Introduction to GST Notes

1. TAXATION
&
GOODS and SERICES TAX (GST)
GST UNIT I 1
Dr. N. PRAKASH

2. Meaning of Tax- Features of Tax
Objectives of Taxation – Rules
of Taxation - Problems of Taxation
Direct Tax & Indirect Tax
Merits & Demerits of Direct Tax & Indirect
Tax
Direct & Indirect Tax (Central & State
Taxes)
GST – Goods and Service tax – concept
& Structure and framework of GST
GST UNIT I 2

3.  A TAX IS A SHARE OF THE INCOME OF AN
CITIZENS WHICH THE GOVERTMENT NEEDS
FUNDS IN REGULATE THE VAUABLE
SERVICES FOR THE PEOPLES FOR THAT
NECESSARY THEIR ARE COLLECTIG TAX AND
THE CONSTRUCTION OF GENERAL PUBLIC
SERVIES.
GST UNIT I 3

4. Tax is legal Collection
Tax is a Personal Responsibility
Tax is a Compulsory Contributions
Tax is imposed by Government alone
It is a Revenue Collection
Socio-economic Objective
Tax is a contribution for the common
Benefits of the society
GST UNIT I 4

5. 1. Raising Revenue
2. Regulatory Consumption, Production,
Import & Export and Inflation
(demand & supply)
3. Developmental of economic, capital
formation and increasing employment
opportunities
4. Reducing economical inequalities and
regional imbalances
GST UNIT I 5

6. GST UNIT I 6

7. Multiplicity of taxes
Dominance of indirect taxes
Imbalance in tax system
Lack of Co-ordination
Lack of built-in-elasticity
GST UNIT I 7

8. GST UNIT I 8

9. Direct tax is one which is really paid
by a person on whom it is legally
imposed while an Indirect tax is
imposed on one person, but paid
partly or wholly by another.
Indirect tax is one which can be
shifted or passed on
GST UNIT I 9

10. MERITS
EQUITY
ECONOMY
CERTAINTY
CONVENCIENCE
LESS POSSIBIITY
CIVIC DEVELOPMENT
DEMERITS
UNPOULAR
INCONVENIENCE
INJUSTICE
UNSUITABLE
UNDERESTIMATION
GST UNIT I 10

11. MERITS
CONVENIENCE
FLEXIBILITY
PRODUCTIVE
MINIMUM POSSIBLE
WIDE COVERAGE
ECONOMY COLLECTION
DEMERITS
HARMFUL
UNCERTAINTY
ADMINISTRATIVE
COST
DISCOVERAGE
SAVINGS
REGRESSIVENESS
GST UNIT I 11

12. GST UNIT I 12

13. GST UNIT I 13

14. Central
Excise Duty
tax -
manufacture
Customs
Duty
tax –
Import
&
Export
Central
Sales
tax
Services
tax
GST UNIT I 14

15. State Sales tax
Value Added tax (VAT)
Sales Excise Duty tax
Entertainment tax
GST UNIT I 15

16.  Specific Duties
 Advalorem Duties – Value of goods
 Proportional tax – ability to pay
 Progressive tax – Income
 Regressive tax – expenditure
 Single tax
 Multiple tax
GST UNIT I 16

17. The Goods ad Services Tax (GST) is a tax
levied
on most goods and services sold for
domestic consumption.
The GST is paid by consumers, but it is
remitted to the govt by the businesses
selling the goods and services.
It effect, GST provides revenue for the
govt, and ultimately borne by the
consumers.
GST UNIT I 17

18. France was the first country to introduce GST
as early as in 1954. so far 150 countries have
introduced GST and most of the countries
have a unified GST system. But Brazil &
Canada follow dual system now India as
also following same dual system
GST UNIT I 18

19. “Goods And Services Tax Is A Comprehensive
Tax Levy On Manufacture, Sale And
Consumption Of Goods And Service At A
National Level under Which No Distinction Is
Made B/W Goods & Services For Levying Of
Tax. It Will Mostly Substitute All Indirect Taxes
Levied On Goods And Services By The Central
And State Govt In India”
GST UNIT I 19

20. First time in 1999. on 8 august 2016, the
constitutional amendment bill for roll out of
GST was passed by the parliament more
than 15 state and enactment of the GST bill
in September.
GST Laws
GST Rules – Tax Rates Structure –
Classification of Goods and Service into
Different Rate Slabs - Exemptions- Tax
Administrations
GST UNIT I 20

21.  Central GST (CGST)
 Integrated GST (IGST)
 Union Territory GST(UTGST)
 Bill to compensate states
________________________________________
______
1. Approval of GST Bills
2. Notification of GST Rules
3. Migration to common portal
4. Relaxation of filing procedure
GST UNIT I 21

22. 1. Change in law and procedures on
Implementation of GST
2. New tax rates
3. Reforms in tax credit system
4. Treatment of stock transfers from one state to
another
5. Avoiding of double taxation sale/services
6. Goods to be classified
7. Software Up-gradation
8. Continuous training of staff & Professionals
GST UNIT I 22

23. 1. Financial super power
2. Vital role of GST
3. Destination principle
4. Common market
5. Efficient allocation of factor of production
6. Gains to GDP
7. Economies of scales
8. Rational tax system
GST UNIT I 23

24. 1. VAT/ Sales tax
2. Entertainment tax
3. Luxury tax
4. Taxes on lottery, betting & gambling
5. State cesses & surcharges – supply of
goods & services
6. Entry tax
7. Purchase tax*
GST UNIT I 24

25.  GST eliminates the cascading effect of tax
 Higher threshold [entry] for registration
 Composition scheme for small businesses
 Simple & easy online procedure
 Number of compliances is lesser
 Defined treatment for E-commerce
operators
 Improved efficiency of logistics
 Unorganized sector is regulated under GST
GST UNIT I 25

26.  Increased costs due to software
purchase
 Being GST- compliant
 GST will mean an increase in
operational costs
 GST came into effect in the middle of the
financial year
 GST is an online taxation system
 SMEs will have higher tax burden
GST UNIT I 26

27.  Avoiding of cascading effect –
production & distribution goods &
services
GST being applicable to all goods
& services
Goods no exempted – tobacco
Exempted goods – ATF, HSD, Petrol
products
Dual taxation system – CGST/SGST
GST UNIT I 27

28.  Non economical- ground level traders &
services providers
 All taxes being no subsumed- electricity &
alcohol etc
 Diversification of Taxes – basis of location,
geographical structure
 Scope for increasing tax rates
 Technology issues
GST UNIT I 28

29.  Levy of additional taxes on Inter-State
Supply – import goods & services it is
applied as addition to custom duties
 Banking transaction to be costly
 National justice to be in conflict
 Influence of political parties
GST UNIT I 29

30.  One country – one tax
 Consumption based tax instead of
manufacturing
 Uniform GST Registration, payment and input
tax credit
 To eliminate the cascading effect of indirect
taxes on single transaction
 Reduce tax evasion [avoiding]
 Increase productivity & tax to GDP Ratio
 Reducing economic distortions
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31.  Respect to tax turnover
 Respect to nature taxes
 Respect to number of enactments of statues
 Respect to rates of taxation
 Respect to tax management & infrastructure
GST UNIT I 31

32.  Contribution of GST for the business &
commerce – it will supply chain till the
time utilization
 Growth of revenue in state & union
 Reduces transaction costs & unnecessary
wastages
 Reduction of multiplicity of taxation
 One point single tax
GST UNIT I 32

33. 1. Price reduction - manufactures, wholesalers
2. Less compliance & Procedural Cost – record /
reports
3. Pricing & Profitability – re-examined, decline
prices have direct impact on consumer
4. Govt. Revenue – changing price @ tax rate
5. Cash flow – [remove excise duty] time of
sale/ supply/ production
6. Uniform Per Capita Taxation
7. Fight tax Evasion [avoiding]
GST UNIT I 33

34. a. Additional power of levy of taxation of
services for the states
b. System of comprehensive set-off relief
c. Subsuming of several taxes in the GST
d. Removal of burden of CST
_________________________________________
__
Dual GST
CGST- CENTRAL GOODS and SERVICES TAX
SGST – STATE GOODS and SERVICES TAX
GST UNIT I 34

35. CGST – Central goods and service tax –
levied by central govt. – any transaction of
goods & services whether made within or
outside the state or exported out of the
country
SGST – State goods and service tax – levied
by state govt. – [Tamilnadu State]
“ they would have multiple statutes – one
CGST statue and SGST statutes for every
state”
GST UNIT I 35

36. GST UNIT I 36
IGST – Integrated goods and service tax
– tax is charged on the supply of
commodities & services from one state to
another state [inter-state trade]
Integrated GST [IGST] – applicable
between two states transactions of
goods & services, as well on imports.

37. UTGST- Union Territory goods & services tax
are intra-state tax and IGST is inter-state to
union territories
Union Territory GST [UTGST] – applicable for
five union territories of India there are
Andaman & Nicobar Island, Chandigarh,
Daman & Diu , Dadra & Nagar Haveli and
Lakshadweep.
GST UNIT I 37

38. CGST - tax chargeable intra-state supply
[central Govt]
SGST – tax chargeable intra-state supply
[state Govt]
UTGST – tax chargeable intra-state supply
[Union territory]
IGST- Integrated GST- Tax chargeable in
inter-state supply [entire tax collected by
central govt but 50% share of the state is
given by central govt to state govt in the
backend]
GST UNIT I 38

39. Point of different CGST SGST
Material transactions
[goods & services]
Intrastate
[within one
state]
Intrastate
[within one
state]
Collected by Central. Govt State. Govt
Benefitting authority Central. Govt State. Govt
Tax credit use priority
[main control]
CGST
“IGST”
SGST
“IGST”
GST UNIT I 39

40. ANY
QUESTIONS?
GST UNIT I 40

41. Dr. N. PRAKASH
GST UNIT I 41