Gst

Ekta Kapri
etikaprirai@gmail.com
Family Resource Management

The Goods and Services Tax was implemented in July 2017 in
an effort to subsume multiple indirect taxes. The new tax
regime has been adopted quite well by business across the
country since its implementation. The Goods and Services Act
will also have a great impact on the tax system in India by
reducing the unfavorable effect of tax on the cost of goods and
services. It is expected that the creation of the Goods and
Services Tax act and its implementation will have a great
impact on various aspects of business in India by changing the
traditional pattern of pricing the products and services.

Content
1) TAX
- Taxation
- History of taxation in India
- Objective of Tax
- Purpose & Use of Tax
2) Type of Tax
- Direct Tax
- Indirect Tax
3) Early Taxation
- List of tax abolished after GST
implementation
4) Journey of Taxation
- GST Bill Approval process
5) GST- meaning, definition
- Constitutional perspective
- GST council
- Type of GST
6) GST Bill and Act
- Need of GST
- GST Model
- Feature of GST
7) How GST work
- How to calculate GST
8) Categories / Rate of GST 2019
- GST on loan & advance
9) GST return
- Type of GST return
- How to fill GST return
10) Boone & Bane
- Challenge of GST
- Advantage & Disadvantage
- Impact of GST rate on economy and
other sectors

• A tax is a mandatory financial charge upon an individual or other
legal entity by a governmental organization in order to fund
various public expenditures.
• Taxes are levied by governments on their citizens to generate
income for undertaking projects to boost the economy of the
country and to raise the standard of living of its citizens.
• The authority of the government to levy tax in India is derived
from the Constitution of India, which allocates the power to levy
taxes to the Central and State governments.
Tax (Latin taxo)
https://en.wikipedia.org/wiki/Tax https://www.bankbazaar.com/tax.html

Taxation
The act of levying taxes is called taxation.
The taxes may be imposed on the income and wealth of persons
or corporations and the rate of taxes may vary.
• An important restriction on this power is Article 265 of the
Constitution which states that "No tax shall be levied or
collected except by the authority of law".
• Therefore, each tax levied or collected has to be backed by an
accompanying law, passed either by the Parliament or the
State Legislature.
https://en.wikipedia.org/wiki/Taxation_in_India

Sharma, P. (2018) mentioned that “The compulsory payments
made to governments associated with certain activities are
called Taxes.”
Tayib (1998) identified that individuals’ awareness towards the
tax system can increase when the individuals has knowledge
about the tax. This makes tax knowledge and tax awareness
has significant relationship and when the individuals or the
taxpayers have knowledge about it and it will make it easier
for them to study and follow the tax rules.
Sharma,P.2018. A Project Report on Customers Perception Towards GST ( Goods & Service Tax) in Distt Hamirpur Himachal Pradesh ( India).Report.MBA. HP Technical University, Hamirpur:15

History of Taxation in India
• Taxation in India is rooted from the period of Manu Smriti and
Arthasastra.
• According to Manu Smriti, the king should arrange the collection of
taxes in such a manner that the tax payer did not feel the pinch of paying
taxes.
• He laid down that traders and artisans should pay 1/5th of their profits in
silver and gold, while the agriculturists were to pay 1/6th, 1/8th and
1/10th of their produce depending upon their circumstances.
• It was introduced for the first time in India in 1860 to overcome the
finical crisis (revenue crisis) of 1857.
https://www.jagranjosh.com/general-knowledge/history-of-taxation-in-india-1481028305-1

• In India, this tax was introduced for the first time in 1860, by
Sir James Wilson in order to meet the losses sustained by the
government on account of the Military Mutiny of 1857.
• In 1918, a new income tax was passed and again it was
replaced by another new act which was passed in 1922.This Act
remained in force up to the assessment year 1961-62 with
numerous amendments.

In consultation with the Ministry of Law finally the Income
Tax Act, 1961 was passed and brought into force with 1 April
1962.
• Since 1962 several amendments of far-reaching nature have
been made in the Income Tax Act by the Union Budget every
year.
http://shodhganga.inflibnet.ac.in/bitstream/10603/147895/9/09_chapter%20-i.pdf

Raising Revenue Encouraging Domestic Industries
Stimulating Investment Promoting Economic Growth
Ensuring Price Stability
Regulation of
Consumption and Production
Development of Backward Regions
Reducing Income Inequalities
Objectives of Taxes
T
A
X

Purposes and Use of TAX
• The levying of taxes aims to raise revenue, to fund government and/or to
alter prices in order to affect demand.
• States and their functional equivalents throughout history have used money
provided by taxation to carry out many functions.
• Some of these include expenditures on economic infrastructure (roads,
public transportation, sanitation, legal systems, public safety, education,
health-care systems), pensions for the elderly, military, scientific research,
culture and the arts, Energy, water and waste management, public works,
distribution, data collection and dissemination, public
 When expenditures exceed tax revenue, a government accumulates debt. A
portion of taxes may be used to service past debts.
 A government's ability to raise taxes is called its fiscal capacity.
https://en.wikipedia.org/wiki/Tax https://en.wikipedia.org/wiki/Tax

Raise
revenue
Culture and art
Transportation
Advertisement Purposes
and Use of
TAX

Types of Taxes
• Taxes are of two distinct types, direct and indirect taxes. The
difference comes in the way these taxes are implemented. Some are
paid directly by you, such as the dreaded income tax, wealth tax,
corporate tax etc. while others are indirect taxes, such as the value
added tax, service tax, sales tax, etc.
 Direct Taxes
 Indirect Taxes
• other taxes that have been brought into effect by the Central
Government to serve a particular agenda. ‘Other taxes’ are levied on
both direct and indirect taxes such as the recently introduced
• Swachh Bharat Cess tax,
• Krishi Kalyan Cess tax, and
• Infrastructure Cess tax
https://www.bankbazaar.com/tax.html

1. Direct Tax
 Direct tax, are taxes that are paid directly by you
 levied directly on an entity or an individual
 cannot be transferred onto anyone else
 the body that overlooks these direct taxes is the
Central Board of Direct Taxes (CBDT) which is a
part of the Department of Revenue.

2. Indirect Tax
 Indirect taxes are those taxes that are levied on goods or services.
 They differ from direct taxes because they are not levied on a
person who pays them directly to the government, they are instead
levied on products and are collected by an intermediary, the person
selling the product.
 The most common examples of indirect tax can be VAT (Value
Added Tax), Taxes on Imported Goods, Sales Tax, etc.
 These taxes are levied by adding them to the price of the service or
product which tends to push the cost of the product up.
Indirect
tax

Direct Taxes Indirect Taxes
1
2
3
4
5
1
2
3
4
5
Income Tax Sales Tax
Capital Gain Tax Service Tax
Security Transaction Tax Value Added Tax
Perquisite Tax Custom Duty & Octroi
Corporate Tax Excise Duty

Other Taxes
Professional Tax
Entertainment Tax
Education Cess
Wealth Tax
Swachh Bharat Cess
Infrastructure Cess
Municipal Tax
Registration Fees
Transfer Tax
Gift Tax
Toll Tax
Krishi Kalyan cess

Early Taxation System
Central Taxes StateTaxes
• Central Excise duty
• Additional duties of excise
• Excise duty levied under Medicinal &
Toilet Preparation Act
• Additional duties of customs (CVD &
SAD)
• Service Tax
• Surcharges & Cesses
• State VAT / Sales Tax
• Central Sales Tax
• Purchase Tax
• Entertainment Tax (other than those
levied by local bodies)
• Luxury Tax
• Entry Tax (All forms)
• Taxes on lottery, betting & gambling
• Surcharges & Cesses
Constitution amended to provide concurrent powers to both Centre & States to levy GST
(Centre to tax sale of goods and States to tax provision of services)
GST

Before goods and service tax
Buying Raw
Material
Manufacture
Final Sale to
Consumer
Sale to
Wholesaler/Warehousing
Sale to Retailer
VAT
VAT+Excise Duty
VAT
VAT
https://cleartax.in/s/gst-law-goods-and-services-tax

List of Taxes abolished after GST implementation
Government List of Taxes
Central Government Taxes • Central Excise Duty
• Service Tax
• Additional Custom Duty
• Surcharges and all Cess
State Government Taxes • VAT/Sales Tax
• Entertainment Tax
• Entry tax not in lieu of Octroi
• Other taxes and Duties (Luxury Tax, Taxes
on lottery etc.)
Taxes imposed by State Governments
on Goods on Services
• Stamp Duty
• Vehicle Tax
• Tax on Goods and Passengers
• Taxes and duties on Electricity
Nayyar.A and Singh,I .2018. A Comprehensive Analysis of Goods and Services Tax (GST) in India. Indian Journal of Finance:58-73

2006 2011
2009 2014
Announcement of GST for the first time
was made by the then Union Finance
Minister, during budget of 2006-07 that it
would introduced from 1 April 2010
First Discussion Paper
was released by the
Empowered Committee
The Constitution (122nd
Amendment) Bill was introduced in the
Lok Sabha
Constitution (115th Amendment)
Bill introduced and subsequently
lapsed
Aug
2016
The Constitution (One
Hundred and First
Amendment) Act was
enacted
May 2017 April 2017 March 2017 Sept 2016
30 June 2017
All States
except J&K
passed their
SGST ACT
GST Council
recommends all the
rules
CGST, IGST, UTGST
and Compensation
Cess Acts passed
GST Council Recommends the
CGST, SGST, IGST, UTGST
and Compensation Cess Act
1st GST Council Meeting
1st July 2017
GST Launched
Journey Continues…
8th July 2017
SGST Act passed by J&K;
CGST and IGST Ordinances
promulgated to extend GST to J&K
True Economic Integration of
India
• Notifying and amending rules
• Dealing with IT relatedissues
• Revision of Rates
• Clarification and
communication with taxpayers

Bill introduced in the Lok Sabha (March 2011)
2014 the Bill lapsed
Bill was passed by the Lok Sabha (May 6, 2015)
Lok Sabha will ratify the Bill again
President will constitute a GST Council
Draft of the Bill make available in the public domain
Amendments made
The President approves the bill
The Parliament pass legislation
Goods and Services Tax officially active
GST Bill Approval Process

GST - Goods and Service Tax
The Goods and Services Tax was implemented in 8 July 2017.
It is a kind of tax imposed on sale, manufacturing and usage of goods
and services.
Goods and Services Tax is applied on services and goods at a national level
with a purpose of achieving overall economic growth.
GST is particularly designed to replace the indirect taxes imposed on goods
and services by the Centre and States.
Sale Manufacturing Usage or consumption

“Goods and Services Tax can be defined as a
kind of Value Added Tax imposed by on
various goods and services by different
countries.”
The tax charged on goods and services may differ from country to country.
Goods and services tax is imposed to collect revenues for the government.
This tax is paid by the consumers of goods and services and collected and
forwarded to the government by the business entities.

• Kumar,N. (2014) studied, “Goods and Service Tax- A Way
Forward” and concluded that implementation of GST in India
help in removing economic distortion by current indirect tax
system and expected to encourage unbiased tax structure
which is indifferent to geographical locations.
• Rani,S. (2017) mentioned GST is essentially a consumption
tax and is levied at the final consumption point. The final
consumer will thus bear only the GST charged by the last
dealer in the supply chain, with set-off benefits at all the
previous stages.
Rani,S.2017.A research paper on goods and service tax (GST) and its impact on Indian economy .
International Journal of Advanced Research and Development .2(5):209-212
Sehrawat,M. and Dhanda ,U.2015.GST IN INDIA: A KEY TAX REFORM . International Journal of Research –
Granthaalayah.Vol. 3(12) 133-141

GST Law from a Constitutional Perspective
“Goods and services tax” means any tax on supply of goods,
or services or both except taxes on the supply of the
alcoholic liquor for human consumption.
S. No. Definition Article Definition
1.
Goods 366(12) Includes all materials, commodities, and articles
2.
Service 366 (26A) Anything other than goods
3.
Goods
& Services
366 (12A) any tax on supply of goods or services or both except taxes on the
supply of the alcoholic liquor for human consumption

It was set up by president under article 279-A.
It is chaired by union finance minister.
It will constitute union minister of state , in charge of revenue and minister, in
charge of finance or taxation or of any other field nominated by state governments.
The 2/3rd representatives in council are from states and 1/3rd from UT.
The decision of council is made by 3/4th majority of the votes cast and quorum of
council is 50%.
It will make recommendations on
Taxes, surcharge, cess of central and states which will be integrated in GST.
Goods and services which may be exempted from GST
Interstate commerce – IGST- proportion of distribution between state and center
Registration threshold limit for GST
GST floor rates
Special rates during calamities
Provision with respect to special category states specially north east states
It may also work as Dispute Settlement Authority for GST.

GST
IGST
SGST
CGST
Inter-State
GST
Intra-State
GST
Under GST, CGST is a tax
levied on Intra State supplies of
both goods and services by the
Central Government and will be
governed by the CGST Act.
Under GST, SGST is a tax
levied on Intra State supplies
of both goods and services by
the State Government and will
be governed by the SGST Act.
Under GST, IGST is a tax
levied on all Inter-State
supplies of goods and/or
services and will be governed
by the IGST Act.
.

Examples
Haryana Haryana
Rs.10,000
GST rate = 18% (of Rs.10,000) = Rs.1800
CGST
9%
SGST
9%
CGST
900
SGST
900
Total amount = Rs.11,800
Punjab
Haryana
Rs.10,000
GST rate = 18% (of ₹10,000)= Rs.1800
Collected
by Center
Total amount = Rs. 11,800

Goods and Services Tax Bill
The Goods and Services Tax Bill is officially known as the
Constitution (122 Amendment) Bill, 2014 which is formulated to
create a pan-India tax system and end the number of multiple taxes
charged by the Centre and the States on various goods and services.
The key points of the GST bill are given below:
- It is an indirect, uniform tax that is levied on the goods and services.
- Surcharge on supply of goods, cesses, special ad-on duty of
customs, and excise and central excise duty replaced by Central
Taxes GST.
- Entertainment tax, entry tax, purchase tax, central sales tax, VAT,
etc. replaced by State Tax GST.
- The primary objectives of GST is eliminating the excessive taxation.
- The 2014 bill deleted the 2011 bill provision that imposed certain
restrictions on the states on taxation of the products that are
important for inter-state commerce and trade.

Goods and Services Tax Act
The GST act, which is also known as The
Constitution (101 Amendment) Act, 2016, mainly
focuses on changing the Constitution of India to
simplify the process taxation on goods and services in
India. The act bestows power on the
parliament/center and the state legislatures to make
laws for imposing taxes on goods and services at the
national level.

Ahmed, E. and Poddar, P. (2009) studied “Goods and service tax
reforms and intergovernmental consideration in India ” and found
that GST introduction will provide implies and transparent tax
system with increase in output and productivity of economy in
India. But the benefits of GST are critically dependent on rational
design of GST.
Vasanthagopal, R. (2011) Conducted a study on , “ GST in India : A
big leap in the Indirect Taxation System” and concluded that
switching to seamless GST from current complicated indirect tax
system in India will be positive step in becoming Indian economy .
Sehrawat,M. and Dhanda ,U.2015.GST IN INDIA: A KEY TAX REFORM . International Journal of Research –
Granthaalayah.Vol. 3(12) 133-141

Need of GST
As per the reports of Task Force on Goods and Services Tax
(2009),
- the Indian taxation system led to misallocation of resources
- and lower productivity in terms of economic growth,
international trade, and overall development of the Indian
economy.
- Therefore, there was an emergent need to replace the existing
tax system with a new engine of taxation of goods and
services to attain the following objectives (Roychowdhury,
2012) :
 The tax incidence fell primarily on domestic consumption.
 The optimization of efficiency and equity of the Indian
system is desired.
 There should be no export of taxes across the taxing
jurisdiction.
 The Indian market should be brought under a single umbrella
of common market.
 Enhancement to the cause of cooperative federalism.

The GST is dual between the Centre and the States :
 Federal GST and provincial retail sales taxes (RST)
administered
 Joint federal and provincial VATs administered federally
(Harmonious Sales Tax - HST),
 Separate federal and provincial VAT administered
provincially (QST)
Similar to the Kelkar - Shah
Model
 collection at Central levels
only
 Based on “Grand Bargain”
 To merge taxes like Central Excise, Service
Tax, & VAT.
 Similar to the Canadian Model
 collection at Central and State levels
The Kelkar
- Shah
Model
The Bagchi
- Poddar
Model
Canadian
Model

List of GST Rates Applicable in Various Countries
Note : Ranking as per Descending Order . Source: Central Board of Excise and Customs (2017)
28%
21%
20% 20%
19%
18%
17% 17%
16%
15%
10%
8%
7%
6%
5%
0%
5%
10%
15%
20%
25%
30%

Key Features of Goods and Services Tax
• The Goods and Services Tax will include Central Indirect taxes.
• It will also include State Value Added Tax or Sales Tax.
• Inclusion of the concept of ‘declared goods of special importance’ as per
the Indian constitution.
• It has levied integrated Goods and Services Tax on inter-State transactions
of goods and services.
• It has levied additional tax of 1% on supply of goods in inter-State trade
which will be collected by the Government of India for a period of two
years and will be allocated to the states from where the supply comes.
• It has levied at every stage of the production distribution chain by giving
the benefit of Input Tax Credit (ITC) of the tax remitted in the previous
stages, but is meant to be refunded to all parties in the various stages of
production other than the final consumer.

• The GST that a merchant pays to procure goods or services can be set off later
against the tax applicable on supply of goods and services. Therefore, manufactures,
wholesalers and retail merchants can avail tax credit mechanism under GST regime.
• Petroleum and petroleum products and alcohol have been kept out of the reach of
GST.
• The act will have two constituents - Central GST charged by the Centre and State
GST charged by the states.
• But, in case of inter-state trade or commerce, only the Centre will levy tax and collect
Goods and Services Tax, and the tax collected would be divided between the Centre
and the State as per the provision made in the parliament.
• A Goods and Services Tax Council will be created to address the issues relating to
goods and services tax and give recommendations to the Union and the States on
areas such as rates, exemption list and threshold limits.
• The GST Council will constitute of the Union Finance Minister as chairman followed
by the Minister –in-charge of Finance or Taxation or any other Minister nominated by
each State Government.
• The GST Council will function under the Chairmanship of the Union Finance
Minister and it will be a joint forum of the Centre and the States.
Rani,S.2017.A research paper on goods and service tax (GST) and its impact on Indian economy.International Journal of Advanced Research and Development .2(5):209-212
STATE CENTER

0
30 30
40
0
0
5
10
15
20
25
30
35
40
45
Strongly
Agree
Agree Neutral Dis Agree Strongly
Dis Agree
GST be effective in improving the
taxation system of the country and
bringing more transparency
Strongly
Agree
Agree Neutral Dis
Agree
Strongly
Dis
Agree
0
30
50
20
0
GST will reduce transaction costs for
taxpayers through simplified tax
compliance
N=20 N=20

How GST Works
• All the sundry taxes will be clubbed into just
2 levels – Central GST and State GST.
• The consumer who buys the product will have
to pay only the GST charged by the last dealer
in the supply chain.
• GST will also prevent the multiple taxation
occurring on certain goods, and ensure
transparency with regards to the rate of
taxation and the total amount that goes to the
government as taxes on a product.

How to calculate GST
In order to add GST to base amount:
Add GST
GST Amount = ( Original Cost * GST% ) / 100
Net Price = Original Cost + GST Amount
In order to remove GST from base amount,
Remove GST
GST Amount = Original Cost – (Original Cost * (100 / (100 + GST%)
Net Price = Original Cost – GST Amount
How to use our GST Calculation Tool?
• Step 1: Select GST Inclusive/GST Exclusive as per the requirement
• Step 2: Enter the original amount
• Step 3: Select the GST rate from the drop down menu list
• Step 4: Click on Calculate to check the result. The result will show the total
GST amount and Pre-GST/Post-GST amount as per your original requirement.
* https://www.paisabazaar.com/tax/gst-calculation-tool/
https://www.paisabazaar.com/tax/gst-calculation-tool/

Working of Goods and Services Tax (GST)
(i) Manufacturer
Before GST:
Cost of Production = Rs. 200
+ Excise Duty@ 10% = Rs. 20
+ VAT @ 5% = Rs. 10
Total Cost = Rs. 230
(ii) Distributor
Before GST:
Cost of Good Received = Rs. 230
+ Profit @ 20% = Rs. 46
+ VAT @ 5% = Rs. 11.5
Service Tax@ 15% = Rs. 34.5
Total Price = Rs. 322
(iii) Retailer
Before GST:
Cost of Goods Received = Rs. 322
Profit Margin @ 20% = Rs.64
VAT @ 5% = Rs. Rs. 16
Service Tax@ 15% = Rs.48
Total Price = Rs.448

After GST
Manufacturer
wholesaler
Retailer
Ist stage
IInd stage
IIIrd stage
Raw material = Rs. 200
Profit add = Rs. 60
= Rs. 260
(10% of Rs. 200 = Rs.20)
Tax impose Total Tax
(10% of Rs. 260 = Rs. 26)
Rs. 20
Rs.26
ITC = Rs. 26 - Rs. 20 = Rs. 6
Material = Rs. 260
Profit add = Rs. 40
= Rs. 300
(10% of Rs. 300 = Rs. 30)
Rs. 30
ITC = Rs. 30- Rs.26 = Rs. 4
Material = Rs. 300
Profit add = Rs. 20
= Rs. 320
(10% of Rs. 320 = Rs. 32)
Rs. 32
ITC = Rs. 32- Rs. 30 = Rs. 2
Final Price = Rs. 320 Total GST impose : Rs. 20+ Rs. 6+ Rs. 4+ Rs. 2= Rs. 32

0
10
20
30
40
50
60
Strongly
Agree
Dis Agree
0 0
60
40
0
Strongly
Agree
Dis Agree
0
50
30
20
0
GST has increased the tax burden on
businessman.
GST has increased the tax burden on
common man

Types Of Categories under GST rate
0%
5%
12%
18%
28%
Exempted
categories
Commonly
used Goods
and
Services Standard
Goods and
Services fall
under 1st
Slab
Standard
Goods and
Services fall
under 2nd
Slab
Special
category of
Goods and
Services
including
Luxury Goods

5% 12
%
18
%
28
%
GST Rates 2019
GST Rates on Goods and services
The government has proposed a 4-tier tax structure
Note:
*Only those commodities are included in this list whose rates have been revised in
various council meetings.
*Government has exempted healthcare and educational services from the purview of
the GST.

No Tax for Goods
Hulled cereal grains like barley, wheat, oat,
rye, etc.
Bones and horn-cores unworked and waste of
these products.
Jaggery
All types of salt
Kajal [other than kajal pencil sticks]
Picture books, coloring books or drawing
books for children
Human hair – dressed, thinned, bleached
Sanitary Napkins
Unit container-packed frozen branded
vegetables (uncooked/steamed)
Vegetables preservatives
Music Books/manuscripts
Chargeable services offered on
Basic Savings Bank Deposit (BSBD)
account opened under the PMJDY
(Pradhan Mantri Jan Dhan Yojana) etc.
No Tax for Services

5% Tax Slab for Goods
Cashew nuts/cashew nuts in shell
Ice and snow
Bio gas
Insulin
Aggarbatti
Kites
Coir mats, matting and floor covering
Pawan Chakki that is Wind-based Atta Chakki
Postage or revenue stamps, stamp-postmarks,
first-day covers, etc.
Braille paper, braille typewriters, braille
watches, hearing aids and other appliances to
compensate for a defect or disability
Fly-ash blocks
Walking sticks
Accessories/parts for carriages designed for
differently-abled individuals
5% Tax Slab for Service
Railways-Transportation of goods,
passengers
Goods transported in a vessel from
outside India
Renting a motor cab without fuel cost
Transport services in AC contract/stage or
radio taxi
Transport by air (scheduled)/air travel for
purpose of pilgrimage via chartered/non-
scheduled flights
Tour operator services
Leasing of aircrafts
Print media
Working for printing of newspapers

Pickle, murabba, chutney, jam, jelly, Ketchups, sauces
and mustard sauce
Bari made of pulses including mungodi
Menthol and menthol crystals, peppermint, fterpenated
mentha oil, dementholised oil, Mentha piperita oil and
spearmint oil
All diagnostic kits and reagents
Plastic beads
Exercise books and note books
Glasses for corrective spectacles and flint buttons
Spoons, forks, ladles, skimmers, cake servers, fish
knives, tongs
Two-way radio (Walkie talkie) used by defence, police
and paramilitary forces etc.
Intraocular lens
Corrective spectacles
Playing cards, chess board, carom board and other
board games, like ludo, etc.
Debagged/roughly squared cork
Items manufactured from natural cork
12% Tax Slab for Services
Rail transportation of goods in containers
from a third party other than Indian Railways
Air travel excluding economy
Food /drinks at restaurants without
AC/heating or liquor license
Renting of accommodation for more than
Rs.1000 and less than Rs.2500 per day
Chit fund services by foremen
Construction of building for the purpose of
sale
IP rights on a temporary basis
Movie Tickets less than or equal to Rs.
100

Kajal pencil sticks
Dental wax
Plastic Tarpaulin
School bags ,Hand bags and shopping bags
Toilet cases
Precast Concrete Pipes
Salt Glazed Stone Ware Pipes
Aluminium foil
Rear Tractor tyres and rear tractor tyre tubes
Rear Tractor wheel rim, tractor centre
housing, tractor housing transmission,
tractor support front axle
Weighing Machinery other than electric or
electronic weighing machinery
Printers other than multifunction printers
Ball bearing, Roller Bearings, Parts &
related accessories
Transformers Industrial Electronics
Electrical Transformer
Static Converters (UPS)
CCTV including CCTV with video recorders
Set top Box for TV
Computer monitors not exceeding 17 inches
Electrical Filaments or discharge lamps
Winding Wires, Coaxial cables and Optical
Fiber
Perforating or stapling machines (staplers),
pencil sharpening machines
Baby carriages
Instruments for measuring length, for use in
the hand (for example, measuring rods and
tapes, micrometers, callipers)
Bamboo furniture
Swimming pools and paddling pools
Televisions/Monitors (upto 32 inches)
Power banks powered by Lithium-ion
batteries
Sports goods, games consoles and related
items with HS code 9504
All items with HS code 8483 including gear
boxes, transmission cranks and pulleys
Used or retreaded pneumatic rubber tires

18% Tax Slab for Service
Food/drinks at restaurants with liquor license
Food /drinks at restaurants with AC/heating
Outdoor catering
Renting for accommodation for more than
Rs.2500 but less than Rs.7000 per day
Supply of food, shamiyana, and party
arrangement
Circus, Indian classical, folk, theatre, drama
Supply of works contract
Movie Tickets over Rs. 100

The council meeting was held to
‘reduce’ the tax rates on certain
items based on customer
preferences. Hence, no additional
items were added to the highest
GST rates slab of 28%.
NOTE: *The GST rates for various products are subject to change from time to time
without prior information.
Entertainment events-amusement
facility, water parks, theme parks, joy
rides, merry-go-round, race course, go-
carting, casinos, ballet, sporting events
like IPL
Race club services
Gambling
Food/drinks at AC 5-star hotels
Accommodation in 5-star hotels or
above
28% Tax Slab for Goods 28% Tax Slab for Services

Times of India dated (2017) stated that the GST implication across different
places for the same product has wider differences which the consumers are
unaware, resulting them in surprise. Ex. a Rasamalai sold in counter at a
shop is taxed with 5% but if it is served in the hotel it is taxed with 18%
this has resulted in difference of consumers shopping to purchase the
similar product.

GST on Loans and Advances
The rate of Service Tax was 15% whereas the rate of GST is 18%.
A lot of people are of the opinion that the effective cost of having a loan would
increase as the rate of GST is 3% higher than the rate of Service Tax.
Several people said that their EMI’s has been increased by 3%. However, GST is not
levied on repayment of loan or on payment of interest on Loan.
GST is only levied on the processing charges and any other charges paid to the bank
excluding the principal repayment and interest payment.
These other charges include the Loan Processing Fees, Loan Prepayment Charges
and other charges, if any.
As a major chunk of the loan repayment comprises of principal repayment and
interest payment, the impact of GST on Loans would be very negligible.

• GST rate on cars has been fixed at
28% for all personal use vehicles
featuring a petrol or diesel driven
engine.
• However, in addition to GST, a
composition cess is also
applicable to cars over and above
the GST Rate.
• Thus the overall tax rate
applicable to vehicles under GST
ranges from 29% to 50%.
• GST rate on gold is 3%.
• 10% Customs Duty on gold being
imported from overseas
• 3% GST on the value of gold in
the jewelry
• 5% GST on making charges of the
gold jewelry
GST on Cars GST on Gold

• GST is applicable to real estate purchases only if you are purchasing an under construction
property.
• Builders can opt for existing 12% tax rate for under construction homes or choose new rate of
5%.
• In case of under- construction affordable homes, builders can choose between the existing 8%
tax rate or GST rate of 1%.
• No GST is applicable in case you are purchasing a ready to move in property.
• Different GST rates are applicable to various building materials used in the construction of
houses/flats.
• This can range from 5% (sand, marble rubble, etc.) to 28% (cement, etc.).
GST on Real Estate

GST on transport
• Ranging from nil to 18%.
Transport of Passengers by Air
• 5% GST on economy class air tickets
• 5% GST on tickets of chartered flights for
the purpose of pilgrimage
• 12% GST on business class air tickets
• 18% GST on rental services of aircraft
(with or without operator)/chartered flights
Transport of Passengers by Rail
• 18% GST on AC and First Class train
tickets
• Nil GST on sleeper and general class
tickets
• Nil GST on metro tickets/tokens
Transport of Passengers by Road
• Nil GST on passengers travelling by
road on public transport
• Nil GST on transport by road of
passengers by metered taxi/auto
rickshaw/e-rickshaw
• Nil GST on transport by non-A/C
contract carriage/stagecoach
• 5% GST on transport by A/C contract
carriage/stagecoach (no Input Tax
Credit)
• 5% GST on transport by radio taxi and
similar services
• 18% GST on rental services of road
vehicles including cars, buses, coaches
(with or without operator)

GST on Medicines and Medical Supplies
• Nil GST on medicines is currently only applicable to human blood
• Nil all types of contraceptive products
• 5% -Human/animal blood vaccines, Diagnostic kits for hepatitis,
Oral rehydration salts, Insulin, Ayurvedic, Siddha, Unani,
Homeopathic, Artificial kidneys, Artificial limbs, wheel chairs,
crutches
• 12%- Animal blood prepared for diagnostic, therapeutic,
Toothpowder, Bandage, wadding, gauge, Diabetic foods,
glucometer and test strips, Photographic film, Medical grade
oxygen
• 18%- Nicotine polacrilex gum, dental/oral hygiene, various hair
care products, dental, surgical, medical, operating tables,
examination tables,

Under GST, a registered dealer has to file GST
returns that include:
Purchases
Sales
Output GST (On sales)
Input tax credit
(GST paid on purchases)

Return Particulars
GSTR-1
Details of outward supplies of taxable goods or services or both effected
GSTR-2
Details of inward supplies of taxable goods or services or both claiming input
tax credit
GSTR-3
Monthly return on the basis of finalization of details of outward supplies and
inward supplies along with the payment of amount of tax
GSTR-4 Quarterly Return for compounding taxable persons
GSTR-5 Return for Non-Resident foreign taxable persons
GSTR-6 Input Service Distributor return
GSTR-7 Return for authorities deducting tax at source
GSTR-8 Details of supplies effected through e-commerce operator
GSTR-9 Annual Return
GSTR-9A
Simplified Annual return by Compounding taxable persons
https://www.taxmann.com/blogpost/2000000043/gst-returns-types-forms-due-dates-of-gst-returns-2017.aspx

Visit the GST portal (www.gst.gov.in)
A 15-digit GST identification number will be issued based on your state code and PAN number.
Upload invoices on the GST portal or the software. An invoice reference number will be issued against each invoice.
After uploading invoices, outward return, inward return, and cumulative monthly return have to be filed online. If there
are any errors, you have the option to correct it and refile the returns.
File the outward supply returns in GSTR form through the information section at the GST Common Portal (GSTN) on or before
10th of the following month.
Details of outward supplies furnished by the supplier will be made available in GSTR to the recipient.
Recipient has to verify, validate, and modify the details of outward supplies, and also file details of credit or debit notes.
Recipient has to furnish the details of inward supplies of taxable goods and services in GSTR form.
The supplier can either accept or reject the modifications of the details of inward supplies made available by the recipient in GSTR.

Challenges of GST implementations
With respect to tax threshold
With respect to nature of taxes
With respect to rates of taxation
With respect to tax management and infrastructure
High revenue neutral rate (RNR)

This is a federal law, which means that the states will no longer have the
right to make new laws on taxation towards goods and services.
It simplifies the tax system and makes it easier to understand as well as
cheaper to implement at various levels.
Tax evasion at various stages will be eliminated as tax offsets can be
collected only if taxes have been paid originally. You will also be able to
buy raw materials or constituent materials for production only from those
who have paid taxes, in order to claim benefits.
It will be cheaper to buy input goods and services for production from other
states.

The current supply and distribution chain may undergo a change
with a change in taxation system that does away with excise and
customs duties.
The consumer will get the end-product at cheaper rates because of
elimination of multiple taxes and the tax cascade.
As of now, petroleum and petroleum products have been kept out of
the GST regime until further notice.
Sale of newspapers and advertisements are also likely to fall under
the GST regime, allowing the government to increase its revenue
considerably.
While there will be central GST and state GST, the tax applicable on
goods and services being exported and imported between states in
India would fall under an Integrated GST (GST) system in order to
avoid conflict of dominion.

0
30 30
40
0
0
5
10
15
20
25
30
35
40
45
Strongly
Agree
Agree Neutral Dis Agree Strongly Dis
Agree
GST be effective in improving the taxation system
of the country and bringing more transparency
Strongly Agree
Agree
Neutral
Dis Agree
Strongly Dis Agree
0
0
40
60
0
GST affects the Indian wholesale
market

Pinki , Kamma, S. and Verma, R. (2014) studied “Goods and Service Tax
“Panacea for indirect tax system in India “ and concluded that the
government in India is positive towards implementation of GST and it is
beneficial for central government , state government and as well as for
consumers in long run if its implementation is backed by strong it
infrastructure.
Guptha, N. (2014) in her study stated that implementation of GST in the
Indian framework will lead to commercial benefits which were untouched
by the VAT system and would essentially lead to economic development.

Disadvantages of GST
• GST is not good news for all sectors.
• In the current system, many products are exempted from taxation. The GST
proposes to have minimal exemption list. Currently, higher taxes are levied
on fewer items, but with GST, lower taxes will be levied on almost all
items.
• GST is not applicable on liquor for human consumption. So alcohol rates
will not get any advantage of GST.
• Stamp duty will not fall under the GST regime and will continue to be
imposed by states.
Mawuli,A. (2014) studied , “ Goods and Service Tax An Appraisal “ and found that GST is not
good that low income countries and does not provide broad based growth to poor countries. If
still countries want to implement GST then the rate of GST should be less than 10 % for
growth.

GST Rates Impact on Economy
As GST has transformed the economy at its peak. It’s a game-changing reform
for the Indian economy as it brings about net appropriate price for the
goods and services considered under single taxation system. Mentioned
below are some of the important GST rates impacts in the Indian economy :
• Uniformity of tax rate and structure
• Increase in Competition
• End cascading effect
• Easy compliance
• Growth in revenue in state and UT
• Reduce average tax burden
• Reduce transaction cot and unnecessary wastage
• Gain to manufactures & Exports
• Simple and easy to administration
• Higher revenue efficiency
• Relief in overall tax burden
• Removal of manufacturing costs
• Reduce corruption

Food Services & Restaurant Business
Housing and Construction Industry
Online Shopping
Fast Moving Consumer Goods (FMCG) sector
Financial Services
Information Technology
Textile
Agriculture
Telecom
Freelancer
Small Enterprises

1. Food Services & Restaurant Business
• living under subsistence
level
• drastically shrink the tax
base
• small business registration
threshold
• dining out more pocket-
friendly
• helpful for restaurant
owner
https://www.posist.com/restaurant-times/trending/all-your-questions-about-the-gst-and-the-restaurant-business-answered.html

1 Hotels, lodges with tariffs less than Rs 1,000 5%
2 Non-AC restaurants and Hotel lodges with
tariffs between Rs 1,000- Rs 2,500
12%
3 AC restaurants 18%
4 Hotel lodges with tariffs between Rs 2,500-
Rs 5,000
18%
5 Both AC and Non-AC (outdoor seating) 18%
6 Five-star and luxury restaurants 28%
According to a report by
Grant Thornton in India -
Bon Appétit –
Emerging trends,
opportunities and
challenges in Indian
restaurant industry, 70
per cent of the restaurant
owners believe GST is a
positive decision for the
industry. The report
further highlights that 68
per cent businesses believe
that GST will ease
compliance as it is backed
by technology.

According to the National Restaurant Association of India’s 2013 India Food
Service Report, the current size of the Indian food service industry is
Rs.2,47,680 crore and is projected to grow to Rs.4,08,040 crore by 2018 at the
rate of 11%. This growth is further fueled by the growth of the great Indian
middle class.
https://cleartax.in/s/impact-gst-food-services-restaurant-business

2. Housing and Construction
Industry
Developers will have input credits on
GST paid for services and goods
purchased by them which will reduce
the cost for them and can be passed on
to the buyers.
Reduced as multiple taxes are
subsumed and due to the availability of
input tax credit.
3. Online Shopping
With the introduction of GST,
various E-commerce companies
will face much burden of work
in rate of filling taxes and cost
will be increased.
https://blog.capitalfloat.com/will-gst-impact-financial-services-sector-india/

4. Fast Moving Consumer
Goods (FMCG)
Three main segments in the sector –
- Food and beverages : 19 % of the sector
- Healthcare : 31 %
- Household and personal care : 50 %
• GST rate for this sector is around 17%
As per the report of Alankit group “The
leading companies manufacturing ayurvedic
product had expected that the government
would set such products at a lower tax slab
rate (12%), given the fact that the
government was heavily promoting
traditional Indian medicines.
Before GST, FMCG companies paid 24-25% tax
including Excise Duty etc. With GST, the
rate of return would be 17-19% leading to
strong impact in production and
consumption (Jain, 2013).
5. Financial Services
• Increased GST rate on transactions
• Transaction charges on cash withdrawals
from different bank
• Loan processing fee
• Little extra on your insurance premiums
• Increase in costs in the financial sector
Kumar, R.(2017) revealed that increase in cost
should not be considered a negative GST
impact on financial services sector. In the
long run, banks will be able to transfer the
advantage of input tax credit – enabled
under GST – to the customers.
https://blog.capitalfloat.com/will-gst-impact-financial-services-sector-india/

6. Information Technology
Software services charge increase
Place of Supply provision has been introduced
National Association of Software and Services
Companies (Nasscom) president R.
Chandrashekhar mentioned that GST regime
can create a difficult scenario for the industry
as with GST, there are lot many complex
invoicing and billing coming ahead which can
further strangle the taxation of IT industry
making a tough growth.
GST will allow more implementation of digital
systems and services. GST will increase the
rate of tax from 14 -15% to 18%, which will
increase the cost of electronic products like
mobile phones, laptops, etc. (Adhana, 2015).
7. Textile
Tax rate under GST would be higher than
the current tax rate for the textile
industry.
Natural fibers (cotton, wool) which are
currently exempt from tax, would be
taxed under GST.
But , there is reduction in
manufacturing costs, input credit
allowed on capital goods and break in
input credit chain
https://blog.saginfotech.com/gst-impact-on-indian-it-industry

8. Telecom Sector
With the current VAT charges of
15% being replaced by18% GST
rate, the price of mobile
Calling, SMS, and broadband
services would be impacted. This
will have a negative impact for
big telecom giants like Airtel,
Vodafone, Idea, etc.
9. Agriculture
Agricultural sector covers around 16% of
Indian GDP.
Major issues faced by the agricultural
sector is transportation of agri products
across state lines all over India.
Fertilizers has been increased to 12%
Dairy farming, poultry farming, and stock
breeding are kept out of the definition of
agriculture. Therefore these will be taxable
under the GST.
Agrawal,Y.K.2017. Goods and Services Tax and Its Impact on Indian Economy . IOSR Journal of Business and Management . Vol 19 (10) :26-30

10. Freelancers
According to
Aggrawal.Y.K.(2017) GST
become much easier for
freelancers to file their taxes as
they can easily do it online.
They will be taxed as service
providers, and the new tax
structure has brought coherence
and accountability in this
sector.
11. Small Scale Enterprises
GST will help and ease the process
of starting a business in India
GST a business does not have to
register or collect GST if the
annual turnover is 10 lakh. This is
applicable to every state. This will
allow many small businesses
which have a turnover between 5
lakh – 10 lakh to avoid applying
for the GST return.
Agrawal,Y.K.2017. Goods and Services Tax and Its Impact on Indian Economy . IOSR Journal of Business https://www.dbs.com/in/sme/businessclass/articles/economic-outlook/impact-gst

Parkash,J. (2014) mentioned that the GST at the Central and the
State level are expected to give more relief to industry, trade,
agriculture and consumers through a more comprehensive and
wider coverage of input tax set-off and service tax set off,
subsuming of several taxes in the GST and phasing out of
CST.
Ahmed,E. and Poddar, S.(2009) studied, “Goods and Service
Tax Reforms and Intergovernmental Consideration in India”
and found that GST introduction will provide simpler and
transparent tax system with increase in output and
productivity of economy in India. But the benefits of GST are
critically dependent on rational design of GST.
Sehrawat,M. and Dhanda ,U.2015.GST IN INDIA: A KEY TAX REFORM . International Journal of Research – Granthaalayah.Vol. 3(12) 133-141

The introduction of GST will be a very noteworthy step in the field
of indirect tax reforms in India.
By merging a large number of Central and State taxes into a
single tax, GST is expected to significantly ease double taxation and
make taxation overall easy for the industries.
For the end customer, the most beneficial will be in terms of
reduction in the overall tax burden on goods and services.
Introduction to GST will also make Indian products competitive in
the domestic and international markets.
The GST, because of its transparent character, will be easier to
administer.
It will further sustaining growth for the Indian Economy.

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