Goods and Services Tax (GST) is a comprehensive indirect tax system

implemented in many countries, including India, to streamline the taxation

process. It is designed to replace multiple taxes levied by the central and state
governments with a single unified tax structure. Here's an overview of GST:

Key Features of GST:

1. Single Tax Structure: GST merges various indirect taxes such as excise
duty, VAT (Value Added Tax), service tax, etc., into one unified tax.
2. Multi-Stage Taxation: GST is levied at each stage of the supply chain,
from production to consumption. It is charged on the value addition at
each stage.
3. Dual GST System: In countries like India, there are two types of GST:
o Central GST (CGST): Levied by the central government.
o State GST (SGST): Levied by the state government. This system
ensures that both the central and state governments receive their
share of tax revenue.
4. Destination-Based Taxation: GST is applied at the point of
consumption, meaning that the tax is collected where the goods or
services are consumed, not where they are produced.
5. Input Tax Credit (ITC): GST allows businesses to claim a credit for
taxes paid on inputs (raw materials, services) used to manufacture
products or deliver services. This reduces the cascading effect of taxes.
6. Standardization of Tax Rates: GST categorizes goods and services into
different tax slabs, typically 5%, 12%, 18%, and 28%, to standardize tax
rates across the country.

Types of GST:

1. CGST (Central Goods and Services Tax): Tax collected by the central
government on intra-state sales.
2. SGST (State Goods and Services Tax): Tax collected by the state
government on intra-state sales.
3. IGST (Integrated Goods and Services Tax): Tax collected by the
central government on inter-state sales or imports.
4. UTGST (Union Territory Goods and Services Tax): Similar to SGST
but applicable in union territories.

Advantages of GST:

1. Reduction in Tax Cascading: By allowing input tax credits, GST

minimizes the cascading effect (tax on tax).
2. Streamlined Tax Structure: The unification of multiple taxes simplifies
the tax system and reduces administrative costs.
 3. Increased Compliance: GST encourages businesses to keep better
records of transactions, thus leading to improved transparency and tax
compliance.
4. Boosts Economic Growth: By lowering the cost of goods and services,
GST can encourage trade and increase economic activity.
5. Improved Business Efficiency: The simplified tax structure reduces the
burden on businesses, allowing them to focus on operations rather than
tax-related complexities.

Challenges of GST:

1. Complexity in Compliance: Small businesses, in particular, may find it

challenging to keep up with the documentation and compliance
requirements.
2. Initial Implementation Issues: GST implementation has faced technical
challenges, especially in terms of GST software and systems.
3. Tax Rate Disputes: The classification of products and services into tax
slabs can lead to disputes and confusion.

In summary, GST is a key reform in taxation systems designed to simplify and

streamline indirect taxes, improve compliance, and foster economic growth.
However, its successful implementation requires continuous monitoring,
adjustments, and an educated business community.

MEANING OF GST

GST stands for Goods and Services Tax. It is a single, unified tax system that
is levied on the sale, manufacture, and consumption of goods and services. The
main purpose of GST is to streamline the indirect tax structure by replacing
various taxes such as excise duty, sales tax, VAT (Value Added Tax), and
service tax with a single tax. It is designed to be comprehensive, transparent,
and to reduce the cascading effect of taxes (tax on tax) by allowing input tax
credits.

In simple terms, GST is a value-added tax applied at each stage of the

production and distribution process, with the final tax burden being borne by the
consumer.

IGST:

IGST stands for Integrated Goods and Services Tax. It is a type of GST that
is applied to the inter-state supply of goods and services. IGST is used when
goods or services are sold from one state to another, i.e., in cross-border
transactions between states within a country (e.g., in India).
Key Features of IGST:

1. Applicable on Interstate Transactions: IGST is levied when goods or

services move from one state to another, ensuring that tax is paid to the
central government, which then distributes the revenue appropriately
between the central and state governments.
2. Mechanism for Tax Distribution: When a transaction takes place
between two states:
o The seller charges IGST, which is paid to the central government.
o The buyer can then claim the credit for the IGST paid, which can
be set off against CGST or SGST.
3. Prevents Double Taxation: IGST ensures that a transaction between
states is taxed only once and that the appropriate authorities (both central
and state governments) get their due share of the tax revenue.

Example:

If a business in State A sells goods to a business in State B:

 The seller in State A will charge IGST on the sale.

 The business in State B can claim the IGST paid as an input tax credit
when they file their GST returns.

IGST plays a critical role in facilitating seamless interstate trade and ensuring
that no double taxation occurs under the GST framework.

The scope of Goods and Services Tax (GST) in India is broad and encompasses
various aspects of taxation, including:

1. Tax on Supply of Goods and Services:

o GST is levied on the supply of goods and services in India,
including the import of goods and services.
o It applies to every supply of goods and services unless specifically
exempted.
2. Destination-based Taxation:
o GST follows the principle of destination-based taxation. The tax is
collected at the point of consumption (destination) rather than the
point of origin.
3. Dual GST Structure:
o India has a dual GST system consisting of:
 Central GST (CGST): Levied by the central government.
 State GST (SGST): Levied by the state governments on
intra-state supplies.
  Integrated GST (IGST): Levied on inter-state supplies and
imports.
4. Comprehensive Coverage:
o It covers the entire value chain, from manufacturer to final
consumer, and applies to goods and services alike.
o All businesses, traders, service providers, and manufacturers are
required to comply with GST regulations, provided their turnover
exceeds the prescribed threshold limit.
5. Input Tax Credit (ITC):
o GST allows businesses to claim credit for the tax paid on input
goods and services used to produce taxable goods or services. This
reduces the cascading effect of taxes.
6. Exemptions and Thresholds:
o Certain goods and services are exempted from GST, such as
healthcare, education, and certain food items.
o Small businesses with a turnover below a specified threshold are
exempt from GST or may have to comply with a simpler scheme
(e.g., composition scheme).
7. Exports and Imports:
o Exports are zero-rated under GST, meaning that no GST is levied,
but exporters can claim a refund on input tax credits.
o Imports of goods and services are subject to IGST, which is levied
and collected at the point of entry.
8. Electronic Compliance:
o GST emphasizes electronic filing and digital record-keeping,
including the use of GSTN (Goods and Services Tax Network),
which provides a platform for returns filing, payments, and tax
compliance.

In summary, the scope of GST is extensive and affects nearly all economic
activities, aiming to streamline the taxation system, reduce tax evasion, and
improve ease of doing business in India.

1. Structure and Types of Taxes

Old Tax System:

 Multiple Taxes at different levels:

o Central Excise Duty (on manufacturing of goods)
o Service Tax (on services)
o VAT (Value Added Tax on goods, levied by states)
 o Sales Tax (state-level tax)
o CST (Central Sales Tax) (on inter-state trade)
o Octroi/Entry Tax (state-specific taxes on goods entering a state)

GST System:

 Single Tax on Goods and Services:

o CGST (Central GST): Levied by the central government for intra-
state transactions.
o SGST (State GST): Levied by state governments for intra-state
transactions.
o IGST (Integrated GST): Levied for inter-state transactions and
imports.
 Unified Tax for both goods and services.

2. Tax Rate Structure

Old Tax System:

 Multiple Rates depending on the type of tax (Excise, VAT, Service Tax,
etc.) and state policies.
 Differing rates across states for VAT, and a range of complex excise
duties and service tax rates.

GST System:

 Standardized Tax Rates:

o 0%: Exempted goods and services.
o 5%, 12%, 18%, and 28%: Goods and services taxed based on
categories.
o A uniform tax rate for the whole country (except for some state-
specific exemptions).

3. Cascading Effect

Old Tax System:

 Cascading Effect: Taxes were levied on the tax paid at previous stages
(i.e., tax on tax), increasing the overall cost of goods and services.
GST System:

 No Cascading: GST allows for Input Tax Credit (ITC), where businesses
can claim credit for taxes paid on inputs, reducing the tax burden and
eliminating the cascading effect.

4. Tax Filing and Compliance

Old Tax System:

 Multiple Authorities: Businesses had to deal with various authorities for

different taxes (Central Excise, VAT, Service Tax).
 Complex Filing: Separate returns and compliance for each tax (e.g., VAT
returns, excise returns, service tax returns).

GST System:

 Unified Platform: A single tax return system through the GSTN (GST
Network). Businesses file one return for all taxes under GST.
 E-filing: Completely electronic filing and documentation, simplifying
compliance.

5. Tax Administration

Old Tax System:

 Fragmented Administration: Different tax authorities (Central vs. State)

for different taxes created inefficiencies.
 State-specific Variations: State taxes like VAT and entry tax had different
rules in each state.

GST System:

 Centralized Administration: GST is administered by the GST Council,

which standardizes the tax structure across the country.
 One Registration: Businesses need only one GST registration for the
whole country, reducing administrative overhead.
6. Impact on Trade and Exports

Old Tax System:

 Exports: Exports were exempt from taxes like VAT, but businesses
couldn’t claim refunds on tax paid on inputs, leading to inefficiency.
 Interstate Transactions: Central Sales Tax (CST) created barriers to
seamless interstate trade.

GST System:

 Zero-Rated Exports: Exports are zero-rated under GST, meaning no tax

is levied, and exporters can claim refunds on input taxes.
 Seamless Interstate Trade: IGST ensures smoother interstate
transactions with tax credits, eliminating the barriers caused by CST.

7. Taxation on Goods vs. Services

Old Tax System:

 Different Taxation for Goods and Services:

o Goods were taxed under VAT, while services were taxed under
Service Tax.
o No unified approach to taxation.

GST System:

 Unified Tax for Both Goods and Services: GST applies to both goods and
services, making the taxation system consistent and simpler to manage.

8. Threshold Limits for Taxability

Old Tax System:

 State-Specific Thresholds: Different states had their own turnover

thresholds for VAT, Service Tax, etc.
 Small businesses with low turnover faced complex rules or were
excluded from the tax system entirely.
GST System:

 Unified Threshold: GST applies a uniform turnover threshold across

states. Small businesses can opt for the Composition Scheme (simplified
tax rates and compliance) if their turnover is below the prescribed limit.

9. Impact on Businesses

Old Tax System:

 Higher Compliance Costs: Due to multiple tax laws, different tax

authorities, and the cascading effect, businesses faced higher
compliance and operational costs.
 Lack of Transparency: Complexity in tax laws made it harder for
businesses to understand the tax implications.

GST System:

 Simplified Compliance: With a single tax and uniform rates, businesses

face lower compliance costs.
 More Transparency: The GST system is more transparent, with clearer
tax rates and a simpler process for claiming tax credits.

Summary of Differences:

Aspect Old Tax System GST System (Present)

Multiple taxes (Excise, VAT, Single tax on goods and
Type of Tax
Service Tax, etc.) services (GST)
Standardized rates (0%, 5%,
Tax Rates Vary by state and tax type
12%, 18%, 28%)
Separate filings for
Tax Filing Single unified filing (GSTN)
different taxes
Cascading Effect Yes (tax on tax) No (Input Tax Credit available)
Administration Multiple tax authorities Centralized administration
 Aspect Old Tax System GST System (Present)
(GST Council)
Exempt but no input tax Zero-rated exports with input
Exports
credit tax credit refunds
Interstate Seamless interstate trade via
CST and other barriers
Transactions IGST
Simplified, electronic
Compliance Complex and fragmented
compliance
Impact on Higher costs and Lower costs, easier
Businesses complexity compliance, and transparency

Conclusion:

GST has significantly simplified the tax system by unifying the taxation of
goods and services under a single framework, eliminating the cascading effect
of taxes, and reducing administrative burden for businesses. The transition from
the old system, which was more fragmented and complex, to GST has created a
more transparent, efficient, and business-friendly environment.

Goods and Services Tax (GST) or its equivalents are implemented in many
countries worldwide, though each country has designed its system based on its
own economic conditions, administrative requirements, and tax structure.
Below is an overview of GST in various countries, highlighting some
similarities and differences:

1. Canada

 GST/HST (Goods and Services Tax / Harmonized Sales Tax):

o GST Rate: 5% (standard rate).
o HST: In provinces like Ontario, New Brunswick, and Nova Scotia,
GST is combined with Provincial Sales Tax (PST) to form
Harmonized Sales Tax (HST).
o Input Tax Credit (ITC): Businesses can claim ITC for taxes paid
on inputs.
o Exemptions: Certain goods and services are exempt, including
basic food items, medical services, and educational services.
 o Administration: Administered by the Canada Revenue Agency
(CRA), but provinces administer HST in their jurisdictions.

2. Australia

 GST (Goods and Services Tax):

o GST Rate: 10% (flat rate).
o Input Tax Credit (ITC): Businesses can claim ITC on the GST
paid for inputs.
o Exemptions: Some goods and services like basic food, medical
services, and education are exempt from GST.
o Administration: Administered by Australian Taxation Office
(ATO). The system is simple, with businesses filing quarterly or
annual GST returns depending on turnover.

3. European Union (EU)

 Value Added Tax (VAT): The EU does not have a unified GST, but
VAT functions similarly across EU member states with a framework set
by EU regulations. Each country in the EU sets its own VAT rates,
though they must meet EU guidelines.
o Standard VAT Rates: Vary across EU countries. The minimum
standard rate is 15%, but most countries have higher rates. For
example:
 France: 20%
 Germany: 19%
 Italy: 22%
o Exemptions: Similar to GST, basic food, healthcare, and education
are generally exempt.
o Cross-border Trade: VAT rules include mechanisms for cross-
border trade within the EU, allowing businesses to reclaim VAT
paid on imports or exports.

4. Singapore

 GST (Goods and Services Tax):

o GST Rate: 8% (as of 2023; planned to increase to 9% in 2024).
o Input Tax Credit (ITC): Businesses can claim ITC for tax paid on
inputs.
 o Exemptions: Exemptions for certain financial services, healthcare,
education, and residential properties.
o Administration: Administered by Inland Revenue Authority of
Singapore (IRAS). Singapore has a relatively simple and efficient
GST system, which is a major component of its tax structure.

5. United Kingdom

 VAT (Value Added Tax):

o VAT Rate: 20% (standard rate). There is also a 5% reduced rate
for some goods and services (e.g., domestic energy).
o Input Tax Credit (ITC): Businesses can recover VAT paid on
purchases.
o Exemptions: Financial services, education, healthcare, and charity
work are generally exempt.
o Administration: HM Revenue & Customs (HMRC) administers
VAT. The UK has implemented a detailed VAT reporting system,
with quarterly or annual filings for businesses.

6. New Zealand

 GST (Goods and Services Tax):

o GST Rate: 15% (standard rate).
o Input Tax Credit (ITC): Available for businesses to recover tax
paid on inputs.
o Exemptions: Basic foodstuffs, some health and education services,
and certain financial services are exempt from GST.
o Administration: Administered by Inland Revenue (IR). New
Zealand's GST system is recognized for its simplicity, with most
businesses required to file returns every two months.

7. South Africa

 VAT (Value Added Tax):

o VAT Rate: 15% (standard rate).
o Exemptions: Basic foodstuffs, certain medical services, and
educational services are exempt from VAT.
o Input Tax Credit (ITC): Available for businesses to recover VAT
paid on inputs.
 o Administration: Administered by South African Revenue
Service (SARS).

8. Malaysia

 GST (Goods and Services Tax):

o GST Rate: Initially introduced at 6% in 2015, but repealed in
2018, and replaced with SST (Sales and Service Tax).
o Sales and Service Tax (SST): This is a simpler version, with a
sales tax of 5%-10% and a service tax of 6% applied to various
services.
o Exemptions: Like GST, certain goods and services are exempt
(e.g., healthcare, education, and food).
o Administration: Administered by the Royal Malaysian Customs
Department.

9. India

 GST (Goods and Services Tax):

o GST Rate: India has a multi-tier GST structure with rates of 0%,
5%, 12%, 18%, and 28%, depending on the type of goods or
services.
o Input Tax Credit (ITC): Available for businesses to recover tax
paid on inputs.
o Exemptions: Certain goods and services like healthcare, education,
and some food items are exempt.
o Administration: GST is administered by both Central
Government and State Governments under the GST Council
framework.
o Features: India implemented GST in 2017, which replaced various
indirect taxes (like VAT, Service Tax, and Excise Duty).

10. Brazil

 ICMS (Imposto sobre Circulação de Mercadorias e Serviços) and IPI

(Imposto sobre Produtos Industrializados):
o ICMS is similar to GST and is levied by state governments on
goods and services. Rates vary from 7% to 18%.
o IPI is a federal tax on manufactured goods, similar to excise duties.
 o Input Tax Credit (ITC): Available to businesses on ICMS and
IPI.
o Exemptions: Various goods, such as basic foodstuffs, and essential
goods, are exempt.
o Administration: Brazil has a complex indirect tax system, and
businesses must comply with both federal and state tax authorities.

Summary of Key Features of GST in Different Countries:

GST/VAT Input Tax

Country Exemptions Administered By
Rate Credit
Basic food,
5% (GST), Canada Revenue
Canada Yes healthcare,
HST varies Agency (CRA)
education
Basic food,
Australian Taxation
Australia 10% Yes healthcare,
Office (ATO)
education
EU (Various Varies (15- Food, healthcare, National tax
Yes
Countries) 28%) education authorities
Healthcare,
Inland Revenue
8% (planned education,
Singapore Yes Authority of
9%) residential
Singapore (IRAS)
properties
20%
Food, healthcare, HM Revenue &
UK (standard), Yes
education Customs (HMRC)
5% (reduced)
Food, healthcare,
New Zealand 15% Yes Inland Revenue (IR)
education
Basic food, South African
South Africa 15% Yes healthcare, Revenue Service
education (SARS)
Yes (for
Royal Malaysian
6% (prior, GST Food, healthcare,
Malaysia Customs
now SST) before education
Department
2018)
GST Council
Healthcare,
India 0%-28% Yes (Central & State
education, food
Governments)
7%-18% Federal and State
Brazil Yes Essential goods
(ICMS) Tax Authorities
Conclusion:

Each country’s GST or VAT system has its own structure, tax rates,
exemptions, and administrative framework. While GST in countries like
Canada, Australia, and Singapore is largely similar to India’s model, countries
like Brazil, Malaysia, and the European Union have unique systems. The key
features that most systems share are the Input Tax Credit (ITC) mechanism
and the focus on reducing the cascading effect of taxes.

EXISTING TAXES PROPOSED TO BE SUBSUMED TAXES

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Under the Goods and Services Tax (GST) regime introduced in India, several
existing taxes were proposed to be subsumed into the GST framework. The
objective was to streamline the tax system, reduce the cascading effect of taxes,
and provide a unified tax structure for both goods and services.

Here’s a breakdown of the existing taxes that were proposed to be subsumed

under GST:

1. Central Taxes Subsumed into GST:

a. Central Excise Duty

 Current Tax: Levied on the manufacture of goods in India.

 Under GST: This tax was subsumed under Central GST (CGST).

b. Service Tax

 Current Tax: Levied on the provision of services, including sectors like

telecommunications, hospitality, and professional services.
 Under GST: This tax was subsumed into GST, and services are now taxed
under the unified GST structure.
c. Countervailing Duty (CVD)

 Current Tax: Levied on imported goods to match the excise duty

applicable to domestic goods.
 Under GST: CVD was subsumed into Integrated GST (IGST), applicable to
imports.

d. Special Additional Duty (SAD)

 Current Tax: Levied on imports of goods to provide a level playing field

for domestic industries.
 Under GST: This duty was subsumed into Integrated GST (IGST) on
imports.

e. Central Sales Tax (CST)

 Current Tax: Levied on interstate sales of goods, hindering the free flow
of goods across state borders.
 Under GST: CST was abolished, and IGST was introduced for interstate
transactions, facilitating smoother interstate trade.

f. Central Surcharge and Cesses

 Current Taxes: Various surcharges and cesses like Education Cess,

Secondary and Higher Education Cess, Krishi Kalyan Cess, Swachh
Bharat Cess, etc.
 Under GST: These surcharges and cesses were abolished, and the
revenue is now part of the GST.

2. State Taxes Subsumed into GST:

a. State VAT (Value Added Tax)

 Current Tax: Levied by state governments on the sale of goods within

the state.
 Under GST: State VAT was subsumed under State GST (SGST), which
applies to intra-state sales.
b. State Sales Tax

 Current Tax: Earlier levied in certain states, but its role was largely
replaced by VAT.
 Under GST: State Sales Tax was subsumed under SGST as part of the
broader GST framework.

c. State Excise Duty

 Current Tax: Levied on the production or manufacture of alcoholic

beverages and certain other goods.
 Under GST: State excise remains applicable only to alcoholic drinks and
petroleum products, while other goods were brought under SGST.

d. Luxury Tax

 Current Tax: Levied by states on luxury goods and services (e.g., hotel
rooms, air-conditioned restaurants, etc.).
 Under GST: This tax was subsumed under GST, but services like hotel
accommodation above a certain tariff continue to be taxed under GST.

e. Entertainment Tax

 Current Tax: Levied on entertainment, amusement, and certain other

services.
 Under GST: This tax was subsumed under GST, including the tax on
movie tickets, amusement parks, etc.

f. Entry Tax

 Current Tax: Levied by states on goods entering the state from other
regions, creating hurdles for interstate trade.
 Under GST: Entry tax was abolished, and goods moving between states
are now subject to IGST.

g. Purchase Tax

 Current Tax: Levied by some states on the purchase of goods within the
state.
 Under GST: This was subsumed under SGST, except for a few items (such
as alcoholic beverages) that remain outside the GST ambit.
h. Luxury Tax

 Current Tax: Levied by state governments on luxury goods and services.

 Under GST: Luxury tax was abolished in most states, and such goods and
services are now taxed under the GST regime.

i. Tax on Works Contract

 Current Tax: Levied on works contracts like construction, installation,

etc.
 Under GST: Tax on works contracts is now governed by GST, with
provisions for tax credits on inputs.

3. Other Taxes and Levies Subsumed into GST:

a. Octroi

 Current Tax: Levied by local authorities (municipal corporations) on

goods entering the city limits.
 Under GST: Octroi was abolished and replaced by the IGST framework
for interstate trade.

b. Purchase Tax on Goods

 Current Tax: Certain states had specific taxes on the purchase of goods.
 Under GST: This was subsumed under SGST, and such taxes are no
longer applicable for most goods.

c. Taxes on Advertisements

 Current Tax: Some states imposed taxes on outdoor advertisements and

billboards.
 Under GST: This has been subsumed into the GST structure, and taxes
are now levied under GST.

Key Taxes that Remain Outside the Scope of GST:

Despite the broad coverage of GST, certain taxes remain outside the GST
regime due to specific exemptions or the nature of the goods/services involved:
 1. Alcoholic Beverages:
o State-level excise duties remain applicable, as alcohol is outside
the scope of GST.

2. Petroleum Products:
o Crude oil, natural gas, diesel, petrol, and aviation turbine fuel
(ATF) remain outside the scope of GST and continue to be taxed
under Excise Duty (for central government) and VAT (for states).

3. Electricity:
o Taxes on electricity (e.g., electricity duty) are still under the
jurisdiction of state governments.

Conclusion:

The introduction of GST in India subsumed a wide range of existing taxes,

including central and state-level duties like excise, VAT, service tax, CST, and
entry tax, aiming to create a simpler, more transparent, and unified tax system.
However, certain specific taxes, such as those on alcoholic beverages,
petroleum products, and electricity, remain outside the GST framework due
to their unique characteristics or political considerations.

The principle for subsuming various taxes into the Goods and Services Tax
(GST) regime in India was guided by the aim to simplify and rationalize the
complex tax structure in the country, ensuring greater transparency, efficiency,
and ease of doing business. Several key principles and objectives were
considered when determining which taxes to subsume and how to implement
GST. Below are the main principles adopted for subsuming the taxes under
GST:

1. Simplification of the Tax Structure

 Multiple Taxes into One: A key objective was to replace the complex
structure of multiple indirect taxes, both at the Central and State levels,
with a single tax regime. For example, taxes like Central Excise Duty,
Service Tax, State VAT, CST (Central Sales Tax), and Luxury Tax
were all subsumed into GST, thus creating a simplified tax framework.
  Reduction of Cascading Effect: The cascading effect of taxes (tax on
tax) was one of the major issues with the previous system. Under GST,
this issue was addressed by allowing Input Tax Credit (ITC), meaning
that businesses can claim credit for taxes paid on inputs, which reduces
the overall tax burden and eliminates the cascading effect.

2. Uniform Tax Structure Across the Country

 One Nation, One Tax: GST aimed to create a uniform tax structure
across the country, meaning that the same tax rate and rules would apply
uniformly across all states and Union Territories. This was particularly
important to eliminate interstate tax barriers, such as the Central Sales
Tax (CST) and Entry Taxes, which created inefficiencies in the flow of
goods and services between states.
 Subsuming State-Specific Taxes: Several state-specific taxes, like
Entry Tax and Luxury Tax, were subsumed into GST to ensure
uniformity in taxation across the entire country. This helped to reduce
the confusion and complexity of dealing with multiple tax regimes.

3. Centralization and Coordination Between States and Center

 Cooperative Federalism: GST was designed to follow the principle of

cooperative federalism by creating a shared responsibility between the
Central and State governments. Taxes like Central Excise Duty, Service
Tax, and State VAT were replaced by Central GST (CGST) and State
GST (SGST), where the revenue is shared between the Central and State
governments.
 GST Council: A GST Council was established to decide on key matters
such as tax rates, exemptions, and the list of goods and services covered
under GST. This body ensures that decisions are taken with the consensus
of both the Central Government and State Governments, ensuring
smooth coordination.

4. Addressing the Distortions in Inter-State Trade

 Unified System for Interstate Transactions: One of the significant

changes was the introduction of Integrated GST (IGST), which replaced
the Central Sales Tax (CST). The IGST system allows for seamless
 interstate trade by ensuring that taxes are levied at the point of sale and
businesses can claim input tax credits for interstate transactions.
 Removal of State-Level Barriers: Previous taxes like Entry Tax
imposed by states created barriers for the movement of goods across state
borders. By subsuming these taxes into the IGST system, the GST
framework has allowed for smoother and more efficient interstate trade.

5. Improving Transparency and Reducing Tax Evasion

 Transparent Tax System: GST introduced electronic filing of returns,

tax payments, and claims for input tax credits (ITC), leading to greater
transparency in the tax system. With a single tax platform (GSTN),
businesses could now easily comply with tax requirements, reducing the
possibility of tax evasion.
 Self-Policing Mechanism: The introduction of a GST invoice matching
system allowed for better tracking of transactions and ensured that
businesses could claim ITC only when their suppliers had paid the taxes.
This helped to reduce tax evasion and encouraged greater compliance
among businesses.

6. Easing the Burden on Businesses

 Simplified Compliance for Small and Medium Enterprises: The GST

framework introduced provisions such as the Composition Scheme,
which simplified tax compliance for small businesses with lower
turnover. Businesses that opt for this scheme pay a fixed percentage of
their turnover as tax, instead of the regular GST rates, thereby reducing
their compliance burden.
 Single Return Filing: Instead of filing multiple returns for different taxes
(e.g., VAT, Service Tax, Excise), businesses now only need to file one
unified GST return, reducing paperwork and administrative costs.

7. Ensuring a Broad Tax Base

 Taxing Both Goods and Services: GST was designed to be a

comprehensive tax system covering both goods and services. This
broadens the tax base and ensures that both producers and service
providers are taxed equally. Service Tax, VAT, and Excise Duty were
previously separate taxes that applied to only specific sectors, leading to
 gaps in the tax base. GST addresses this by taxing both goods and
services under the same regime.

8. Ensuring Revenue Neutrality

 Revenue Protection for States: The transition to GST was designed to

be revenue-neutral for states. To ensure that the states did not lose
revenue after the introduction of GST, the Compensation Scheme was
implemented. Under this scheme, states that faced a loss of revenue due
to the introduction of GST would receive compensation from the central
government for the first five years (2017-2022).
 Seamless Taxation: GST ensures that taxes are levied at the point of
consumption (in the case of goods and services) and not at the
production or manufacturing stage. This shift allows for a more efficient
tax system, reducing the burden on industries and enabling a smoother
flow of goods and services.

9. Addressing the Concerns of Trade and Industry

 Streamlining the Tax Process: The key principle behind subsuming

taxes was to make the tax process less cumbersome for businesses. By
combining multiple taxes into one unified tax system, it reduced the
complexity of complying with a range of different rules, returns, and
assessments.
 Focus on Input Tax Credit (ITC): A central principle in subsuming the
taxes was to enable businesses to claim Input Tax Credits (ITC) for
taxes paid on inputs. This encourages businesses to maintain accurate
records of their transactions, leading to greater transparency and
compliance.

10. Flexibility in the Tax Rate Structure

 Multiple Tax Slabs: In recognition of the diverse nature of goods and

services, GST adopted a multi-tiered tax rate structure, with different
rates for different goods and services (e.g., 0%, 5%, 12%, 18%, 28%).
This flexibility allowed the tax system to cater to different economic
sectors and ensure that essential goods and services were taxed at lower
rates, while non-essential and luxury items were taxed at higher rates.
  Special Provisions for Certain Goods and Services: Some goods (e.g.,
alcohol, petroleum products) were excluded from GST and continue to
be taxed under the existing regimes, recognizing the political and
economic significance of these sectors.

Dual taxes in GST refer to the levying of both Central GST (CGST) and State GST
(SGST) on intra-state supplies. Here's a breakdown:

Types of Dual Taxes

1. CGST and SGST: Both central and state governments levy taxes on intra-state
supplies. The tax rate is divided equally between CGST and SGST.
2. IGST (Integrated GST): Levied on inter-state supplies, IGST is a combination
of CGST and SGST. It's levied by the central government and is applicable to
imports and exports.

Dual Taxation Structure

1. Intra-State Supplies: CGST + SGST = Total Tax Liability

2. Inter-State Supplies: IGST = Total Tax Liability

Benefits of Dual Taxes

1. Simplified Taxation: Dual taxes simplify the taxation process by eliminating

the cascading effect of taxes.
2. Increased Revenue: Dual taxes allow both central and state governments to
generate revenue.
3. Reduced Compliance Burden: Taxpayers only need to file returns for CGST,
SGST, and IGST.
Challenges of Dual Taxes

1. Complexity: Dual taxes can be complex, especially for small businesses and
startups.
2. Increased Tax Burden: Dual taxes can lead to an increased tax burden on
certain industries or sectors.
3. Compliance Issues: Taxpayers may face challenges in complying with dual
tax laws and regulations.
The benefits of GST (Goods and Services Tax) are numerous and can be
categorized into several areas:

Economic Benefits

1. Simplified Taxation: GST simplifies the taxation process by eliminating the

cascading effect of taxes.
2. Reduced Tax Burden: GST reduces the overall tax burden on businesses and
consumers.
3. Increased Tax Revenue: GST increases tax revenue for the government due
to the widened tax base.
4. Improved Tax Compliance: GST encourages tax compliance due to the
transparent and accountable tax system.

Business Benefits

1. Reduced Compliance Costs: GST reduces compliance costs for businesses

due to the simplified tax return filing process.
2. Increased Efficiency: GST increases efficiency in business operations due to
the reduced complexity in taxation.
3. Improved Cash Flow: GST improves cash flow for businesses due to the
reduced tax burden.
4. Increased Competitiveness: GST increases competitiveness for businesses
due to the reduced tax burden and improved efficiency.

Consumer Benefits

1. Reduced Prices: GST reduces prices of goods and services due to the
reduced tax burden on businesses.
2. Increased Transparency: GST increases transparency in pricing due to the
clear and accountable tax system.
3. Improved Quality of Goods and Services: GST improves the quality of goods
and services due to the increased competition among businesses.
4. Increased Consumer Choice: GST increases consumer choice due to the
increased availability of goods and services.

Social Benefits

1. Reduced Corruption: GST reduces corruption due to the transparent and

accountable tax system.
2. Increased Government Revenue: GST increases government revenue, which
can be used for social welfare programs and infrastructure development.
3. Improved Public Services: GST improves public services due to the increased
government revenue.
4. Increased Economic Growth: GST increases economic growth due to the
simplified taxation system, reduced tax burden, and increased efficiency in
business operations.
The GST Council is a constitutional body responsible for governing the Goods
and Services Tax (GST) in India. It's comprised of the Union Finance Minister
(chairperson), the Union Minister of State in charge of Revenue or Finance, and
the Minister in charge of Finance or Taxation from each state government.¹
The GST Council's primary functions include:

- Recommending GST Rates: Deciding on the rates of GST for various goods and
services
- GST Laws and Rules: Making recommendations on the laws, rules, and
regulations governing GST
- GST Threshold Limits: Deciding on the threshold limits for GST registration
and exemptions
- Dispute Resolution: Resolving disputes arising from GST implementation

The GST Council plays a crucial role in ensuring a harmonized and efficient GST
system across India, promoting economic growth, and enhancing the overall
business environment.
Here's an overview of the GST Network (GSTN) and the GST Regime:
GST Network (GSTN)
1. Definition: GSTN is a non-profit, non-government company responsible for
managing the GST system in India.
2. Objectives: GSTN aims to provide a shared IT infrastructure and services to
Central and State Governments, taxpayers, and other stakeholders for the
implementation of GST.
3. Functions: GSTN is responsible for:
1. Developing and maintaining the GST portal
2. Processing GST returns and payments
3. Providing GST registration and verification services
4. Maintaining the GST taxpayer database
4. Benefits: GSTN provides a single, unified platform for GST compliance,
making it easier for taxpayers to file returns, pay taxes, and access GST-related
services.
GST Regime

1. Definition: The GST Regime refers to the system of taxation introduced in

India on July 1, 2017, which replaced the previous indirect tax system.
2. Key Features:
1. Dual GST: The GST Regime is a dual GST system, where both the Central
Government and State Governments levy GST on goods and services.
2. GST Rates: GST rates are divided into five slabs: 0%, 5%, 12%, 18%, and
28%.
3. GST Returns: Taxpayers are required to file GST returns on a monthly or
quarterly basis.
4. GST Payment: GST payments can be made online through the GST portal.
3. Benefits: The GST Regime aims to:
1. Simplify the tax system
2. Reduce tax evasion
3. Increase tax revenue
4. Promote economic growth and development

GST Regime Structure

1. CGST (Central GST): Levied by the Central Government on intra-state

supplies.
2. SGST (State GST): Levied by the State Governments on intra-state supplies.
3. IGST (Integrated GST): Levied by the Central Government on inter-state
supplies.
4. UTGST (Union Territory GST): Levied by the Union Territory Governments on
intra-state supplies.
Here's an overview of the Integrated Goods and Services Tax Act, 2017
(IGST Act), focusing on its title, definitions, and administration:
Title
The Integrated Goods and Services Tax Act, 2017 (No. 13 of 2017)

Definitions
As per Section 2 of the IGST Act:

1. Integrated Goods and Services Tax (IGST): Tax levied on the supply of goods
and/or services in the course of inter-State trade or commerce.

2. Central Goods and Services Tax Act (CGST Act): The Central Goods and
Services Tax Act, 2017 (No. 12 of 2017).

3. State Goods and Services Tax Act (SGST Act): The respective State Goods and
Services Tax Act.

4. Union Territory Goods and Services Tax Act (UTGST Act): The Union Territory
Goods and Services Tax Act, 2017 (No. 14 of 2017).

5. Supply: All forms of supply of goods and/or services, including imports and
exports.

Administration
As per Chapter XXI of the IGST Act:

1. Central Government: Responsible for the administration of IGST.

2. Commissioner of IGST: Appointed by the Central Government to administer
and enforce the provisions of the IGST Act.

1. Officers of Central Tax: Authorized to administer and enforce the provisions

of the IGST Act.

2. State Governments: May also administer IGST in accordance with the

provisions of the IGST Act.

3. IGST Council: Established to recommend rates, laws, and procedures for

IGST.

The IGST Act provides for the levy and collection of IGST on inter-State supplies
of goods and services. Its administration involves both Central and State
Governments, ensuring a harmonized and efficient tax system.

UNIT-II
Registration under GST is a crucial step for businesses to comply with the
Goods and Services Tax regime. Here's an overview:

Types of Registration

1. Voluntary Registration: Any business can opt for voluntary registration, even
if the turnover is less than the threshold limit.
2. Mandatory Registration: Businesses with a turnover exceeding the threshold
limit (Rs. 40 lakhs for goods and Rs. 20 lakhs for services) must register
mandatorily.
3. Compulsory Registration: Certain businesses, such as those engaged in e-
commerce, are required to register compulsorily, regardless of turnover.
Threshold Limits

1. Goods: Rs. 40 lakhs (Rs. 20 lakhs for special category states)

2. Services: Rs. 20 lakhs (Rs. 10 lakhs for special category states)
Documents Required
1. PAN Card: Permanent Account Number card
2. Aadhaar Card: Unique Identification Number card
3. Proof of Business: Registration certificate, partnership deed, etc.
4. Address Proof: Rent agreement, electricity bill, etc.
5. Bank Account Details: Bank account number, IFSC code, etc.

Registration Process

1. Visit GST Portal: Go to the official GST portal (gst.gov.in)

2. Fill Part-A: Fill the registration form (Part-A) with required details
3. Verify Email and Phone: Verify email and phone number through OTP
4. Fill Part-B: Fill the registration form (Part-B) with additional details
5. Submit Application: Submit the registration application
6. Verification: Verification of application by GST authorities
7. GSTIN: Receive Goods and Services Tax Identification Number (GSTIN)

Benefits of Registration

1. Legitimate Business: Registration provides legitimacy to the business

2. Input Tax Credit: Registered businesses can claim input tax credit
3. Compliance: Registration ensures compliance with GST laws
4. Increased Credibility: Registration increases credibility with customers and
suppliers
Here are the rules and procedures for registration under GST:

Application for Registration

1. Electronic Application: Application for registration must be made

electronically through the GST portal.
2. Form GST REG-01: Application must be made in Form GST REG-01, which
includes details such as business name, address, PAN, Aadhaar, and bank
account details.

Verification of Application

1. Verification by Tax Official: The tax official will verify the application and
may request additional documents or information.
2. Site Verification: In some cases, a site verification may be conducted to
verify the business premises.

Issue of Registration Certificate

1. Registration Certificate: If the application is approved, a registration

certificate will be issued in Form GST REG-06.
2. GSTIN: A unique Goods and Services Tax Identification Number (GSTIN)
will be assigned to the registered taxpayer.

Amendment of Registration

1. Electronic Application: Application for amendment of registration must be

made electronically through the GST portal.
2. Form GST REG-14: Application must be made in Form GST REG-14, which
includes details of the amendment.

Cancellation of Registration

1. Voluntary Cancellation: A registered taxpayer can voluntarily cancel their

registration by applying in Form GST REG-16.
2. Cancellation by Tax Official: A tax official can cancel a registration if the
taxpayer fails to comply with GST laws or regulations.

Registration for Casual Taxable Person

1. Form GST REG-01: A casual taxable person must apply for registration in
Form GST REG-01 at least 5 days prior to the commencement of business.
2. Advance Tax Deposit: A casual taxable person must deposit advance tax,
which will be credited to their electronic cash ledger.

Registration for Non-Resident Taxable Person

1. Form GST REG-09: A non-resident taxable person must apply for

registration in Form GST REG-09 at least 5 days prior to the commencement of
business.
2. Tax Deductor: A non-resident taxable person must appoint a tax deductor in
India.

Registration for Input Service Distributor

1. Form GST REG-04: An input service distributor must apply for registration
in Form GST REG-04.
2. ISD Registration: ISD registration is required for distributing input tax credit
to recipients.
Here are the exempted goods and services under GST:

Exempted Goods

1. Fresh Fruits and Vegetables: Fresh fruits and vegetables, including potatoes
and onions.
2. Grains and Pulses: Rice, wheat, pulses, and other grains.
3. Milk and Dairy Products: Milk, butter, cheese, and other dairy products.
4. Eggs and Meat: Eggs, meat, and poultry products.
5. Fish and Seafood: Fish and seafood products.
6. Salt: Salt, including iodized salt.
7. Bread and Confectionery: Bread, cakes, and confectionery items.
8. Prasad: Prasad, including food offered to deities.
9. Jhuggi and Slum Dweller Ration: Ration provided to jhuggi and slum
dwellers.
10. Agricultural Produce: Agricultural produce, including sugarcane, tea, and
coffee.

Exempted Services

1. Healthcare Services: Healthcare services, including medical, dental, and

nursing services.
2. Educational Services: Educational services, including teaching, training, and
coaching services.
3. Charitable Services: Charitable services, including services provided by
charitable institutions.
4. Religious Services: Religious services, including services provided by
religious institutions.
5. Funeral Services: Funeral services, including services provided by funeral
homes.
6. Postal Services: Postal services, including services provided by India Post.
7. Railway Services: Railway services, including passenger and freight services.
8. Air Transport Services: Air transport services, including passenger and
freight services.
9. Bundled Services: Bundled services, including services provided by telecom
operators.
10. Services Provided by Government: Services provided by government,
including services provided by government departments and agencies.

Other Exemptions

1. Exports: Exports of goods and services are exempt from GST.

2. SEZ Units: Supplies to SEZ units are exempt from GST.
3. Duty-Free Imports: Duty-free imports are exempt from GST.
4. United Nations Organizations: Supplies to United Nations organizations are
exempt from GST.
5. Embassies and Consulates: Supplies to embassies and consulates are exempt
from GST.

Note: The exemptions listed above are subject to change and may not be
comprehensive. It's always best to consult the GST Act and relevant
notifications for the most up-to-date information.
GST Registration Rules

1. Registration Threshold: Businesses with a turnover exceeding ₹40 lakhs

(₹20 lakhs for special category states) must register for GST.
2. Voluntary Registration: Businesses can opt for voluntary registration, even if
their turnover is below the threshold limit.
3. Registration Process: Registration must be done online through the GST
portal.
GST Invoice Rules

1. Invoice Requirements: Invoices must contain the GSTIN of the supplier and
recipient, invoice number, date, and tax amount.
2. Invoice Format: Invoices must be in a prescribed format, which includes a
unique invoice number and date.
3. Time Limit for Issuing Invoices: Invoices must be issued within 30 days of
the date of supply.

GST Payment Rules

1. Payment Due Date: GST payments are due on the 20th of the next month.
2. Payment Modes: Payments can be made online through the GST portal or
through authorized banks.
3. Late Payment Fees: Late payment fees apply if payments are not made on
time.

GST Return Filing Rules

1. Return Filing Frequency: Returns must be filed monthly or quarterly,

depending on the taxpayer's turnover.
2. Return Filing Due Date: Returns are due on the 20th of the next month (for
monthly returns) or the 31st of the next quarter (for quarterly returns).
3. Late Return Filing Fees: Late fees apply if returns are not filed on time.

GST Refund Rules

1. Refund Eligibility: Refunds are eligible for excess tax paid, tax paid on
exports, and tax paid on supplies to SEZ units.
2. Refund Application: Refund applications must be made online through the
GST portal.
3. Refund Processing Time: Refunds are processed within 60 days of the refund
application.

GST Audit Rules

1. Audit Requirements: Taxpayers with a turnover exceeding ₹1 crore must

undergo a GST audit.
2. Audit Process: Audits are conducted by a chartered accountant or a cost
accountant.
3. Audit Report: The audit report must be submitted to the GST authorities
within 30 days of the audit completion.

GST Assessment Rules

1. Assessment Types: There are two types of assessments: self-assessment and

scrutiny assessment.
2. Assessment Process: Assessments are conducted by GST authorities to verify
the correctness of tax payments.
3. Assessment Report: The assessment report must be issued to the taxpayer
within 30 days of the assessment completion.
GST at 5%
- Fresh fruits and vegetables
- Grains and pulses
- Milk and dairy products
- Eggs and meat
- Fish and seafood
- Salt
- Bread and confectionery
- Prasad
- Jhuggi and slum dweller ration
- Agricultural produce
- Coffee, whether or not roasted or decaffeinated
- Tea, whether or not flavoured
- Spices, including cumin seeds, coriander seeds, and turmeric
- Vegetable materials of a kind used primarily for plaiting
- Natural borates and concentrates thereof
- Natural boric acid containing not more than 85% of H3BO3
- Liquefied Propane and Butane mixture, Liquefied Propane, Liquefied Butane,
and Liquefied Petroleum Gases (LPG) for supply to non-domestic exempted
category (NDEC) customers¹

GST at 12%
- Fresh or chilled vegetables, roots, and tubers
- Fresh or chilled fruits
- Other edible parts of plants
- Spices, including cinnamon, cardamom, and cloves
- Tea, whether or not flavoured
- Coffee, whether or not roasted or decaffeinated
- Jute fibres, raw or processed but not spun
- Cotton fibres, raw or processed but not spun
- Coir fibres, raw or processed but not spun

GST at 18%
- Biscuits, wafers, and cookies
- Pasta, spaghetti, and macaroni
- Corn flakes, muesli, and other breakfast cereals
- Cereals, including oats, barley, and rye
- Meat and edible meat offal
- Fish and crustaceans, molluscs, and other aquatic invertebrates
- Dairy products, including butter, cheese, and ghee
- Edible oils, including coconut oil, palm oil, and olive oil
- Spices, including pepper, nutmeg, and mace

GST at 28%
- Aerated drinks, including cola, lemonade, and fruit juice
- Tobacco products, including cigarettes, cigars, and chewing tobacco
- Pan masala, including gutkha and other tobacco-free preparations
- Wines, including still wine, sparkling wine, and fortified wine
- Beer
- Automobiles, including cars, buses, and trucks
- Motorcycles and scooters
- Aircraft and helicopters
- Yachts and boats
- Jewelry, including gold, silver, and precious stones
- Perfumes and fragrances
- Cosmetics and toiletries, including soap, shampoo, and toothpaste
- Leather goods, including handbags, wallets, and belts
- Footwear, including shoes, boots, and sandals
- Furniture and furnishings, including beds, chairs, and tables
- Household appliances, including refrigerators, air conditioners, and washing
machines
- Electronic devices, including TVs, computers, and smartphones
- Solar panels and solar inverters
- Wind turbines and wind turbine components
- Biomass briquettes and biomass pellets
- Electric vehicles, including e-rickshaws and e-cars
- Hybrid vehicles, including hybrid cars and hybrid buses
- Hydrogen fuel cell vehicles
- Methanol
- Bio-diesel
- High-speed diesel
- Petrol
- Aviation turbine fuel
- Natural gas
- Compressed natural gas (CNG)
- Liquefied natural gas (LNG)
- Liquefied petroleum gas (LPG)
- Coal
- Lignite
- Peat
- Uranium
- Thorium
- Nuclear fuel
- Radioactive elements
- Isotopes
- Compounds or mixtures of isotopes
- Nuclear reactors
- Fuel elements (cartridges) for nuclear reactors
- Isotopes and compounds or mixtures of isotopes, not containing uranium or
thorium, or compounds or mixtures thereof, for use in a nuclear reactor
- Heavy water (deuterium oxide)
- Uranium enriched in U 235 or U 233; plutonium and its compounds; alloys,
dispersions (including cermets), ceramic products and mixtures containing
uranium enriched in U 235 or U 233, plutonium or compounds of these products
- Radioactive elements and isotopes and compounds or mixtures thereof, not
containing uranium or thorium, or compounds or mixtures thereof, for
industrial, commercial, agricultural, medical, scientific or educational purposes
- Fuel wood, including logs, billets, and twigs
- Charcoal, including activated carbon
- Wood tar; wood tar oils; wood creosote; wood naphtha; vegetable pitch;
brewers' pitch
- Residual lyes from wood pulp manufacture
- Lignite whether pulver
Here's an overview of the procedure relating to levy (CGST and SGST)
under GST:

Levy of CGST and SGST

1. CGST: Central GST (CGST) is levied on intra-state supplies of goods and

services.
2. SGST: State GST (SGST) is also levied on intra-state supplies of goods and
services.

Procedure for Levy

1. Supply: A supply of goods or services is made by a taxable person.

2. Taxable Event: The taxable event is the supply of goods or services.
3. Taxable Person: The taxable person is the person liable to pay tax on the
supply.
4. Tax Rate: The tax rate is determined based on the nature of the supply and
the tax slab applicable.
5. Tax Calculation: The tax is calculated on the value of the supply.
6. Tax Payment: The tax is paid by the taxable person to the government.

CGST and SGST Payment

1. CGST Payment: CGST is paid to the Central Government.

2. SGST Payment: SGST is paid to the State Government.

Input Tax Credit (ITC)

1. Eligibility: ITC is eligible on tax paid on inputs used for business purposes.
2. ITC Claim: ITC can be claimed by the taxable person in their GST return.

GST Returns

1. GST Returns: GST returns are filed by the taxable person to report their
supplies, tax payment, and ITC claim.
2. Return Filing: Returns are filed online through the GST portal.

GST Payment and Return Filing Due Dates

1. Due Dates: GST payment and return filing due dates are specified in the GST
Act and rules.
2. Late Fees: Late fees are applicable for delayed payment and return filing.
various schedules related to supply under GST:

Schedule I: Supplies Deemed to be Made in the Course or Furtherance of

Business
1. Permanent transfer or disposal of business assets
2. Supply of goods or services between branches
3. Supply of goods or services to an agent or principal

Schedule II: Supplies Not Considered as Supplies

1. Services provided by an employee to the employer

2. Services provided by a director to the company
3. Renting of residential dwelling for personal use
4. Transactions between a principal and agent

Schedule III: Activities or Transactions Which Shall be Treated Neither as a

Supply of Goods Nor a Supply of Services

1. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of
building
2. Actionable claims, other than lottery, betting and gambling
3. Transactions related to securities

Schedule IV: Categories of Goods or Services Exempt from Tax

1. Fresh fruits and vegetables

2. Milk and dairy products
3. Eggs and meat
4. Fish and seafood
5. Salt
6. Bread and confectionery
7. Prasad
8. Jhuggi and slum dweller ration

Schedule V: Exemptions on Supply of Services

1. Healthcare services
2. Educational services
3. Charitable services
4. Religious services
5. Funeral services
6. Postal services
7. Railway services
8. Air transport services

Schedule VI: Valuation of Supply

1. Value of supply shall include any taxes, duties, cesses, fees, and charges
2. Value of supply shall not include any discount or rebate allowed

Schedule VII: Classification of Goods and Services

1. Classification of goods and services shall be based on the Harmonized

System of Nomenclature (HSN) and the Service Accounting Code (SAC)

Schedule VIII: Transitional Provisions

1. Transitional provisions for taxes and duties levied prior to the appointed day
2. Transitional provisions for input tax credit
 Schedule IX: Special Provisions Relating to Supply of Goods or Services

1. Special provisions for supply of goods or services to SEZ units

2. Special provisions for supply of goods or services to diplomats and
international organizations

Schedule X: Special Provisions Relating to Supply of Goods or Services by an

Unregistered Person

1. Special provisions for supply of goods or services by an unregistered person

to a registered person

Schedule XI: Special Provisions Relating to Supply of Goods or Services by a

Composition Taxpayer

1. Special provisions for supply of goods or services by a

composition taxpayer

computation of taxable value and tax liability (CGST and SGST) under GST:

Taxable Value

1. Transaction Value: The price actually paid or payable for the supply of goods or
services.
2. Value of Supply: The transaction value plus any taxes, duties, cesses, fees, and
charges levied under any law, other than the GST Act.
3. Discounts and Rebates: Discounts and rebates allowed after the supply has been
made can be deducted from the transaction value.

Tax Liability (CGST and SGST)

1. CGST: Central GST is levied on intra-state supplies of goods and services.

2. SGST: State GST is also levied on intra-state supplies of goods and services.
3. Tax Rates: The tax rates for CGST and SGST are specified in the GST Act and
rules.
4. Tax Liability Calculation: The tax liability is calculated by multiplying the
taxable value by the applicable tax rate.

Formula for Tax Liability Calculation

Tax Liability = (Taxable Value x CGST Rate) + (Taxable Value x SGST Rate)

Example

Suppose a taxpayer makes an intra-state supply of goods worth ₹100,000. The

CGST rate is 9% and the SGST rate is 9%.

Taxable Value = ₹100,000

CGST Liability = ₹100,000 x 9% = ₹9,000
SGST Liability = ₹100,000 x 9% = ₹9,000
Total Tax Liability = ₹9,000 + ₹9,000 = ₹18,000

Input Tax Credit (ITC)

1. Eligibility: ITC is eligible on tax paid on inputs used for business purposes.
2. ITC Claim: ITC can be claimed by the taxpayer in their GST return.
3. ITC Utilization: ITC can be utilized to set off tax liability.

Reverse Charge Mechanism (RCM)

1. Applicability: RCM is applicable in cases where the supplier is not registered or

is a composition taxpayer.
2. Tax Liability: The recipient of the supply is liable to pay tax under RCM.

procedure relating to levy (IGST) under GST:

Levy of IGST

1. Inter-State Supplies: IGST is levied on inter-state supplies of goods and services.

2. Import of Goods: IGST is also levied on the import of goods.

Procedure for Levy of IGST

1. Supply: A supply of goods or services is made by a taxable person.

2. Taxable Event: The taxable event is the supply of goods or services.
3. Taxable Person: The taxable person is the person liable to pay tax on the supply.
4. Tax Rate: The tax rate is determined based on the nature of the supply and the tax
slab applicable.
5. Tax Calculation: The tax is calculated on the value of the supply.
6. Tax Payment: The tax is paid by the taxable person to the government.

IGST Payment

1. IGST Payment: IGST is paid to the Central Government.

2. Payment Modes: Payments can be made online through the GST portal or
through authorized banks.

Input Tax Credit (ITC)

1. Eligibility: ITC is eligible on tax paid on inputs used for business purposes.
2. ITC Claim: ITC can be claimed by the taxable person in their GST return.

GST Returns

1. GST Returns: GST returns are filed by the taxable person to report their supplies,
tax payment, and ITC claim.
2. Return Filing: Returns are filed online through the GST portal.

GST Payment and Return Filing Due Dates

1. Due Dates: GST payment and return filing due dates are specified in the GST Act
and rules.
2. Late Fees: Late fees are applicable for delayed payment and return filing.