GOODS AND

SERVICE TAX
KNOW ABOUT
GST
 WHAT IS GST ?!
The Goods and Services Tax (GST) is a consumption tax levied on goods and services at
each stage of production or distribution. It streamlines the taxation system, replacing
multiple indirect taxes with a single unified tax, promoting transparency and efficiency.
Implemented in various countries, GST aims to enhance economic growth and simplify tax
compliance.

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 HOW DOES THE GST WORKS?

• Manufacturer
• The manufacturer will be responsible for paying GST on the raw materials that are purchased as well as the
value that has been added to the product during the manufacturing process.
• Service Provider
• In this case, the service provider will be responsible for paying GST on both the amount paid for the product
and the amount of value that has been added to the product. However, the amount of tax that the
manufacturer has paid can be deducted from the total amount of GST that is required to be collected.
• Retailer
• The retailer is responsible for paying GST on both the product purchased from the distributor and the margin
added to the price of the product. However, the amount of tax that has been paid by the retailer can be
deducted from the total amount of GST that is required to be collected.
• Consumer
• As a consumer, you are responsible for paying GST on the product you have purchased.

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KINDS OF GOODS AND SERVICES [GST].

• Central Goods and Services Tax (CGST): The CGST is levied on products and services
that are supplied within a state
• State Goods and Services Tax (SGST): Like the Central Goods and Services Tax (CGST),
the State Goods and Services Tax (SGST) is levied on the sale of goods and services
within a state
• Integrated Goods and Services Tax (IGST): The IGST is levied on interstate transactions
involving the sale of goods and services
• Union Territory Goods and Services Tax: Tax on the supply of goods and services in the
Union Territories of the country, which include the Andaman and Nicobar Islands,
Daman and Diu, Dadra and Nagar Haveli, Lakshadweep, and Chandigarh, is levied under
the Union Territory Goods and Services Tax (UTGST). The UTGST is levied in addition to
the CGST

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 OBJECTIVES OF GST
• In order to realise the ideology of “One Nation, One Tax”
• In order to consolidate a large proportion of India’s indirect
taxes
• In order to prevent the cascading effect of taxes
• To put a stop to tax evasion
• In order to broaden the base of taxpayers
• Procedures for conducting business online for the
convenience of the customer
• Improved distribution and logistical infrastructures
• The goal is to promote competitive pricing while also
increasing consumption

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KEY FEATURES OF GST
• Single Indirect Tax
• GST is single, unified tax reform. It consolidated numerous existing indirect central and state taxes such as the Central
Value Added Tax, Special Additional Duty of Customs, Service Tax, and VAT. The abolition of these indirect taxes has made
many goods and services more inexpensive compared to consumers as well as made tax compliance easier for businesses.
• Input Tax Credit System
• The input tax credit is a popular GST feature in India. A manufacturer or service provider can deduct input tax paid on
purchases from their total output tax liability. To claim the tax credit, the input and output invoices must match. This
removes the traditional ‘tax-on-tax’ effect. It also reduces tax evasion.
• GST Composition Scheme
• A voluntary composition scheme is available to SMEs in certain states with a turnover of up to Rs. 1.5 crore and in the
case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75 lakh. Businesses can pay a fixed GST rate of
1%,5%, 6% based on their business and their turnover under this scheme. However, they cannot claim the input tax
credit. A company must choose between the composition scheme and the input tax credit feature.
• Four-tier Tax Structure
• GST has four tiers of taxation: 5%, 12%, 18%, and 28%. This tax structure applies to all goods and services. Many essential
commodities, such as food, are exempt from GST. This 4-tier structure offers improved transparency and lower costs for
goods and services.
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BENEFITS OF GST

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 FOR BUSINESSES AND INDUSTRY
• The GST regime in India will be built on a solid IT infrastructure.
• Online services for taxpayers include registration, returns, and payments.
• A reduction in corporate transaction costs would eventually increase trade and
industry competitiveness.
• This would improve Indian exports and increase the competitiveness of Indian
goods and services globally

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 FOR CENTRAL AND STATE GOVERNMENT:
• GST replaces multiple central/state indirect taxes
• GST would be simpler and easier to administer if it had a comprehensive IT
infrastructure
• GST is projected to reduce the government’s tax collection costs and hence
increase revenue efficiency

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 FOR CONSUMERS:

• Most goods and services in the country were taxed numerous times by the
central and state governments, with incomplete or no ITC provided at various
levels of value addition
• There would be simply one tax from maker to consumer, leading to tax clarity
• The overall tax burden on most commodities will be reduced due to efficiency
gains and leakage prevention, benefiting consumer

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HIGHEST TAXPAYERS IN INDIA

RELIANCE INDUSTRIES STATE BANK OF INDIA INFOSYS TATA STEEL

LIMITED
As India’s largest private sector A behemoth in the banking A global IT services company, A cornerstone in India’s
corporation and a Fortune 500 and financial services sector, Infosys, paid Rs 9,214 crore in industrial history, Tata Steel
company, RIL paid a staggering SBI, a Fortune 500 company, taxes, emphasizing its paid a substantial sum of Rs
sum of Rs 20,713 crore in taxes contributed significantly to the significant contribution to the 10,160 crore in taxes, reflecting
during the FY 2022-23. nation’s coffers with a tax Indian Government’s revenue. its continued economic impact.
payment of Rs 17,649 crore.
PIYUSH GUJAR

MAYANK AGARWAL

BHAVESH
CHOUDHARY