1.
GST - AN ITRODUCTORY
SESSION
A Revolution of Taxation in India
By: CA UDIT AGRAWAL

2.
What is GST ?
GST is nothing but a basket which Contains Various Indirect Taxes in itself,like as;
Excise Duty, Service Tax, vat, Entertainment Tax, Octroi and Others.
Hence In GST Regime One Single Tax i.e Gst is Leviable in Place of these all.
GST eliminates the cascading effect of Taxation.
GST is a Consumption based Tax. Means the Place where the Goods or Supply will
be consumed,That State Govt will Impose the SGST.

3.
Current Tax Regime
Direct taxes:
Taxes Covered in Direct Taxation:
❖ Income Tax
❖ Wealth tax (eliminated w.e.f finance Act
2014)
❖ Luxury Tax
Indirect Taxes:
Taxes Covered In Indirect taxation:
❖ Custom Duty
❖ Excise duty
❖ Service Tax
❖ Vat
❖ Cst
❖ Entertainment Tax
❖ Octroi

4.
Taxes to be subsumed in GST Regime
❖Custom Duty (Except BCD)
❖Excise Duty
❖Service Tax
❖VAT/CST
❖Entertainment tax
❖Octroi
❖Tax on Lotteries & betting
❖Entry Tax

5.
Current V/S Gst Tax Regime
Present System:
Basic Selling Price Rs. 1,000.00
Add: 12.5 % Excise duty Rs. 125.00
Add: 13.5 % vat Rs. 151.88
Total Selling Price Rs: 1276.88/-
Here Vat is calculated on Basic Selling price
inclusive of excise duty (1000+125). It is called
cascading effect of taxation (Tax on tax)
GST Regime
Basic Selling Price Rs: 1,000.00
Add: CGST @14 % Rs. 140.00
Add: SGST @ 14% Rs. 140.00
Total Selling Price Rs. 1,280.00
Here CGST and SGST both are calculated on the
Basic Price i.e Rs. 1000. hence GST eliminates
the cascading effect of Tax as present in the
Current System.
Situation 1.Mr. X a manufacturer produces some goods and selling price (Basic Value) is Rs. 1000
than total taxes on sale:

6.
Taxes Leviable under GST
CGST(Central
GST)
• Leviable on all Intra-state Supply of Goods and Services. (Levied by the
Central Govt.)
SGST (State
GST)
• Leviable on all Intra-state Supply of goods and Services along with
CGST. (Levied by the State Govt.)
• (There will be Dual GST on Intra-state transaction; CGST and SGST)
IGST (Integrated
GST)
• It is leviable on all the Inter-state supply of goods and Services, levied
by the Central Govt. and will be apportioned between the Central and
State Govt. as per the Recommendation of the GST Council.
The IGST Rate is expected to be Double the
CGST Rate.

7.
Taxes Leviable under GST
CGST(Central GST): Leviable on all Intra-state Supply of Goods and Services.
(Levied by the Central Govt.)
SGST (State GST): Leviable on all Intra-state Supply of goods and Services along
with CGST. (Levied by the State Govt.)
(There will be Dual GST on Intra-state transaction; CGST and SGST)
IGST (Integrated GST): It is leviable on all the Inter-state supply of goods and
Services, levied by the Central Govt. and will be apportioned between the Central
and State Govt. as per the Recommendation of the GST Council.
The IGST Rate is expected to be Double the
CGST Rate.

8.
Input Tax Credit Of CGST,SGST and IGST:
Input CGST Input SGST Input IGST
Output
CGST
Output
IGST
Output
SGST
Output
IGST
Output
IGST Outpu
t
CGST
Output
SGST( if
any)

9.
Input Tax Credit of CGST, SGST and IGST
•Input Tax Credit of SGST can be utilised for payment of SGST first and balance
for payment of IGST on Outward Supply.
•Input Tax Credit of CGST can be utilised for payment of CGST first and balalnce
for payment of IGST on Outward Supply.
•Input Tax Credit of IGST can be utilsed for payment of IGST, CGST and SGST (in
that order)on outward supply.
•NOTE: Input Tax Credit of CGST and SGST/UTGST is not inter-changeable
For Availing Above Mentioned Credits Payment to
Supplier must have been made within 180 days
from the date of invoice. (Otherwise Reversal of ITC
shall be made.)
Always Remember:

10.
Requirements for availing ITC:
Possession of Tax Invoice or Debit Notes
Received the Goods or Services or Both
Tax Charged in the Invoice has been actually paid to the Govt in cash or through
utilisation of ITC.
Furnish Return U/S 39 (Every Taxable Person is required to file electronic return
every month u/s 39 of CGST Act.

11.
Supply of Goods and Services ineligible for ITC – Negative List
Food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where such
inward supply of goods or services or both of a particular category is used by a registered person for making an outward
supply of the same category of goods or services or both or as an element of taxable Composite or mixed Supply.
Membership of a club, health and fitness centre,
Rent-a-cab, life insurance except where (A) the Govt. notifies the services which are obligatory for an employer to provide
to its employees under any law (B) Such inward supply is made by a registered person for making an outward supply of
Goods or services.
Goods or services recd by a taxable person for construction of an immovable property (other than plant & Machinery)
GST Paid Under Composition Scheme.

12.
Taxable Events in GST
 Supply of Goods or Services or both is ‘taxable event’ in GST except Alcoholic liquor for Human Consumption.
 Supply of Goods and services for consideration is always Taxable
 Supply by taxable person to related Person is subject to GST even if there is no Consideration.
 Free Gifts to related persons will be subject to GST.
 Import of Service from related person or from business establishment outside india is subject to GST even if there is
no consideration.
 Lottery, betting and gambling is subject to GST.
 Supply between two distinct persons in course of business is subject to GST. This will cover inter-state stock transfer,
branch transfers etc.
 Petroleum products will be presently Out of GST but will be brought in GST network at a later stage on
recommendation of GST Council.

13.
Meaning of Goods and Services
“Goods” means every kind of movable property other than money and securities but includes actionable claim, growing
crops, grass and things attached to or forming part of the land which are agreed to be served before supply or under a
contract of supply.
“Services” means anything other than goods, money and securities but includes activities relating to the use of money or
its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or
denomination for which a separate consideration is charged.
Though definition of service can cover even immovable property, sale of land and sale of completed building has been
excluded from the definition of goods or service.
Software in Physical form should be goods and on the other hand Development of software is ‘Service’.
Service by employees to employer is not subject to GST
Hire Purchase of goods and financial lease is Goods and Hire or operating lease of goods is service.

14.
Small taxable persons-Exemptions and Composition Scheme
Small taxable persons means persons having turnover upto Rs 20 lakhs are exepmt from GST (limit Rs 10 Lakhs for
northern Eastern states, Himachal Pradesh and uttarakhand and J&K.
Small Taxable persons Supplying goods upto Rs 50 lakhs per annum are eligible for Composition scheme.
Composition Scheme is available to small taxable persons if all the their purchases are from registered persons within the
state . Otherwise, they have to pay GST on purchases.
The taxable person opting for composition scheme will have to pay a fixed percentage of gross turnover as tax.
They have to pay CGST as follows- (a) 1% of turnover in state or union territory in case of a manufacturer (b) 2.5 % of
turnover in state or union territory in case of restaurant service (c) 0.5 % in case of traders..
There will be equal SGST/UTGST. Thus, Total tax payable will be double the aforesaid rates.
Taxable persons whose all supplies of goods and services are within the state only will be eligible for the simplified
scheme.
Taxable persons who opt for composition scheme will not be entitled
to any input tax credit.

15.
Place of Supply of Goods and services within india
The Basic Principle behind ‘place of Supply’ provisions is that GST is consumption based tax. The tax is payable in the
state in which goods or services or both are consumed.
Supply of services in the course of inter-state trade means any supply where the location of the supplier and the place of
supply are in different stats.
Supply of Services to or by a SEZ developer or an SEZ unit, shall be deemed to be a supply in the course of inter-state trade
Specific provisions have also been made for place of supply in case of services directly relating to immovable property,
restaurant, training and appraisal, admission to events, transportation of goods and passengers, services on board a
conveyance, telecom services, banking and FI services, insurance services and advertisement services to Govt. within india.
In case of services other than specified, the place of Supply of Services- (a) made to a registered person shall be the
location of recipient (b) made to any person other than a registered person shall be (i) the location of the recipient where
the address on record exists (ii) the location of supplier in other Cases.
Import of services will be considered as inter state supply hence IGST will be payable mostly under Reverse Charge.

16.
Job Work- Treatment of Goods sent to Job Worker
•Goods can be sent directly to place of job worker and can be supplied to recipient directly from place of job worker.
•Input and semi-finished goods can be sent for job work. These should be brought back or dispatched directly from place of
job worker within one year.
•Capital goods can be sent to place of job worker for period upto three years, this time limit is not applicable for sending
moulds, dies, jigs, fixtures and tools to the place of job worker.
•When material is sent for job-work, Delivery challan should be prepared in triplicate.
•Details of Challans in respect of goods dispatched to a job worker or received from job worker shall be included in return in
Form GSTR – 1
•If Inputs/ Capital goods are not received during prescribed period, GST will be payable for which challan issued will be
considered as ‘Invoice’
•If inputs or semi-finished goods sent by principal are lying with job worker on 01-0702017, Principal should submit stock
statement as on 01/07/2017 and then he can take input tax credit of central excise duty or VAT.

17.
Reverse Charge under GST
•Normally tax is payable by supplier of goods or services or both. However, in some cases, the recipient is made liable to
pay tax. This is termed as ‘Reverse charge’.
•When tax is payable under reverse charge basis, the exemption available to small taxable persons (20 or 10 lakhs) is not
available.
•When tax is payable under reverse charge basis, it has to be paid by cash i.e. through electronic cash ledger only.
•Once tax is paid, its input tax credit is available if such supply of goods or services or both are otherwise eligible for input
tax credit.
•All recipients receiving supply from unregistered persons are liable to pay tax under reverse charge.
•The list of services on which Reverse charge is applicable is as follows.
(a) Service Provided by Any person who is located in a non-taxable territory. Here 100% GST would be paid by any person
located in the taxable territory other than non-assesse online recipient.

18.
(b) Services provided by a goods transport agency(GTA) in respect of transportation of goods by road. Here, service
recipient will pay 100% GST. Service recipient can be any factory, society, cooperative society, any person registered under
GST, any company, partnership firm of casual taxable person.
(c )Services provided an individual advocate or firm of advocates. Here, 100% GST payable by any business entity.
(d) Services provided by an arbitral tribunal. Here, 100% GST payable by any business entity.
(e) Sponsorship services provided by any person. Here, 100% GST payable by any Company or Partnership firm.
(f)Services provided by a director of a company to the said company;Here, 100% GST payable by such Company.
(g) Services provided by an insurance agent to any person carrying on insurance business. Here, 100% GST payable by
person carrying on insurance business.
(h) Services provided by a recovery agent. Here, 100% GST payable by a banking company or a financial institution or a non
banking financial company.
(I )Services provided by way of transportation of goods by a vessel from a place outside India up to the customs station of
clearance in India by a person located in non-taxable territory to a person located in non-taxable territory. Here, 100% GST
payable by Importer.

19.
(j) Service provided by Author or music composer, photographer,artist, etc. Here, 100% GST payable by Publisher, Music
company, Producer.
(k) Services provided by Taxi driver or Rent a caboperator through electronic commerce operator to any person. Here, 100%
GST payable by Electronic Commerce Operator

20.
I Hope we have gained and learn something about GST in this
Session.
By: CA UDIT AGRAWAL