GST Basic

WELCOME
All
AT
NRL
Dr.Amit FCA,CMA MCom,
OBJECTIVE OF THE WORKSHOP
•GST OVERVIEW
•THE BASIC UNDERSTANDING GST LAWS
•PLACE OF SUPPLY & TIME OF SUPPLY
•ELECTRONIC CASH LEDGER
•REGISTRATION NUMBER
•GST RETURNS
•TRANSITION ISSUES
GST Ready
Dr.Amit FCA,CMA MCom, Ph.d.9811264821

Constitutional
• Concurrent • Authority for Centre to • GST defined as

jurisdiction for levy & collection of any tax on
Article 246A
Article 269A
levy of GST by IGST on supplies in supply of goods
the Centre and the course of inter- or services or
Article 366(12A)
the States State trade or both other than
commerce including on alcohol for
imports human
• Parliament has • Import of goods or consumption
exclusive power to provision of services
make laws with from outside India will
respect to goods be treated as Inter-
and services tax State supplies
where the supply • ‘Place of supply’ of
takes place in the goods & services to be
course of inter- determined as per
State trade or Rules formulated by
commerce Centre

Present
Indirect Tax
Regime and
its
shortcoming
s
EXISTING INDIRECT TAX STRUCTURE
Entry Tax & Octroi
Customs Excise Entertainment Tax

Duty Duty
Electricity Duty
Centr Luxury Tax

al
Levie
Central VAT
SaleCsesTsax
s Service
Tax
State
Levi
es

PRESENT SCENARIO: ISSUES & CONCERN
Indian truck drivers clock an average of 280 km

per day as against world average of 400 km per
day and 700 km per day in US.
Truck drivers in India spend 60% of their time
check posts & toll plazas.
There are 650 odd check posts in the country
and 11 categories of taxes.
Introduction of GST will help improving the Indian

truck productivity
PRESENT SCENARIO: ISSUES & CONCERN
 At present the Restaurants are charging

both Central Tax (Service Tax) and State
Tax (VAT)
After introduction of GST single tax will be

applicable

Current Indirect Tax Structure
Subject of Tax levy divided between Centre and State
EXCISE DUTY SERVICE TAX
Removal of Provision of
Good from the Service
Factory
Service Service
Provider Receiver
VAT/CST CUSTOMS DUTY
Sale of
Goods
Import or
Export of Goods
Trader Buyer

The Effort and Work Done
18000 +
30 + Man Hours of
10 Years…
Sub-Groups & discussion by
In Making
Committees GST Council
14 EC Meetings Constitution
175 +
in 10 years and Amendment and 5
Officers
13 GSTC Laws approved by
Meetings
Meetings in 6 collaborative effort
months

Present - Major Indirect TaxLevies
Central Taxes State Taxes Local body Taxes
• Central Excise • VAT/Sales Tax & CST • Octroi

Duty • State Excise duty • LBT
• Excise under M&TP
Act • Entertainment Tax • Property Tax
• Additional • Luxury Tax • Entertainment
duties of excise Duty
• Taxes on lottery, betting
and gambling • Gram Panchayat
• Custom Tax
Duty • Entry tax
• Stamp Duty
o Basic
• Electricity Duty
o CVD
• Profession Tax
o SAD
• Service Tax

Existing Indirect Tax Structure in India
Central Taxes State Taxes
• Central Excise duty • State VAT / Sales Tax
• Additional duties of excise • Central Sales Tax
• Excise duty levied under Medicinal • Purchase Tax
& Toilet Preparation Act • Entertainment Tax (other than
• Additional duties of customs (CVD those levied by local bodies)
& SAD) • Luxury Tax
• Service Tax • Entry Tax (All forms)
• Surcharges & Cesses • Taxes on lottery, betting &
gambling
• Surcharges & Cesses
GST
Constitution amended to provide concurrent powers to both Centre & States to

levy GST (Centre to tax sale of goods and States to tax provision of services)
Understanding CGST, SGST, UTGST & IGST
State 1
Foreign Territory
State 2
Union territory without
legislature
Features of Constitution Amendment Act
Alcohol for human

Power to tax remains with the State
consumption
Five petroleum
products – crude oil , GST Council to decide the date from
diesel, petrol, natural which GST will be applicable
gas and ATF
Part of GST but power to levy

Tobacco additional excise duty with Central
Government
Entertainment tax Power to tax remains with the State

levied by local bodies

Benefits of GST (1/2)
1 Reduction in Cascading of Taxes

Decrease in
2 Overall Reduction in Prices Inflation
3 Common National Market

Ease of Doing
4 Benefits to Small Taxpayers Business
5 Self Regulating Tax System

Decrease in “Black”
Non-Intrusive Electronic Tax System
Transactions
6

17
Benefits of GST (2/2)
7 Simplified Tax Regime

More informed
8 Reduction in multiplicity of Taxes consumer
9 Consumption Based Tax

Poorer States
10 Abolition of CST to Gain
11 Exports to be Zero Rated

Make in India
12 Protection of Domestic Industry - IGST

18
Present - Major Indirect TaxLevies
Central Taxes State Taxes Local body

Taxes
• Central Excise • VAT/Sales Tax & CST • Octroi

Duty • State Excise duty • LBT
• Excise under M&TP
Act • Entertainment Tax • Property Tax
• Additional • Luxury Tax • Entertainment
duties of excise Duty
• Taxes on lottery, betting
and gambling • Gram Panchayat
• Custom Tax
Duty • Entry tax
• Stamp Duty
o Basic
o CVD
• Profession Tax
o SAD
• Service Tax

Present Indirect Tax Structure – Cascading effect of
taxes
Particulars Value Tax
Manufacture of Goods 1,00,000

Add: Excise Duty (12.5% of 1,00,000) 12,500 12,500
Ex-factory value 1,12,500
Add: Vat (13.5% of 1,12,500) 15,188 15,188
Taxable Amount 1,27,688
Total Transaction Cost
Cascading effect of tax i.e. tax on tax

GST – Perceived advantages
 Higher threshold for traders and service providers
 Benefit to end consumers on account of reduction of tax

incidence on commodities:
Present Tax Incidence GST Tax Incidence
Excise Duty / CVD 12.5%
VAT / SAD 13.5%
Octroi 5.5% 18%
Aggregate Tax 31.5%
Effective Tax Burden (considering 34.71%
cascading effect)
 Elimination of multiple taxation on

same transaction
 Removal / minimization of cascading

effect of taxes
Reduction in Price of Goods under GST
All other
taxes are
Cumulative taxes replaced by
of 32% levied GST
Rs. 132
Rs. 128
Service VAT
Tax – 1% 14.5%
32% Entry 28%
Tax Excise GST @
CST 12.5%
2% 2% 28%
Rs. 100
Rs. 100
Cost of production
of goods is Rs. 100 Overall
incidence of
tax will be
reduced

21 21
Reduction in Price of Goods under GST
Service tax
Service tax 15% replaced by
and embedded GST
VAT of ~3%
Rs. 115 Rs. ~115
15% Service 18%

Tax
Rs. 100 GST
VAT
Rs. 97 Rs. 97
Cost of production Overall

of goods is Rs. 97 incidence of
tax will be
same

22 22
Major Taxes subsumed in GST
Central State Local Body

Taxes Taxes Taxes
• Central • VAT/Sales Tax • Octroi
Excise Duty & CST
• Local Body tax
• Additional • Purchas
(‘LBT’)
Excise Duty e tax
• Excise under • Entertainme
M&TP Act nt Tax
• Countervailin • Luxury
g Duty Tax
• Special • Taxes on lottery,
Additional Duty betting and
• Service
Tax gambling
• Entry
tax

Major Taxes retained Post-GST
Central Taxes State Taxes Local Body Taxes
• Central Excise on: • State Excise on Alcohol liquor • Property Tax
o Tobacco products • State VAT on: • Entertainment Duty
o Petroleum Products • Gram Panchayat Tax

o Alcohol liquor
• Basic Custom Duty
o Petroleum Products
• Stamp Duty
• Profession tax
• Road tax
• Taxes on Mineral Rights

GST – Fundamental shift in taxationbasis
State A Revenue goes State A
(Manufactured to State A (Manufactured
) )
Origin Based
Movement of
Movement of
Destination
Tax levied on all
Based
goods
goods
products
PRODUCED Tax levied on all
domestically products
(such as excise CONSUMED
duty on domestically
manufacture)
State B Revenue goes to State B
(Consumed) State B (Consumed)
Shift of taxable event from being produced to getting consumed

Revenue from inter-state transaction to accrue to the DESTINATION State & not to ORIGIN State

7
7
GST – Proposed Rate Structure
• Proposed Rates in GST Council Meeting held on 03rd –
04th October 2016: Description Rates
Exports, Deemed Exports, Essential items (vegetables, food grains) 0%
Common use items / necessity items (bulk drugs, etc) 5%
Standard rates 12% and 18%
Demerit rate (tobacco products, luxury item, aerated beverages) 28%
 No abatement prescribed till date

 No special tax rate prescribed till date
 The Council has proposed a broad rate of 15 % as cess
on demerit goods.
GST –Important features
Meaning • Broad based and comprehensive levy on goods and services consumed in
economy
Dual Model • Central GST (CGST) to be levied on intra state supplies by Central
Government
• State GST (SGST) to be levied on intra state supplies by State Government
Union Territory GST (UTGST) to be levied on intra state supplies by Union
Territory
• CGST & SGST or CGST & UTGST would be levied simultaneously on intra-
state supply
• Integrated GST (IGST) to be levied on inter state supplies by Central
Government and to distributed between Centre and States
Destination • At present VAT is collected and retained by originating state
• Under GST, tax to accrue to the taxing authority which has
Based
jurisdiction over the place of consumption also termed as place of
Consumption
supply
Tax Dr.Amit FCA,CMA MCom,
GST – Important Features
Registration • Branches / units of taxable person in different states are regarded as
distinct person
• Separate registration for branches / units in different states are to be
obtained
• No concept of centralized registration
TDS Specified recipient of goods and services of contract value exceeding
Rs.2,50,000 will be obliged to:
• Deduct TDS @ 2% (1% CGST + 1% SGST) on amount paid or
credited to supplier’s account
• Pay such amount before 10th of subsequent month
• Issue TDS certificate within 5 days from payment of tax
• File monthly TDS returns on 10th of subsequent month
Reverse Charge • Reverse charge to be prescribed (goods and service)
• Reverse charge on supplies received from unregistered persons
Exemptions As notified by Dr.Amit
council FCA,CMA MCom,
GST – Important Features
Export of • It will be zero rated
Goods • Supplier will have 2 options:
and
 Supply goods or services or both without payment of GST
Services
and claim refund of unutilised Input tax credit; or
 Supply goods or services on payment of GST (in cash or from ITC
balance) and claim refund of GST paid on exports
Supply to SEZ • It will be zero rated
unit and SEZ • Supplier will have 2 options:
Developer
 Supply goods or services or both without payment of GST
and claim refund of unutilised Input tax credit; or
 Supply goods or services on payment of GST (in cash or from ITC
balance) and claim refund of GST paid on such supplies
Sale of • It is neither supply of goods nor supply of services (Schedule III) and
Land/ hence not liable to GST
buildi Dr.Amit FCA,CMA MCom,
ng
Dual GST: Scenarios
Intra-State Supplies Liable for

CGST & SGST
Inter-State Supplies Liable for

IGST
Branch Transfers Liable for IGST
Imports Liable for IGST CGST+SGST
Exports entitled for Zero Rating

‘Intrastate’ and ‘Interstate’
Intrastate: CGST &

SGST/UTGST
leviable
Location of Supplier
Same States or
Union Territory INTRA State Supply
Place of Supply
Interstate:
IGST
leviable
Location of Supplier
• Different States
• Different Union Territory
INTER State trade/commerce
• A State and a Union Territory
Place of Supply

Tax levies in GST regime for Supply of Goods/Services
- Relevant extract of tax invoice
Intra-State Inter-State
Supply Supply
Particulars Amou Amou Particulars Amou Amou
nt nt nt nt
(Rs.) (Rs. (Rs.) (Rs.
) )
Value of Goods / Services 100,000 Value of Goods / Services 100,000
CGST(9% of 100,000) 9,000 IGST (18% of 1,00,000) 18,000
SGST/ UTGST (9% of 9,000 18,000
100,000)
Total 118,000 Total 118,000
Amou Amount
nt
Few mandatory details:

1. Name and address of Supplier
2. Name and address of Buyer
3. 15 digit GST Identification no. of dealer as well as buyer
4. HSN Code of goods supplied / SA code
Dr.Amit of services
FCA,CMA MCom, supplied
Post GST - Supply chain
Imports Outside India Zero rated

Overseas Overseas
Vendor customer
BCD- Cost**
IGST* Exports
Maharashtra Purchase/service
Gujarat
Purchase / Service IGST* Vendor
Vendor Factor y
CGST + SGST* Transfer

* Cenvatable Transfer Warehouse
No tax IGST*
** Not cenvatable
*** B2B Cenvatable &
B2C non-cenvatable
Warehouse
Sale CGST
+
SGST***
Sale CGST + SGST*

Agent
Sale Sale
Customer Retailer Distributor
Sale
CGST + SGST* Customer
CGST + SGST***
Dr.Amit FCA,CMALLPMCom,
India
CGST + SGST***
Dual GST Scenario for Manufacturers
Procurement of
goods Intra-State sales of
goods
Intra-State C Excise CGST
VAT SGST
C Excise CGST
VAT SGST Manufacturer

Inter-State sales
Inter-State
C Excise IGST
C Excise IGST
CST
CST
Procurement of Services
Import
Exports
BCD BCD No taxes No taxes
Intra-State Inter-State Import
CVD IGST Stock Transfers
SAD S Tax CGST S Tax IGST S Tax IGST
No taxes IGST
SGST

Dual GST Scenario for Traders
Procurement of Intra-State sales of

goods goods
Intra-State VAT CGST
SGST
C Excise CGST
Trader
VAT SGST Inter-State sales
Inter-State CST IGST
C Excise IGST
CST
Procurement of Services Exports
Import
No taxes No taxes
BCD BCD Intra-State Inter-State Import
Stock Transfers
CVD IGST S Tax CGST S Tax IGST S Tax IGST No taxes IGST
SAD
SGST

Dual GST Scenario for Service Providers
Procurement of
goods
Intra-State services
Intra-State
S Tax CGST
C Excise CGST
SGST
VAT SGST
Service Provider
Inter-State Inter-State services
C Excise IGST S Tax IGST
CST
Import Procurement of Services

Exports
BCD BCD
No taxes No taxes
Intra-State Inter-State Import
CVD IGST
S Tax CGST S Tax IGST S Tax IGST
SAD
SGST

Illustration to Showcase
Tax Benefit under GST
Present Scenario (Intra-State Trade of Goods)
State Tax = 13.31

( 11 + 1.10 + 1.21)
VAT = 12.10 VAT = 13.31
VAT = 11 ITC = ( 11) ITC = ( 12.10)
1.10 1.21
Input Manufacturer Output Manufacturer Dealer Consumer
Excise = 11
Excise = 10 ITC = (10)
1
Central Tax = 11
Tax Invoice (B) ( 10 + 1)
Cost = Tax Invoice (C)
Tax Invoice (A) 100 Cost = 121
Value = 100 Value = 110 Value = 133.10
Excise = 10 Excise = 11 VAT =
VAT = 11 VAT = 13.31
12.10
121 146.41
133.10

GST Scenario (Intra-State Trade of Goods)
State Tax = 12.10

( 10 + 1 + 1.10)
SGST = 11 SGST = 12.10
SGST = 10 ITC = ( 10) ITC = ( 11)
1 1.10
Input Manufacturer Output Manufacturer Dealer Consumer
CGST = 11 CGST = 12.10

CGST = 10 ITC = (10) ITC = (11)
1 1.10
Central Tax = 12.10
Tax Invoice (C) ( 10 + 1 + 1.10)
Tax Invoice (B)
Cost = 110
Tax Invoice (A) Cost =
Value = 121
Value = 100 100
CGST = 12.10
CGST = 10 Value = 110
SGST =
SGST = 10 CGST = 11
12.10
120 SGST = 11
132
145.20

Present Scenario (Inter-State Trade of Service)
State Tax (X) = 0 State Tax (Y) = 0
Input Service Provider Output Service Provider Agent Consumer
Service Tax = 11 Service Tax = 12.10

Service Tax = 10 ITC = (10) ITC = (11)
1 1.10
Central Tax = 12.10
( 10 + 1 + 1.10)
Tax Invoice (C)
Tax Invoice (A) Tax Invoice (B)
Cost = 110
Value = 100 Cost = 100
Value = 121
Service Tax = 10 Value = 110
Service Tax = 12.10
Service Tax = 11
110 121
133.10

GST Scenario (Inter-State Trade of Service)
State Tax (X) = 0

( 10 - 10*) State Tax (Y) = 12.10
( 2.20 + 9.90**)
SGST = 12.10
SGST = 10 ITC = ( 9.90)
2.20
Input Service Provider Output Service Provider Agent Consumer
IGST = 22
CGST = (10) CGST = 12.10
CGST = 10 SGST = (10) IGST = (12.10)
2 0
Central Tax = 12.10
( 10 + 2 + 10* - 9.90**)
Tax Invoice (C)

Tax Invoice (A) Tax Invoice (B)
Cost = 110
Value = 100 Cost = 100
Value = 121
CGST = 10 Value = 110
CGST = 12.10
SGST = 10 IGST(20%)= 22
SGST = 12.10
120 132
145.20

Comparison (Trade of Goods)
Sr. No. Particular Intra-State Inter-State

Present GST Present GST
1. Initial Value 121.00 120.00 121.00 120.00
2. Centre’s Tax 11.00 12.10 11.00 12.22
3. State (X)’s Tax 13.31 12.10 11.00 1.10
4. State (Y)’s Tax - - 16.91 12.22
5. State’s Total 13.31 12.10 27.91 13.32
6. Total Tax paid to Govt. 24.31 24.20 38.91 – 25.54
Refund
Claim
7. Non-Vatable Tax borne by 11.00 0.00 25.00 1.10
Business
8. Final value paid by 146.41 145.20 152.97 146.65
Consumer

Comparison (Trade of Service)
Sr. No. Particular Intra-State Inter-State

Present GST Present GST
1. Initial Value 110.00 120.00 110.00 120.00
2. Centre’s Tax 11.00 11.00 12.10 12.10
3. State (X)’s Tax 0.00 11.00 0.00 0.00
4. State (Y)’s Tax - - 0.00 12.10
5. State’s Total 0.00 11.00 0.00 12.10
6. Total Tax paid to Govt. 11.00 22.00 12.10 24.20
7. Non-Vatable Tax borne by 0.00 0.00 0.00 0.00
Business
8. Final value paid by 121.00 132.00 133.10 145.20
Consumer

Objectives and Components of GST
OBJECTIVES
Uniform tax Reduce Principle of

Usher in single
across the cascading ‘consumption-
rate of tax
country effect of taxes based taxation’
COMPONENTS
Integrated GST
Central GST (CGST) State GST (SGST)
(IGST)
Levy on supply of Levy on supply of

Levy on ALL inter-
ALL goods and/ or ALL goods and/ or
State supplies of
services within a services within a
goods and/ or
particular State, by particular State, by
services, by the
the Central the respective State
Central Government
Government Government
Concept of CGST, SGST and IGST
• Leviable on Supply of Goods and Services

• Levy on transaction value with set-off of input tax
• Backed by Goods and Services Tax Network (GSTN)
Possible Rate Structure

Exempt Supplies: Nil-rate, Zero Percent Supplies
Zero-Rated Supplies: Exports and Supplies to SEZ
Supplies Taxable at 5%


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WELCOME

Dr.Amit FCA,CMA MCom, Ph.d.9811264821

• Concurrent • Authority for Centre to • GST defined as

Dr.Amit FCA,CMA MCom,

Entry Tax & Octroi

Customs Excise Entertainment Tax

Centr Luxury Tax

Dr.Amit FCA,CMA MCom,

Indian truck drivers clock an average of 280 km

Introduction of GST will help improving the Indian

 At present the Restaurants are charging

After introduction of GST single tax will be

Dr.Amit FCA,CMA MCom,

EXCISE DUTY SERVICE TAX

Dr.Amit FCA,CMA MCom,

Dr.Amit FCA,CMA MCom,

Central Taxes State Taxes Local body Taxes

• Central Excise • VAT/Sales Tax & CST • Octroi

Dr.Amit FCA,CMA MCom,

Constitution amended to provide concurrent powers to both Centre & States to

Alcohol for human

Part of GST but power to levy

Entertainment tax Power to tax remains with the State

Dr.Amit FCA,CMA MCom,

1 Reduction in Cascading of Taxes

3 Common National Market

5 Self Regulating Tax System

Dr.Amit FCA,CMA MCom,

7 Simplified Tax Regime

9 Consumption Based Tax

11 Exports to be Zero Rated

Dr.Amit FCA,CMA MCom,

Central Taxes State Taxes Local body

• Central Excise • VAT/Sales Tax & CST • Octroi

Dr.Amit FCA,CMA MCom,

Manufacture of Goods 1,00,000

Total Transaction Cost

Cascading effect of tax i.e. tax on tax

Dr.Amit FCA,CMA MCom,

 Higher threshold for traders and service providers

 Benefit to end consumers on account of reduction of tax

 Elimination of multiple taxation on

 Removal / minimization of cascading

Dr.Amit FCA,CMA MCom,

Rs. 115 Rs. ~115

15% Service 18%

Cost of production Overall

Dr.Amit FCA,CMA MCom,

Central State Local Body

Dr.Amit FCA,CMA MCom,

Central Taxes State Taxes Local Body Taxes

• Central Excise on: • State Excise on Alcohol liquor • Property Tax

o Tobacco products • State VAT on: • Entertainment Duty

o Petroleum Products • Gram Panchayat Tax

• Taxes on Mineral Rights

Dr.Amit FCA,CMA MCom, Ph.d.9811264821

State A Revenue goes State A

(Manufactured to State A (Manufactured

State B Revenue goes to State B

(Consumed) State B (Consumed)

Shift of taxable event from being produced to getting consumed

Dr.Amit FCA,CMA MCom, Ph.d.9811264821

Exports, Deemed Exports, Essential items (vegetables, food grains) 0%