INDEX

• My aims and objectives

• Introduction
• Meaning and definition
• History of GST
• Reasons for implementation
• Types of GST
• Features of GST
• Problems in implementation
• Goods and Services Tax Network (GSTN)
• Why does India need GST?
• GST advantages.
• GST disadvantages
• How is GST applied?
• GST rates
• Things to get cheaper
• Things to get costlier
• Opposition to GST
• One India One Tax is a Myth.
• Conclusion
• Bibliography
My aims and Objectives
• To study and understand the concept of GST.
• To learn about the positive and negative aspects of GST.
• To learn about the effect of GST on different sectors of the
economy.
• To gain knowledge about the effects on the prices of
different commodities after introduction of GST.
• To know the advantages and disadvantages of GST.
• To gain knowledge about which products fall under GST and
what are the different GST rates.
• To learn about the long-term and short- term impact on the
economy.
• To learn about the different taxes that the different
countries had adopted.
Dynamics of GST
Introduction
Earlier the constitution empowered the central government
to levy excise duty on manufacturing and service taxes on the
supply of services. Similarly, it empowers the state
government to levy the state tax on Value Added Tax (VAT) on
sales of goods. This exclusive division of fiscal powers has led
to a manipulation of indirect tax in the country. Further, a
central tax was levied on intrastate of goods. In addition,
many states also levy entry tax on the entry of goods in their
locality. So, as to overcome this problem, the government at
this stage has introduced a single taxation system which
includes in itself all taxes to avoid the various problems
related to taxation system and thus giving this control in only
one hand. GST stands for Goods and Services Tax. It is an
indirect tax throughout India to replace taxes levied by the
central and state government. It was introduced as the 122
Amendment Act, 2016, following passage of Constitution 122
Bill Amendment. The GST is governed by GST Council and its
chairman is UNION FINANCE MINISTER OF INDIA → ARUN
JAITLEY. Its introduction is a step in the reform of indirect
taxation in India. Amalgamating of several central and state
taxes into a single tax. This would mitigate crusading or
double taxation, defoliation a common national market. This
simplicity of the tax is leading to easier terms of a reduction
in the overall tax burden on goods, which is currently
estimated at 28-30% free movement of goods from one state
to another without stopping at borders for hours for checking
or state tax or entry tax and reduction of work to a large
extent. GST was applicable from 1st July 2017. The reform in
indirect taxes was introduced by VISHWANATH PRATAP
SINGH. By introduction of Modified Value Added Tax
(MODVAT), GST will be levied concurrently by the central
government (CGST) and state government (SGST). The
features would be common for an individual or interstate
suppliers within India. It would attract an Integrated GST
(IGST) which is an aggregate of CGST and SGST. The
transactions made within a single state will be levied within
GST and SGST by the government.
Meaning and Definition
GST is set to become one of the biggest financial reform that
our country has witnessed. GST is a comprehensive tax levied
on the manufacture, sale, and consumption of goods and
services at the national level under which no distinction is
made on goods and services by central and state government
in India. GST is a tax on goods and services under which every
person is liable to pay tax on his output and is entitled to get
Input Tax Credit (ITC) on its input (a tax on value addition
only) and ultimately the final consumer shall bear the tax.
GST is a Canadian value-added tax levied on the sale of
domestic consumption. It has streamlined all the different
types of indirect taxes and implements a single taxation
system. This single taxation system is GST. The main purpose
accomplished by the implementation of GST is the abolition
of all other indirect taxes prevailed earlier, we can also say
that all those taxes trap had finally come to an end with only
one indirect tax in the country called GST. It is the
collaboration of all taxes within a new name which replace all
indirect tax rate with a new and single rate taxation system.
History of GST
The president of India approved the Constitutional
Amendment Bill for Goods and Services Tax (GST) on 8th
September 2016 following the bill's passage in the parliament
and its ratification by more than 160 countries who have
adopted some forms of GST. The following taxes are bounded
by GST: -
• Central excise duty
• Service tax and commercial tax
• Value added tax and food tax
• Central state tax and entertainment tax
• Purchase tax and luxury tax
• Octroi, advertisement tax and lottery tax
GST levied on all transactions which means taxation system is
administered by both state and union government.
Transactions are made within a single state will be levied with
CGST and SGST. The Government of that state for intrastate
transactions and imported goods and services are integrated
GST (IGST) be levied. It complicated the tax collection by the
state due to the rebate. IT sector infrastructure also rebate.
This was proposed by SHRI SANTOSH KUMAR, minister of
state in the Ministry of Finance in a written reply to a
question in Rajya Sabha. At the end of the day, GST comes
out with a better result as it will reduce the cost of
production and inflation in the economy both domestically
and internationally and contribute to significant growth of
Indian economy. This was all about the history of GST...
Reasons for implementation of GST
• There was no uniformity of tax rates and structure across
states.
• There is a cascading of taxes due to "Tax on Tax". No credit
excise duty and service tax are paid at the state of
manufacture are available to the traders while paying the
state level sales tax or VAT.
• No payment of state taxes speed in one state can be
reimbursed in other states. Hence the prices of goods set
artificially inflated to the extent of "Tax on Tax".
Types of GST
There are three kinds of taxes under the GST.
They are: -
1. SGST:- State Goods and Services Tax is a part of a tax
diverted to the state which is credited by the revenue
department of the state government. This is generally
equivalent to GST. This compensates the loss of existing VAT
or sales tax revenue to the state government. In the case of
local sales, 50% quantum of tax amount under GST is diverted
to SGST tax..
2. CGST: Central Goods and Services Tax is all the goods tax
diverted to revenue department of Central Government. This
share of the tax compensates the loss of existing excise duty
and service tax to the Central government. In the case of local
sales, balance i.e. 50% quantum of GST is transferred to CGST.
3. IGST: Integrated Goods and Services Tax is levied under
interstate sales and purchase is made. One part of this tax
transferred to the central government and other to the state
government to whom goods and services belong. The IGST is
the separate tax which is charged only in case of interstate
sales or when transactions between two states are issued.

Features of GSF
• Dual Good and Services Tax:
The functioning of CGST and SGST has helped a lot to the
economy.
• Interstate transactions and IGST mechanism: The center
would levy and collect the Integrated Goods and Services Tax
on all interstate supply of goods and services. IGST
mechanism has been signed to ensure seamless goods flow
from one state to another. The interstate seller would pay
IGST on the sale of his goods to the central government. After
adjusting credit of IGST, CGST And SGST on his purchases in
Shat order. The exporting state will transfer to the Center. The
credit of SGST used in payments of IGST. The importing dealer
will claim a credit of IGST while discharging his content tax
liability (both CGST added GST of state) in his own state. The
center will transfer to the importing state, the credit of IGST
used in payment of SGST.
• Destination-based consumption tax: GST will be a
destination-based tax. This implies that all SGST collected will
ordinarily occur to the state where the consumer of goods
and services sold resides.
• Consumption of GST on the basis of Invoice Credit Method:
The liability under the GST will be invoice credit method i.e.
credit will be allowed on the basis of the invoice issued by
suppliers.
• Payment of GST: The CGST and SGST are to be paid to
accounts of the central and state respectively.
• Input Tax Credit (ITC) set off: ITC for CGST and SGST will be
taken for taxes allowed against respectively.
Problems of Implementation of GST
VAT or sales tax is levied and collected by State Government.
Different state government charge different rate of taxes on
the kinds of goods traded within their respective territories
limits under the extreme power provided to the state under
the state list of the constitution whereas GST is levied by the
central government and collected by the state as per
concurrent list of the constitution whereas the excise duty as
per Central Excise Act in 1994 and service tax as per Finance
Act 1994 is levied and collected by central government
through the extreme power provided under Union list of
constitution. Due to this distribution of powers under the
constitution, no state government wants to lose the revenue
source called VAT or Sales Tax. GST is a subject matter of
union list and no state agrees to bifurcate their income to the
central. government but as some political party is in maturity
in India and or state government agreed to the proposal. As a
result, GST roll act. GST was first time introduced instead
after being initiated in 1986 by Vishwanath Pratap (7th Prime
Minister of India) than in 2007 and 2011. After the passage of
time (25 years) of economic reforms, in indirect taxes is giving
for a revolutionary change in form of GST. So, we can say that
GST is a complete insight impact tax rate and conclusion
posted on 22nd July 2017.
Goods and Services Tax Network (GSTN)
GSTN is a non-profit platform organized to create and for all
the concerned parties i.e. stakeholders, government,
taxpayers to collaborate on a single portal. The portal will be
accessible to the central government which will track down
every transaction till its end and while the taxpayers will be
having a vast service to return file their taxes and maintain
their details. The IT network will be developed by private
firms which are being in a tie with the central government
and will be having stakes accordingly. The known authorized
capital of GSTN is Rs. 10 crores (US $ 1.6 million) in which the
central government holds 24.5% and rest with the private
banking firms.
Why does India need GST?

• Firstly, the GST will greatly increase the reserves available at

the states and centers disposal by expanding the tax base.
More importantly, the resources of the power states like U.P.,
Bihar, Madhya Pradesh will increase substantially.
• Secondly, the GST will facilitate "Made in India" by
converting the geographical landscape of the country into a
single market. Despite being one country, India is a union of
30 or more markets. Too many taxes in the current system
like the central sales tax or interstate taxes and the extensive
nature of the countervailing duty exemptions, favour imports
domestic production. GST would get rid of and subsume most
of the other taxes and since it will also be applicable to
imports, the major tax factor working against "Made in India"
disappear, greatly boosting the production and in turn
exports. This will ultimately help to bridge the current
account deficit.
• Thirdly, the GST would improve tax governance in two ways:
One like the VAT, it is a self-collecting and self-enforcing text,
what essentially means that the companies which are buying
suppliers from outside parties will insist on tax payment on
the goods supplied as without this, they cannot get set off on
their own final product sales.
Two, due to dual monitoring structure of GST-one by the
states and another by the centre. It is difficult to evade taxes.
Even if one set of tax authorities overlooks or fails to detect
evasion, there is the possibility that the other overseeing may
not happen by the next authorities.
• Moreover, the current structure of taxes in India is a rat
trap. The wide powers to levy and collect taxes provided to
state and Central Government. As a result, both levy different
kind of taxes which makes the Indian tax structure very
complex and complex economy too.
GST Advantages
• GST is a transparent tax and reduces the number of indirect
taxes.
• GST will not be a cost to registered retailers. Therefore,
there is no hidden taxes and the cost of doing business will be
lower.
• Benefit people as prices will come down which will intern
help companies as consumption will increase.
• There is no doubt that the production and distribution ok
good services will not increase.
• It will also help to build a transparent and corruption-free
taxation system.
• GST is backed by GSTN which is fully an integrated platform
to deal with all aspects of GST.
• Adaptation and migration to the new GST system reduce
thinking troubles and learning from the entire ecosystem.
GST Disadvantages
• Some economists say that GST in India would impact
negatively on the real estate market. It would add up to 8% to
the cost of the new home and reduce demand by 12%.
• Some experts say that CGST and SGST are nothing but new
names of central excise duty, service tax, VAT and CGST.
Hence, there is no major reduction in the number of tax
layers.
• The aviation industry would be affected. Service taxes on
airfares currently range from 6-9% and effectively double the
tax rates.
• Some retail products currently have only 4% text on them.
After GST, garments, and clothes would become more
expensive.
• Adaptation and migration to the new GST system would
have thinking troubles and learning from the entire
ecosystem.
How is GST applied?
GST is a consumption-based tax. It is based on destination
principles. It is applied to all goods and services at the place
where final consumption happens. GST is paid on
procurement of goods and services. The manufacturers or
wholesalers or retailers pay the applicable GST rate what will
claim back through tax credit mechanism. GST can be levied
on the place of consumption of goods and services. It will be
levied on intrastate supply and consumption of goods and
services. GST is a comprehensive tax levied on the
manufacture, sale, and consumption. The system will change
from the current production-based taxation to consumption
based. It is expected to increase efficiency.
GST Rates
Goods and services tax is set to be rolled out from 1st July
2017 and GST Council in its meet in Srinagar on 18th may
2017 decided on tax rates or 1211 items. It is found that 43%
of 1211 items have put in 18% GST slab which is bound to
make things cheaper, 14% items have been brought under 5%
GST slabs, 17% items in 12% tax slab and rest only 7% have
been exempted from GST ambit.
Starting from quite essential soap two to hotel and restaurant
services will become cheaper.
1. Soaps are being taxed at 28% but not at 18% under GST
cheaper as it dropped to 10% from 28%
2. Cereals and food grains that have a current tax rate of 6%
and 5% will be excluded from GST and brought under 10% tax
rate are milk and cream, not concentrated nor containing
added sugar or other sweetening matter. Excluding UHT milk
and dairy products.
3. Food grains will be at 0% tax rate.
4. Eggs, butter, curd, milk etc. will be at 0% tax rate under
GST.
5. Edible oil that is currently taxed between 3 to 9% will be
brought down to 5% under GST.
6. Tea, coffee, and masala that are taxed at 3 to 9% will be at
5% under GST.
7. Coal will come down from 11.7% to GST 5%.
8. Entertainment services will fall from 22% to 18%.
Things to get cheaper
The following are the things that will get cheaper for the
common man: -
1. Prices of movie tickets will become cheaper in most of the
states.
2. Food grains, edible oils, etc.
3. Dining in restaurants.
4. Books, pencils, notebooks, etc.
5. Two wheelers.
6. Coal and coal products.
7. SUV's or luxury or premium cars.
8. Staying in hotels.
9. Televisions.
10. Other entertainment services.
11. Washing machines.
12. Tea, coffee and other masalas.
13. Stones.
14. Eggs, curd, butter, paneer.
15. Toothpaste, hair products, cereals, and soaps.
Some critics say that GST would affect low and middle-
income groups very badly as the prices of the goods will go
up with the implementation of GST.
Things to get costlier
The following things are expected to become costlier under
GST for the common man.
1. Mobile bills.
2. Renewal premium for Life Insurance policy.
3. Banking and investment management.
4. Residential rent.
5. Healthcare.
6. School fees.
7. Courier services.
8. Aerated drinks.
9.Cigarettes and tobacco.
10. Basic luxurious for the common man like Wi-Fi and DHT
services.
11. Online booking of tickets for railways, airways, etc.

Opposition to GST
Presently, the government has long-term prospects in their
minds. It is clearly a long- term strategy which will lead to
higher investments, higher output, more employment
opportunities, and higher economic growth but during the
initial phase of implementation, it is expected then there will
be a hike in inflation rates, more administered cost and stiff
protest from the opposition. In pre-GST India, states have the
capability of reduction of taxes, thereby making a
comparative advantage for themselves, now places like
Puducherry relied on the ability to create a lower tax burden.
Aside from this, it was seen that there were zero women on
GST Council. Thus, aids for pregnant ladies are not being
taken care of.
One India One Tax Is A Myth
GST is one tax in India, is not a correct statement. Indirect
taxes such as customs duty or import or export will remain
continuous to levy. Further, few amendments have already
been made in customs law and the same will remain
applicable in India. All other direct taxes like income tax, gift
tax, property tax, etc. will remain continued in forces as
earlier.
Findings
This project helped me to learn that changes in society are
bound to happen. We need to bring change accordingly to
the society. Economic reforms are one such step. Seeing the
present scenario, old economic policies seem to be outdated
as it used to divide India into economic terms. Value of
money was not the same to all persons. States which used to
have less tax help their people save more tax which brings
disharmony among people. New GST policy will put people of
all states on equal footing. Moreover, the interstate trade will
become easier that will help to boost the economy. It also
brings the feeling of united India. Although, people are
finding new rules and regulations much difficult. But this
problem will surely be solved in the long run and India will
move towards economic growth smoothly.
Conclusions
Most analysts forecast the economy to grow close to 7.4% in
2017-18, the first year of GST rollout, which is slightly higher
than 7.1% in 2016-17, but lower than 7.4 in 2015-16 while
GST is unlikely to be a positive for economic growth in short
term. This reform will improve the ease of doing business,
bold star investor sentiment and have a more foreign
investment in coming years. GST rates are divided into 5, 12,
18 and 28% slabs. Petrol, gas, crude oil are out of GST. It is the
best decision taken by the government. For the same reason,
1st July is celebrated as Financial Independence Day in India
wherein all MPs attend the function in the Parliament House.
Confusion and complexities. are expected to happen. It is up
to the government to address the capacity building amongst
the participants of GST. GST will become Goods and Services
Tax only if the entire country works as a whole towards
making it successful.
Bibliography
• www.gstindia.com
• https://cleartax.in
• economicstimes.indiatimes.com
• The Tribune
• Times of India
• The Economic Times
• www.successmantra.com
• www.medetariansea.com