Goods and Service Tax

BBA 309
Unit 1
Prepared & Presented by
Ms. Shanu Jain
Assistant Professor, DME
Management School

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 Unit Details
S.NO. Topic
1.1 Introduction to GST

1.2 Constitutional provision of Indirect taxes

1.3 Basic Concepts of Supply

1.4 Composite and Mixed Supply

1.5
Services under GST
1.6 Levy and charge of GST
1.7 Registration under GST
1.8 Procedure for Registration

1.9 Person and Taxable person

1.10 Payment of Tax 3

 1.1 Introduction to
GST
•Background of Taxes
•Pre GST Era
•Why there was a need of GST ?
•Comparison of Pre and Post GST Scenario
•Benefits /Limitations
•GST Rates
•How GST will work ?

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 Suggested Readings
• Author : Arpit Haldia
• Title of the Book : GST Made Easy
• Chapter’s Name: An overview to GST

• Author:Awdesh Singh
• Title of the Book : GST Made simple
• Chapter’s Name: The tax structure in India before GST

• Author:Awdesh Singh
• Title of the Book : GST Made simple
• Chapter’s Name: Introduction( 1-5)
References
• Nayyar, A., & Singh, I. (2018). A comprehensive analysis of
goods and services tax (GST) in India. Indian Journal of
Finance, 12(2), 57-71.
• Goods and Service Tax Website https://www.gst.gov.in/
• Statistical Report on 3 Years of GST
https://tutorial.gst.gov.in/downloads/news/3YearReport.pdf 5
 Suggested Readings

GST In Media
GST in Media | Goods and Services Tax Coun
cil (gstcouncil.gov.in)

GST Flyers at a Glance

http://gstcouncil.gov.in/gst-media

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 1.1 Introduction to GST
What is Tax and why taxes?
•A compulsory payment to government under any
law.
•Taxes are generally an involuntary fee levied on
individuals or corporations that is enforced by a
government entity, whether local, regional or
national in order to finance government
activities{education, healthcare, infrastructure.}
•Article 245 and 246
•Union List , State List, Concurrent List
•Anonymous: "The best things in life are free, but
sooner or later the government will find a way to tax
them." 9
1.1 Introduction to GST
What is Tax and why taxes?

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 Direct and Indirect taxes
Advantages and
Disadvantages of direct
and Indirect taxes

Progressive Versus
regressive

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Comparison at a Glance

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 Indirect taxes before GST

• Central Sales Tax( levied on Interstate trade)

• Central Excise Duty( levied on goods
manufactured In India, wrapped up in Selling
Price, CENVAT)
• Service tax ( all services except in Negative List)
• Value added Tax(2005,intrastate sale) 13
 Taxes Subsumed after GST
CENTRAL TAXES TO BE SUBSUMED IN GST
• Central Excise Duty (CENVAT)
• Additional Excise Duties
• Service Tax
• Additional Customs Duty, commonly known as Countervailing Duty (CVD)
• Special Additional Duty of Customs – 4% (SAD)
• Central Sales Tax to be phased out.

STATE TAXES TO BE SUBSUMED IN GST

• VAT (Value Added Tax)
• Entertainment tax (unless it is levied by the local bodies)
• Luxury tax
• Taxes on lottery, betting and gambling
• State Cesses and Surcharges in so far as they relate to supply of goods and
services
• Octroi and Entry Tax
• Purchase Tax
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 TAXES WHICH ARE NOT TO BE SUBSUMED

• GST may not subsume the following taxes within its ambit:

• Basic Customs Duty: These are protective duties levied at the time of
Import of goods into India.
• Exports Duty: This duty is imposed at the time of export of certain goods
which are not available in India in abundance.
• Road & Passenger Tax: These are in the nature of fees and not in the
nature of taxes on goods and services.
• Toll Tax: These are in the nature of user fees and not in the nature of taxes
on goods and services.
• Property Tax, Stamp Duty, Electricity Duty
• Supply of the alcoholic liquor for human consumption
• Tax on petroleum crude/ high speed diesel/ motor spirit/ natural gas/
aviation turbine fuel
• Tax on newspapers and advertisement therein
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 GST: A new Tax Regime
• GST is making sure the slogan “One Nation, One Tax, One Market” 
• Destination based Tax
• 1 Jul 2017( 8 July 2017,J&K)
• Tax incidence to be ultimately borne by final consumer(set off benefits at
all previous stages).
• Mitigation of cascading effect/double taxation.
• Cascading effect of tax is a situation wherein the end-consumer of any
goods or service has to bear the burden of the tax to be paid on the
previously calculated tax and as a result would suffer an increased or
inflated price.
• Under the GST regime, however, the customer is exempted from the tax
they would otherwise pay as a result of the cascading effect.
• Dual GST Model

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 GST: A new Tax Regime
International Scenario
• France was the first country to implement GST to reduce tax- evasion. Since then, more
than 140 countries have implemented GST with some countries having Dual-GST (e.g.
Brazil, Canada etc. model. India has chosen the Canadian model of dual GST.

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GST : A Case Study

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GST: A case Study

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GST: A Case Study

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GST: A Case Study

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 Features of GST
1. Dual tax System : CGST,SGST,IGST and UTGST
2. Applicability
3. Destination Based tax system
4. No hidden rate
5. Collection of GST
6. Reduce Complexity
7. Input Tax Credit setoff
8. Administration
9. Goods and Service Tax Network (GSTN)
10. GST Council
11. Uniformity
12. Returns under GST

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GST Rates

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 GST Rates
Items Currently out of GST
1.Crude Oil
2.Petrol
3.Diesel
4.Jet Fuel
5.Natural gas
6.Alcohol for Human Consumption

RECENT AMENDMENTS ( w.e.f 18 July 2022)

https://newsroompost.com/business/decoded-new-gst-rate-changes-
and-their-impact-on-common-mans-life/5131884.html 24
 Benefits of GST
(1) Benefits to the Government:
(a) GST aims to make India a common market with common tax rates and
procedures. It will boost foreign Investment and “Make in India” campaign. (b)
The states will be benefited due to improvement in investment cult in the
country.
(c) The uniform SGST and IGST rates actually reduce the incentive for tax evasion.
(d) It will bring buoyancy to the Government revenue by widening the tax base and
improving the tax payer compliance.

(2) Benefits to Trade and Industry:

(a) The multiplicity of indirect taxes has been reduced.
(b) By allowing a set-off of prior-stage taxes for the transactions across the entire
value chain, GST leads to mitigation of ill effects of cascading.
(c) Due to uniformity in tax rates, the common national market has been developed.

(d) The export has been classified as zero rated supply. It will boost the exports

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 Benefits of GST

(3) Benefits to customer:

(a) It is relatively simple tax system.
(b) On account of mitigation of cascading effect, there is a reduction in
prices of goods and services.
(c) The pricing structure is uniform through the country.
(d) The taxation system is more transparent

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 Impact on Various Sectors
Aviation
Banking

• Automobile

Manufacturing
Entertainment
Real Estate

Source 1 :
https://economictimes.indiatimes.com/markets/stocks/news/how-gst-will-impact-
sectors/telecom/slideshow/59408728.cms
Source 2 :
https://cleartax.in/s/gst-analysis-and-opinions
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 Limitations of GST
• Old wine in New bottle

• Inflation rate

• Costlier Services

• Requirement of multiple Registration

• Change in Business software

• Multiple Return Filing

• Payment of tax liability

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 How will GST work ?

Ques 1. Rajesh of Bengaluru sells cloth to Dharmesh of Mysore

having taxable value of 2,00,000.How will we calculate GST
assuming rate to be 5%?

Ques 2. Continuing the above example, if Dharmesh delivers

the same cloth after making value addition of Rs. 50,000 to
Ramesh of Pune, how will be the calculations ?
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 Conclusion
After the lesson, you should be able to answer the
following :
Difference Between Direct and Indirect Taxes
Advantages and Disadvantages ( Direct, Indirect,GST)
Why was GST introduced in India?
Which all taxes submerged after GST?
Basic structure of GST

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