gst introduction

1. GST
(GOODS AND SERVICES TAX)
By-SAHIL KUMAR

2. CONTENTS
1. Introduction of GST
2. Defination under GST
3. Registration process under GST
4. Kelkar shah model of GST

3. What is GST?
 Goods and service tax (GST) is a comprehensive tax
levy on manufacture, sale and consumption of
goods and service at a national level.
 Gst is a tax on goods and services with value
addition at each stage.
 Gst will include many state and central level indirect
taxes.
 It overcomes drawback present tax system.

4. TAX STRUCTURE IN INDIA
 Direct Tax:
e.g Income Tax, Corporate Tax, Wealth Tax
 Indirect Tax:
e.g Excise Duty, Custom Duty, Service Tax, Octrai
Tax, VAT.

5. OBJECTIVES OF GST
• One country – one tax
• Consumption based tax instead of manufacturing
• Uniform GST registration, payment
• To eliminate cascading effect of indirect taxes/
doubling tax/ tax on tax
• Subsume all indirect taxes at centre and state level
• Reduce tax evasion and corruption
• Increase productivity
• Increase Tax to GDP and revenue surplus

6. SALIENT FEATURES OF GST
• Dual GST Model
• Destination based consumption tax
• Taxes to be subsumed
Central tax – central excise duty
service tax
Surcharges and cess
State tax – VAT
Entertainment tax
Luxury tax
Taxes on lottery, betting
Octroi – entry tax
• GST on Export and Import
• Computation of GST on the basis of invoice credit method
• Payment of GST - CGST AND SGST are paid through GST

7. Person Liable For Obtaining GST
Registration
As per section 22 of the Central Goods and Service Tax
(CGST) Act, 2017 following list of persons are liable for
obtaining GST registration –
1. Every person whose aggregate turnover exceeds a
threshold limit .
Goods--- 20Lakh Services--- 10Lakh Both--- 10Lakh
2. Any person who is registered under Existing Law i.e
VAT/Excise Duty/Service Tax.
3. A Persons transferring his business under Succession/
Inheritance .

8. Person Not Liable For
Obtaining GST Registration
There are three persons who are not liable to register
under GST and those are:-
# Person whose Turnover < Threshold Limit
(20Lakh/40Lakh).
# Agriculturist.
# Any other person as may be notified by Central
Government.

9. GST Compulsory Registration
Some of the certain cases in which registration is
compulsory are:-
* Inter State Suppliers
(e.g: BATHINDA-DELHI)
* Casual Taxable Person
* Person Required To Pay ‘’RCM’’(Reverse Charge
Mechanism).
* Input Service Distribution.

10. GST NUMBER
GST Identification Number (GSTIN) is a unique 15-digit PAN based
number required by all eligible service providers and traders in
India to operate their business smoothly under GST.
GST Number is the most important basic requirement for the
identification of taxpayers under the GST regime. Without
GSTIN, a person can neither collect tax from his customers nor
claim any ITC (Input Tax Credit) of taxes paid by him.
Now let us see how a GSTIN is structured –

11. Time Limit for GST Registration
a) The time limit for applying for GST registration is within
30 days from the Date of Liable under GST.
b) Casual Trader
Minimum 5Days before the commencement of
Business.
c) Non-Resident Taxable Person
Minimum 5Days before the commencement of
Business in INDIA.
d) Existing Tax Payers
The time limit for existing taxpayers was before 1st
July 2017.

12. GST Registration Procedure
GST registration can be done online through the GST Portal.
Step 1: Creation of Login Account.
Step 2: Submission of Form GSTR-1.
Step 3: Receipt of Submission of Form GSTR-2.
Step 4: Verification by GST officer.
Step 5: Further clarification by GST officer GSTR-03.
Step 6: Registration Number granted GSTR-04 (within 3
working days).
Step 7: Deemed Registration.

13. Cancellation Of Registration
a) When Business discontinued.
b) When Business transferred.
c) Change in the constitution of Assessee.
d) When not required.
e) When person controvers the Provisions of the Act.
f) Voluntarily Cancellation.
g) When GST officer – “Suo-moto”.
Note: Revocation of Registration is “within 30 Days”.

14. MODELS OF GST

15. GST In Different Countries
France was the first country to implement GST to reduce tax-
evasion. Since then, more than 140 countries have
implemented GST with some countries having Dual-GST (e.g.
Brazil, Canada etc. model. India has chosen the Canadian
model of dual GST.
“USA does not have GST as it ensures high autonomy for the
states”.

16. Kelkar - Shah Committee
Recommendations
The recommendations of the Kelkar Committee on
direct and indirect taxes are in line with the present
government’s economic policy of rewarding the rich
with tax cuts while putting the burden on the middle
classes and the common people by cutting their
savings and the returns earned from them. Among
the sops to the rich, corporate tax rate is to be
reduced to 30 per cent for domestic companies and
the tax on dividends withdrawn. The richest
sections will need pay only a 30 per cent income
tax.

17. Four Stages Of GST
Implementation
According to the Kelkar task force the GST can be
implemented as per the following 4 stages:
Stage 1: Establishing information technology
systems.
Stage 2: Building Central GST.
Stage 3: Political effort of agreeing on “Grand
Bargain”.
Stage 4: Interaction with States.

18. Main Recommendations of Kelkar
Shah Task Force
Recommendations of the Task Force on Indirect Taxes:-
a) Customs Duty:
i. Multiplicity of levies to be reduced to 3, i.e. basic customs duty, additional duty of
customs and anti-dumping duties.
ii. Substantial duty reduction (0 per cent) on items like life saving drugs and equipment,
sovereign imports and imports by RBI, 10 per cent duty on raw materials, inputs and
intermediate goods and 20 per cent duty on consumer goods (by 2004-05), 5 per cent
duty on basic raw materials like coal, 8 per cent duty on intermediate goods, 10 per cent
duty on finished goods other than consumer durables and 20 per cent on consumer
durables by 2006-07.
iii. Duty reduction to the level of 5-10 per cent should start after the introduction of state
level VAT.
iv. A duty of 8 per cent on crude oil and 15 per cent on petroleum products from 2004-
05.
v. A higher duty upto 150 per cent – on certain agricultural products.
vi. All exemption should be removed except in the case of life saving drugs, goods of
security and strategic interest, goods for relief and charitable purpose and international
obligations.

19. b) Central Excise Duty:
i. All levies should be reviewed and replaced by only one levy:
CENVAT.
iii. Zero per cent excise duty on life saving drugs and equipment’s,
security items, food items and agricultural products; 6 per cent for
processed food products and matches; 14 per cent standard rate for
all items not mentioned against other rates; 20 per cent on motor
vehicles, air conditioners and aerated waters.
iii. A uniform rate of 16 per cent on all fibres and yams.
iv. All exemptions to be removed on the textile sector except for
handloom woven fabrics and certified as khadi.
v. Duty exemption in respect of small scale sector to be extended to
only small units with a turnover of Rs 50 lakhs.
vi. Uniformity in all state legislations and procedures relating to VAT.
vii. Extension of service tax in a comprehensive manner leaving only
a few services by including them in a negative list.