- GST is scheduled to be implemented in India from July 1, 2017 after a long history of discussion and legislation. It will merge multiple indirect taxes into a single tax applied to goods and services. - Under GST, taxes will be levied as CGST, SGST, and IGST depending on whether a transaction occurs within a state or between states. Businesses will be able to claim input tax credit which will reduce the overall tax burden. - The GST Council has been established as the decision making body consisting of central and state government representatives to determine tax rates and policies under GST. Registration and return filing will be largely electronic and simplified under GST.

1. GOODS AND SERVICES
TAX
- Salient pointers
- Guidelines
- Concept CA Kaustubh Deshpande

2. History behind GST
• In 2006, announcement was made to introduce GST by 2010
• In 2009, First Discussion Paper was released
• In 2011 and 2015 Constitutional Amendment Bill was introduced
• In August 2016 Constitutional Amendment Bill passed
• GST likely to be implemented from 1st July 2017

3. Current Indirect Tax Structure
• Central list
• Excise duty
• Additional duties of excise
• CVD and SAD under Custom
• Service tax
• Surcharge and Cess
• State list
• State VAT Sales tax
• Central Sales Tax Purchase Tax
• Entertainment tax (Other than
those levied by Local body )
• Luxury Tax Entry tax
• Surcharge and Cess
Now Constitutional Amendment has given powers to Central and State to levy GST on all Goods and
Services.

4. GST –Inflationary –School of thought
• There is one school of thought that : Other countries who have implemented GST, has seen inflation in
their economy. So India will also see inflation after GST implementation
• However, in those countries before implementing GST, there was single point taxation which changed to
multilevel taxation to consider value addition at each level under GST, therefore these countries observed
inflation
• As far as India is concern, Current indirect taxation is multilevel i.e. covers value addition at each level ,
So now, its only merging of Excise, VAT, Service tax under one umbrella.
• In current scenario , cascading effect of indirect taxes is more which will be reduced , e.g. in case of inter-
state sales CST is applicable for which input credit is not available, in case of service provider input credit
of VAT is not available, which will now washout and input credit of CGST, SGST, IGST is fungible
internally and against goods and services , so burden of unabsorbed input tax will reduce.

5. Compensation Model- States
• Constitution is amended to compensate states for loss of revenue for five years
• Model of Compensation = (2015-16 Revenue*114/100)- Actual Revenue
• Revenue of all taxes subsumed in GST by the State for 2015-16 as the base
• Assumption of 14% of Annual growth Rate
• Compensation to be provided through cess
• This model will be implemented for five years as per constitutional amendment

6. GST –Tax Structuring
• Sale of Goods Services within State : E.g, if any commodity is taxable at 18% and when there is
sale within state either B 2 B or B 2 C, then seller will levy 9% CGST and 9% SGST. If its B 2 B
transaction then buyer will be eligible for Input credit of CGST and SGST. Credit is available
irrespective whether buyer is Service provider or seller of Goods.
• Sale of Goods Services from one state to another state: GST rate in case of one commodity is
same either in case of sale within state or inter state. So if commodity mentioned in above example is
sold in inter state sale then GST rate will be 18%. Seller will levy IGST 18% in its Invoice.
• Buyer will be eligible for Input credit of IGST after doing further domestic sale. So mostly IGST will
be claimed as input credit in all B 2 B transaction and therefore it will be washout tax except in below
case :
• If its inter state sale between B 2 C then in that transaction IGST will not be claimed as input credit
therefore , that IGST will be shared 50- 50% between Central and State government.

7. GST –Tax Structuring- Continued
• In current law, in case of Inter state sale – CST is applicable @ 2% if C form is
provided, otherwise at local rate or 2% whichever is higher. Input credit of CST is not
available.
• Possibility of misuse- By reflecting transaction as inter state sale with C form at 2% ,
however actual consumption within state.
• Now under GST no such concession is available, rate is same either for sale within state
or inter state.
• Input credit of IGST is allowed therefore not burden on buyer unless it is B 2 C.
• Therefore, misuse of CST can be stopped.

8. GST - Import
• Currently CVD, SAD is charged to compete with domestic market. SAD is 4%, but
State VAT rate is different than 4% which is either higher or lower.
• Now after GST implementation, CVD, SAD will be subsumed and IGST will be levied
at the time of import which will be equal to domestic GST rate of that commodity to
promote make in India and to promote healthy competition between importer and
domestic market.
• Input credit of above IGST will be available.
• Custom tariff will continue, it will not be part of GST.

9. Commodities outside GST
• Portable Alcohol – It will remain under state list
5 Basic Petroleum Products -
• It will be added later after recommendation from Council
• Crude
• High Speed Diesel
• Motor Spirit
• Natural Gas
• Aviation Turbine Fuel

10. GST Council- Information
• Its Federal Constitutional Council. Being it consist of central and state government therefore federal.
• This council is originated from constitution therefore it is constitutional body.
• This council has decision making power.
• It will consist of Chairperson (Union FM) , Vice Chairperson (elected from State FM), and State FM or
Minister nominated by CM from each state, so it will be council of 33 member.
• Quorum: 50% required , Voting for decision 75%
• GST council has power to make recommendation on Law, Rules and Rates

11. GST Applicability – Assesse
• GST registration is not mandatory up to turnover of Rs. 20 Lacs in case of normal state and
in case of Special Category it is Rs.10 Lacs.
• Composition Scheme is available for assesses having turnover between Rs.20 Lacs -50 lacs.
This Scheme is not applicable to inter state supplier, Specified category manufacturer and
Service providers (except restaurant service)
• In composition scheme assesse will have to discharge GST liability based on percentage
prescribed in rules.
• In this scheme assesse will have to file quarterly return and invoice wise details are not
required, only turnover need to be provided in return.

12. Miscellaneous Issues
• Industrial Incentives are not available in GST, each state if desire to grant any incentive, It will be through
state budgetary provision and it will be through reimbursement of tax, so first assesse will have to pay
complete GST and state will reimburse as per their budgetary provision.
• Rate prescribed are 5%, 12%, 18%, 28% - Commodity will be fit under either of rate considering current
burden of indirect taxes – rate near current burden (Excise + VAT +Service tax) will be considered.
• There will be list of exempt goods services.
• In case of precious metal Separate rate will be determined
• Additional Cess on luxurious product, tobacco will be levied.

13. GST Registration
• GST is under electronic administration
• Online application along with scan documents and bank details is to be uploaded.
• Within three days GST registration number will be allotted, if there are no queries , other
wise email about queries will be received, after solving them GST number will be allocated .
• GST is PAN based number . It will be 15 digit number. Therefore, without PAN, GST
registration is not possible.
• Assesse having turnover less than Rs. 20 Lacs can voluntarily register and comply with law.

14. Returns under GST regime
• Concept of GST practitioner introduced to assist in filing return on behalf of
assesse
• Online (Software) and offline tools (Excel format) will be provided to file return. It
will help to generate return once required data is filled.
• Tax payment – Online- NEFTRTGSCheque Debit Card Credit Card and cash
only if it less than Rs.10,000
• Computer system will do rating of assesse based on defaults and frequency of
defaults in A,B,C,D . It will help to decide whether to do business with such assesse
or not in future. Its online compliance rating of assesse.

15. Returns under GST regime
• Practically assesse has to file only GSTR-1 monthly , In this return he has to provide invoice wise details
of sales with GSTN of buyer , Basic amount and taxes. It can be uploaded using software or offline
tools mentioned in earlier slide.
• GSTR-1 to be uploaded before 10th of the next month
• Now, after filing this return , the details of purchases will be auto populated for assesse, being everyone
filed its sales with GSTN and it will appear as purchases based on GSTR-1 filed by our seller in our
account as our purchases.
• Now GSTR-2 will be auto generated on web site , assesse has to just verify whether all purchases on
which input credit is to be claimed are appearing, if any invoices isare missing then he will have to add
that invoice in list and submit saying ok before 15th

16. Returns under GST regime
• Once assesse add those missing invoices with GSTN of seller then mail will be sent to seller to either accept or reject the
transaction filed by buyer. If he accepts, transaction is reconciled.
• If rejected, In that month GST credit will be available, So assesse will get time to reconcile till next due date , if it is not
reconciled in next month, then system will automatically reverse input credit and whenever that seller will pay and reconcile
that transaction, then input credit can be availed.
• Now difference between Input credit as per GSTR-2 and liability as per GSTR-1 will be payable , after doing final payment
, return filing process can be completed, before 20th of next month for which return is under process.
• Separate electronic ledger of input credit and cash balance (like PLA) will be maintained online.
• Assesse under composition scheme and doing business with B 2 C will not have to file invoice details but only item wise
turnover.
• Assesse availing any goods or services from unregistered dealer will have to comply with reverse charge mechanism

17. GST Pointers
• Companies in E-commerce business will have to do TCS and credit of TCS will be available to buyer.
• There is provision of Anti profiteering – i.e. In case of reduction in GST rate, benefit should be pass on
to consumer.
• Refund to be granted within 60 days and in case of refund due because of export , provisional refund of
90% will be granted within 7 days. Refund will be directly credited in bank account
• E-permit (old law road permit) is required in case of Goods above worth Rs. 50,000, it will be unique
ID generated after filing information over GSTN
• Input tax credit is available on all taxes paid on all procurements (except few specified)

18. Thank You
CA Kaustubh Deshpande
F.C.A, B.Com