By

Smt.Sowmya.K
Guest Faculty in School of Law
Manasagangotri, UOM &
Mysore
 CONCEPT OF GOODS AND SERVICE TAX[GST]
Meaning
“GST is a tax on goods and services with value addition at each stage
having comprehensive and continuous chain of set of benefits from the
producer’s or service provider’s point up to the retailers level where only the
final consumer should bear the tax.”
It is a comprehensive indirect tax on manufacture, sale and consumption
of goods and services at national level.
The GST is expected to replace all the indirect taxes in India. At the
centre's level, GST will replace central excise duty, service tax and customs
duties. At the state level, the GST will replace State VAT.
France was the first country to introduce this value added tax system in
1954 .
Definitions
Article 366 (12A) of the Indian Constitution defined Goods and Services
Tax (GST) to mean “any tax on supply of goods or services or both except taxes
on the supply of alcoholic liquor for human consumption.”
Article 366(26A) defines “service” to mean “anything other than goods.”
Article 366(12) defines “goods to include all materials, commodities, and
articles.”
Smt.Sowmya.K 2
 HISTORY OF GST
When we look in to the history of tax structure in the world, it
is found that several countries have already established the Goods
and Services 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. In
Australia, the system was introduced in 2000 to replace the Federal
Wholesale Tax.GST is a value-added tax in Malaysia that came into
effect in 2015. 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 idea of adopting Goods and Service Tax in India was first
suggested by the Central Government in the leadership of Sri Atal
Bihari Bajpayee in 2000. The state finance ministers formed an
Empowered Committee to create a road map and structure for GST
on the basis of their experience in designing State Value Added Tax.
The representatives from the centre and states were requested to
examine various aspects of the GST proposals and create report on
the thresholds, exemptions, taxations of inter-state supplies and
taxation of services. The committee was chaired by Mr Asim Das
Gupta of West Bengal.

Smt.Sowmya.K 3
 The Kelkar Committee (Headed by Vijay Kelkar) indicated in 2004 that
the existing tax structure had many issues that would be mitigated by the
proposed GST system.
In 2005, the Finance Minister of Central Government Mr P.
Chidambaram, during the discussion on budget, declared that the medium to
long term goal of the government was to implement a uniform GST
structure across the country, covering the whole production, distribution
chain.
In February 2006, the Finance Minister of India set 1 April,2010 as the GST
introduction date.
In July 2009, the new central finance minster Mr Pranab Mukharjee
announced the basic structure of the GST system. In November, the
Empowered Committee put forth the first Discussion Paper describing the
proposed GST regime with the expectation to start the debate and generate
inputs from various stakeholders.
The central government introduced the mission-mode project with a
budgetary outlay of Rs 1133 crore, to computerize commercial taxes in
states. This project laid the foundation for GST in India.
In March 2011, the government put forth the Constitution
Amenment (115th) Bill for the introduction of GST and the bill was sent to
standing committee for detailed examination. The standing committee starts
discussions on the bill in June 2012 and the deadline was set as 31st
December,2012 for the resolution of issues. Congress led central
government could not implement GST during her tenure.
Smt.Sowmya.K 4
 In May 2014, Mr Narendra Modi came into the power at centre. Arun
Jately, the Finance Minister of India, submits the Constitution Amendment
(122nd) Bill, 2014 in the Parliament. Government indicated that she is
looking to implement the GST by 1st April, 2016. In May, 2015 Lok Sabha
passes the bill but Rajya Sabha could not. In June 2016, government
releases the draft model law on GST to the public expecting suggestions and
views. In August 2016, the bill was passed in the Rajya Sabha. After
consent of Honourable President of India, the bill became an Act. Four bills
related to GST namely- Central GST Bill, Integrated GST Bill, Union
Territory GST Bill and GST (Compensation to States) Bill also became Act.
The GST Council also finalised on the GST rates and GST rules. The
Government declares that the GST Bill will be applicable from 1 July 2017,
following a short delay that is attributed to legal issues.
A Goods and Services Tax Council (GSTC) was created in Sep, 2016
by the union finance minister, revenue minister, and ministers of states to
take decisions on GST rates, thresholds, taxes to be subsumed, exemptions,
and other features of the taxation system. The state finance ministers
mentioned that the EC would be a platform for states where there would be
discussions of their regional issues. The GST Council is a separate entity
that would oversee the implementation of the GST system.
Smt.Sowmya.K 5
 OBJECTIVES OF GOODS AND SERVICE TAX
a) One Country – One Tax
b) Consumption based tax instead of Manufacturing
c) Uniform GST Registration, payment and Input tax
Credit
d) Subsume all indirect taxes at Centre and State Level
under
e) Reduce tax evasion and corruption
f) Increase productivity
g) Increase Tax to GDP Ratio and revenue surplus
h) Increase Compliance
i) Reducing economic distortions

Smt.Sowmya.K 6
 CONSTITUTIONAL PROVISIONS ON GST
Article-246A. Special provision with respect to goods and services tax.

Article-269A. Levy and collection of goods and services tax in course of

inter-State trade or commerce.

Article-279A. Goods and Services Tax CounciL

Article -366 of the Constitution,—

‘(12A) “goods and services tax”

‘(26A) “Services”

(26B) “State”

Smt.Sowmya.K 7
"246A. Special provision with respect to goods and services tax.
(1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2),
the Legislature of every State, have power to make laws with respect to goods and services tax
imposed by the Union or by such State.
(2) Parliament has exclusive power to make laws with respect to goods and services tax where the
supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.
Explanation.—The provisions of this article, shall, in respect of goods and services tax referred to in
clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax
Council.’’.
‘‘269A. Levy and collection of goods and services tax in course of inter-State trade or
commerce.
Goods and services tax on supplies in the course of inter-State trade or commerce shall be
levied and collected by the Government of India and such tax shall be apportioned between the
Union and the States in the manner as may be provided by Parliament by law on the
recommendations of the Goods and Services Tax Council.
Explanation.—For the purposes of this clause, supply of goods, or of services, or both in the course of
import into the territory of India shall be deemed to be supply of goods, or of services, or both in
the course of inter-State trade or commerce.
(2) The amount apportioned to a State under clause (1) shall not form part of the Consolidated Fund
of India.
(3) Where an amount collected as tax levied under clause (1) has been used for payment of the tax
levied by a State under article 246A, such amount shall not form part of the Consolidated Fund of
India.
(4) Where an amount collected as tax levied by a State under article 246A has been used for payment
of the tax levied under clause (1), such amount shall not form part of the Consolidated Fund of the
State.
(5) Parliament may, by law, formulate the principles for determining the place of supply, and when a
supply of goods, or of services, or both takes place in the course of inter-State trade or
commerce.’’. Smt.Sowmya.K 8
‘‘279A. Goods and Services Tax CounciL
(1) The President shall, within sixty days from the date of commencement of the
Constitution (One Hundred and First Amendment) Act, 2016, by order, constitute a
Council to be called the Goods and Services Tax Council.
(2) The Goods and Services Tax Council shall consist of the following members,
namely:—
(a) the Union Finance Minister........................ Chairperson;
(b) the Union Minister of State in charge of Revenue or Finance................. Member;
(c) the Minister in charge of Finance or Taxation or any other Minister nominated by
each State Government....................Members.
(3) The Members of the Goods and Services Tax Council referred to in sub-clause (c)
of clause (2) shall, as soon as may be, choose one amongst themselves to be the
Vice-Chairperson of the Council for such period as they may decide.
(4) The Goods and Services Tax Council shall make recommendations to the Union
and the States on—
(a) the taxes, cesses and surcharges levied by the Union, the States and the local
bodies which may be subsumed in the goods and services tax;
(b) the goods and services that may be subjected to, or exempted from the goods and
services tax; (c) model Goods and Services Tax Laws, principles of levy,
apportionment of Goods and Services Tax levied on supplies in the course of inter-
State trade or commerce under article 269A and the principles that govern the place
of supply;

Smt.Sowmya.K 9
 (d) the threshold limit of turnover below which goods and services may be exempted from
goods and services tax;
(e) the rates including floor rates with bands of goods and services tax;
(f) any special rate or rates for a specified period, to raise additional resources during any
natural calamity or disaster;
(g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and
Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh
and Uttarakhand; and (h) any other matter relating to the goods and services tax, as the
Council may decide.
(5) The Goods and Services Tax Council shall recommend the date on which the goods and
services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly
known as petrol), natural gas and aviation turbine fuel.
(6) While discharging the functions conferred by this article, the Goods and Services Tax
Council shall be guided by the need for a harmonised structure of goods and services tax
and for the development of a harmonised national market for goods and services.
(7) One-half of the total number of Members of the Goods and Services Tax Council shall
constitute the quorum at its meetings.
(8) The Goods and Services Tax Council shall determine the procedure in the performance
of its functions.
(9) Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a
majority of not less than three-fourths of the weighted votes of the members present and
voting, in accordance with the following principles, namely:—
(a) the vote of the Central Government shall have a weightage of onethird of the total votes
cast, and
(b) the votes of all the State Governments taken together shall have a weightage of two-
thirds of the total votesSmt.Sowmya.K
cast, in that meeting. 10
 (10) No act or proceedings of the Goods and Services Tax Council shall be invalid
merely by reason of—
(a) any vacancy in, or any defect in, the constitution of the Council; or
(b) any defect in the appointment of a person as a Member of the Council; or
(c) any procedural irregularity of the Council not affecting the merits of the case.
(11)The Goods and Services Tax Council shall establish a mechanism to adjudicate any
dispute —
(a) between the Government of India and one or more States; or
(b) between the Government of India and any State or States on one side and one or
more other States on the other side; or
(c) between two or more States, arising out of the recommendations of the Council or
implementation thereof.’’
Article 366 of the Constitution,—
(i) after clause (12), the following clause shall be inserted, namely:— ‘(12A) “goods
and services tax” means any tax on supply of goods, or services or both except taxes
on the supply of the alcoholic liquor for human consumption;’;
(ii) after clause (26), the following clauses shall be inserted, namely:—
‘(26A) “Services” means anything other than goods;
(26B) “State” with reference to articles 246A, 268, 269, 269A and article 279A
includes a Union territory with Legislature;’.

Smt.Sowmya.K 11
 DUAL GST MODEL TAXATION
The Goods and Services Tax (GST) is a comprehensive value added tax (VAT) on
the supply of goods or services.
Dual GST:- Many countries in the world have a single unified GST system i.e. a single
tax applicable throughout the country. However, in federal countries like Brazil and
Canada, a dual GST system is prevalent whereby GST is levied by both the federal
and state or provincial governments. In India, a dual GST is proposed whereby a
Central Goods and Services Tax (CGST) and a State Goods and Services Tax
(SGST) will be levied on the taxable value of every transaction of supply of goods
and services.
Impact on Prices of Goods and Services:-The GST is expected to foster increased
efficiencies in the economic system thereby lowering the cost of supply of goods
and services. Further, in the Indian context, there is an expectation that the aggregate
incidence of the dual GST will be lower than the present incidence of the multiple
indirect taxes in force. Consequently, the implementation of the GST is expected to
bring about, if not in the near term but in the medium to long term, a reduction in the
prices of goods and services. The expectation is that the dealers would start passing
on the benefit of the reduced tax incidence to the customers by way of reduced
prices. As regards services, it could be that their short term prices would go up given
the expectation of an increase in the tax rate from the present 10% to approximately
14% to 16%.

Smt.Sowmya.K 12
Benefits of Dual GST: – The Dual GST is expected to be a simple and transparent tax
with one or two CGST and SGST rates. The dual GST is expected to result in:-
• reduction in the number of taxes at the Central and State level
• decrease in effective tax rate for many goods
• removal of the current cascading effect of taxes
• reduction of transaction costs of the taxpayers through simplified tax compliance
• increased tax collections due to wider tax base and better compliance
Certainty of implementation:- The Finance Minister has made a categorical statement
in Parliament that GST will be implemented on April 1, 2013. In his subsequent
media interactions, he has further indicated that he is keen to implement the GST
even if some of the States are not ready or willing to implement GST by this date.
Accordingly, based on the present indications, as also on the basis of our subsequent
interactions with senior Government Officials, we believe that the April 1, 2013
timeline for introduction of the dual GST will be met.

Smt.Sowmya.K 13
 GST COUNCIL:
The Cabinet Ministry was given their approval for the establishment
of GST Council, notification regarding the establishment of Council was
issued on Saturday the 10th day September 2016 and the provisions came
into force on Monday the 12th day of September 2016.
For this purpose Article 279A having provisions regarding
establishment of GST Council was inserted after Article 279 of THE
CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT) ACT,
2016. The Union Finance Minister Mr. Arun Jaitley who is the head of GST
Council while the First Meeting of the council was held on 22nd and 23rd
September 2016 in New Delhi.
Constitution
According to the Article 279A, it is on the part of Prime Minister to
give the order to constitute the council of GST within the 60 days from the
12th September 2016 which is already notified by the Government.
Following are the designated personnels, who will form the GST Council
together:-
The Union Finance Minister who will be the CHAIRMAN of the council;
The Union Minister of State in charge of Revenue or Finance who will be the
MEMBER of council;
ONE MEMBER from each state who is Minister in charge of Finance or
Taxation or any other Minister, and anyone of them will be VICE
CHAIRMAN of the GST Council who will be mutually elected by them.
Smt.Sowmya.K 14
Quorum and Decision-Making
For a valid meeting of the members of GST Council, at least 50 percent of the
total number of the member should be present at the meeting.
Every Decision made during the meeting should be supported by at least 75
percent majority of the weighted votes of the members who are present and voting at the
meeting. In “article 279A” a principle is there which divides the total weighted vote cast
between Central Government and State Government :-
The vote of Central Government shall have the weighted of one-third of the total
votes
The votes of State Government shall have the weighted of two third of the total
votes, cast in the meeting
Functions of the GST Council
The GST council will be supposed to make recommendation to the Union and State on
the following matters :-
On subsuming of various taxes, cess, and surcharge in GST.
Details of services and goods that will be subjected to GST or which will be exempted
from GST.
On Threshold limit below which services and goods will be exempted from GST.
On GST rates including floor rate with bands of GST and any special rate for time being
to arrange resources to face any natural calamity.
Making special provisions for the following states:
Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram,
Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
On model law on GST, Principal of levy of GST and the principals which will govern
the place of Supply. Smt.Sowmya.K 15
 GST Impact on Gross Domestic Product (GDP) in India
The biggest tax reform is on its way and very soon Goods and Services Tax will be the part
of Indian Economy. A new and unified tax structure will be followed for indirect taxation on the
place of various existing tax laws like Excise duty, Service Tax, VAT, CST etc. and for sure the
new tax regime will eliminate the cascading effect of tax on transaction of products and services,
and it will result in availability of product and services to consumers at lower price. It is expected
that it will be helpful in increasing production and the purchasing power of the buyer which may
increase the GDP by 1% to 3%. Recently, India accounted 7.1 percent growth for the financial year
of 2016-17 while for the march quarter, it was behind the china at 6.1 percent in front of 6.9
percent of china’s statistics.
GST Positive Impact of GDP
There will be one tax rate for all which will create a unified market in terms of tax
implementation and the transaction of goods and services will be seamless across the states.
The same will reduce the cost of transaction. In a survey, it was found that 10-11 types of
taxes levied on the road transport businesses. So the GST will be helpful to reduce transportation
cost by eliminating other taxes.
After GST implementation the export of goods and services will become competitive
because of nil effect of cascading effect of taxes on goods and products. In a research done by
NCAER it was suggested that GST would be the key revolution in Indian Economy and it could
increase the GDP by 0.9 to 1.7 percent. As speculated earlier, the tax experts can now assume that
the growth will be around 1 to 2 percent after the implementation of the GST.
GST will be more transparent in comparison to the existing law provision so it will
generate more revenue to the Government and will be more effective in reducing corruption at the
same time. Overall GST will improve the tax Compliances.
In a report issued by the Finance Ministry, it was mentioned that Make In India
programme will be more benefited by the GST structure due to the availability of input tax credit
on capital goods.
As the GST will subsume all other taxes, the exemption available for manufacturers in
regards of excise duty will be taken off which will be an addition to Government revenue and it
could result in an increase in GDP.
Smt.Sowmya.K 16
 The GST regime has although a very powerful impact on many things including the
GDP also. The Gross Domestic Product has the tendency to loom on the shoulders of
revenue generated by the economy in a year. Still, a worthwhile point includes that the
GST has the capability to extended the GDP by a total of 2 percent in order to complete
the ultimate goal of increasing the per-capita income of every individual. Also, the GST
scheme will certainly improve the indirect revenues to the government as the tax
compliance will be further enhanced and rigid, extending the tax paying base which will
add to the revenue. The increased income of the government will redirected towards the
developmental projects and urban financing creating an overall implied scenario.
GST Negative Impact on GDP
As the GST rates are 5%, 12%, 18% and 28% and if the GST rate on service will
be finalized at 5% or 12% then cost of services will get reduced while in else case if the
rate will be 18% or 28% on services then services will become costlier and it will lead to
inflation for a short period.
In a report, DBS bank noted that initially GST will lead to rise in inflation rate
which will remain for a year but after that GST will affect positively on the economy.
As we know Real Estate also plays an important role in Indian economy but some
expert thinks that GST will impact the Real Estate business negatively as it will add up the
additional 8 to 10 percent to the cost and reduce the demand about 12 percent.
GST will applicable in the form of IGST, CGST AND SGST on the Center and
State Government, but some economists say that there is nothing new in the form of GST
although these are the new names of Central Excise, VAT, CST and Service Tax etc.
As every coin has two faces in the same way we tried here to familiarize the things
related to GST with both perspective i.e. positively and negatively in this article. Despite
having some factor which is being expected to affect the Economy adversely there are so
many other things which are expected with a positive impact on GDP.
Smt.Sowmya.K 17
Goods and Services Tax Network (GSTN)
Launch of GST needs mega infrastructural support including IT
facilities. So far, the Centre and State indirect tax administrations worked
under different laws, regulations, procedures and formats and consequently
they have independent IT systems. Integrating them for GST
implementation and bringing them under an entirely new indirect tax system
and administration need fresh institutional arrangement. For this task, the
government has created Goods and Services Tax Network (GSTN).
Meaning
The Goods and Services Tax Network (GSTN) is a non-government
non-profit private limited company created for providing the front end and
back end IT and infrastructural support for the working of GST. It is
registered as a non – profit Company under the New Companies Act in
March 2013.
Shareholding
Given its non-government nature, the shareholding is important.
Here, the Governments –centre, states plus UTs hold 49% of GSTN. Central
government holds 24.5% while the remaining governmental share of 24.5%
is held by states and UTs. It has an authorized capital of Rs.10 crore to
establish and operate the IT backbone of GST.
Smt.Sowmya.K 18
 The remaining 51% share is divided among five financial institutions—
LIC Housing Finance with 11% stake and ICICI Bank, HDFC, HDFC Bank and
NSE Strategic Investment Corporation Ltd with 10% stake each.
Management
Though the shareholding looks non-government, governments have more
say in the management of GSTN. The Central and the state governments
together have seven members in the 14-member GSTN board, including the
Chairman. Private share-holders have only three members. The remaining three
are independent members and a board-appointed chief executive officer. This
means that the strategic control of the company lies with government.
Functions of GSTN
Following are the main functions of GSTN:
(i) facilitating registration;
(ii) filing and forwarding the returns to Central and State tax authorities;
(iii) computation and settlement of IGST;
(iv) matching of tax payment details with banking network;
(v) providing various Management Information System reports to Governments.
(vi) analysis of tax payers’ profile; and
(vii) running the matching engine for input tax credit.
GST Suvidha Providers or GSP
GSP or GST Suvidha Providers are third party IT vendors who develop the web or
mobile base interfaces for taxpayers to interact with the GST network.
Smt.Sowmya.K 19
 GSTIN
GSTIN, short for Goods and Services Tax Identification Number is a unique 15 digit
identification number assigned to every taxpayer ( primarily dealer or supplier or any business
entity) registered under the GST regime. Obtaining GSTIN and registering for GST is absolutely
free of cost. Before GST was introduced, all dealers registered under the state VAT law were issued
a unique TIN number by the respective state tax authorities; GSTIN has replaced the same.
Business entities registering under GST are now provided with a unique identification number
known as the GSTIN.
Structure of GSTIN
Every taxpayer under the GST regime is provided with a State + PAN-based 15-digit Goods
and Services Taxpayer Identification Number (GSTIN). Here is the breakdown of the GSTIN
format:
The first 2 digits of the 15 digit GSTIN represents the state code.
The next 10 digits are the PAN Number of the person or the business entity.
The thirteenth digit is based on the number of registrations done by the firm within a state under the
same PAN.
The fourteenth digit will be the alphabet “Z” by default
The last digit is called the check code to detect errors and can be denoted by either a number of an
alphabet
Applying for GSTIN comes under the GST enrolment procedure. Once your GST
application is approved by the concerned GST officer, a unique GSTIN is allocated. There are 2
ways to apply for GSTIN, viz.

Smt.Sowmya.K 20
GST Login Procedure
1) Log on to GST online portal https://services.gst.gov.in/services/quicklinks/registration
2) Go to ‘New Registration’ and fill in the details such as your name, e-mail ID and mobile number in
Part A of the application
3) The portal will then verify your details by sending an OTP to your registered mobile and email
4) After the completion of the verification process, you will receive an Application Reference Number
(ARN) via mobile or email
5) You can now fill Part B of the application using the ARN. The documents that you will need in this
step include:
6) Photographs
7) Constitution of taxpayer
8) Proof(s) of the location of the business
9) Bank account details
10) Authorization form
11) In the next step, provide all the information and upload the required documents in the application
and submit the application using DSC or Aadhaar OTP
12) Once you have submitted the Part B also, the GST officer will verify your application within 3
working days. The officer, after verification, can either approve your application, in which case you
will receive your Certificate of Registration (Form GST REG 06), or the officer may ask for more
information using the Form GST-REG-03.
13) The additional details must be provided within 7 working days. Once you have provided the details,
the officer has the authority to reject the application providing reasons for the same in the Form
GST-REG-05. If the GST officer finds the details provided by you genuine, then the application
will be processed and you will receive a Certificate of Registration.
GST Seva Kendra
The second way to register for GSTIN is by visiting a GST Seva Kendra directly. The
government has established a plethora of service centers or “Seva Kendras” to facilitate all things
related to GST and for the ease of taxpayers as well. The government has set up the Seva Kendras to
facilitate the migration to GST for many taxpayers.
Smt.Sowmya.K 21
Format of GSTIN

Smt.Sowmya.K 22
 TAX INVOICE
Invoice is a document which provides evidence as to existence of transaction of sale or purchase of
goods or the agreement of supply. It is generally issued by the supplier notifying the purchaser of the
obligation to make payment in respect of any transaction. It contains information as mentioned under Rule 1
of GST Invoice Rules. A tax invoice is an essential evidence to:
a. support a registered person’s claim for the ITC of GST (input tax) incurred;
b. trigger the time of supply as the invoice date will determine when GST is to be accounted for by a
registered person on the supply of goods and services (accounting on invoice basis);
Section 2(59) defines invoice as a meaning assign to under section 28. In common parlance, Invoice
indicates the amount receivable by the person issuing the invoice from the person to whom the invoice is
issued.
IMPORTANCE OF TAX INVOICE
The GST required to be paid throughout the distribution chain of ‘Supply’, on the value addition
made at each stage is taxed thus avoiding double taxation. The GST will be paid in full, by utilizing the
credit amount of GST already paid by the input supplier and in cash pertaining to the value addition.
The GST system designed to be a self-regulatory system based on strong Information Technology
backing. This proposed system will be monitor by way of Invoice Reporting at every stage in the form of
Returns GSTR-1, GSTR-2, GSTR-3 etc or rectified in form of returns GSTR-1A, GSTR-2A, GSTR-3A.
Therefore, Tax invoices are the most important document under GST Scheme as they would issue by the
supplier notifying the purchaser of obligation to make payment in respect of any transaction.
Invoice is important for the determination of GST liability of taxpayers particularly is important for
following purposes:
1) For determination of address of delivery
2) For determination of continuous journey of goods or services
3) For input services distributor’s mechanism;
4) For determination of time of supply of goods and services;
5) Application of GST in case of change in rate of tax;
6) For determination of Value of goods or services;
7) For taking input tax credit;
8) Assessment and other proceedings.
Smt.Sowmya.K 23
Smt.Sowmya.K 24
 CENTRAL GOODS AND SERVICES TAX ACT, 2017
The Central Goods and Services Tax Act, 2017 has been enacted
to make a provision for levy and collection of tax on intra-state supply of
goods or services or both by the Central Government and the matters
connected therewith or incidental thereto. This series of Articles shall
analyze the provisions of Central Goods and Services Tax Act, 2017,
which has been enacted on 12 April, 2017.
Objects of CGST Law
Presently, the Central Government levies tax on, manufacture of
certain goods in the form of Central Excise duty, provision of certain
services in the form of service tax, inter-State sale of goods in the form of
Central Sales tax. Similarly, the State Governments levy tax on and on
retail sales in the form of value added tax, entry of goods in the State in
the form of entry tax, luxury tax and purchase tax, etc. Accordingly, there
is multiplicity of taxes which are being levied on the same supply chain.
Taxonomy of CGST Act
The CGST Act, 2017 comprises of 174 Sections in 21 Chapters and
three Schedules on supplies without consideration, treatment of activities
as to goods or services and activities which shall be considered as neither
goods or services.Smt.Sowmya.K 25
Salient Features of CGST Act
The Central Goods and Services Tax Act, 2017, inter alia, will provide for the
following, namely:—
a) to levy tax on all intra-State supplies of goods or services or both except supply of
alcoholic liquor for human consumption at a rate to be notified, not exceeding twenty per
cent. as recommended by the Goods and Services Tax Council (the Council);
b) to broad base the input tax credit by making it available in respect of taxes paid on any
supply of goods or services or both used or intended to be used in the course or
furtherance of business;
c) to impose obligation on electronic commerce operators to collect tax at source, at such
rate not exceeding one per cent. of net value of taxable supplies, out of payments to
suppliers supplying goods or services through their portals;
d) to provide for self-assessment of the taxes payable by the registered person;
e) to provide for conduct of audit of registered persons in order to verify compliance with
the provisions of the Act;
f) to provide for recovery of arrears of tax using various modes including detaining and sale
of goods, movable and immovable property of defaulting taxable person;
g) to provide for powers of inspection, search, seizure and arrest to the officers;
h) to establish the Goods and Services Tax Appellate Tribunal by the Central Government
for hearing appeals against the orders passed by the Appellate Authority or the Revisional
Authority;
i) to make provision for penalties for contravention of the provisions of the proposed
Legislation;
j) to provide for an anti-profiteering clause in order to ensure that business passes on the
benefit of reduced tax incidence on goods or services or both to the consumers; and
k) to provide for elaborate transitional provisions for smooth transition of existing taxpayers
to goods and services tax regime.
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 SECURITIES TRANSACTION TAX
STT is levied on every purchase or sale of securities that are listed on
the Indian stock exchanges. This would include shares, derivatives or equity-
oriented mutual funds units
The securities transaction tax (STT) was introduced in India a few
years ago, to stop tax avoidance of capital gains tax. Earlier, many people
usually didn’t declare their profits on the sale of stocks and avoided paying
capital gains tax. The government could tax only those profits, which have
been declared by people. To stop this situation, the then Finance Minister P
Chidambaram in the Union Budget 2004-05—introduced STT. Transactions
in stock, index options and futures would also be subject to transaction tax.
This tax is payable whether you buy or sell a share and gets added to the price
of the stock at the time the transaction is made. Since brokers have to
automatically add this tax to the transaction price, there is no way to avoid
it. The Finance Ministry has supported the introduction of the STT to
simplify the tax regime on financial market transactions. According to the
ministry, STT is a clean and efficient way of collecting taxes from financial
markets. In the words, STT is a neat, efficient and easy-to-administer tax and
it has the great advantage of virtually eliminating tax avoidance.

Smt.Sowmya.K 27
 STT is levied on every purchase or sale of securities that are listed on the
Indian stock exchanges. This would include shares, derivatives or equity-oriented
mutual funds units. The rate of tax that is deducted is determined by the central
government, and it varies with different types of transactions and securities. STT is
deducted at source by the broker or AMC, at the time of the transaction itself, the net
result is that it pushes up the cost of the transaction done.
Scope of STT
According to the Securities Contracts (Regulation) Act, 1956, STT would be applicable
on following securities.
Shares, bonds, debentures, debenture stock or other marketable securities of a like
nature in or of any incorporated company or other body corporate
Derivatives
Units or any other instrument issued by any collective investment scheme to the
investors in such schemes
Security receipt as defined in section 2(zg) of the Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002
Government securities of equity nature
Rights or interest in securities
Equity-oriented mutual funds
STT is not applicable for any off-market transaction.

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Meaning E WAY BILL
E-way bill is an electronic document generated on the GST portal evidencing movement of
goods. It has two Components-
Part A comprising of details of - GSTIN of recipient, place of delivery (PIN Code), invoice
or challan number and date, value of goods, HSN code, transport document number (Goods Receipt
Number or Railway Receipt Number or Airway Bill Number or Bill of Lading Number) and
reasons for transportation; and
Part B comprising of transporter details (Vehicle number). As per Rule 138 of the CGST
Rules, 2017,every registered person who causes movement of goods (which may not necessarily be
on account of supply) of consignment value more than Rs. 50000/- is required to furnish above
mentioned information in part A of e-way bill. The part B containing transport details helps in
generation of e-way bill.
Purpose of E-Way Bill
E-way bill is a mechanism to ensure that goods being transported comply with the
GST Law and is an effective tool to track movement of goods and check tax evasion.
Responsibility to generate E-Way Bill
E-way bill is to be generated by the consignor or consignee himself if the transportation is
being done in own/hired conveyance or by railways by air or by Vessel. If the goods are handed
over to a transporter for transportation by road, E-way bill is to be generated by the Transporter.
Where neither the consignor nor consignee generates the e-way bill and the value of goods is more
than Rs.50,000/- it shall be the responsibility of the transporter to generate it. Further, it has been
provided that where goods are sent by a principal located in one State to a job worker located in any
other State, the e-way bill shall be generated by the principal irrespective of the value of the
consignment.
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Validity of E-Way Bill
The validity of e-way bill depends on the distance to be travelled by the goods. For
a distance of less than 100 Km the e-way bill will be valid for a day from the relevant
date. For every 100 Km thereafter, the validity will be additional one day from the
relevant date. The “relevant date” shall mean the date on which the e-way bill has been
generated and the period of validity shall be counted from the time at which the e-way bill
has been generated and each day shall be counted as twenty-four hours. In general, the
validity of the e-way bill cannot be extended. However, Commissioner may extend the
validity period only by way of issue of notification for certain categories of goods which
shall be specified later. Further, if under circumstances of an exceptional nature, the goods
cannot be transported within the validity period of the e-way bill, the transporter may
generate another e-way bill after updating the details in Part B of FORM GST EWB-01.
Exceptions to e-way bill requirement
No e-way bill is required to be generated in the following cases –
a) Transport of goods as specified in Annexure to Rule 138 of the CGST Rules, 2017
b) goods being transported by a non-motorised conveyance;
c) goods being transported from the port, airport, air cargo complex and land customs
station to an inland container depot or a container freight station for clearance by
Customs;
d) in respect of movement of goods within such areas as are notified under rule 138(14)
(d) of the SGST Rules, 2017 of the concerned State; and
e) Consignment value less than Rs. 50,000/-
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STATE GOODS AND SERVICES TAX ACT, 2017 [SGST]
SGST, short for State Goods and Service Tax, is one of the three main
categories of Goods and Service Tax, i.e. (CGST, IGST, and SGST) and carries a
concept of one tax one nation. SGST falls under the State Goods and Service Tax
Act 2016.
Features of SGST
SGST is levied and collected by the states on all goods and services supplied for
consideration.
The tax collected is deposited to the accounts of the respective state
Each state has its separate SGST act under its State Goods and Service Tax
Department. However, the basic features of the GST law for all the states like the
charges, valuation, taxable event, measure, classification, etc would remain the same
across the respective act of each state
SGST is not applicable to the exempted goods and services as they do not come
under the influence of GST. Furthermore, SGST is also not applicable where the
aggregate annual turnover is less than the prescribed limit.
Intra-State Supply is referred to any supply where the supplier and the place of
supply reside in the same State or Union Territory. In such a case of supply of goods
and services, a seller must collect both CGST and SGST. Once both the taxes are
collected, the CGST part gets deposited with the Central Government. And the
SGST gets deposited with the respective State Government.
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 Integrated Goods and Service Tax [IGST]
Meaning
"Integrated Goods and Services Tax” (IGST) means the tax levied under this Act
on the supply of any goods and/or services in the course of inter-State trade or
commerce and for this purpose.”
Integrated goods and services tax (IGST) would mean the tax levied under IGST
Act on the supply of any goods and / or services in the course of inter-state trade or
commerce.
This IGST based on the principle-IGST rate= CGST rate + SGST rate (more or less)
Salient Features of the enactment
The IGST Act comprises of the following 11 Chapters, 33 Sections and 8 Definitions.
The Act is called the Integrated Goods and Services Tax Act, 2017 (in short IGST), an
Act enacted to levy, collect and administer IGST in India.
This Act shall be applicable to the whole of India, i.e., including the State of Jammu &
Kashmir. And shall come into force from a date which will be notified by the Central
Government by way of a notification.
The IGST Model gives meaning to the GST Act of which IGST is one of the
components. The IGST Act clarifies that Centre would levy IGST which would
be CGST plus SGST on all inter-State transactions of taxable goods and services with
appropriate provision for consignment or stock transfer of goods and services.
Smt.Sowmya.K 32
 The seller making supply outside the state will pay IGST on value
addition after adjusting available credit of IGST, CGST, and SGST
on his purchases. And the exporting State will transfer to the Centre
the credit of SGST used in payment of IGST.
On the other hand, the Importing dealer will claim credit of IGST
while discharging his output tax liability in his own State. The Centre
will then transfer to the importing State the credit of IGST used in
payment of SGST.
Integrated GST shall also apply to import of goods and services into
India. The basic ideology stipulates that any supply of goods or
services in the course of import of goods or services into Indian
territory shall be deemed to supply involving inter-state trade or
commerce and hence liable to IGST.
Interstate trade or commence will, therefore include :
1. Supplies made in the course of – Inter-state trade or commence
2. Import into Indian territory (deemed to be inter-state)
3. Export (deemed to be inter-state)

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 Union Territory Goods and Service Tax Act [UTGST]
The Constitution(One Hundred and first Amendment) Act, 2016 inserted a new clause ,
Clause 26B in Article 366 of the Constitution. As per this clause-State with reference to Articles
246A, 268,269,269A and 279A includes a Union territory with Legislature.
Even State for the purposes of GST, includes a Union territory with Legislature. Delhi and
Puducherry are Union Territories with legislature and are considered as – States technically SGST
cannot be levied in a Union Territory without legislature. This applies to following Union Territories
of India:
1) Andaman and Nicobar Islands
2) Lakshadweep
3) Dadra and Nagar Haveli
4) Daman and Diu
5) Chandigarh
Objectives of the enactment
a) It provides for levy of tax on all intra- State supplies of goods or services or both, except
alchoholic liquor for human consumption, at the rates recommended by the GST Council.
b) It empowers the Central Government to grant exemptions on the recommendationof the GST
Council.
c) Enables apportionment of tax and settlement of funds on account of transfer of input tax credit
between the Central Government, State Governments and Union Territories;
d) Empowers recovery of tax, interest or penalty payable by a person and remaining unpaid;
e) Empowers establishing of an Authority for Advance Ruling to enable the taxpayers to seek
binding clarity on taxation matters;
f) Provides for elaborate transitional provisions for smooth transition of taxpayers to GST regime;
and
g) Allows application of certain provisions of the CGST Act, 2017 to the extent relevant for the
purposes of this Act;
Smt.Sowmya.K 34
3. Officers under this Act
The Administrator may, by notification, appoint Commissioners and such other class of
officers as may be required for carrying out the purposes of this Act and such officers shall
be deemed to be proper officers for such purposes as may be specified therein: Provided
that the officers appointed under the existing law shall be deemed to be the officers
appointed under the provisions of this Act.
4. Authorisation of officers
The Administrator may, by order, authorise any officer to appoint officers of Union
territory tax below the rank of Assistant Commissioner of Union territory tax for the
administration of t his Act.
5. Powers of officers
(1) Subject to such conditions and limitations as the Commissioner may impose, an officer
of the Union territory tax may exercise the powers and discharge the duties conferred or
imposed on him under this Act.
(2) An officer of a Union territory tax may exercise the powers and discharge the duties
conferred or imposed under this Act on any other officer of a Union territory tax who is
subordinate to him.
(3) The Commissioner may, subject to such conditions and limitations as may be specified
in this behalf by him, delegate his powers to any other officer subordinate to him.
(4) Notwithstanding anything contained in this section, an Appellate Authority shall not
exercise the powers and discharge the duties conferred or imposed on any other officer
of Union territory tax.
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6. Authorisation of officers of Central Tax as proper officer in certain circumstances
(1) Without prejudice to the provisions of this Act, the officers appointed under the Central
Goods and Services Tax Act are authorised to be the proper officers for the purposes of this
Act, subject to such conditions as the Government shall, on the recommendations of the
Council, by notification, specify.
(2) Subject to the conditions specified in the notification issued under sub-section (1), —
(a) where any proper officer issues an order under this Act, he shall also issue an order
under the Central Goods and Services Tax Act, as authorised by the said Act under intimation
to the jurisdictional officer of central tax;
(b) where a proper officer under the Central Goods and Services Tax Act has initiated
any proceedings on a subject matter, no proceedings shall be initiated by the proper officer
under this Act on the same subject matter.
(3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order
passed by an officer appointed under this Act, shall not lie before an officer appointed under
the Central Goods and Services Tax Act.
7. Levy and collection
(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the Union
territory 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 of the
Central Goods and Services Tax Act and at such rates, not exceeding twenty per cent., as
may be notified by the Central 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 Union territory tax on the supply of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect
from such date as may be notified by the Central Government on the recommendations of the
Council.

Smt.Sowmya.K 36
(3) The Central 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 Union territory 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 Central 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, he does not have a
representative in the said territory, such electronic commerce operator shall
appoint a person in the taxable territory for paying tax and such person shall be
liable to pay tax.

Smt.Sowmya.K 37
8. Power to grant exemption from tax
(1) Where the Central Government is satisfied that it is necessary in the public interest so to
do, it may, on the recommendations of the Council, by notification, exempt generall y
either absolutely or subject to such conditions as may be specified therein, goods or
services or both of any specified description from the whole or any part of the tax leviable
thereon with effect from such date as may be specified in such notification .
(2) Where the Central Government is satisfied that it is necessary in the public interest so to
do, it may, on the recommendations of the Council, by special order in each case, under
circumstances of an exceptional nature to be stated in such order, exempt from payment of
tax any goods or services or both on which tax is leviable.
(3) The Central Government may, if it considers necessary or expedient so to do for the
purpose of clarifying the scope or applicability of any notification issued under sub -
section (1) or order issued under sub-section (2), insert an explanation in such notification
or order, as the case may be, by notification at any time within one year of issue of the
notification under sub-section (1) or order under sub-section (2), and every such
explanation shall have effect as if it had always been the part of the first such notification
or order, as the case may be.
(4) Any notification issued by the Central Government under sub-section (1) of section 11 or
order issued under sub-section (2) of the said section of the Central Goods and Services
Tax Act shall be deemed to be a notification or an order issued under this Act.
Explanation. —For the purposes of this section, where an exemption in respect of any
goods or services or both from the whole or part of the tax leviable thereon has been
granted absolutely, the registered person supplying such goods or services or both shall not
collect the tax, more than the effective rate, on such supply of goods or services or both. 38
Smt.Sowmya.K