GST Overview: Know about 'Goods and Service Tax' smart Taxation System in India. Learn about GST, Indirect Tax structure in India before GST, GST Rates, GST Compensation Cess, Input Tax Credit, GST Composition Scheme, GST Return, TCS in GST eWay Bill and GST Audit through our PPTs and PDFs.

2. Meaning
Goods and Services Tax (GST)
is a value added tax and a
comprehensive tax levy which is
levied on the supply of goods
and services all across the
country. It will be levied only on
the value added as against tax
levied at each stage.

3. Indirect Tax structure in India before GST
The earlier indirect tax framework in India suffered from various
shortcomings. Under the earlier indirect tax structure, the various
indirect taxes being levied were not necessarily mutually exclusive.
Example: When goods were manufactured and sold, both Central Excise
Duty (CENVAT) and State Level VAT were levied. Though both were
essentially value added taxes but set off of one against the credit of
another was not possible as CENVAT was a central levy and VAT was a
state levy.

4. Issues in Pre-GST regime
 Cascading effect
 Complexity
 Lack of uniformity
 Corruption (Under GST tax payers and department's dealing reduced
radically)
 Tax Evasion (GST introduced dual checks for Central Government
and State Governments)
 Complexity in determining the nature of transaction (eg. restaurant
services)

5. The Cascading Effect
Producer /
Manufacturer
Cost of input Value of output Tax rate Selling price
including tax
rate
Tax burden
Producer A -- 1000 10% 1100
(1000 + 10% of
1000)
100
Producer B 1100 1500 10% 1650
(1500 + 10% of
1500)
150
Producer C 1650 2000 10% 2200
(2000 + 10% of
2000)
200

6. Constitutional Amendments
Introduction of the GST required amendment in the Constitution so
as to enable integration of the central excise duty including
additional duties of customs, state VAT and certain state specific
taxes and service tax levied by the center into a comprehensive
GST and to empower both center and the state to levy and collect
it.
Consequently, Constitution (101st Amendment Act), 2016 was
passed.

7. Taxes subsumed in GST
• Service Tax
• Excise Duty
• VAT/Sales Tax
• CVD and SAD
• Octroi and Entry Tax
• Additional Excise duty
• Excise duty under medicinal Act
• Entry tax other than levied by local bodies

8. Acts governing the GST regime
• The Central Goods and Services Tax Act, 2017
• The Integrated Goods and Services Tax Act, 2017
• The Union Territory Goods and Services Tax Act, 2017
• The State Goods and Services Tax Act, 2017 (for each State)
• The Goods and Services (State Compensation) Tax Act, 2017

10. Taxable event: Supply
One of the very important
features of the GST regime is the
complete change in the taxable
event. The taxable event in the
GST would be the supply of
goods and/or services.
Continued...

11. Taxable event: Supply (Contd.)
Supply includes:
(a) all forms of supply of goods and/or services such as sale,
transfer, barter, exchange, license, rental, lease or disposal made or
agreed to be made for a consideration by a person in the course or
furtherance of business,
(b) importation of services, for a consideration whether or not in
the course or furtherance of business, and
(c) a supply specified in Schedule I, made or agreed to be made
without a consideration.

17. Goods and Services Tax Network (GSTN)
GSTN is the backbone of the Common Portal which is the interface
between the taxpayers and the government. The entire process of
GST is online starting from registration to the filing of returns.
The GSTN will handle:
• Invoices
• Various returns
• Registrations
• Payments & Refunds

19. Types of taxes and cess under GST
 CGST: To be levied on all intra-state supplies.
 SGST/UTGST: To be levied on all intra-state/UT supplies
 IGST: To be levied on all inter-state/UT supplies and import of
goods and services.
 GST Compensation CESS: would be applicable on both supply
of goods or services that have been specified luxury and demerit
goods such as pan masala, tobacco, aerated waters, and motor
cars etc.

20. Goods kept outside the purview of GST
• Alcoholic liquor for human
consumption (will continue
to cover under State Excise
and VAT/CST).
• Petroleum Products (will
come under the GST purview
from a date notified by the
GST Council).

21. GST on Import and Export
Countervailing Duty (CVD) and
Special Additional Duty (SAD) on
imports have been replaced with
IGST.
Any supply made by a registered
dealer as an export or supply to an
SEZ qualifies for Zero Rated
Supplies in GST. The rate of tax on
such supplies is ‘Zero’ or we can say
the supplies are tax-free.

22. GST World Wide
 France was the first country to implement
GST in 1954.Within 64 years of its
advent, about 160 countries across
the world have adopted GST.
 India, Canada and Brazil
have adopted dual GST model.
 The World Banks says, India has most complex GST structure in the
world with not only highest tax rates but also a number of tax slabs.
But, it will boost the GDP as well.

24. Introduction
GST Council is a constitutional body for making recommendations
to the Union and State Government on issues related to Goods and
Services Tax.
GST Council is a joint forum of the Center and the States, shall
consist the following members:
• Union Finance Minister;
• Union Minister of State in charge of Revenue or Finance;
• Minister in charge of Finance or Taxation or any other Minister
nominated by each State Government.

25. Role of GST Council
GST Council shall make recommendations to the Union and the
States on the following matters:
 taxes, cesses, and surcharges levied by the Union, the States and
the local bodies which may be subsumed in the GST;
 goods and services that may be subjected to, or exempted from
the GST;
 threshold limit of turnover below which goods and services may
be exempted from goods and services tax;
continued...

26. Role of GST Council (Contd.)
• Any special rate or rates for a specified period, to raise additional
resources during any natural calamity or disaster;
• Special provision with respect to the States of Arunachal Pradesh,
Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram,
Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand;
• Council shall recommend the date on which GST be levied on
petroleum products.

29. Introduction
GST Compensation Cess is an additional cess levied on certain notified
goods in addition to GST applicable on it. Due to the implementation of
GST many states faced a decrease in revenue as it is a consumption
based tax. Thus, states which were manufacturing oriented faced a loss in
revenue.
To compensate these states, an additional tax by the name GST
compensation cess is levied. It is imposed on certain notified goods and
revenue collected from it is distributed amongst these states. This Cess
will be levied for 5 years from the date of implementation of GST.

30. Goods liable for GST Cess
• Pan Masala
• Tobacco and tobacco products
• Cigarettes
• Coal
• Aerated water
• Motor vehicles

34. ITC not available on the following items:
• Motor vehicle except when they are used for making the following
taxable supplies:
- Further supply of such vehicles or conveyances or
- Transportation of passenger or
- Imparting training on driving such vehicles
- Used for transportation of goods
• Goods or services on which the tax is paid under composition
scheme.
• Goods or services used for personal consumption.
• Goods lost, stolen, destroyed, written off or disposed of by way of
gift or free samples.
• Certain other supplies.

35. Tax Invoices and Vouchers
• “Tax Invoice” (For sale of goods or services)
• “Bill of Supply” (Other than Tax Invoice)
• “Receipt Voucher” (For Advance Payment)
• “Refund Voucher” (For returning)
• “Invoice for Purchase” from Unregistered Person
• “Payment Voucher” for purchase from Unregistered Person

37. Composition Scheme: Introduction
It is a simple and easy scheme for small taxpayers whose
turnover is less than Rs. 1.50 crore.
Persons ineligible for this scheme:
• Supplying exempt goods/services
• Supplier of services other than restaurant related services
• Manufacturer of ice cream, pan masala, or tobacco
• Casual taxable person or a non-resident taxable person
• Supplier of goods through e-commerce operator.

38. Composition Scheme: Conditions
• ITC cannot be claimed
• Cannot issue tax invoice
• Cannot make any inter-state supply of goods.
• Cannot supply GST exempted goods
• Taxpayer has to pay tax at normal rates for transactions under Reverse Charge
Mechanism (RCM)
• If a taxable person has different segments of businesses under the same PAN,
then all such businesses under the scheme collectively or opt out of the
scheme.
• Taxpayer has to mention the words ‘composition taxable person’ on every
notice or signboard displayed prominently at their place of business.
• Taxpayer has to mention the words ‘composition taxable person’ on every bill
of supply issued by him.

40. Who is liable to be registered?
• Any business whose annual turnover is Rs. 20 lakhs (Rs. 10 Lacs for
special category states)
• Anyone registered under the previous regime, for example, VAT or
Service Tax.
• Casual taxable person
• Non-Resident taxable person who doesn’t have a fixed place of
business
• Taxable person under reverse charge
• Input service distributor
• Continued...

41. Who is liable to be registered? (Contd.)
• E-commerce operator
• Inter-State supplier of goods
• Suppliers who supply through an e-commerce operator
• A person who supplies on behalf of some other taxable person (i.e. an
agent of a principal).
• TDS Deductor
• Supplier of online information and database access or retrieval (OIDAR)
services from outside India to a non-registered person in India
• any person may voluntarily obtain registration.

43. • Aadhaar card
• Address proof of the place of business
• Bank account statement/cancelled cheque
• Identity and Address proof of Promoters/Director with photographs
• Digital Signature
• Proof of business registration or incorporation certificate
• PAN Card of the Business or Applicant
• Letter of Authorization/Board Resolution for Authorized Signature
Documents Required for GST Registration

46. Types of Returns
• GSTR - 1: Outward Return
• GSTR - 2: Inward Return
• GSTR - 3: Monthly Return
• GSTR - 3B: Summary Return
• GSTR - 4: For composition dealer
• GSTR - 5: For NRTP
• GSTR - 6: For ISD
• GSTR - 7: For Tax Deductor
• GSTR - 8: For Tax Collector
• GSTR - 9: Annual Return
• GSTR - 10: Final Return
• GSTR - 11: For persons having UIN
Abbreviations:
NRTP: Non-resident Taxable Person
ISD: Input Service Distrbutor
UIN: Unique Identification Number

47. Due Dates of Returns
Types of GST Returns Due Date
GSTR - 1 10th of the next month
GSTR - 2 15th of the next month
GSTR - 3 20th of the next month
GSTR - 3B 20th of the next month
GSTR - 4 18th of the month following the end of the quarter
GSTR - 5 20th of the next month
GSTR - 6 13th of the next month
GSTR - 7 10th of the next month
GSTR - 8 10th of the next month
GSTR - 9 31st December of the end of the financial year
GSTR -10 within 3 months of the cancellation of the registration
GSTR - 11 28th of the month following the month in which inward supply received

48. Challenges under GST
• Lack of clarity on GST provisions and rules.
• Robust and efficient IT infrastructure is required to manage
the central database.
• E-commerce giants like Flipkart, Amazon also have not
escaped the after effects of GST roll-out.
• Multiple returns are required to be filed.
• Small Scale Industries suffered at the initial stage of
introduction.

50. Introduction and Applicability
Normally, the supplier of goods or services pays the tax on supply. In the
case of Reverse Charge, the receiver becomes liable to pay the tax i.e. the
chargeability gets reversed.
Reverse Charge is applicable in the following 3 cases:
• Supply from an Unregistered dealer to a Registered dealer
(Suspended till Sept 30th, 2018)
• Services through an e-commerce operator
• Supply of certain goods and services specified by CBIC (formerly
known as CBEC).

53. National Anti-Profiteering Authority (NAA)
• If NAA finds that entity has not passed on GST benefits, it will either
direct entity to pass on benefits to consumers or if beneficiary cannot be
identified, it will ask the entity to transfer amount to ‘consumer welfare
fund’ within specified timeline.
• NAA has power to cancel registration of any entity or business if it fails
to pass on to consumers benefit of lower taxes under GST regime, but it
will probably be last step against any violator.
• NAA will suggest return of undue profit earned from not passing on
reduction in incidence of tax to consumers along with an 18% interest,
and also impose penalty.

55. HSN & SAC
 Harmonized System of Nomenclature (HSN) and Service Accounting
Code (SAC) will be new concepts for most businesses, even though
they have been borrowed from existing systems. Businesses need to
determine the HSN and or SAC of the goods and services that they
sell, since these are mandatory fields in a GST compliant invoice.
 It is a multipurpose international product nomenclature developed by
the World Customs Organization (WCO). HSN is assigned to goods by
organizing them in a hierarchical manner and is 8 digits long.
Depending on the turnover or nature of sale, a business might be
required to quote a 2-digit HSN, a 4-digit HSN or an 8-digit HSN
(mandatory for exports). Continued...

56. HSN & SAC (Contd.)
 Small businesses under composition scheme will not be required to
mention HSN codes in their invoices.
 A business whose turnover is less than INR 1.5 crore need not quote
HSN in the invoice
 A business with turnover between INR 1.5 crore and INR 5 crore will
need to quote a 2-digit HSN
 A business with turnover equal to or greater than INR 5 crore will
need to quote a 4-digit HSN
 All exports will need to quote 8-digit HSN in the invoice
 SAC is the nomenclature adopted by the GST Council for identifying
services delivered under GST. This is similar to the classification that
was in existence under the Services Tax regime.

58. Introduction and Applicability
(suspended till Sept 30th, 2018)
TDS is one of the ways to collect tax based on certain percentages on the
amount payable by the receiver on goods/services. Tax so deducted need
to deposited with the revenue authority by the due dates so prescribed.
Following persons are liable to deduct TDS:
 A department or an establishment of the Government; or
 Local authority; or
 Governmental agencies; or
 Such persons or category of persons as may be notified. (Such as
Societies, PSUs etc.)

59. When will the liability to deduct
TDS be attracted? What is the rate of TDS?
• TDS is to be deducted at the rate of 2 per cent
(CGST +SGST) on payments made to the
supplier of taxable goods and/or services,
where the total value of such supply, under an
individual contract, exceeds Rs. 250,000/-.
• No deduction of Tax is required when the location of supplier and
place of supply is different from the State of the registration of the
recipient. (refer chart)

62. TCS compliance for e-commerce sector
(suspended till Sept 30th, 2018)
A clause has been inserted under GST
law for all the e-commerce aggregators.
E-commerce aggregators are made
responsible under the GST law for
deducting and depositing tax at the
rate of 2% (CGST+SGST) from each of the transaction. Any
dealers/traders selling goods/services online would get the
payment after deduction of 2% tax.
Continued...

63. TCS compliance for e-commerce sector
(Continued)
It is a significant change which would
increase a lot of compliance and
administration cost for online aggregators
like Flipkart, Snapdeal, Amazon etc. They
would need to deposit the tax deducted by
the 10th day of the next month.
All the traders/dealers selling goods/services online would need to get
registered under GST even if their turnover is less than 20 Lakhs for
claiming the tax deducted by Ecommerce operators.

65. Introduction
E-Way Bill is an electronic way bill for movement of goods which can
be generated on the E-Way Bill Portal. Transport of goods of more than
Rs. 50,000 (Single Invoice/bill/delivery challan) in value in a vehicle
cannot be made by a registered person without an e-way bill.
E-Way bill can also be generated or cancelled through SMS, Android
App and by Site-to-Site Integration(through API). When an e-way bill is
generated a unique e-way bill number (EBN) is allocated and is available
to the supplier, recipient, and the transporter.

66. Who should Generate an E-Way Bill?
Registered Person: E-Way bill must be generated when there is a movement of
goods of more than Rs. 50,000 in value to or from a Registered Person. A Registered
person or the transporter may choose to generate and carry e-way bill even if the
value of goods is less than Rs. 50,000.
Unregistered Persons: Unregistered persons are also required to generate e-
Way Bill. However, where a supply is made by an unregistered person to a
registered person, the receiver will have to ensure all the compliances are met
as if they were the supplier.
Transporter: Transporters carrying goods by road, air, rail, etc. also need to
generate e-Way Bill if the supplier has not generated an e-Way Bill.

69. Thank You