GOODS AND SERVIC “Goods and services tax” means any tax on supply o! on the supply of the alcoholic liquor for human consumption MAJOR CENTRAL TAXE:! INTRODUCTION TO GST TAX - cle 366(12.4) vous, oF services or both except t Here are some of the major central taxes that were subsumed: 6 Central Excise Duty: This tax, which was levied on the manufacture or production of goods in India, was subsumed into the GST. Central Excise Duty was previously imposed by the central government Service Tax: Service Tax, which was levied on specified services provided within India, was subsumed into the GST. The central government was responsible for imposing and collecting Service Tax. Additional Customs Duty (Countervailing Duty - CVD): CVD, which was customs duty imposed on imported goods to provide protection to domestic manufacturers, was subsumed into the GST. It was previously collected by the central government, Special Additional Duty (SAD): SAD, which was an additional duty of customs levied rmed into the GST. It was imposed by the central on imported goods, was also sub: government. Central Sales Tax (CST): CST, which was a tax imposed on inter-state sales of goods, was subsumed into the GST. It was previously collected by the originating state but \was meant 0 compensate the destination state Central Surcharges and Cesses: Various surcharges and cesses imposed by the central government, such as Education Cess, Swachh Bharat Cess, and Krishi Kalyan Cess, were also subsumed into the GST. These central taxes were consolidated and subsumed into the Central Goods and Services Tax (CGST) component of the GST system. It aimed to create a unified and simplified tax structure, reducing cascading effects and promoting ease of doing business in India MAJOR STATE TAXES SUBSUMED IN GST. Here are some of the major state taxes that were subsumed: I Value Added Tax (VAT): VAT was a state-level tax imposed on the sale of goods within the state, It was subsumed into the GST, and the state component of GST is known as the State Goods and Services Tax (SGST). Central Sales Tax (CST): CST was a tax levied on inter-state sales of goods. It was collected by the originating state but meant to compensate the destination state. CST |was subsumed into the GST, and the integrated GST (IGST) component replaced it for inter-state transactions. Dr. Karthik Reddy. maa, Phi, i. Com, KSET, Ph. Scanned with CamScanner Pagel6 Entry Tax: Enuy tax was a tay levied by states on the entry of yoods into their (ermlontes: Iwas subsumed into the GST. and no separate entry tax is applicable under the GST regime Lux ry Taw Lusury tay was a tax imposed on certain luxury goods and services. tt Was subsumed into the GST tnd the applicable tax rate would be determined based on the classification of goods and services under the GST system Enter inment Tay: Entertainment tax was imposed by states on various forms of entertainment, such as movies, amusement parks, and cultural e into the GST, and the appli nts. It was subsumed. ble tax would be determined based on the nature of the entertainment under the GST regime. State Surcharges and Cesses: Various surcharges and cesses imposed by state Sovernments, such as education cess, infrastructure cess, and road development cess, were subsumed into the GST. These state taxes were consolidated and subsumed into the State Goods and Services Tax (SGST) component of the GST system, The implementation of GST aimed to create a common national market, reduce tax cascadin; and streamline the indirect tax structure across states TAXES NOT SUBSUMED IN GST While the Goods and Services Tax (GST) in India subsumed a wide range of central and state ‘axes, there are certain taxes that were not subsumed and continue to be imposed separately Here are some taxes that are not subsumed into the GST 1 6. Basic Customs Duty (BCD): Basic Customs Duty, which is a tax imposed on imports and exports of goods, is not subsumed into the GST. It is levied by the central government on goods imported into India and is governed by the Customs Act, 1962 Stamp Duty: Stamp Duty, which is levied on various types of documents, such as property transactions, agreements, and legal instruments, is not subsumed into the GST. It is imposed by the state governments and the rates may vary from state to state Road and Toll Taxes: Taxes levied on road usage, such as toll taxes, are not subsumed into the GST. These taxes are imposed by state governments and local authorities for the maintenance and development of roads and infrastructure Property Tax: Property lax, which is a tax on the ownership or occupation of property, is not subsumed into the GST. Itis levied by municipal corporations or local bodies and is based on the value of the property. Electricity Duty: Electricity Duty, imposed on the consumption or sale of electricity, is not subsumed into the GST. It is levied by state governments and the rates may vary across states, Taxes on Petroleum Products: Taxes on petroleum products, such as petrol, diesel, and natural gas, including excise duties and value-added taxes (VAT), are not subsumed into the GST. These taxes are imposed separately by the central and state governments, Dr. Karthik Reddy. MBA, MPhil, Com, KSET, Ph.0, Scanned with CamScanner PageW's important 10 note that the GST system covers taxes and levies continue to be most goods and services, but certain specific Imposed outside the scope of GST, as mentioned above. SALIENT FEATURES OF GST The Goods and Services Tay (GST) is a comprehensive indirect tax syst India, Here are some of the salient features of GST implemented in 1, One Nation, One Tax: GST aims to cteate a unified tax sti central and state taxes with a sin state taxes (S Dual GST Structure: GST operates under a dual structure, consisting of Central GST (CGST) levied by the centtal government and State GST (SGST) levied by the state rated GST (IGST) is levied. which is a ure by replacing multiple ax. IC rings together the central taxes (CGST) and ST) under one umbrella le governments, For inter-state tra combination of CGST and SGST, Destination-Based Consumption Tax: GST is a destination-based tax, meaning that the tax is levied and collected at the place of consumption of goods or services. These benefits consuming states as they receive the tax revenue. 4. Input Tax Credit: One of the key features of GST is the seamless availability of input {ax credit across the value chain, Businesses can claim credit for taxes paid on inputs (purchases) against the taxes collected on outputs (sales). This eliminates the cascading effect of taxes and helps reduce the overall tax burden 5. Threshold Exemption: GST provides a threshold exemption limit for small businesses. Entities with a turnover below the specified threshold are exempted from GST registration and tax liability, providing relief 1o small-scale businesses. 6, Composition Scheme: GST offers a composition scheme for small taxpayers with a limited turnover. Under this scheme, eligible businesses can opt for a simplified tax compliance process and pay tax at a predetermined percentage of turnover. 7. Online System and Simplified Compliance: GST operates on a robust online portal where businesses can register, file retums, and make tax payments electronically. This simplifies the compliance process and reduces manual intervention, 8. Comprehensive Tax Base: GST covers a wide range of goods and services, including ‘goods, services, intangibles, and digital products. It aims to bring various sectors of the economy under its ambit, promoting a more inclusive tax structure. 9. Anti-Profiteering Measures: GST includes anti-profiteering provisions to ensure that the benefits of tax reduction are passed on to consumers. Businesses are required to pass on any reduction in tax rates or input tax credit to the final consumers. 10. GST Council: The GST Council is a constitutional body that comprises representatives from the central and state governments. It is responsible for making key decisions rates, exemptions, and administrative aspects. ictions, Inte; regarding GST, such as ta ‘These salient features of GST aim to simplify the tax structure, reduce tax barriers, promote ‘ease of doing business, and create a common national market in India. Dr. Karthik Reddy. moa, MPhil, M. Com, KSET, Ph.D, Scanned with CamScanner PageCONSTITUTIONAL AMENDMENTS OF GST The Goods and Services Tax (GST) is gover Am ned by the Constitution (One Hundred and First ment) Act, 2016 in India. This amendment introduced several changes to the Indian Constitution to enable the implementation of the GST regime. ‘The key provisions of this amendment include 6 Insertion of Article 464) Article 246A was. Inserted to empower both the central and state governments to levy and collect GST on the supply of goods and services within their respective jurisdictions. Substitution of Entry 924° Entry 92A of the Union List was substituted to provide for the centtal government’s power to levy and collect the integrated Goods and Services Tax (IGST) on inter-state supply of goods and services $4: Entry 54 of the State List was substituted to provide for 1 power of the state governments to levy and collect the State Goods and Services Tax (SGST) on intra-state supply of goods and services. Substitution of Entry 84: Entry 84 of the Union List was substituted to provide for the Power of the central government to levy and collect the Central Goods and Services Tax (CGST) on intra-state supply of goods and services. Insertion of Article 269A: Article 269A was inserted to provide for the mechanism of levy and collection of GST on supplies in the course of inter-state trade or commerce. Italso provided for the assignment of such taxes to the states and the Parliament's power to make laws in this regard Insertion of Article 279A: Article 279A was inserted to establish the Goods and Services Tax Council, which consists of the Union Finance Minister (as the Chairperson) and the Finance Ministers of the states. This Council is responsible for making recommendations on various aspects of GST, such as rates, exemptions, threshold limits, and more. Substitution of Entry These constitutional amendments were made to ensure the smooth implementation of the GST regime in India and to provide a comprehensive legal framework for the taxation of goods and services at both the central and state levels. ADVANTAGE! OF GST structure by merging various indirect easier for Simplified tax structure: GST simplifies the taxes into a single tax, It replaces multiple taxes with a single tax, maki businesses to understand and comply with the tax laws. Elimination of cascading effect: Cascading effect, also Known as the "tax on tas,” is the tax levied on the tax component of a product or service, GST eliminates the cascading effect by allowing businesses to claim input tty credit for taxes paid on inputs. This ensures that taxes are only levied on the value addition at each stage of the supply chain, leading to a more ent tax system. GST simplifies the compliance process for stration process and online tax filing system, Increased ease of doing busines: businesses. It introduces a unified re Dr. Karthik Reddy. Maa, MPhil, M. Com, KSET, Ph.D. Scanned with CamScanner ragedDI e administr e burd es. This leads to incre. (SMEs) non busi ally for small and medium-sized enterpri Expansion of tax base: GST broadens the tax base by includin bringing more busine: not liable to indirect taxes now come under the purview of GS tax evasion and in more sectors anized sectors that were T. Thi es under the tax net. Previously unorg elps in reduein easing lay revenue for the government Promotes seamless me. different nterstate trade: Under the previous tay r ales had different tax laws and procedures, leading to complexities in interstate trade. GST brings uniformity in tax rates, procedures, and compliance across the country. It facilitates seamless movement of and services between states, promoting economic int tion. Boost to the manufacturing and export sectors: GST promotes the manufacturing sector by eliminating the cascading effect and providing input tax credit. It reduces the ‘ax burden on manufacturers, making their products more competitive in the market Additionally, GST offers several export incentives and zero-rated provisions, making exports more lucrative Positive impact on consumers: GST aims to create a uniform tax structure, which can lead to a reduction in the overall tax burden on consumers. It eliminates hidden taxes and reduces the prices of goods and services, making them more affordable for the end consumer. DVANTAGES OF GST Initial implementation challenges: The implementation of GST can be complex and. challenging, especially during the initial phase. It requires businesses to adapt their accounting systems, tax processes, and compliance procedures to comply with the new tax regime. This transition period can be disruptive and time-consuming for businesses, particularly small and medium-sized enterprises (SMEs), Increased compliance burden: Although GST aims to simplify the tax structure, it in still impose a significant compliance burden on businesses. They are required to maintain detailed records, file regular returns, and adhere to various compliance requirements. This can be particularly challenging for small businesses with limited resources and may increase their administrative costs and Potential increase in costs: While GST intends to eliminate the cascading effect reduce the overall tax burden, there can be instances where the tax burden increases for certain industries or products. The tax rate under GST may be higher than the previous tax rates for specific goods or services, which can lead to increased costs for businesses. * Complexity in multiple tax rates: GST allows for multiple tax rates based on the of goods and services. This can introduce complexities in determining the correct tax rate for different products and services. It may require businesses to classify their products correctly, leading to interpretation and classification challenges, especially for items that fall under multiple categories or have unclear definitions catego Dr. Karthik Reddy. maa, MPhil, M. Com, KSET,Ph.0. aged Scanned with CamScannerDUAL GST MODEL: The Dual GST model is a tax system adopted by India for the and Services Tax (GST) Implementation of the Goods and Under the Dual GST model, both the c ‘ntral_governmer © governments have the > ler collect Gs’ "woods ricer a eaeeneeiue authority to levy and collect GST on the Supply of goods and services, In the Dual GST mode! |. bv components of GST are implemented. 1. Central Goods a cent dl Services Tax (CGST): The CGST is levied and collected by the Scxcunmient on intta-state supplies of goods and services. The revenue venerated from CGST goes to the central government. State Goods and Services is levied and collected by the state Soctiments on intra-state supplies of goods and services, The revenue generated from SGST goes to the respective state governments The Dual GST model ensures that both the central government and state governments have the authority (0 levy and collect GST on the supplies made within thei respective jurisdictions 1c allows for the distribution of tax revenue between the central government and state governments, promoting fiscal autonomy and ensuring a balanced revenue-sharing mechanism, In addition to CGST and SGST, the Dual GST model also includes the Integrated Goods and Services Tax (IGST), which is Jevied on inter-state supplies of goods and services. The |GST is collected by the central government, and a portion of the revenue is later distributed to the destination state where the goods or services are consumed. The Dual GST model allows each state to have its own SGST legislation, ensuring that GST is Dual GST model allows each state to have its own SGST legislation, implemented and administered at both the central and state levels in a cooperative federal structure UTGST ACT The UTGST Act primarily deals with the levy and collection of taxes on the supply of goods and services within the Union Territories. 1, Andaman and Nicobar Islands Chandigarh Dadra and Nagar Haveli and Daman and Diu (merged) Lakshadweep Delhi (National Capital Territory of Delhi) Puducherry (Pondicherry) Jammu and Kashmir SAYA we wH Ladakh Dr. Karthik Reddy. maa, MPhil, M. Com, KSET, Ph.O. Scanned with CamScanner Pagejem 1. In respect of the following, of goods or services. independent cases, determine the type of GST leviable on supply |. Mr Shiv of Dethi supplied goods to Mr. Vinod of Delhi Raman of Kashmir provided services to Shyam of Pune Janaki of Goa supplied goods to Mr. Cruz of Goa Pankaj supplied goods from his pla I ied goods from his place of business in Chandiga urender Dehradun (U.P) mae 5. Ms. Kajol sold goods to Rani, They both live in the state of Rajasthan Problem Consider the following details in respect of independent cases of taxable supplies by a registered person: fee ‘Value of Supply (RS.) a ~s0.000 2 ty i 60.000) 3 pply from Assam to Punjab 35.000 i ipply trou Delhi vo Goa 30,000) 5 iy trom Delhi to Puduchenyy ipply in Chandigarh The rates of GST to be followed are CGST @9%: SGSTUTGST @o & IGSTG IS. Find ovt the amouint of respective GST in respect of above independent cases of taxable supplies at normal rates. | Problem 3: ‘Analyze the following independent case and determine the type of GST that will be leviedoa the transaction. Mr. Sonu of Rajasthan, Udaipur supplied goods to Mr, Kansh of lui (Rajasthan) Mr. Swaminathan of Chennai provided services to Mr. Kelkar of Pune. ii iii Mrs. Shanyi of Puducherry supplied goods to Mrs. Elizabeth of Puducherry. iv, Ms, Soumya of Goa sent goods to Ms, Mona of Goa \ Chinmay of Deli sent goods to Nisha of Tamilnadn Dr. Karthik Reddy. 6a, MPhil, M. Com, KSET, PhD Scanned with CamScanner Page7GOODS AND SERVIC S TAX NETWORK ( ) The Ge Services Ta ods and Services Tax Network (GSTN) is a non-profit organization established to provide LT infrastructure and services for the implementation of the Goudls Tax (GST) in India, It acts as the backbone of the GST 1 technological platform for taxpayer registration, return filin and Services ‘gime by providing a robust tax payment, and other related processes * Tay Payer Services: GSTN provides a user- where taxpayers ndly online portal (www: ) register, file theit GST retrs, and perform other necessary compliance activities, The portal also offers various services like tracking payment status, generating e-way bills, and accessing information related to tax rates and rules Integration with Tax Authorities: GSTN integrates with the systems of both the central and state tax authorities to facilitate real-time data sharing and exchange. It enables tax authorities to access and analyze taxpayer data, conduct audits, and ensure compliance with GST regulations * Invoice and Input Tax Credit Matching: GSTN's IT infrastructure facilitates the matching of invoices and input tax credit claimed by taxpayers. It helps in preventing tax evasion, ensuring accurate reporting of transactions, and minimizing discrepancies in the input tax credit claims. * Security and Data Privacy: GSTN ensures the security and confidentiality of taxpayer data by implementing robust data protection measures. It adheres to strict protocols to safeguard taxpayer information and prevent unauthorized access. GST COUNCIL = The GST Council is a constitutional body established under the Goods and Services Tax (GST) Act in India + It is responsible for making key decisions regarding GST, including tax rates, exemptions, thresholds, procedural rules, and any other matters related to GST implementation and administration. The council is chaired by the Union Finance Minister of India and comprises representatives from both the central and state governments ion: The GST Council consists of the Union Finance Minister as the \d the finance ministers or = Compo: chairperson, the Union Minister of State for Finan e ministers in charge of finance from each state and union territory that has implement GST. + Decision-making: The GST Council operates on the principle of consensus-based decision-making, All decisions are made collectively, and each member has one vote The decisions of the council are binding on both the central and state government Dr. Karthik Reddy. mea, MPhil, M. Com, KSET, Ph.D. Scanned with CamScanner PageFunctions and Pow ” ‘owers: The GST. ne T Council has several functions and powers, inet owers, including but 1. Deciding the Gst 5 ‘Mes for goods and services, includ «tia # the threshold for exemption r lations on special rates fc cial rates for specific circumstance — . ‘ances or industries, Mining the rules and procedures for GST Pest administration, registra : ‘eistration, and return 4. Deciding o1 e t ciding on the division of tax revenue between the ntral and state governments. Resolving disputes between the centra and slate governments or among the states themselves, "Meet weet 2 Frequency: The GST Council meets periodically to discuss and make “cisions on GST-related matters. The frequency of meetings depends on the need and urget 2 ‘ney of the agenda items. Typically, the council meets at least once every quarter, Empowering Sub-Committees: The GST Council has the power to constitute sub- Committees or groups to examine specific issues, make recommendations, and provide technical inputs. These sub-committees play a crucial role in analyzing complex issues, and assisting the council in decision-making * Empowering Secretariat: The GST Council is supported by a Secretariat, which serves as its administrative arm. The Secretariat provides the necessary research, analysis, and coordination support to facilitate the functioning of the council + Review and Adaptation: The GST Council reviews the implementation of GST periodically and makes necessary adaptations or amendments to address any challenges or emerging issues. It ensures that the GST framework remains relevant, efficient, and in line with the evolving needs of the economy. ‘The GST Council plays a crucial role in the effective implementation and administration of GST in India, It promotes cooperation and coordination between the central and state ‘governments, fosters consensus-based decision-making, and ensuresa unified approach to GST across the country. GST COMPENSATION CESS, ALSO KNOWN AS THE COMPENSATION CESS and services to compensate the states in India 1e Goods and Services financial assistance to Is an additional levy imposed on certain goods for any revenue losses they may incur due tothe implementation of th Tax (GST) regime. It was introduced as a emporary measure to provide states during the initial years of GST implementation nd services that are categorized under coal, aerated drinks, and certain 10 these goods levied on specific goods tobacco products, the regular GST rates applicable i,m. Com, KSET, PhO, ‘The compensation cess i ‘ different rates, such as automobiles, luxury items. The cess is over and above Dr. Karthik Reddy. mea, MPh Scanned with CamScanner PaseDand services, The cess revenue is used to cre: * ale a ded Compensation Fund 1 dedi ‘Med fund known as the GST Go SE, ODS AND SERVICES TAX IDENTIFICATION NUMBER * GSTIN ; N stands for Goods and Services Tax Ident identification number assi red to ee ni tation Number 1 a unique 5 0 every registered tax Services Tax (GST) rey 7 fer under the Goods a Tay GST) rexime in India, GSTIN is 15-digit alphanumeric mumhe, a ie number that is used for varions GST fi ‘avious GST-related processes, inclu reesses, including regi el suse if fexistration, return filing, and tax * GSTIN serves as ° 'N serves as a unique identification number for each taxpayer, helping to rack nce, and tax liabilities. It is required to be mentioned on ee Feturns, and other GSt-related documents, The validity and authenticity 2 GSTIN can be verified on the official GST portal or through the GST verification tools available online their transactions, compl invoic T's important for businesses and taxpayers to obtain a valid GSTIN and ensure its accurate usage in all GST-related processes to comply with the GST regulations in India. - * The first two digits represent the state code as per the Indian Census 2011. * The next ten digits are based on the PAN (Permanent Account Number) of the taxpayer. + The thirteenth digit indicates the number of registrations within a state for the same PAN. + The fourteenth digit is by default "2", = The fifteenth digit is a check digit used for verification purposes. HARMONIZED SYSTEM OF NOMENCLATURE (HSN) ods for taxation purposes under the jes are intemationally arious industries. * [tis a standardized code system used to classify 20% Goods and Services Tax (GST) regime in India. HSN cod recognized and help in the systematic classification of goods across ¥ code that categorizes goods into different chapters, ed on their nature, composition, function, or use. The the next two digits indicate the heading, and the = The HSN code is a six-digi headings, and subheadings ba first two digits represent the chapter, last two digits specify the subheading. ¢ rate of GST applicable to a particular product dd by the government for each HSN code, and ir goods or services while filing + The HSN code is used to determine th ce. rescribe or service, The tax rates are p! y the power businesses must use the appropriate HSN code for the GST returns. r. Karthik Reddy. MBA, MPhILM. Com KSET, PhO Scanned with CamScanner rage LOLEVY AND COLLECTION OF TAX Section 8 of the Integrated Goods and Services Tax (I and Services Tax (IG! aoe ST) Act, 2017 in India deals with the PPIY #8 considered inter-state or intrastate, The section provides the place of supply for various types of supplies. Here's a bret determination of whether guidelines for determinin, explanation Inter. tate s Ply (Section 8(1) of IGST Act): Acc ording to this provision, a supply of w or services is considered inter-s ‘stent ate iFany of the following conditions are satisfied: a. The supplier and the recipient are located in different states b. The supplier and the recipient are locate different Union territories. © The supplier is located in one state and the recipient is located in another state or Union territory For example, if a supplier in Maharashtra sells goods to a recipient in Gujarat, it would be considered an inter-state supply. Intra-state Supply (Section 8(2) of IGST Act): A supply of goods or services that does not meet the criteria for inter-state supply is considered intra-state. In other words, if the ‘supplier and the recipient are located within the same state or Union territory, the supply is treated as intra-state For example, if a supplier in Karnataka sells goods to a recipient also located in Kamataka, would be considered an intra-state supply. The determination of whether a supply is inter-state or intra-state is crucial for the appropriate levy and collection of taxes, such as IGST for inter-state supplies and CGST/SGST for intra- state supplies, under the Indian GST regime Problem 1. ys GST under regular scheme and is not eligible for any Manish, a supplier of goods, pa the tax period threshold limit exemption. He has made following outward taxable supplies in = Intra-state supply of goods: Rs. 8,00,000. = Inter-State supply of goods: Rs. 3,00,000. are exclusive of taxes of CGST, SGST and IGST are 9 GST Payable by Mr Manish on outward supplies 1%, 9% and 18% Ifthe given amounts respectively. Compute eT, PhO Dr. Karthik Reddy. maa, Pil, M. Com KS Scanned with CamScanner Pagel 1Problem 2, Zora Emporium, Mumbai has issued following invoices Value of Supply 4) Gupta faney store, Ahmedabad 180,000 b) Rani Emporium, Pune 2.50,000 ¢) Kamal Entreprises, Delhi 3.00,000 Iftax rates were 9% CGST, 9% SGST and 18% IGST Compute GST Payable on outward supplies of Zohi porium, if no ITC is available SUPPLY Definition of Supply: Section 7(1)(a) states that supply includes all forms of supply of goods or services of both, such as sale, transfer, barter, exchange, license, rental, lease, or disposal. It encompasses both tangible goods and intangible services. PARAMETERS OF TAXABLE SUPPLY In the context of Goods and Services Tax (GST), there are certain parameters that determine whether a supply is considered taxable. These parameters help determine the liability of a supplier to charge and collect GST on the supply. Here are the key parameters for taxable supply: 1, Supply of Goods or Services: A taxable supply can be either the provision of goods or the provision of services. It encompasses any transaction that involves the transfer, exchange, lease, rental, barter, disposal, or licensing of goods or services for consideration 2. Consideration: A taxable supply must be made for a consideration. Consideration refers to any payment made by the recipient to the supplier, including monetary payment, non-monetary consideration, or any act or forbearance in retum for the supply. ness Activity: The supply must be made in the course o furtherance of business. 3. Bi n by a registered business entity or an It implies that the supply should be undert entity engaged in business activities with the intention of making a profit. 4. ‘Threshold Limit: In many jurisdictions, there isa threshold limit for GST reisaton Ifa supplier's turnover (aggregate value of all taxable supplies) crosses the specifi Dr. Karthik Reddy. mB, MPhil, M. Com, KSET,Ph.O. Scanned with CamScanner Pagel 2threshold within a 8iven period, they bec hey become li eae lable 0 register for on their taxable Pand charge Gst Taxable Event: A taxable event wi jurisdiction, the ta Bers the liability to pay GST LY Secur a different stages, such as the issuance of an he completion of the supply of woods or services. laxable supplies and charge GST, thorities, Once registered, they obi hem to comply with GST te able every Depending on the Invotce, receipt of payment. or t © GST Registration: To make t supplier must register ‘ain a unique identification lations and fulfil their tax obligations. for GST with the ta: number, enabli GST Rates: The t oe xability ofa supply depends on the applicable GS rates. Differem and services are categorized under different GST slabs, which specify the tax Pplicable to them. The supplier must charge G taxable supplies rates sT at the appropriate rate on TURNOVER LIMIT FOR GST REGISTRATION. (WHO IS LIABLE) In India, there are two tumover limits for GST registration based on the ype of business a. Regular Category For businesses operating in most states of India, the turnover threshold for GST registration is an annual aggregate tuover of 240 lakhs (Indian Rupees). However, in certain special category states, including the northeastern states of India, the turnover threshold is 220 lakhs b. Special Category States: For businesses operating in the northeastern states of India, including Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Himachal Pradesh, the tumover threshold for GST registration is 210 lakhs. It’s important to note that for certain categories of businesses, irrespective of turnover, GST registration is mandatory. This includes businesses engaged in inter-state supplies, e-commerce operators, input service distributors, and non-resident taxable persons. COMPOSITE AND MIXED SUPPLY As per Section 2 y refers t0 a ite Supply: 2(30) of the CGST Act, a composite supply re Composite Supply: As per Section mpi ply fe 1 supply consisting of two or more taxable supplies of goods oF se erty bundled and supplied in conjunction with each other. composite supply. one compane ‘dered the principal supply, while the other components are ancillary or incidental consi . principal supply. mined by the principal supply. The GST rate it ly is deter ‘The tax treatment of a composite supply icable based on the principal supply. In other ‘and tax liability of the composite supply are app! Dr. Karthik Reddy. mea, MPhil, M. Com, KSET,Ph.O, Scanned with CamScanner PageWords, the tas rate and treatment of the prineipal supply ae extended to the supply “ Fe composite Mixed Supply: As pet Section 2(74) of the CGST Act, a mixed supply refers to any supply ds or services or both " 1e5 or both, made in conjunction with each other, but are not naturally bundled. ina mixed supply, the supplies on each other and ca that involves two or more individual supplies of good are not dependent n be provided separately In the ease ofa mixed supply. the tay treatment is based on the supply that attracts the highest rate of tay among the individual supplies, The to the supply attracting the highest rate tire mixed supply is taxed at the applicable Problem 3: \ supply: is made by a taxable person that comprises font taxable supplies of goods and services. The tnnhividal rates of GST are the follo i a [3 c Goods bt Seriice Ifthe value of the package is Rs. 8000, you are required to determine the applicable rate and the total GST payable in each of the following independent enses: 1) tis acomposite supply a Supply, 2) risa composite supply a isthe Principal Supply. 3) Itis a composite supply and tem °C" is the Prineipal Supply. 4) Tis a composite supply and fem *D" isthe Principal Supply 5) tis a mixed supply. Problem 4: A supply is made by a taxable person tat comprises four taxable supplies of goods and services. The individual rates of GST are the following Category of tem includedin | Rate of GST |__| package A Goods B Service ic Goods [D | Service If the value of the package is Rs. 20,000, you are required to ‘determine the applicable rate and the total GST payable in each of the following independent cases: 1) It is amixed supply. 2) Itis.a composite supply and Item ‘A’ isthe Principal Supply 3) Itis.a composite supply and Item “B" isthe Principal Supply 4) Ieisa composite supply and Item *C is the Principal Supply '5) It is a composite supply and Item *D' is the Principal Supply. Dr. Karthik Reddy. MBA, MPhil, M. Com, KSET, Ph.D Scanned with CamScanner pagel 4EXEMPT SUPPLY; Exempt supply 1s defined under Section 2147) of the CGst es or both thai . Act. It refers to the supply of ically exempted from the levy of GST ‘ions oF provisions of the law are speci are listed under various notifie from GST. Exempt supplies supplies. These supplies mat rant them an exemption and no tax is levied or coll ate not subject to GST ted on such The list of exempt supplies can vary based on the provisions of the CGST Act a c ee P of the CGST Act and notifications Some common examples of exempt supplies in India inclutes 1. Certain ete icultural product fres! {ural products, such as fresh fruits and vegetables, unprocessed cereals. Education services provided by educational institutions 3. Health vi 3. Healthcare services provided by hospitals, clinics. and healthcare practitioners 4. Renting of residential properties for residential purposes. 5. Servic 7 ; 5. Services provided by the Reserve Bank of India, Central Government, State Government, ete. supply which wholly non- . attracts exempt taxable ee nil rate from tax supply; of tax ZERO RATED SUPPLY The concept of "Zero Rated Supply" is indeed covered under Section 16 of the Integrated Goods and Services Tax (IGST) Act in India. Zero-rated supply refers to the export of goods or services or both or the supply of goods or services or both to a Special Economic Zone (SEZ) or a Special Economic Zone developer. but the tax rate applicable to them is 0%, meaning no Zero-rated supplies are taxable supplies, 0 0 can be claimed for inputs, input tax is charged on such supplies. However, input tax credits services, and capital goods used in making zero-rated supplies. MOST COMMON GOODS WHICH ARE GST EXEMPT Here are some commonly exempted goods. 1d Vegetables: Unprocessed fresh fruits and vegetables are generally 1. Fresh Fruits an ‘exempt from GST. Basic 2. Unprocessed Cereals: millets, are typically exempt from GST. unprocessed cereals, such as rice, wheal, maize, and Dr. Karthik Reddy. eA, MPhil M. Com, KSET, Ph.D Scanned with CamScanner Pagel SMOST COMMON SERVICE Milk and Dairy Products: Milk, buttermilk, curd, and cert paneer and natural honey are exempt from GST “ve Eggs, Meat, laity products like nd Seafood Eyes, meat (including fish products are usually exempt trom GST Unprocessed F and seafood), and other animal od Gra ns. Unprocessed food ¢ enerally exempt from GST ins like pulses, lentils, and grams are ‘ommon salt (including iodized salt) is ex or Books and Newspapers GST mpl from GST ani manure, such as animal excreta, is exempt from GST Printed books, newspapers, and periodicals nic Manur are exempt from S WHICH ARE G: XEMPT Here are some commonly exempted services: 1 6. 9. 10. Healtheare Services: Services provided by hospitals, clinics, and healthcare bractvoners including doctors, dentists, and paramedics, are generally exempt from s Education Services: Services provided by recognized educational institutions, such as schools, colleges, and universities, are exempt from GST, Public Transportation: Services provided by public transportation systems, including local buses, metro, monorail, and certain railway services, are generally exempt from GST. Postal Services: Basic postal services provided by the Department of Posts are exempt from GST. Services by Government: Services provided by the Central Government, State Govemment, or Union Territory administrations are exempt from GST. except for certain specified services. Cultural and Sports Services: Services related to cultural 3 performances, exhibitions, and events, and services related to recognized sports events and competitions, are exempt from GST. Services by Charitable Organizations: Services provided by charitable organizations registered under relevant laws, including those related to healthcare, education, and religion, are generally exempt from GST. Services by Agriculture Sector: Several services related to agricultural activities, such as renting or leasing of agricultural land, post-harvest activities, and agricultural extension services, are exempt from GST. Financial Services: Certain financial services, such as interest on loans, insurance services, and services provided by the Reserve Bank of India, ate exempt from GST. Government-to-Government Services: Services provided by one government 10 another government or local authority are generally exempt from GST. ities, including Dr. Karthik Reddy. mba, MPhil, M. Com, KSET, Ph.D Scanned with CamScanner PagelREVIEW QUESTIONS 3. Marks 1. What are Goods and Services Tay? 2. What is Union Territory GST? 3. What is Supply? 4. What is Inter-State Supply? What is Intra-State Supply? 6. What is Composite Supply? 7. What is Mixed Supply? What is Exempted Supply? 8. What is Zero rate Supply? 10. What is Input tax Credit? 11, What is GST Compensation Cess? 12. Expand and Interpret HSN Code. 13. List out any 6 most common goods which are GST exempt. 14, List out any 6 most common services which are GST exempt. 15. Who is liable for GST registration based on turnover limit. 7 Mark: 16. Explain salient features of GST. 17. Discuss about subsuming of taxes. 18. Explain the benefits of implementing GST. 19. Discuss about the constitutional amendments of GST 20. Explain the structure of GST (Dual Model). 21. Explain the parameters of taxable supply. 22. What is GST Council? Explain the structure, powers and functions of GST Council. 23. Explain about Goods and Services tax Network, 24. Explain about Goods and Services Tax Identification Number KSET, Pho. Dr. Karthik Reddy. maa, Phi. M-Com, Scanned with CamScanner Pagel 7