Introduction t 6st Major defects in structure of indirect taxes prior to G.S.T Over the period of almost six decades the complexities and showed several sh system. These short coming prevailing indirect tax regime create jortcomings forcing Government t overhaul the existing S are summarised below. 1. Cascading Effect: Both central an Government levy tax on the s levy tax on manufacture of goods and the later levy VAT ego Government does not permit credit of excise duty paid by the manufacture to the dealer Sf goods. Thus VAT is also payable an excise duty component of the price cascading effect. Similarly service tax is payable on rendering of service. No tax pald on input service used in selling of goods is provided by the levied on tax. It boosted inflation, m6 gotide Fortier. nsal of service 2. Multiplicity of Tax/Cess: Multiple taxes were levied in pre GST regime like Excise duty, VAT, Entry tax, luxury tax, Entertainment tax, Service tax, Octrol ete: These taxes were in additions to various cesses imposed by State and Central Government like Krishi Kalyan Cess, cess ete All this made the tax structure very cumbersome 3. Overlapping of Jurisdiction:Over the years, distinction be become hazy, due to which there is overlapping of state VAT and Central Ser transactions like works contract, food related services of restaura soflware, SIM cards, renting of movable property etc. In these cases it whether the transaction was sale of goods or rendering of service. Therefore both t and state Government would impose tax. 4. Rivalry amongst states: Pre-GST regime of indirect tax was not destin origin based tax. In that regime taxes are collected and utlized by the sta where goods/services are transacted/manufactured or supplied, This would encourage st .¢ administration provide sales tax/VAT relief to attract industries and at the same time * goods from other state by imposing entry tax, oc from other states. luxury tax ete. on goods cor fe being one nation ot devel 5 Hindrance to integrated markt syste: India despte Berg one natin could nat deve natal market due to invisible bariersof Central State tax VAT. ent tax ete as ment in last paint. These invisible barriers were visible in he form of check posts on the boundar of states. yunted by states on entry point milion o 6. Loss of Man and Truck hours: Due to check posts mounted by st‘man hours and Truck hours were lost Besides that huge corruption was involved which mad) logistics management a costly affair 7. Difficulty in Compliance for Taxpayers tioned already pre GST regime had multi-pli of Tax and consec ently tax laws. M manufacture for Excise, VAT for ach tax had a different taxable event like re multiple of Tax authorities. Compliance required volumi the part taxpaye is0 promoted Inspector raj iculty in Cross Verification of Credit availed by department to get the verif jessee: Earlier it was difficult for the tax ation report from supplier of goods to know whether the supplier has issued particular invoice on the basis of which input tax credit has been taken by the Purchaser. Due to lack of online data the verification was done off line Often the report of upPliet was not received or recelved after considerable lapse of time. Many scrupulous dealer exploited this and availed fraudulent credit 9. Tax Evasion: Burden of compliance, m iplicity of tax laws increa taxes. Fudging of records, concealment of tran adopted to remain id the propensity to evade action, bribing the tax officials were the tools 10. Huge Amount of litigation: With multiple tax laws each having different taxable events res was lot of disputes regarding availment of credit, determining ma facture of goods, value of 900d8, classification of goods etc. Dispute settlement mechanism is almost choked with such disput 5 resulting in pendency of tax den 2)-Structure and need of 6.S.T in India GST has tax slab rates of 5%, 12%, 18%, and 28%. 7% items are exempted fi 14% items have 5% GST ta 18% GST slab rate and 19% items have 28% GST slab ra 3ST, whereas, slab and 17% items have 12% GST tax slab. Around 43% items have How Does GST Registration Work For You? Any business offering sale of goods with annual turn over of 40 lacs or service with annual turn ration for ‘over of 20 lacs would requite the regiFind the structure of GST in india SST was introduced ith the aim of minimizing the tax burden and inflation rates, A ‘amalgamation of vat nie based tax syst lous taxes, GST is a comprehensive, uniform, multi-stage, e am that is applied to every value addition brought some tax reli Although 1 niable is that the significant increase in compliance The GST tax structure comprises of Cent Services Tax (SGST), Integrated Goods and Serv T). There are four slab tiers r ) and Union Territory G Services Tax (UT the lowest a for essential items and the highest for luxury good: Fn percent to 28 perc Central taxes that are subsumed by GST are: + Central excis duty + Additional excise duties + Excise duties levied under the Medicinal and Toilet Preparatio + Service tax ‘+ Additional customs duty oF Countervaling duty ‘= Special additional duty of customs = Central surchatges and cesses in the nature of taxes on goods/ser State taxes absorbed under GST are ‘© State VAT Luxury tax «Entertainment tax thats levied by the local body + Taxes onadvertise” + Taxes on lottery, betting and gambling + State charge and cesses + Central sales tax ve slabs - 0% 5%, 12%, 18% and 28% ‘+ Goods and Services are divided into fhWho should register for GST? The following entities have to mandatority do GST registration * Business entities with an aggregate turnaver per annum exceeding 40 lakh: S of goods on the e-commerce platform + When selte ell gonds to other states + Ecommerce aggregators hat are liable to pay Reverse Charges © Individual supply Via e-commerce aggregators GST tex rates on common items Tax slab | Products Ni Alllive animals other than horses, meat, certain dairy products like fresh milk, Pasteurised milk, curd, buttermilk, cream; eggs, natural honey, fresh vegetables ‘and fruits, coconuts, cereals lke rice, maize, barley, flour, sweets, etc. | SS Other household necessities such as frozen meat and vegetables, edible oi, Butter, milk powder, skimmed milk, coffee, tea, groundnuts, soya beans, bread, drugs, ete 12% This includes computers and processed food ike cheese, refined gugar, spices, | instant foods, packaged fruit juices, nuts, spices, etc. 18% Certain packaged foods like condensed milk, cornflakes, pastries; tolletries like hair oll, toothpaste and soaps; and capital goods and industrial intermediaries are covered here. 28% Aerated waters containing sugar; luxury items such as premium cars, and small” cars, consumer electronics like AC and refrigerators, cigarettes, high-end motorcycles are included in this slab,Need of 6.8.7 India he old indirect tax regime hi many drawback and rulify the majority ofthe shorteominge by otf ene P Seamless Flow of Credit: ST is a destination tax, the revenue of SGST ordinary accrues to th ates. The interstate supplier in the exporting State can set off the available credit of CGST, SGST/V and IGST against the IGST payable on an interstate supply made by him. The Importing state buying is allowed to avail the credit of IGST paid on fe purchases made by him. 7 Unlike the earlier scenario where the credit chain used to break in case of interstate sales on account of non-VATable CST, unde nterstate supplies. The centre transfers to the payment of UTGST/SGST. The revenue of int State, and the exporting State transfers to the centre the cre payment of IGST. Thus, the IGST needed a robust settlement mechar and the St claims and inform re ‘A.central agency is needed which can act as a clearing ho pective governments to transfer the funds help of a robust IT infra, Boosts in exports: Suppose the Indian marketplace is competitive in ter hich will result in more numbers of exporters and ultimately foreign players wil try to enter, peneft the nation Competitive prices: GST eliminates all other taxes of indirect nature, and this will effectively mean that the tax ‘amount paid by end consumers will reduce. As we study economics | 1, more “demand for that product, which will result in more consumption and will benefit the ent Increase In revenue: One reason behind the need for GST was also to boost the revenue ‘easy to understand, and a simple tax structure wi iment ng mote taxpayers and the nation. GST Is. imeturn, itil ine ‘ease the revenue for the Indian goEasy and straightforward tax structure: Before GST, taxpayers needed to pay a lot of taxes, but with GST, a single tax s tex needs to be paid, which is comparatively easy and business complexities will reduce and result in less paperwork, saving both money to understand, For a 3d tim Conclusion As wi liscussed the issues with the old indirect tax regime, a new and better tax regime w needed in India, and GST was in talks for an extended period. Though GST still has some shortcomings that the council constantly looks over and improves, the outcomes have bee! excellent and have been a successful revolution till now! GST covers up and nullifies the old system's negatives and offer ferits, which we discussed in this article Benefits of GST 1. Integrated National Market GST aims to make India a common market with the economic barriers thus paving the way for an integrate will ensure seam less and smooth movement of o nmon tax rates and procedures and remove nom at the national lev and service across the nat 2. Elimination of Cascading Effect: Cascading of tax oc levied. At certain occasions, ticular activity is taxed by bot d State Government Which leads to duality of taxes. This results in ca I overcome the problem of tax cascading through Input Tax Credit Mechanisms and ultimate burden o taxes to be paid would be on the consumer of Goods and Services 3. Removal of Multiplicity of Taxes: GST will remove all the multiple taxes which are levied in the p? lke Excise Duty. Value Added Tax, Entry Tox, Luxury Tax, Entertainment Tax, Octo} and ‘Services Tax shall subsume under GST. There s 3GiNsparency and ease of doing business in India 4. Increase in GDP: GST u tainly bring ease of doing business in India, itis expecte Business Index of India which remains around 140 bring trust and faith in the taxation reg that the Ease of Doing ly Foreign inves leading to GDP Gro all fall to dos me, leading to huge capt There shall be boom in the manufacturing as well as figures. It will ce inflow fror 5. Efficient Administration by Government GST is a fully automated tax regime. From filing of retuins to refunds to assessme proceedings everything shall be online. There shall be least physical in taxpayer and the revenue authorities. Online System is set to bring tran: su & SotTUption and better administration by the Govenmen nbel Easy compliance: Arobust and comprehensive IT system would b Therefore, all tax payer serv the foundation of the GST regime in India. 85 such as registrations, returns, payments, ete, would be available to the taxpayers online, which would make compliance easy and tra Uniformity of tax rates and structures: GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doit Removal of cascading: system of seainless tax-credits throughout the value chain, and across boundaries of Sates vould ensure that there {s minimal cascading of taxes. This would reduce hidden costs of doing business. Improved competitiveness: sould eventually lead to an improved implementation of the Reduction in transaction costs of doing busine: ompettiveness forthe rade and industr. Word Bank befeves hat he mpereriatsy Te als un Service Tax (GST), combined with alsmanting of interstate cher ore etal reform that could improve competriveness of India's manufactl Gain to manufacturers and exporters:y The subsuming of major Central and Stat input goods and sery 1axes in GST, complete and comprehensive set-of and phasing out of Central Sales Tax (CST) would reduce the locally manufactured goods and services, This wil increase the competitiveness of india ‘Seeds and services inthe intemational market and give boost to Indian exports, The uniform in 12x fates and procedures across the country will also go a long way in reducing the compliance cost ras cantyelS cle geome Simple and easy to administer: Multiple inditect taxes at the Cent eal and State levels are being replaced by GST. Backed with a robust end-to-end IT sys fem, GST would be simpler and easier fo administer than all other Indirect taxes of the Centre and State levied so far Better controls on leakage: GST will result in bet tran {ax compliance due to a robust IT infrastructure Due to the seamless er Of Input tax credit from one stage to another in the chain of value addition, there is an in lan of GST that would incentivize tax compliance by trades. ‘ult mechanism inthe des Higher revenue efficiency: GST is exp fed to decrease the cast of collection of tax ri fenues ofthe Government, and wll therefore, lead to higher revenui efficiency Single and transparent tax proportionate to the value of goods and services: Bue to multiple indirect taxes being levied by the Centre and State, with incomplete or no input {ax ctedits available at progressive stages of value addition, the cost of most goods Services in the country today are laden with many hidden taxes. Under GST, there would ‘one tax from the manufacturer to the consumer. leading to transparency of taxes paid to the final consumer, Relief in the overall tax burden: Credits of mput taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value adltion at each stage. Beca efficiency gains and prevention of leakages, the overall tax burden on most commodities will ‘come down, which will benefit consumers. The final consurer will thus bear only the GST charged by the last dealer inthe supply chain, with setoff benefits at all the previous stagesConstitutional Provisions of ¢.¢-7 The Constitution contains the [ Given to the c Way that both the c nion List and the State Let nite and State entre and the stat Separate taxes is S received the power to oy y ‘and legislation hag aislatures. Fo entre and i Soares result of these changes: *+ The delineation of powers to levy and make laws with re ‘+The applicability and scope of the GST law ‘= The manner of apportionment of revenue from GST among Centre ar ‘= The constitution, powers and duties of the G: ntinuation of existing taxes to give way for GST + The diseo * Themanner of providing compensation to States for loss 0 Introduction of GST ticle 246A: Special Provision for GSTThis Article was newly inserted to give power to the Parliament and the respective Legislatures to make laws on GST respectively imposed by each of them. However, the Parliament of india is given the exclusive power to make laws with respect to inter-state Supplies. The IGST Act deals with inter-state supplies. Thus, the power to make laws under t GST Act will rest exclusively with the Parliament, Further, the article excludes the fol SST until a date recommended by the GST Council products from the scope of * Petroleum Crude * High-Speed Diesel + Motor Spirit + Natural Gas + Aviation Turbine Fuel Article 269A: Levy and Collection of GST for Inter-State Supply Wile Atticle 246A gives the Parliament the exclusive power to make laws with respect to inter- State supplies, the manner of distribution of revenue from such supplies between the Centre and the State is covered in Article 269A. I allows the GST Councllto frame rules thie regard, Import of goods or services will also be called as inter-state supplies. Ths glves the Contra Government the power to levy IGST on impor transactions. Import of goods was subject to Gountervaliing Duty (CVD) inthe eatlier scheme of taxation, IGST levy helps a taxpayer to aval the credit of IGST paid on import along the supply chain, which was not possible betore Article 279A: GST Council entre and Stat This Article gives power to the President to constitute a joint forum of the called the GST Council. The GST Council is an apex member committee to modify, reconcile or to procure any law or regulation based on the context of Goods and viees Tax in India. Article 286: Restrictions on Tax Imposition This Was an existing article which restricted states from passing any law that allowed them to fe or in the case of imp. collect tax on sale or purchase of goods either outside the st se of serv transactions. It was further amended to restrict the passing of any laws in Further, the term ‘supply’ replaces ’sale or pure‘Article 366: Adltion of important detnitons e5 Union Territory with le ‘Compensation to States Under GST his Act also contains a p ‘What does the Seventh Schedule State? he Seventh Schedule to Article 246 contains three ists, which contain th Inion and the State G List ~t State List Incontains the matters in resp (of which the state gover =I: Concurrent List It contains the mattes in respect of which b rie Govern het power fo make laws. The relevant entrles inthis lst were adjusted in for the following:+ Tocontinue the levy of excise duty by the Centre on manufact re/production of Petroleum products namely: petroleum crude i peed diesel, motor spirit, and aviation turbine fuel. tn addition to the above, excise duty is also levied on to and tobacco products. As a result, tobacco and tobacco products are subject to bot five petroleum products was given tothe states too Yertainment tax was abolished except where itis levied by local bode Concept of CGST act, ‘About the Central Goods and Services Tax (CGST) plies of both goods and services by th Central Government and will be governed by the CGST Act. SGST wil lve Be ened os he gam This implies that both the Central and the vernments wail agree on combining their levies with an appropriate proportion { sharing between them. However, ts clearly oned n Section 8 ofthe GST Act that the taxes be levied on all Intra‘State supplies o Concept of sesT One of the tay componsnts of GST Service Tax is One of the three categories undk derstanding could be that SaisyifeqEntinaianin: faxes on ottery, betting and gambling, Entry tax not in lieu of Octo, State Gesses a taxin GST called S relate to supply of goods and services et. are subsun All the tax p lected under the head SGST is forConcept of UTEST UTGST Meaning JTGST Act ni y Goods and Services T i intrastate supply of goods and services together wi ed un goods and services do not include supply of alcoholic liqu man con: nement asf the taxable pers UTGST states + Andaman and Nicobar Islands + Dadra and Nagar + Damn and Di iat is Integrated Goods and Services Tax ( Inder GST, {GST is a tax levied on oll Inter-State supple Note: Under 1GST. would be zerorrated. Exper Tax will be shared between the Central and State GAn example for GST at a businessman Rajesh from Maharashtra had sold orth Rs. 1,00,000. The GST rate is 18% rel narge Rs. 18,000 as IGS Registration under GST SST Rules alongwith FORM GST istration of any business entity un let the GST Law implies obtaining a unique number Known as the GSTIN/UIN from the tax authorities so thatthe registered person can collect tax on behalf of the goverment and there by availinput tax credit fr the taxes on his inward supplies. Without registration, a person caniot do the same. ability for Registration (Section 22) ‘900ds oF service or both from tory year exceeds 20 lakhs rupees, he shall be lab sd, However, i such Person makes taxable supply from any o cial hall be lable to be Fegistered if his aggregate tumover in a financial year ex : However, as per ‘Amendment act 2018, the threshold limit has been in specified category of state Who should register for GST? mandatory av registration + Business entities with an a ‘= Sellers of goods on the e-commerce platform © When sellers sell gots to other states + comm ‘© Businesses that are liable to pay Reverse Charges + Individvals supplying via e-commerce aggregatorsInput Tax Credit InputTax Credit means ¢ Which are used forthe thon backbone of GST and is one i aiming the credit dit ofthe GST paid on 'e Mechanism of Input Tax Gre thee 8 for the inte AS GST is a single tax levied a reaches the en 88 India et), the cha # there is seamie ute of goods, of the same and broken and everybotl is abe t ke benef What is input credit? Input credit means at the time Paid on inputs. Say, you ate amanufacturer- tan ny tax paid on input ( tax payable on output only need to deposit Rs 7 ES) is Rs 300 You NAL PRODUCT) is Rs ROHA an claim INPUT CREDIT of 50 in taxes. See here How to claim input credit under GST? To claim input credit under GST You must have @ tax inv (of purchase) or debit note issued by registered dealer + You should have received the goods/service arged on your purchases has been depasited/paid tothe govemmen ;sh or via claiming input credit supplier in cash o 9 plier has filed GST re Joaded the invoice in their GSTR-1 and it appears in GSTR:28 of the Supplier has uploaded feciplent or buye + path-breaking reform of GST is that input creditis ONLY allowed ifyou Possibly the most pat 9 he collected from you. So every input credit you are c plier has deposited the supplier h Se ae aioe suppers mustbe ST complan3= Well low you to claim input Jaim it. Therefore, to re you can cal shall be mat credit on Purchases all YOU" Spey ov 68} wsE filing of return NS and E pa Ment of taxes With the intr ti Payment tobe mane ine 8c sytem OAS ren Current positi th e been made mand, On of reg E paymey garding the latory step by step The tS as follo Vall persons benefit ho are tax audited are req Pees e required to pay the income tax fringe 2 the assess should obt: n the Inte D and a passw. Provided by the bank concern Internet pin from 1 ne ass t banking facility from any bank it ate the Internet bank account It is nade it whe to op: 1d RBI h; t 2009 it free to have IPIN 3 for making payment the person should log on to eit ior the income tax Gepartment site or the site of ti 4 the challan are availabl le on the site and the person should carefully fill the details the challan have been linked with the pan database maintenance by the income tax department So the name and address are displayed when the pan is entered in the challan 5 currently there are 26 banks which offer the E payme! lity 6 when the challan is filled in the person is automatically transferred to the bank site He can make the payment from that site 7a challan receipt is automatically generated when the payment is successful The asses should take a print out of such receipt 8 the assess should verify that the payment has reached the government account by checking the seller status at Following steps should be taken to make online tax payment Open Internet banking account with any of the bank listed above Go to website income tax India Click on pay tax online Fill in the required challan online. Help is available on screen as {AQ downloads etc Make tax payment through net banking account onlineA challan counterfoil will be available instantaneously on the screen with CIN challan identification number challan identification number on this counter file should be quoted in return of income Print the counterfeit and also save itin the computer if required Check if your payment has reached the income tax department at Advantages of paying tax online You can pay taxes from any location at an time through your net bankiny account sal - AS soon as your bank authorizes payment how to do wnload you will receive a clear legible receipt counterfeit from your bank Translation 1D of the e-payment transaction will be available to you in your bank statement You can check online if your money has actually reached the it this you have to go to tax information network website rtment for Following banks offer E payment facility in India aXis Bank state Bank of Indore state Bank of India vijay bank Punjab National Bank HDFC Bank Indian overseas bank oriental Bank of Commerce | Canada Bank State Bank of Patiala Indian Bank Bank of Baroda Bank of india Idbi Bank State Bank of Mysore Bank of Maharashtra State Bank of Hyderabad Corporation Bank state Bank of Bikaner and Jaipur state Bank of Travancore State Bank of Saurashtra Dena Bank union Bank of India syndicate bank ICici Bank Allahabad BankE filing The asses covered under compulsory required to fi are require Section 44 AB that is tax audited person le return el urn electronical d to file the income tax ret Also all the corporate assess turh electronicall The Excel ct based return prepar: Website ration utility for all fo Pu Y for all forms is available at the Income tax India filing tl i Private companies h: ey can be downloaded free of cost Also some jave come out asses may use any of , a such return preparation utility The asses should fill the appropriate form applicable for him There validating every page of the form if there are validating bs for any errors They are displa The asses has to generate an XML file of the form the tab of gene! used to generate these file These file is to be uploaded For electronic filing of return the asses is required to register with the above mentioned site the asses has to fill in the password and secret question and answer to it in the registration form The secret question can be us changing the password ‘An email is sent to the email address given in the registration form from this email the asses can activate the registration unless the registration is, The filling is not possible the asses can log on to the site using his pan as use ID and the password he has registered his selects the submit returns tab from the site after loggi the screen display the browse tab for selecting the file to be uploaded The ‘asses should select the generated XML file and click on upload button the return is almost instantly uploaded and the asses can get copy of itr v acknowledgement these itr v is password protected The passwo it isthe pan in small letters and the date of birth or establishment in the opmmvyY the asses should get two print out of the itr vone he should keep as office copy ‘and the second copy duly signed by him should be sent to income tax department cpc, postbox no 4, electronic city post office, bangalore S60100 kenrnataka by ordinary post within thirty days from uploading of the xm! flethe department will send E receipt of the ITR V received by email to the ‘eelstered email ID of the asses in due course when did he recite his received the E filing is complete ifthe asses has got digital signature he can sign the return digitally while uploading the XML file In this case there is no necessity to send ITRV to Bangolore the ITRV generated itself is the proof of filling of the return the asses who not required to Efile the return compulsorily can optionally use this facility of e filing 12s company’s allan individual and firm covered under tay audit are required tosend written digitally steps in E filing select appropriate type of return form download return preparation software for selected return form feel Your return off line and generate a XML file register and create a user ID and password login and click on relevant form on lift panel and select submit re turn browse to select xML file and click on upload button Far ecesstul upload acknowledgment detail would be displayed Click on print to generate print out of acknowledgment ITRV form Because Ayakar Gaye in case the return is digitalis signed on generation of acknowledgment The return filing process get completed You may-take a print Out of for your record in case the return is digitally signed on full uploading of E return the ITRV form would be generated which needs to be printed by the taxpayers If this an acknowledgment come verification form the taxpayer has to fill up the verification part and verify the same a duly verified ITRV form should be mailed to income tax department CPC post bag number one electronic city post office Bangalore 560 100 Karnataka biordinary post only we didn’t want 20 days after the date of transferring the data electronically