GOODS AND SERVICES TAX (GST)

Types of Taxes in India

• Direct Tax : Direct taxes are imposed on corporate entities and
individuals. These taxes cannot be transferred to others.
• Indirect Tax : Indirect tax is a type of tax that is passed on to another
individual or entity. Indirect taxes are generally levied on a manufacturer
or supplier who then passes that tax to the final consumer. Indirect tax is
not directly levied on the income of a person.
GST is a multi-stage tax system which is comprehensive in
nature and applied on the sale of goods and services. The main
aim of this taxation system is to curb the cascading effect of other
Indirect taxes and it is applicable throughout India.

The following are the merits of goods and services tax in India
• Regulation of the unorganized sector
• E-commerce operators no longer suffer from differential treatment
• Fewer complications
• Composition scheme
• Registration process and filing of returns are simple
• Higher threshold
• Elimination of the cascading tax effect
EXISTING INDIRECT TAX STRUCTURE

Entry Tax & Octroi

Customs Excise Duty

Duty Entertainment Tax

Property Tax
Central
Levies Luxury Tax

Central Sales VAT

Cess Service Tax
Tax

State
Levies

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 TYPES OF GST

• Stands for Central GST

CGST • Tax collected by Central Government
• Applicable on supplies within the state

• Stands for State GST

SGST • Tax collected by State Government
• Applicable on supplies within the state

• Stands for Union Territory GST

UTGST • Tax collected by Union Territory
• Applicable on supplies within the Union Territory

• Stands for Integrated GST

IGST • Tax collected is shared between Centre and State
• Applicable on interstate and import transactions
Understanding CGST, SGST, UTGST & IGST

State 1
Foreign Territory

State 2
Union territory without legislature
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Central Taxes: TAXES NOT SUBSUMED UNDER GST
• Customs Duty
• Other Customs Duty like anti-dumping
State Taxes:
duty, Safeguard duty etc.,
• Export Duty • Road & Passenger Tax
• Toll Tax
• Property Tax
• Electricity Duty
• Stamp Duty & Registration Fees
 GOODS NOT COVERED UNDER GST

➢ Petroleum Products
Petrol
Diesel
Petroleum Crude
Aviation fuel
Natural Gas
➢Alcohol for Human Consumption
➢Power Sector
 SALIENT FEATURES OF GST
The GST would be applicable on the supply of goods or services.
Destination based consumption tax.
The tax would accrue to the State which has jurisdiction over the place
of consumption which is also termed as place of supply.
Levied at all stages right from manufacture up to final consumption with
credit of taxes paid at previous stages available as setoff.
In a nutshell, only value addition will be taxed and burden of tax is to
be borne by the final consumer.
Exports would be tax-free and imports taxed at the same rate as
integrated tax (IGST) levied on inter-State supply of like domestic
products
 SALIENT FEATURES OF GST
An Integrated GST (IGST) would be levied and collected by the Centre on
inter-State supply of goods and services.
HSN code shall be used for classifying the goods under the GST regime.
For Services, Service Accounting Codes (SAC) shall be used.
Exports and Supplies to SEZs shall be treated as zero-rated supply. No tax is
payable on exports but ITC related to the supply shall be refunded to
exporters.
Import of goods/services would be subject to IGST in addition to Basic
Customs duty.