF THE STUDY

1. To understand the concept of Goods and Service Tax Laws through survey of literature.

2. To study and analyze the various research works carried out on Goods and Service Tax Laws.

3.3 HYPOTHESIS OF THE STUDY

HO: There is no gaps inherent in the current research work regarding Goods and Service Tax Laws.

H1: There is gaps inherent in the current research work regarding Goods and Service Tax Laws.

3.4 REASEARCH DESIGN

We will use the descriptive research design where the main contact technique will be the survey
method. This method will be used because it will help us to get the required response from the
individual used on various parameters. Such as age, sex, occupation etc.

3.5 SAMPLE TECHNIQUE

For the present study the convenience sampling technique is use. The researcher has selected
(Companies). For this study the researcher has collected the primary data from- Respondents.

3.6 DATA COLLECTION

The present research study is based on primary data.

1. The researcher will use both primary as well as the secondary from of data collection. The primary
data will be collected by the survey method where in working in adults will be inter viewed.

2. The researcher will refer to secondary data which is available in the form of published articles in
books, internet website.

So the researcher will use the descriptive researcher design where in the tool used would be survey
method.

37
 CHAPTER-4 DATA ANALYSIS AND INTERPRETATION
4.1 FINDING DISTRIBUTION OF RESPONDER PROFILE

38
4.1 FINDING DISTRIBUTION OF RESPONDER PROFILE

1. Age

Table 4.1 Age group wise classification

Age Group Percentage

20-30 53.5%
30-40 37.2%
40-50 09.3%
Above 50 0%

The diagram 4.1 show, the blue color is 20 to 30 age, red color show 30 to 40 people and yellow
color show 40 to 50 age of people. At the last green color show over 50 age of the people. More
than people answer given blue color which is 53.5%.

39
 2. Gender

Table 4.2 Gender group wise classification

Gender Percentage
Male 88.04%
Female 11.06%
Prefer not to say 0.0%

The above diagram 4.2 show gender of female and male, the blue color shows male and the red color show
female of people. The more people choose male priority on basis which is 88.4%.

40
3. Occupation.

Table 4.3 Occupation wise classification

Occupation Percentage
Student 32.06%
Business 41.09%
Service 25.06%
Other 00.00%

The diagram 4.3 show it will how many of people occupation in business service, other. The blue
color show student choose and the red is for business people, yellow is the service can select the
column. The last of green is other people choose the segment.

41
4. What is the full form GST ?

Table 4.4 what is the full form GST.

What is the full form of GST. Percentage
Goods and Sales Tax 02.03%
Goods and service Tax 97.07%
Goods and Section Tax 00.00%

The Diagram 4.4 Show, what is the full form of GST. More people feedback received in red colour
which is 97.7%. More than people choose answer Goods and service tax. Less people select the range
of blue colour 2.3%.

42
5. GST was introduced in India with effect from?

Table 4.5 GST was introduced in India with effect from.

GST was introduced in India with effect from. Percentage

1.1.2017 00.00%
1.4.2017 02.03%
1.7.2017 97.07%

The Diagram 4.5 show, The most people select Orange colour which is 1.07.2017. The less people
select red colour which is 2.3%. People select normal 0.0%. The correct answer of the question is
Orange colour. Which is 01.07.2017.

43
6. What are the taxes levied on an Intra- State Supply?

Table 4.6 what are the taxes levied on an Intra- State Supply.

What are the taxes levied on an Intra- State Supply Percentage

CGST 00.00%
SGST 02.03%
Both CGST & SGST 97.07%

The Diagram 4.6, Show what are the taxes levied on an Intra – State supply. The Orange colour show
both CGST and SGST. More people select the Orange colour which is 97.07%. The blue colour show
CGST only none people select. The less people select the red colour which is 02.03%.

44
7. What is the maximum rate of CGST prescribed under CGST act 2017?

Table 4.7 what is the maximum rate of CGST prescribed under CGST act 2017

what is the maximum rate of CGST prescribed under CGST Percentage

act 2017
28% 7%
20% 97%
18% 00.00%

The Diagram 4.7, The Maximum rate of cgst prescribed under cgst act 2017 most people answer the
93%. The less people select blue colour which is 7%. 0% people select the 18%.The people select
reddest colour. Above in diagram people select majority of 20%.

45
8. GST is a _________ based tax on consumption of goods and services.

Table 4.8 GST is a _________ based tax on consumption of goods and services

GST is a _________ based tax on consumption of goods and Percentage

services
Dividend 00.00%
Duration 00.00%
Destination 100%

The Diagram 4.8, more people select the destination option which is 100%. Blue colour show
dividend which is 0%. Red colour show duration which is 0%. As per high of destination lower
duration. Dividend less than the destination.

46
9. How many types of taxes will be in indian GST?

Table 4.9 How many types of taxes will be in Indian GST

How many types of taxes will be in Indian GST Percentage

2 02.03%
3 97.07%
4 00.00%

The Diagram 4.9, the survey report explained more people select the red colour which 97.07%. The
red colour show how many type of GST in India it will show 3 which write answer. The blue colour
show gst in India 2 which is 02.03%. Compare of the gst in India more to 2 and 4. The more people
select the answer red colour which 3.

47
10. The full form of hsn code in gst is?

Table 4.10 the full form of HSN code in gst is

The full form of HSN code in gst is. Percentage
Home shopping network 00.00%
Harmonized system number 02.03%
Harmonised system of Nomenclature 97.07%

The Diagram 4.10, the yellow colour show HSN code harmonized system of Nomenclature more
people select which is 97.7%. The blue colour show home shopping Network. The red colour show
harmonized system number which is 02.03%. High of the 97.07%. Compare to the harmonized
system number and home shopping network more is harmonized system of nomenclature.

48
11. The Concept of goods and services tax (GST) originated from which country?

Table 4.11 the Concept of goods and services tax (GST) originated

The Concept of goods and services tax (GST) originated Percentage

Canada 97.07%
Germany 02.03%
Britain 00.00%

The Diagram 4.11, showing the concept of goods and services tax (GST) originated in Canada. More
people select the Canada. The red colour showing Germany. The orange colour showing Britain.
More than the 97.7% is Canada. And lower the Britain 0.0%. More people select the Canada option
as per survey.

49
12. Which of the following tax was abolished by GST?

Table 4.12 which of the following tax was abolished by GST.

Which of the following tax was abolished by GST. Percentage

Corporation Tax 02.00%
Income Tax 04.00%
Service Tax 93.00%

The Diagram 4.12, showing the which of the following tax was abolished by GST. The blue colour
showing corporation tax and red colour showing Income tax. The orange colour showing service tax.
The more people select service tax. Less people select income tax. Upper the highest of showing the
Service tax. As per the diagram less people select the income tax.

50
13. Which of the following tax rates is not applicable under GST?

Table 4.13 which of the following tax rates is not applicable.

which of the following tax rates is not applicable under GST Percentage
5 07.00%
12 07.00%
25 25.00%

The Diagram 4.13, showing which of the following tax rates is not applicable under GST. The blue
colour showing how many people select 7%. The red colour showing how many people select 7%.
The orange colour showing more people select the 25. The highest people select 25 option which is
86%. The less people choose the 12 and 5.

51
14. GST is levied on ________?

Table 4.14 GST is levied wise classification

GST is levied on ________. Percentage

Creator 02.00%
Retailor 02.00%
Consumers 03.00%
All of the above 93.00%

The Diagram 4.14, showing GST levied on all of the above. The blue colour show creditor. The red
colour showing retailer option. Yellow colour showing the consumer. Green colour showing the all
of the above. The highest of the green colour selected by people. People select more of creator, retailer
consumer, all of the above.

52
15. Who is the head of GST council?

Table 4.15 who is the head of gst wise classification

Who is the head of GST council Percentage

Shashikant Das 00.00%
Arun Jaitely 02.03%
Nirmala Sitharaman 97.07%

The Diagram 4.15, the head of gst council main purpose to nirmala sitharaman. The yellow colour
showing nirmala sitharaman. The red colour show arun jaitely option. The blue colour show
Shashikant Das. More people selecting highest rate of 97.07%. Less than the 02.03% which is arun
jaitely.

53
16. What does “I” in IGST stands for?

Table 4.16 what does I in IGST stands for.

What does I in IGST stands for. Percentage

Internal 00.00%
Integrated 100%
Intra 00.00%

The Diagram 4.16, what does “I” in IGST stand for integrated. People more select red colour which
is 100%. The blue colour showing Internal option. Red colour showing integrated. The yellow colour
showing intra option which 0%. Compare to blue colour vs red colour. Red colour is more than the
blue colour.

54
17. Constitution Amendment act, 2016 for GST was ______?

Table 4.17 constitution amendment act, 2016 for GST wise classification.

Constitution Amendment act, 2016 for GST was ______. Percentage

80th 02.03%
101st 97.07%
122nd 00.00%

The Diagram 4.17, the constitution amendment act, 2016 for GST was 101st. The blue color show
80th option. The red colour show 101st option. The yellow colour 122nd which is 0%. More people
select the 101st which is 97.7%. More increasing is 101st. At the level of more profitable red colour.

55
18. Under GST, ‘value addition’ refers to ________?

Table 4.18 under GST value addition refers to wise classification.

Under GST, ‘value addition’ refers to ________. Percentage

Cost plus tax 00.00%
Cost plus tax plus profit 04.07%
Expenses plus profit 95.03%

The Diagram 4.18, under gst value addition in more people choose 95.03%. The blue color showing
cost plus tax. Red colour showing cost plus tax plus profit. More profitable are expense plus profit
which is 95.03%. The people deselect the cost plus tax. The cost plus tax compare to the expense plus
profit is more higher.

56
19. Goods and services tax is a ______ tax system.

Table 4.19 Goods and services is a _____ tax System wise classification.

Goods and services tax is a ______ tax system Percentage

Single point tax 00.00%
Multiple point tax 100%
Regressive tax 00.00%

The Diagram 4.19, Showing goods and Service tax is a Multipoint tax tax system which is 100%. The
blue colour show single point tax. The Red colour show multipoint tax which is 100%. The yellow
colour show regressive tax which is 0%. More people select the multipoint tax. Compare to the more
increase multipoint tax.

57
20. Goods and service tax is ________?

Table 4.20 Goods and service tax is.

Goods and service tax is ________. Percentage

Consumption based 95.03%
Both consumption and supply based 00.00%
Supply based 04.07%

The Diagram 4.20, The blue colour showing consumption based which 95.03%. The red colour
showing both supply and consumption based which is 0%. The yellow colour showing supply based
which is 04.07%. The more people select the consumption based which is 95.3%. The less people
select supply based which is 4.7%. The none people support the both supply and consumption based.

58
21. Tax collected at source at the rate of 2% is applicable in the case of _______.

Table 4.21 tax collected at source at the of 2% is applicable wise classification

Tax collected at source at the rate of 2% is applicable in the Percentage

case of _______
Any GST dealer 00.00%
Government Department 02.04%
E- commerce operator 97.06%

The Diagram 4.21, tax collected at source at the rate of 2% is applicable in the case of E- commerce.
The blue colour showing any GST dealer. The red colour showing Government Department which is
02.04%. The yellow colour showing E- Commerce which is 97.06%. The people more select the
yellow colour which is 97.06%. The Less people select the government departments which is 02.04%.
The none people select the any GST dealer which is 0%.

59
22. SGST is applicable when ________.

Table 4.22 SGST is applicable wise classification

SGST is applicable wise classification Percentage

Goods are sold within state 93.00%
Interstate supply 07.00%
Goods sold by GST dealer to another gst dealer 03.00%

The Diagram 4.22 showing SGST is applicable wise classification. The blue colour show goods are
sold within state which is 93%. The red colour showing Interstate supply which is 7%. The yellow
colour showing goods sold by gst dealer to another gst dealer which is 3%. The more people select
the blue colour which is goods are sold within state. The percentage 93%. Which is higher than the
interstate supply.

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CHAPTER-5 FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 FINDINGS
5.2 CONCLUSION
5.3 RECOMMENDATION

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5.1 FINDINGS
We begin our questionnaire by questioning the respondents if they realized that tax is the major
revenue for the government before proceeding with questions regarding GST. From Table 2, we
found that about 95 percent of respondents realized that tax is the major source of income for the
government. However, there are small groups (5.26 percent) of respondents who are still not aware
of this. Surprisingly, from that amount, about 4.17 percent came from the accounting (ACT)
background. The Diagram 4.17, the constitution amendment act, 2016 for GST was 101st. The blue
color show 80th option. The red colour show 101st option. The yellow colour 122nd which is 0%. More
people select the 101st which is 97.7%. More increasing is 101st. At the level of more profitable red
colour. The Diagram 4.21, tax collected at source at the rate of 2% is applicable in the case of E-
commerce. The blue colour showing any GST dealer. The red colour showing Government
Department which is 02.04%. The yellow colour showing E- Commerce which is 97.06%. The people
more select the yellow colour which is 97.06%. The Less people select the government departments
which is 02.04%. The none people select the any GST dealer which is 0%.

The Diagram 4.22 showing SGST is applicable wise classification. The blue colour show goods are
sold within state which is 93%. The red colour showing Interstate supply which is 7%. The yellow
colour showing goods sold by gst dealer to another gst dealer which is 3%. The more people select
the blue colour which is goods are sold within state. The percentage 93%. Which is higher than the
interstate supply. The Diagram 4.19, Showing goods and Service tax is a Multipoint tax tax system
which is 100%. The blue colour show single point tax. The Red colour show multipoint tax which is
100%. The yellow colour show regressive tax which is 0%. More people select the multipoint tax.
Compare to the more increase multipoint tax. The Diagram 4.15, the head of gst council main purpose
to nirmala sitharaman. The yellow colour showing nirmala sitharaman. The red colour show arun
jaitely option. The blue colour show Shashikant Das. More people selecting highest rate of 97.07%.
Less than the 02.03% which is arun jaitely.

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5.2 CONCLUSION

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 automobile industry

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5.3 RECOMMANDATION

The Goods and Services Tax bill was the biggest talk of this year’s budget. Some say that it could
upset the balance of the economy, some are saying it is flawed in its current state whereas others are
saying that if it isn’t passed it could lead to crisis in the Indian economy. Now manufacturers like
Maruti-Suzuki and Hyundai are all in favour of the GST in its current format as it gives small car
manufacturers massive tax reductions. For the carmakers, the GST is undoubtedly a good news but
till it gets implemented, they run the risk of losing sales as people may hold on to their car purchase
till July, 2017. With the festive season around the corner, the gravity of this trend only seems to
compound further but in the long-run the GST is set to benefit each one of us, beyond the automotive
industry and more. In the end though, the customer wins and remains the king. Now let's hope the
GST implementation doesn't hit a roadblock. GST was implemented from July 1, 2017. The day
marked changes in most tax structures and would help India unite under a single framework. ONE
COUNTRY ONE TAX 19 Introduction of GST will result in –  GST will lead to merger of firms
 Reduction in number of taxes.  Decrease in effective tax rate of goods over a period.  Increase
in transparency and tax collection.  Uniformity in tax rates across India.  It will result in lower
prices and consecutively, boost demand for automobiles. The on-road prices of vehicles could go
down by 4% to 8%.  The automotive sector will be one of the most positively impacted sectors. 
Other than the center imposed taxes, the other major chunk of taxation comes from state imposed
Value added tax (VAT) that ranges between 12-14.5 per cent across states. Add the various cess in
the country and even for a small car, a customer pays upwards of 30 per cent on tax and cess alone.
 Proper GST administration and dispute resolution (more importantly on inter-state transactions) is
very critical. Companies need to upgrade their enterprise resource planning (ERP) — a category of
business-management software — so as to accommodate the complexities of calculating GST. ERP
helps companies manage and monitor everything in the organization, including supply chain, finance
and even human resource functions. SAP and Oracle are the big players in the Indian ERP space.
Many companies will have to move from their current system, where every transaction is recorded
separately, to an upgraded system where 20 there is a correlation between every entry, according to
industry executives. GST rollout is one of the biggest tax reforms for India. Timely GST preparedness
is a key to smooth transition for industry, and we have a huge and experienced talent pool that is fully
geared for this.

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BIBILOGRAPHY

https://gst.caknowledge.in/impact-gst-automobile-sector/

http://www.ey.com/in/en/newsroom/news-releases/ey-gstimpact-on-the-auto-industry

https://www.legalraasta.com/gst/impact-of-gst-on-automobilesector/

http://auto.economictimes.indiatimes.com/news/policy/benefitschallenges-for-auto-sector-in-
gst-
bill/53541153

http://www.abplive.in/auto/gst-bill-how-it-affects-the-autosector-391864

http://www.caclubindia.com/articles/impact-of-gst-onautomobile-dealers-industry-28910.asp

http://www.gstinindia.in/GST-on-Automobiles-sector.aspx

https://www.linkedin.com/pulse/impact-challanges-gstautomobile-industry-india-manish-
goyal

http://www.usstaad.com/Blog/news-reviews/impact-gst-carprices/

http://economictimes.indiatimes.com/articleshow/53678594.cms?utm_source=contentofinteres
t
&utm_medium=text&utm_campa ign=cppst
The Economics Times
Times of India
The Hindu news
www.google.com.
www.yahoo.com.
www.scribd.com.
Yahoo answers.

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APPENDIX
QUESTIONNAIRE

1. What is the full form GST?

 20-30
 30-20
 40-50
 Above 50

2. Gender
 Male
 Female
 Prefer not to say

3. Occupation
 Student
 Business
 Service
 Other

4. What is the full form GST ?

 Goods and Sales Tax
 Goods and service Tax
 Goods and Section Tax

5. GST was introduced in India with effect from?

 1.1.2017
 1.4.2017
 1.7.2017

6. What are the taxes levied on an Intra- State Supply?

 CGST
 SGST
 Both CGST & SGST

7. What is the maximum rate of CGST prescribed under CGST act 2017?
 28%
 20%
 18%

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8. GST is a _________ based tax on consumption of goods and services.
 Dividend
 Duration
 Destination

9. How many types of taxes will be in indian GST?

 2
 3
 4

10. The full form of hsn code in gst is?

 Home shopping network
 Harmonized system number
 Harmonised system of Nomenclature

11. The Concept of goods and services tax (GST) originated from which country?
 Canada
 Germany
 Britain

12. Which of the following tax was abolished by GST?

 Corporation Tax
 Income Tax
 Service Tax

13. Which of the following tax rates is not applicable under GST?
 5
 12
 25

14. GST is levied on ________?

 Creator
 Retailor
 Consumers
 All of the above

15. Who is the head of GST council?

 Shashikant Das
 Arun Jaitely
 Nirmala Sitharaman

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16. What does “I” in IGST stands for?
 Internal
 Integrated
 Intra

17. Constitution Amendment act, 2016 for GST was ______?

 80th
 101st
 122nd

18. Under GST, ‘value addition’ refers to ________?

 Cost plus tax
 Cost plus tax plus profit
 Expenses plus profit

19. Goods and services tax is a ______ tax system.

 Single point tax
 Multiple point tax
 Regressive tax

20. Goods and service tax is ________?

 Consumption based
 Both consumption and supply based
 Supply based

21. Tax collected at source at the rate of 2% is applicable in the case of _______.
 Any GST dealer
 Government Department
 E- commerce operator

22. SGST is applicable when ________.

 Goods are sold within state
 Interstate supply
 Goods sold by GST dealer to another gst dealer

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