This document provides an overview of the Goods and Services Tax (GST) in India through several sections: - It introduces GST as India's new indirect tax that will replace existing indirect taxes and be applied uniformly across the country. - The history and journey of GST is summarized from 2000 when discussions began through its passage in 2016. - Both advantages like simplifying taxes and disadvantages like increased compliance costs are briefly outlined. - International GST rates are listed for several countries mostly in the 5-25% range with India targeting 18%. - An explanation and example is provided for how GST will be applied at each stage of production and distribution with credits given for taxes paid at earlier

1. A PRESENTATION ON
SALIENT FEATURES OF
GOODS & SERVICE TAX (GST)
By
CA. Niraj Kumar Singh
ACA, B.COM (A&F)
Mob - +91 9891 837 735
E-mail –
nirajkumarsingh.ca@gmail.com

2. SALIENT FEATURES OF GOODS & SERVICE TAX (GST)
This Presentation Covers :
•GST - Introduction
•GST - Journey so far
•GST – Advantage and Disadvantage
•GST- Worldwide Rate
•GST – What goes??
•GST- How it works ?

3. GST - INTRODUCTION
• It has been long pending issue to streamline all the different types of indirect taxes and
implement a “single taxation” system. This system is called as GST ( GST is the abbreviated
form of Goods & Services Tax). The main expectation from this system is to abolish all
indirect taxes and only GST would be levied. As the name suggests, the GST will be levied
both on Goods and Services. It is destination based tax.
• GS is one indirect tax for the whole nation, which will make India one unified common
market.
• GST is a single tax on the supply of goods and services, right from the manufacturer to the
consumer. Credits of input taxes paid at each stage will be available in the subsequent stage
of value addition, which makes GST essentially a tax only on value addition at each stage.
The final consumer will thus bear only the GST charged by the last dealer in the supply
chain, with setoff benefits at all the previous stages.
• GST is a tax that we need to pay on supply of goods & services. Any person, who is providing
or supplying goods and services is liable to charge GST.

4. GST - JOURNEY SO FAR
2000
• In 2000, the Vajpayee Government started discussion on GST by setting up an empowered
committee. The Committee was headed by Asim Dasgupta (Finance Minister – Government of
West Bengal).
2002-
2004
• The Kelkar Task Force on the implementation of Fiscal Responsibility and Budget
Management (FRBM) Act, 2003 and suggested a comprehensive Goods and Service Tax
(GST).
2006
• A proposal to introduce a national level Goods and Service Tax (GST) by April 1, 2010 was first
mooted in the budget Speech for the financial year 2006-2007.
2007
• May 2007 – Empowered Committee of State Finance Ministers, on this request, started
worked on GST roadmap.
• November 2007 – The joint working group, submitted its report to the Empowered
Committee on 19 November 2007.
2008 • April 2008 – Empowered Committee finalized views over GST and submitted report titled “A
model and roadmap for Goods and Services Tax (GST) in India.
2009 • November 2009 – First discussion paper released by Empowered Committee.

5. GST - JOURNEY SO FAR
2010
• February 2010 – Mentioned in the speech of then Finance Minister Pranab Mukherjee – GST to be
introduced in April 2011
2011
• March 2011- The Constitution 115th amendment bill introduced in Lok Sabha for levy of GST on all
Goods or services except for the specified goods.
2013
• August 2013 – Standing Committee submitted its report on GST.
• November 2013 – Empowered Committee rejected Government’s proposal to include petroleum
products.
2014
• December 2014 – The Constitution 122nd amendment bill passed in Lok Sabha for levy of GST which
enables the introduction of GST probably by April 2016 on 17th December 2014.
2016
• August 2016 – The Constitution 122nd amendment bill passed by Rajyasabha on 3rd August 2016.

6. GOODS AND SERVICES TAX – ADVANTAGES AND DISADVANTAGES
• GST is a transparent Tax and also reduce numbers of indirect taxes. With GST implemented a business premises can show the
tax applied in the sales invoice. Customer will know exactly how much tax they are paying on the product they bought or
services they consumed.
• GST will not be a cost to registered retailers therefore there will be no hidden taxes and the cost of doing business will be
lower. This in turn will help Export being more competitive. GST can also help to diversification of income sources for
Government other than income tax and petroleum tax.
• Under Goods and Services Tax, the tax burden will be divided equally between Manufacturing and services. This can be done
through lower tax rate by increase Tax base and reducing exemptions.
• In GST System both Central GST and State GST will be charged on manufacturing cost and will be collected on point of sale.
This will benefit people as prices will come down which in turn will help companies as consumption will increase.
• Biggest benefit will be that multiple taxes like octroi, central sales tax, state sales tax, entry tax, license fees, turnover tax etc.
will no longer be present and all that will be brought under the GST. Doing Business now will be easier and more comfortable
as various hidden taxation will not be present.
• In the amended Bill a cap Of 18% GST will be applicable on Goods and Services through the country. Because of this Prices of
those Goods and services on which we used to pay taxes beyond 18% will be restricted to 18% only. For example taxes will be
reduced on Mini SUV for which we are paying 30-40% Tax right now. After GST it will be reduced to 18%. Similarly Consumer
goods like AC, Refrigerator and Transportation cost will also go down.

7. GOODS AND SERVICES TAX – ADVANTAGES AND DISADVANTAGES
• A robust and comprehensive IT system would be the foundation of the GST regime in India. Therefore, all tax
payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which
would make compliance easy and transparent.
• GST will ensure that indirect tax rates and structures are common across the country, thereby increasing
certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral,
irrespective of the choice of place of doing business.
• The subsuming of major Central and State taxes in GST, complete and comprehensive setoff of input goods and
services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and
services. This will increase the competitiveness of Indian goods and services in the international market and
give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long
way in reducing the compliance cost.
• GST is expected to decrease the cost of collection of tax revenues of the Government, and
will therefore, lead to higher revenue efficiency.

8. GST RATE WORLDWIDE
Country Rate of GST
Denmark 25%
Sweden 25%
France 19.60%
Germany 19%
India 18%
Pakistan 18%
New Zealand 15%
Australia 10%
Singapore 7%
Malaysia 6%
Japan 5%
Canada 5%

9. GST – WHAT GOES
Central taxes that The GST will replace
- Central Excise Duty
- Duties of Excise (medicinal and toilet preparations)
- Additional Duties of Excise (goods of special importance)
- Additional Duties of Excise (textiles and textile products)
- Additional Duties of Customs (commonly known as CVD)
- Special Additional Duty of Customs (SAD)
- Service Tax
- Cesses and surcharges in so far as they relate to supply of goods or services
State taxes That The GST will Subsume
- State VAT
- Central Sales Tax
- Purchase Tax
- Luxury Tax
- Entry Tax (all forms)
- Entertainment Tax (not levied by local bodies)
- Taxes on advertisements
- Taxes on lotteries, betting and gambling
- State cesses and surcharges

10. GST – HOW IT WORKS
• The illustration shown in table indicates, in terms of a hypothetical example with
a manufacturer, one wholesaler and one retailer, how GST will work. Let us
suppose that GST rate is 18%, with the manufacturer making value addition of
Rs.30 on his purchases worth Rs.100 of input of goods and services used in the
manufacturing process. The manufacturer will then pay net GST of Rs. 5.40 after
setting-off Rs. 18 as GST paid on his inputs (i.e. Input Tax Credit) from gross GST
of Rs. 23.40. The manufacturer sells the goods to the wholesaler. When the
wholesaler sells the same goods after making value addition of (say), Rs. 20, he
pays net GST of only Rs. 3.6, after setting-off of Input Tax Credit of Rs. 23.40
from the gross GST of Rs. 27 to the manufacturer. Similarly, when a retailer sells
the same goods after a value addition of (say) Rs. 10, he pays net GST of only
Re.1.80, after setting-off Rs.27 from his gross GST of Rs. 28.80 paid to
wholesaler. Thus, the manufacturer, wholesaler and retailer have to pay only Rs.
10.80 (= Rs. 5.4+Rs. 3.6+Re. 1.8) as GST on the value addition along the entire
value chain from the producer to the retailer, after setting-off GST paid at the

11. GST – HOW IT WORKS
Stage of
supply chain
Purchase
value of Input
Value addition
Value at
which supply
of goods and
services made
to next stage
Rate of GST GST on output
Input Tax
credit
Net GST= GST
on output -
Input tax
credit
Manufacturer 100 30 130 18% 23.4 18
23.40 - 18 =
5.40
Wholesaler 130 20 150 18% 27 23.4
27 - 23.40 =
3.60
Retailer 150 10 160 18% 28.8 27
28.80 - 27 =
1.80

12. By
CA. Niraj Kumar Singh
ACA, B.COM (A&F)
Mob - +91 9891 837 735
E-mail –
nirajkumarsingh.ca@gmail.com