FAC 124

FUNDAMENTALS OF GOODS AND SERVICE TAX

ASSIGNMENT 1

NAME ENROLLMENT NO

Tapasya Chadha AU2000005

Aneri

Keshav Phophalia AU1910616

MONSOON SEMESTER 2022-2023

SUBMITTED TO: PROF. NIMIT THAKER

AMRUT MODY SCHOOL OF MANAGEMENT

 GOODS AND SERVICE TAX

The Goods and Services Tax (GST) it is an indirect tax that has replaced the excise duty,
VAT, services tax, and other indirect taxes in India. On March 29, 2017, Parliament approved
the Goods and Service Tax Act, which went into effect on July 1, 2017. Goods and service
tax is applied on the goods and services, it is the law which is comprehensive, multilevel
location-based tax on all value creation. It is the single indirect tax which is applied to the
entire country. In the indirect tax the burden is not borne by the tax payer, it is regressive in
nature and it is also difficult to evade. Goods and service tax has four taxes under it: central
GST, state GST, integrated GST, additional cess.

The taxes that are subsumed in the GST are of two types: central and sales. Central taxes
subsumed in GST are central excise duty and central sales tax, additional duties of excise,
duties of excise (medical and toilet preparations), Service tax, central surcharges and cess,
unique supplementary levies of customs, and others. State taxes subsumed in GST are state
VAT, central sales tax, luxury tax, entertainment tax, entry tax, purchase tax, taxes on
lotteries, betting and gambling. Custom duty, excise duties on alcohol consumption, stamp
duty, property tax does not come under the GST and continuous to be same as earlier.

The majority of countries with a GST have a single, unified GST system, resulting in a
uniform tax rate. A nation with a unified GST platform collects both central and state-level
taxes as a single tax. Almost everything in these nations is taxed at the same rate. The GST
imposed by the final dealer in the supply chain will only be borne by the final consumer.
In accordance with the recommendations of the GST Council, the collected tax would be
divided between the Centre and the States in a manner that would be defined by the
parliament.
 IMPORTANCE OF GOODS AND SERVICE TAX
1. One nation one tax policy
The GST has taken the place of a number of indirect levies that were in effect under
the previous tax structure. The advantage of a single tax is that it applies the same rate
to a particular commodity or service in every state. Tax management is made easier
because the federal government determines the tax rates and rules. Common laws can
be introduced, such as e-way bills for the delivery of products and e-invoicing for
transaction reporting. Tax compliance is improved since taxpayers are not burdened
with various return forms and deadlines. In general, it is an integrated approach to
indirect tax compliance.
2. Eliminate cascading effect of tax
One of the primary objectives of the GST was to eliminate the cascading effect of
taxes. Due to different indirect tax laws, taxpayers were previously unable to compare
tax credits from one tax to another. For instance, the excise taxes paid during
manufacture might not be able to offset the VAT owed during the sale. The upshot
was that taxes started to rise. Under the GST system, only the net value contributed at
each stage of the supply chain is taxed. Input tax credits for both goods and services
are now flowing smoothly as a result, and the tax cascading impact has been
diminished.
3. Subsumed majority of taxes
The government of India has taken on the costs of service tax, value added tax (VAT),
central excise, and other formerly indirect taxes that were assessed at various points
throughout the supply chain. Each state, as well as the federal government, has its
own set of tax rules. There was no one, centralised tax applied to both goods and
services. GST was consequently put into place. Under the GST, most indirect taxes
were combined into a single tax. It has made it easier for the government to
administer taxes and greatly lessened the burden of compliance on taxpayers.
4. Preventing tax evasion
The GST laws in India are tougher than any of the earlier indirect tax laws. The only
invoices on which GST taxpayers are permitted to claim an input tax credit are those
that have been posted by their individual suppliers. This reduces the likelihood that
phoney invoices may qualify for input tax credits. This objective has been
 strengthened even further since the introduction of e-invoicing. In addition, GST is a
federal tax with a centralised surveillance system, which makes it much easier and
quicker to catch defaulters.

ADVANTAGES AND DISADVANTAGES

ADVANTAGES
 GST has consolidated a number of indirect taxes under one roof, simplifying the
taxation of firms that provide services and sell goods.
 GST is not due by service providers whose annual sales are less than Rs. 20 lakhs.
The barrier in the north-eastern country is 10 lakhs, which will assist small firms in
avoiding time-consuming taxing procedures.
 As the cascading effects of taxes are eliminated, the cost of goods and services will
eventually decrease.
 GST lowers logistical costs by getting rid of border taxes and fixing check point
inconsistencies.
 After obtaining GST Registration in India, it is simple to conduct interstate business
through e-commerce operators.
 It provides a composition plan to pay taxes at a set rate while lowering the amount
owed in taxes and the tax rates.
DISADVANTAGES
 The cost of doing business has gone up because of the GST.
 Many SMEs are still apprehensive about making internet purchases and paying taxes
online.
 Penalties may apply if a GST return is filed late. To keep track of the deadlines for all
tax compliances, use Tax Panchang.
 The GST Regime is stringent, and you cannot generate e-way bills without filing a
GST Return.
 The objective of unifying the market is undermined by the fact that products are not
all subject to the Goods and Services Tax (GST). As a result, manufacturers have
suspended their reward programs, which will affect consumers.
 ANALYSIS
Based on the interviews that our group took GST has increased the ease of doing the
business. Firstly, GST reduces cascading effect of taxes which means the tax-on-tax system is
being removed by GST. Secondly, there is only one tax which is to be paid that is GST.
There is no need to look at different taxes like VAT, service tax excise duty etc. as well as
different state tax as we were doing previously, we were paying different taxes in the
different state but now we have IGST for all the taxes to be paid in interstate transaction.

Yes, the introduction of GST has led to reduction in overall tax burden and elimination of
cascading effect of tax. As we were paying multiple taxes before GST came into the action
and we had to pay tax on tax every time good is being transfer till it reaches to its final
consumer. Because of GST as it is one nation one tax policy all the taxes are covered under
one and now there is no need for everyone to go under the process of paying different taxes
and also reducing the cascading effect.

No, we don’t feel that GST has reduced inflationary pressure in the economy. Because after
the GST was implemented tax rates of products differ some are very low and some are very
high. Secondly, Due to inflationary pressure, the process of rationalizing the goods and
services tax (GST) rate is probably going to be postponed.

According to the interviews, the responses are mixed for some it has increased and for others
it had not. For some companies it is less viable and for other it is much needed. Mostly while
taking the interviews few questions like has tax burden got easy mostly the answer was yes
because of only one is now to be paid and cascading effect of taxes were exempted. Another
question was do you need a different person to handle the GST again it was no. we believe
that if the businesses are on the larger ground, they may require but as these are small and
medium ground business they don’t. As well as the advantages and the disadvantages were
also kind of similar about what they think.
 CONCLUSION
To conclude this assignment what we learn from this assignment was the burden of taxes has
been reduced as there came the one nation one policy which is GST. GST has helped a lot as
cascading effect is been exempted no tax on tax which was the problem is now eased out.
Secondly, preventing tac evasion is another beneficial point for the GST. We learned the
method of GST, what is input tax credit how is it simpler to avail. This report shows the
background about the Goods and Service Tax, when it was implemented when it was first
discussed, what is GST which taxes are covered under GST etc. the importance of the GST,
advantage - disadvantage etc. also, the analysis of the interviews that we collected from the
businessmen and how many answers were similar among the interviews we collected. What
were the answers in which their opinion did not match why it was different the reason etc.
All these thin are covered under the report.
 REFRENCES

 ET Bureau. (2022, May 26). India puts GST rate tweaks on hold till it has a grip on

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tweaks-on-hold-till-it-has-a-grip-on-inflation/articleshow/91799743.cms?from=mdr

 Goods & Services Tax (GST) What is GST in India? Indirect Tax Law Explained.

(2022, September 22). Defmacro Software Pvt. Ltd. Copyright (C) 2016. Retrieved

September 28, 2022, from https://cleartax.in/s/gst-law-goods-and-services-tax

 Bajaj Finserv. (2018, October 10). Benefits of GST: What Are the Advantages &

Disadvantages of GST In India. Retrieved September 28, 2022, from

https://www.bajajfinserv.in/insights/what-are-the-top-advantages-and-disadvantages-

of-gst-in-india

 GST Bill, its importance and how does it affect you. (2018, October 12). EduPristine.

Retrieved September 28, 2022, from https://www.edupristine.com/blog/gst-bill-

importance

 What is GST? - Goods and Services Tax in India. (n.d.). BankBazaar. Retrieved
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 (PPT’S)