GOODS AND

SERVICES TAX
Indirect tax
 WHAT IS TAX

To run a nation judiciously, the government needs

to collect tax from the eligible citizens; paying
taxes to the local government is an integral part of
everyone’s life, no matter where we live in the
world. Now, taxes can be collected in any form such
as state taxes, central government taxes, direct
taxes, indirect taxes, and much more. For your
ease, let’s divided the types of taxation in India into
two categories, viz. direct taxes and indirect taxes.
This segregation is based on how the tax is being
paid to the government.
TYPES OF TAX

TAX

DIRECT TAX
INDIRECT TAX FATHER –
FATHER – JAMES WILSON
WILHEMN VON SIEMENS
(ITALY)

INCOM WEALTH CUSTO

GST
E TAX TAX MS
What is GST?

• GST is an indirect tax

• The impact fall on two different person.
• The payer of the tax and bearer of the tax is
two different person.
• It is levied on goods and services.
• Also known as Common National market tax.
 Features of GST

TAX IS
IMPOSED SHIFTING MAJOR
REGESSIV
ON OF WIDER SOURCE
E IN
GOODS BURDEN TAX BASE OF
NATURE
AND REVENUE
SERVICES
 HISTORY OF GST

More than 160 countries have already introduced GST

France was the First country to introduced GST in 1954

There are 2 models of GST ( single & dual )

We have adapted dual model GST from Canada and brazil

 Difference Between Direct TAX and Indirect TAX

Meaning
• Direct tax is a tax of
which impact and Nature of Tax Imposition
incidence falls on • Direct Tax is • It is imposed on
same person Progressive in nature income of the person
• Indirect tax is a tax in • Indirect tax is • It is imposed on
which impact and Regressive in nature goods and services
incidence falls on two
different person
 SHIFTING OF BURDEN MEANS ?

CONSUMER
(humlog)

MANUFA
WHOLES
RETAILER
CTURERALER

Ultimate burden
falls on Consumer
There are 29 States & 7 Union Territories in India
There are 4 types of GST

 CGST ( CENTRAL GOODS AND SERVICES TAX)

 SGST (STATE GOODS AND SERVICES TAX)
 IGST ( INTEGRATED GOODS AND SERVICES TAX)
 UTGST ( UNION TERRITORY GOODS AND
SERVICES TAX)
THE 7 UNION TERRITORIES ARE:

DELHI
DAMAN AND DIU + DADAR AND NAGAR
HAVELI
ANDAMAN AND NICOBAR ISLAND
PUDUCHERRY
LAKSHWADEEP
CHANDIGARH
LADAKH
THERE ARE TWO TYPES OF SUPPLY:

 INTER STATE, UT SUPPLY

 INTRA STATE SUPPLY

WHAT IS INTER STATE SUPPLY ?

 When there is a supply between TWO STATES, TWO DIFFERENT UNION
TERRITORY, A STATE AND A UNION TERRITORY. ( ELIGILBE GST IS –
IGST)
WHAT IS INTRA STATE SUPPLY?
 When there is a supply within the state, or with the union territory, then
it is a INTRA STATE SUPPLY (STATE = CGST+ SGST) (UT=CGST+UTGST)
Now we will talk about Delhi and
Pondicherry
These are union territory
But, UTGST is not applicable on these
two Union Territories
Because they both have their own
Legislative Assembly and that is why
CGST AND SGST is applicable.
Aur Ache se Samjhte hai ?

TWO STATES – IGST

TWO UNION TERRITORY – IGST

WITHIN STATE – CGST AND SGST

ONE STATE AND ONE UNION TERRITORY – IGST

WITHIN UNION TERRITORY – UTGST AND CGST

KUCH BHI HO CENTRAL PESA LEGA HI

KUCH ILLUSTRATIONS ?

1. Dilip kumaar of Mumbai sold goods to Madhubala of UP ====

IGST

2. Rani of Himachal Pradesh sold goods to Raja of Himachal

Pradesh === CGST , SGST

3. Rajesh Khanna of Punjab sold goods to Dimple Kapadia of Goa

=== IGST

4. Tushar Kapoor of Chandigarh sold goods to Rakhi of

Chandigarh === UTGST, CGST

5. Shammi Kapoor of Kashmir sold goods to Helan of Bihar )==

IGST
CENTRAL WISE TAX SUBSUMED
STATE WISE TAXES SUBSUMED
(KHEYE FELECHE)

CENTRAL EXCISE TAX VAT/ SALES TAX

ADDITIONAL EXCISE TAX ENTERTAINMENT TAX

SERVICE TAX LUXURY TAX, PURCHASE TAX

ENTRY TAX, OCTROI, STATE CESS,

ADDITIONAL CUSTOM DUTY
SURCHARGE

SURCHARGE (TAX ON TAX ) TAXES ON ADVERTISEMENT

CESS (KHAJNA) CHOTO TAX CENTRAL SALES TAX

 TAXES NOT SUBSUMED

CUSTOM DUTY
STAMP TAX
SECURITIES TRANSACTION TAX
ELECTRICITY TAX
STATE EXCISE ON ALCOHOL
VAT ON PETROLEUM PRODUCTS
PROFESSION TAX
ENTERTAINMENT TAX BY LOCAL BODIES
CENTRAL EXCISE ON 5 PETROLEUM PRODUCTS & TOBACCO

PROPERTY TAX BY LOCAL BODIES

 5%
28% 12%
GST
1% RATES 18%

3% 40%
0.25%
MAXIMUM RATE IS 40% WHICH IS NOT
APPLICABLE RIGHT NOW ON ANY PRODUCTS

SPECIAL RATE OF GST ON JEWELLERY – 3% ON

GOLD, SILVER & PLATINUM JEWELLERY

0.25% IS ON ROUGH DIAMOND

Real estate – 1% under construction
 WAPAS ILLUSTRATIONS ?

Q1) A PERSON OF KOLKATA SUPPLY GOODS OF RS 10 LAKH TO A PERSON OF

JAIPUR.

Which tax is applicable

And state the division of tax

IGST is applicable
And the tax is given to central and Rajasthan government
DESTINATION BASED TAX – DESTINATION BASED
TAX IS COLLECTED BY THE STATE WHERE THE
GOODS AND SERVICES ARE DELIVERED /
CONSUMED. GST IS KNOWN AS DESTINATION
BASED TAX.
ILLUSTRATION

1) GOODS SOLD FROM KOLKATA TO

BHUBHANESHWAR
2) MR A OF KUNTIGHAT ( KOLKATA ) PURCHASED
GOODS FROM DELHI ( TILAKNAGAR)
 WHY DESTINATION BASED TAX?

IN THE LONG TERM, DESTINATION BASED TAX IS

A BOOM FOR LESS DEVELOPED STATES, WHO
CONSUME MORE THAN WHAT THEY EARN. INDIAN
GOVERNMENT FOR THE GROWTH OF THESE
NORTH EAST STATES, ENACTED THE
DESTINATION BASED TAX.
 COMPENSATION CESS

CENTRAL GOVERNMENT UNDERATAKEN THAT THEY WILL COMPENSATE

ANY LOSS OF REVENUE ( DUE TO IMPLEMENTATION OF GST) TO ANY
STATE FOR THE PERIOD OF 5 YEAR. 2017-2022

COMPENSATION CESS SHALL BE LEVIED (LAGTA HAI ) PAN MASALA,

TOBACCO, MANUFACTURED TOBACCO, COAL, AERATED WATER, LUXURY
CAR ETC.
COMPENSATION CESS WILL BE GIVEN FOR THE PERIODS OF 5 YEARS
GENERAL RATE OF CC – 15%
ILLUSTRATION

A REGISTERED SUPPLIER OF KOLKATA SOLD GOODS TO ANOTHER

REGISTERED PERSON OF JAIPUR FOR 10 LAKH ( EXCLUDING GST @ 28%. SUCH
GOODS ARE FURTHER COMPENSATION CESS @ 15% FIND AMOUNT OF GST
AND COMPENSATION GST

1000000*28%= 280000
1000000*15%= 150000
280000+150000= 430000
 NON APPLICABILITY OF GST
GST NAHI LAGEGA

• ALCOHOL FOR HUMAN CONSUMPTION

• ELECTRICITY

• 5 PETROLEUM PRODUCTS Aviation

Crude Motor
turbine
petrol spirit
fuel

High
speed Natural
diesel gas
oil
 GST COUNCIL

• UNION FINANCE MINISTER ( NIRMALA

SITHARAMAN)
• MINISTER OF STATE
• TAX MINISTER
• HALF OF THE MEMBER SHALL BE
QUOROM OF THE COUNCIL
• DECISION WILL BE GST COUNCIL WITH
3/4TH MAJORITY
 FUNCTIONS OF COUNCIL

PREPARATION OF GST LAW

TO MAKE RECOMMENDATIONS ON GST
EXEMPTIONS AND THRESHOLD
TO MAKE RECOMMENDATION ON GST RATES
TO MAKE RECOMMENDATIONS ON TAXES TO
BE SUBSUMED IN GST
TO SETTLE ANY DISPUTES BETWEEN CG AND
SG
 GOODS AND SERVICE TAX NETWORK (GSTN)
GST IS A NON PROFIT SEEKING COMPANY BEING SET UP TO PROVIDE A
SHARED IT INFRASTRUCTURE AND SERVICES TO CENTRAL AND STATE
GOVERNMENT TAX ADMINISTRATORS AND ASSESSEE FOR IMPLEMENTATION
OF GST

FUNCTIONS OF GSTN
• FACILITATE REGISTRATION
• COMPUTATION OF IGST AND SETTLEMENT
• FILE TAX RETURN AND SUBMIT TO CENTRAL AND STATE AUTHORITIES.
• INTEGRATE BANKING NETWORK WITH TAX PAYMENT
• ANALYSE TAX PAYER’S PROFILE
• MANAGE COMPUTATION ENGINE OF INPUT TAX CREDIT
• SUBMIT MIS REPORT TO GOVERNMENT
 LIST OF STATES:
MANIPUR, MIZORAM, NAGALAND, TRIPURA – 10 LAKHS

UTTRAKHAND, ASSAM, MEGHALAYA, SIKKIM, ARUNACHAL PRADESH – 20

LAKHS

HIMACHAL PRADESH – 40 LAKH

JAMMU AND KASMIR – 40 LAKH

PUDUCHERRY, TELENGANA 20 LAKH

REST STATES OF INDIA – 40 LAKH

 FRAME WORK OF GST
REGISTRATION
THRESHOLD (EXEMPTION LIMIT)
THOSE WHO HAVE PAST TAXES THAT IS VAT, SERVICE TAX, EXCISE DUTY CST

THERE IS 3 THRESHOLD LIMIT FOR EXEMPTION FROM REGISTRATION

40 lakhs 20 lakhs 10 lakhs

AGAR KISI KA INTER STATE SE BHI SALE YAH PURCHASE HOTA HAI TOH
APKO TURNOVER NAHI DEKHNA HAI … DIRECTLY REGISTRATION LENA HAI
 SOME IMPORTANT NOTES:
• ONLY REGISTRAION PERSON IS ELIGIBLE FOR INPUT TAX CREDIT
• PAN IS ESSENTIAL FOR THE GRANT FOR REGISTRATION

• PAN IS PERMANENT ACCOUNT NUMBER. IT IS OF 10 DIGITS CONTAINING

ALPHA NUMERIC – AAAPS1234K
• 4TH LETTER – P – PERSON
• C- COMPANY
• F – FIRM
• 5TH LETTER – SURNAME KA FIRST LETTER
GSTIN 15 DIGITS CODE

FIRST 2 STATE CODE ( WB – 19)

DIGIT
NEXT 10 PAN
DIGIT
NEXT ENTITY NUMBER OF THE SAME PAN HOLDER IN
DIGIT THE STATE
NEXT Z
DIGIT
NEXT CHECK DIGIT
DIGIT
GOODS AND SERVICES SCHEME:
GST

COMPOSITION
REGULAR SCHEME
SCHEME
 COMPOSITION SCHEME
REGULAR SCHEME

• TURNOVER UPTO 150LAKH CAN

AVAIL THE BENEFIT OF
COMPOSITION SCHEME
• 40 LAKHS • TAX RATE IS 1%
• 20 LAKHS • COMPOSITION SCHEME IS NOT
• 10 LAKHS APPLICABLE IF A PERSON IS
• THEY CAN CLAIM INPUT TAX ENGAGED IN INTER STATE
CREDIT SUPPLY
• THEY CAN DO INTER STATE AND • A PERSON HAS TO PAY THE TAX
INTRA STATE OUT OF HIS POCKET ( TAX IMPACT
• TAX RATES – 5%, 12%, 18%, 28% FALL ON THE SAME PERSON)
• CANNOT DO E- COMMERCE
BUSINESS

• A PERSON IS NOT ELIGIBLE FOR

INPUT TAX CREDIT
 MODE OF PAYMENT
EVERY DEPOSIT MADE TOWARDS TAX, INTEREST, PENALTY, FEE

• BY INTERNET BANKING
• BY CREDIT CARD OR DEBIT CARD
• NATIONAL ELECTRONIC FUND TRANSFER ( NEFT)
• REAL TIME GROSS SETTLEMENT ( RTGS)
• BY OTHER MODE

• ALL PAYMENT MUST BE MADE ELECTRONICALLY, HOWEVER OVER THE

COUNTER PAYMENT IS DONE UPTO 10000.

• 3 LEDGERS ARE POPULARLY MAINTAINED ( ELECTRONIC CASH LEDGER ,

ELECTRONIC CREDIT LEDGER, ELECTRONIC LIABILITY REGISTER)
 MERITS ( ADVANTAGES)

TO GOVT TO TRADE TO
CONSUMER
Common national Reduction in Simple tax
market tax Municipality of taxes
Harmonized law with No tax cascading Reduction in price
rest of the world due to no cascading
effect ( tax on
effect
tax )
Boost to make in India Management cost is Uniform prices
less through out the
country
Boost to export Simple tax Better transparency
Increase in revenue Lesser burden of
audit,
Better check on tax
evasion
(tax ka chori karna ---
 DEMERITS OF GST ( DISADVANTAGES)

• CURRENTLY THE BIG DISADVANTAGE IS “INSTABILTY” LAW IS NOT STABLE,

EVERY WEEK THERE IS AN AMENDMENT (CHANGES) BUSINESS HOUSES
HAVING PRBLM FOR PROPER PLAN
• HIGHER TAX --- 28%
• DESTINATION BASED TAX IS HAZARDOUS TO MANY STATE ( HAZARDOUS –
NUKSAAN)
• SIKKIM – WEST BENGAL (DESTINATION WB --- WB SIKKIM ( NORTH EAST)
• MUCH MORE COMPLIANCES EG – 37 RETURNS ( MUSKIL ) CA – CHARGES
• MONTHLY --- GSTR1- 12
• GSTR 2 – 12
• GSTR 3B – 12
• ONE ANNUAL RETURN – 1

• TOTAL = 37 RETURNS ---- CA --- PESA DO --- RETURN BHARWAO

• QUATERLY – 12+8+1 = 21 RETURNS
 GSP AND ASP ----
GSP – GST SUVIDHA PROVIDER

ASP – APPLICATION SERVICE PROVIDER

GSTN ( GOODS AND SERVICES TAX NETWORK HAVE SELECTED

SOME IT COMPANIES TO BE CALLED GSP ---- PREPARE AN
APPLICATION USED BY THE TAX PAYER FOR INTERACTING WITH
GSTN. GSP MAY TAKE HELP FROM ASP
RAW DATA COLLECT BY TAX PAYER ------- CONVERT INTO GST
RETURNS

CLEAR TAX / GST SUVIDHA PROVIDER

ASP ----LINK --- TAX PAYER AND THE GSP
 GSTR 1

• ALL DETAILS RELATED TO SALE (OUTWARD

SUPPLY)
• LAST DATE – 11TH OF NEXT MONTH
• IF TURNOVER IS MORE THAN 1.5 CR , THEN
FILE GSTR 1 MONTHLY
• IF TURNOVER IS LESS THAN 1.5 CR, THEN
YOU MAY FILE QUATERLY
 GSTR 3

• ALL DETAILS RELATED TO SALE

(OUTWARD SUPPLY + INWARD
SUPPLY )
• LAST DATE – 20TH OF NEXT MONTH
TOTAL RETURNS IF ONE REGULAR
SCHEME BUSINESSMAN HAVING
TURNOVER MORE THAN 1.5 CR

GSTR1 = 12
GSTR2= 12 (RECONCILE)
GSTR3 = 12
TOTAL RETURNS IF ONE
AND ANNUAL RETURN = 1
REGULAR SCHEME BUSINESS
TOTAL RETURNS ====37 RETURNS
MAN HAVING TURNOVER LESS
THAN 1.5 CR
GSTR 1 = 4
GSTR 2= 4
GSTR 3 = 12
ANNUAL RETURN – 1
TOTAL RETURNS = 21 RETURNS
 MATCH THE FOLLOWING
SHARES AND NEITHER GOODS AND
SECURITIES SERVICES
GSTIN GST
TOBACCO LIABLE TO GST
ALCOHOL NUMBER OF RETURNS
IGST 15 DIGIT CODE

SGST NOT LIABLE TO GST

37 CAN BE ADJUSTED WITH

SGST, AND IGST ONLY
40% CAN BE ADJUSTED WITH
IGST, CGST AND SGST
DESTINATION HIGHEST RATE OF GST
BASED TAX
 MATCH THE FOLLOWING
REVERSE CHARGE GST HAS BEEN
MECHANISM IMPLEMENTED
INPUT TAX CREDIT RECIPIENT IS LIABLE
TO GST
MANIPUR SPECIAL CATEGORY
STATE UNDER GST
1ST JULY 2017 REGISTERED SUPPLIER
ONLY
UNION TERRITORY LEVIED AND
GOODS AND COLLECTED VY
SERVICES TAX CENTRAL
GOVERNMENT
REGISTRATION TO COMPENSATE
STATE GOVT

COMPENSATION CESS ELECTRONICALLY