TAX

A tax (from the Latin tax) is a mandatory financial charge or some

other type of levy imposed upon a taxpayer (an individual or other
legal entity) by a governmental organization in order to fund
various public expenditures.

• Education
• Defence
• Agriculture
• Law and Safety
• Administration

A failure to pay, along with evasion of or resistance to taxation, is

punishable by law.
 Types of Tax
Direct Taxes are the taxes that are levied on the
income of individuals or organisations. They
include Income tax, corporate tax, wealth tax and
inheritance tax.

Indirect taxes are those paid by consumers when

they buy goods and services. These include excise,
service tax (or GST) and customs duties.

GST is levied on Goods and Services

 GST
GST is an Indirect Tax which flow like this…

Customer > Business > Government

Customers will Businessman Govt. will get

pay the tax to will collect and Tax from
the pay tax to Govt. Businessman. It
Businessman is an income.
 Before GST
SI No. Business Tax

1 Manufacturer Excise duty

2 Traders CST (Central Sales Tax)

3 Service Providers Service Tax

And there were various other taxes such as Luxury Tax,

Entertainment tax etc.

GST Implemented on July 1st 2017.

Central Taxes merged into GST
a. Central Excise duty
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special
Importance)
d. Additional Duties of Excise (Textiles and Textile
Products)
e. Additional Duties of Customs (commonly known as
CVD)
f. Special Additional Duty of Customs (SAD)
g. Service Tax
h. Central Surcharges and Cesses so far as they relate
to supply of goods and services

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State Taxes merged into GST
a. State VAT
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax (all forms)
e. Entertainment and Amusement Tax (except when
levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State Surcharges and Cesses so far as they relate to
supply of goods and services

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Change in Constitution
GST Law empower the Centre and the States to levy and
collect tax on both goods and services.

The Constitution of India has been amended by the

Constitution (one hundred and first amendment) Act, 2016
recently for this purpose. Article 246A of the Constitution
empowers the Centre and the States to levy and collect the
GST.

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 Benefits
Removal of Cascading effect - Allowing set-off of
prior-stage taxes will be available.
Common National market.
For the consumers - Reduction in the overall tax burden
on goods, which is currently estimated at 25%-30%.
Indian products will be competitive in the International and
domestic markets - Economic Growth.
Benefit for Centre and the States – Easy Administration, Widening of
the tax base etc.
Transparent and Easier Tax Compliance System.

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Removal of Cascading Effect
In GST Scenario, all Indirect taxes merged into GST.
So Input Tax Credit is available for Goods and Services
without limit.

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Common National Market
GST removed Check Posts.

In Developed Countries, a Truck was moving 700-800 Kms

in a Day.
In India it was only about 200-250Kms.

GST brought E-way Bill for smooth movement of Goods.

One Vehicle cannot be stopped for more than 30 minutes.
Before GST After GST

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Indian Products in Intnl. Market
• GST is not applicable on Exports.

• Input Tax Credit (Tax Paid on Goods and Services

purchased) is refundable.

• Price of Indian goods will be cheaper.

• Indian Products will be competitive in International

Market.

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Reduction in the Tax Burden

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Easy for Govt. and Businessmen

• Single Tax – • Widened Tax base –

Managing will be On Goods and
easy. Services.
• Input Tax Credit • More Tax Payers –
available. More Revenue.
• Less Returns – Now • Better Tax System.
Single Return • Less Tax Evasion.
coming… • Reduction in cost of
• Removed Headache www.gstcentre.in Administration 14
Features of GST
Levied at all stages right from manufacture up to final consumption.

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B2B and B2C Transactions

Business to Business Transactions.

(B2B)
Input Tax Credit is Available to each Business.
GST is calculated only on the Value Addition.
Govt. is only Custodian of Tax.
Business to Consumer (B2C)
Burden of Tax is on the
www.gstcentre.in Customer Govt. gets Income16
Input Tax Credit
Tax Paid by the Registered Person
can be claimed as Input Tax
Credit.

Tax Collected in B2B Transaction

is liability for the government.

Tax Paid by the Buyer is Asset for

him. Goods / Services supplied
Business Business
(Buyer) Tax Paid by the Buyer to the (Seller)
In Seller with Price
pu
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 Tax Liability
TAX LIABILITY = OUTPUT TAX – INPUT TAX

Input
Goods

Input Capita
Servic l
es Goods
Payment of Tax collected from Customers

Goods / Services supplied

Customer Business
(Buyer) Tax Paid by the Buyer to the (Seller)
Seller with Price

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c te he
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ax C tted
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Dual GST
India is a federal country where both the Centre and the States
have been assigned the powers to levy and collect taxes.

CGST = Central Govt. SGST = IGST = Central Govt. + State

State Govt. Govt.
Intra-state (Within the State) Interstate (Outside the State)

CGST and SGST will apply. IGST will apply. 20

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Example
Suppose you went to a Hotel with your friend.
Had 2 Coffee. The Rate is Rs. 40/-. Total Value is Rs. 80/-.
GST is 12%.
SGST = 6% = Rs. 4.80/- = To be paid to State Govt.
CGST = 6% = Rs. 4.80/- = To be paid to Central Govt.

Here Total rounded off to Rs. 90/-

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Destination based tax on consumption
GST - Destination based tax on consumption of goods and
services.
The tax would accrue to the Tax Authority which has
jurisdiction over the place of consumption which is also termed
as place of supply.

Tax goes to the Government –

Place of Consumption
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Example
Good sold by Mr. Arun (Tamilnadu) to Mr. Hari (Karnataka).

Here the Tax Paid by Mr. Hari will be paid to Karnataka Govt. and
Central Govt.
Goods

Price + Tax Rs.

100/-
IGST

Supplier IGST = CGST + SGST Customer

Tamilnadu Karnataka
CGST = 50 = Central Government
SGST = 50 = Karnataka Govt.

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Intra-State Supply
For any intra-state supply, GST has to be paid.
GST has two components.
Central GST (going into the account of the Central Govt.)
State GST (going into the account of the State Govt.)

Both places are in Maharashtra State

Inter State Supply
For any inter-state supply, tax to be paid is
Integrated GST (IGST) – Paid to the Central Govt.
will have components of both CGST and SGST.

From One State to another State

Calculation of GST
The Central GST and the State GST would be levied simultaneously
on every transaction of supply of goods and services

GST is not applicable on…

Exempted goods and services
Goods which are outside the purview of GST and
the transactions which are below the prescribed threshold
limits.

Tax Rates are – 5% 12% 18% and 28%

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Commodities outside the purview of GST
Alcohol for human consumption
Petroleum Products viz. petroleum crude, motor spirit
(petrol), high speed diesel, natural gas and Aviation turbine
fuel
Electricity.
The existing taxation system - VAT & Central Excise will
continue in respect of the above commodities.
Tobacco and Tobacco products
Tobacco and tobacco products would be subject to GST.

In addition, the Centre would have the power to levy Central

Excise duty on these products.
Actionable Claims, Land and Buildings
GST Law specifically provides that Actionable Claims other than
Lottery, Betting and Gambling will not attract GST.

Land and Completed Buildings also will not attract GST.

General Category
Tax is payable by the taxable person on the supply of goods
and/or services.
SI Category Annual Turnover
No.
1 Normal States 20 Lakhs
2 North Eastern 10 Lakhs
Special Category
States States include Arunachal Pradesh, Assam,
Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim,
Himachal Pradesh, Uttarakhand and J&K*.

If Daily Sales is more than Rs. 6,000/-

Need Registration.
ACCOUNTANT MUST KNOW…
How to register the Business in GST.
Identification of Tax Rates for Goods
Calculation of Tax
Tax Payment
Return Filing
Maintaining Accounts & Records
Tax Invoice, Credit and Debit Notes
Raise E-way Bill
Refund of Tax
Dealing with Consultant / CAs
 CA. NAISON LOUIS
Founder Director And Chairman – Teach Group

CA. UNMESH NARVEKAR MR. GURVINDER SINGH DHILLON

National Head National Head
Training and Development Placement & Self Employment
GST CENTRE ® - Best and Biggest

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 FULL SUPPORT FROM GOVERNMENT

Honourable Shri. Suresh Prabhakar Prabhu (Union Minister for Commerce &
Industry and Civil Aviation of India) inaugurate the 25th GST CENTRE in
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CA. Unmesh Narvekar, Mr. Babaji Vardam and Mr. Prashanth.
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