Hi This is research paper written by me around 10 months back. Would love to get reviews from you

1. RESEARCH PAPER ON
‘’ GOODS AND SERVICES TAX’’
-SIDDHARTH YADAV
(16BA013)
ABSTRACT
To begin with, I elaborate the important concept of – cascading effect of taxes. It is also, logically,
referred to as “taxes on taxes”. It is simple to illustrate – say X sells goods to Y after charging sales
tax, and then Y re-sells those goods to Z after charging sales tax. While Y was computing his sales tax
liability, he also included the sales tax paid on previous purchase,which is how it becomes a tax on
tax. This was the case with the sales tax few years ago
At that time, a VAT(Value Added Tax) system was introduced as Value Added Tax Act (2005)
whereby every next stage dealer used to get credit of the tax paid at earlier stage against his tax
liability. This reduced an overall liability of many traders and also helped to reduce inflationary
impact this had on the prices..
Similar concept came in the duty on manufacture – The Central Excise Duty – much before it came
for sales tax. The CENVAT credit scheme (earlier known as MODVAT) was also a welcome move by
trade and industry where credit of excise duty paid at the input stages was allowed to be set-off
against the liability of excise on removal of goods. With effect from 2004, this system was extended
to Service Tax also. Moreover, cross utilization of credit between excise duty and service tax was also
permitted. To a huge extent, the problem of cascading effect of taxes is resolved by these measures
However, there are still problems with the system that have not been solved till date. We shall talk
about these problems now. The credit of Input VAT is available against Output VAT. In the same
manner, the credit of input excise/service tax is available for set-off against output liability of
excise/service tax. However, the credit of VAT is not available against excise and vice versa. We all
know that VAT is computed on a value which includes excise duty. In the same manner, CENVAT
credit is allowed only for the Excise duty paid on inputs, and not on the VAT paid on the input raw
material. This shows that there is a tax on tax! Excise duty and service tax are levied by the Central
Government, while the VAT is levied by the State Government.

2. INTRODUCTION
The Goods and Services Tax (GST) is a vast concept that simplifies the giant tax structure by
supporting and enhancing the economic growth of a country. GST is a comprehensive tax levy on
manufacturing, sale and consumption of goods and services at a national level. The Goods and
Services Tax Bill or GST Bill, also referred to as The Constitution Bill, 2014, initiates a Value added Tax
implemented on a national level in India. GST is an indirect tax at all the stages of production to
bring about uniformity in the system.
Under GST, goods and services are taxed at the following rates, 0%, 0.25%, 3%, 5%, 12%, 18%, 28%,
29%, 31%, 43%, 45%, 48%, 50%.There is a special rate of 0.25% on rough precious and semi-precious
stones and 3% on gold. In addition a cess of upto 22% or other rates on top of 28% GST applies on
few items like aerated drinks, luxury cars and tobacco products.[4]
GST was initially proposed to
replace a slew of indirect taxes with a unified tax and was therefore set to dramatically reshape the
country's 2 trillion dollar economy
OBJECTIVES OF STUDY
 To understand the concept of goods and service tax
 To study scope of GST
To study challenges before GST in India
 To collect information of current tax system and analysis of tax by GST
 To understand Key Issues and Analysis of GST
 To examine the features of goods and service tax
 To know the benefits of goods and service tax to economy, business, industry and consumer
TAXATION SCHEME
The single GST (goods and service taxes) replaced several former taxes and levies which included:
central excise duty, Services Tax, Additional customs duty, Surcharges, state-level Value Added
Tax and Octroi. Other levies which were applicable on inter-state transportation of goods have also
been done away with in GST regime. GST is levied on all transactions such as sale, transfer, purchase,
barter, lease, or import of goods and/or services. India adopted a dual GST model, meaning that
taxation is administered by both the Union and State Governments. Transactions made within a
single state are levied with Central GST (CGST) by the Central Government and State GST (SGST) by
the State governments. For inter-state transactions and imported goods or services, an Integrated
GST (IGST) is levied by the Central Government. GST is a consumption-based tax, therefore, taxes are
paid to the state where the goods or services are consumed not the state in which they were
produced. IGST complicates tax collection for State Governments by disabling them from collecting

3. the tax owed to them directly from the Central Government. Under the previous system, a state
would only have to deal with a single government in order to collect tax revenue.
RATES
The GST is imposed at variable rates on variable items. The rate of GST is 2% for soaps and 28% on
washing detergents. GST on movie tickets is based on slabs, with 18% GST for tickets that cost less
than Rs. 100 and 28% GST on tickets costing more than Rs.100 and 5% on readymade clothes.The
rate on under-construction property booking is 12%. Some industries and products were exempted
by the government and remain untaxed under GST, such as dairy products, products of milling
industries, fresh vegetables & fruits, meat products, and other groceries and necessities.
Checkposts across the country were abolished ensuring free and fast movement of goods.
LITERATURE REVIEW
The Honourable Minister of Finance and Corporate Affairs, Government of India ArunJaitley
mentioned that the implementation of the GST is pegged as one of the biggest game changing
reforms of the Indian government. It will help India become an economically integrated economy,
will help reduce business costs and facilitate seamless movements of goods and services eliminating
local charges. It would reduce tax cascading eliminating tax on tax and hence help reach a situation
where revenue would be benefited and GDP would improve.
. It is also noted that, buoyed by the success of GST, more than 140 countries have introduced GST in
some form to other and is fast becoming the preferred form of indirect tax in the Asia Pacific region.
INTERPRETETION AND ANALYSIS OF DATA
 Scope of GST
 GST is applicable on the supply of goods or services.
 Initially, GST is not applied to:
(a) petroleum crude, (b) high speed diesel, (c) motor spirit (petrol), (d) natural gas,and (e) aviation
turbine fuel.
 Alcoholic liquor for human consumption is exempt from GST
Tobacco and tobacco products will be subject to GST. The centre may also impose excise duty on
tobacco. The GST Council will decide when GST will be levied on them.

4. Benefits of GST
 For business and industry
Improved competitiveness  Removal of cascading
 For Central and State Governments
 Higher revenue efficiency  Consolidation of tax base
easy to administer
 For the consumer
 Reduction of prices  Single and Transparent tax proportionate to the value of goods and services.
KEY ISSUES AND ANALYSIS
 An ideal GST regime intends to create a harmonized system of taxation by subsuming all indirect
taxes under one tax. It seeks to address challenges with the current indirect tax regime by
broadening the tax base, eliminating cascading of taxes, increasing
economic distortions caused by inter
 The provisions of this Bill do not fully conform to an ideal GST regime. Deferring the levy of GST on
five petroleum products may lead to cascading of taxes.
Report of 13th
finance report, Report of task force on GST
Removal of cascading  Easy compliance
For Central and State Governments
Consolidation of tax base  Better controls on leakage 
Single and Transparent tax proportionate to the value of goods and services.
KEY ISSUES AND ANALYSIS
An ideal GST regime intends to create a harmonized system of taxation by subsuming all indirect
taxes under one tax. It seeks to address challenges with the current indirect tax regime by
broadening the tax base, eliminating cascading of taxes, increasing compliance, and reducing
economic distortions caused by inter-state variations in taxes
The provisions of this Bill do not fully conform to an ideal GST regime. Deferring the levy of GST on
five petroleum products may lead to cascading of taxes.
finance report, Report of task force on GST
Simple and
Single and Transparent tax proportionate to the value of goods and services.
An ideal GST regime intends to create a harmonized system of taxation by subsuming all indirect
taxes under one tax. It seeks to address challenges with the current indirect tax regime by
compliance, and reducing
The provisions of this Bill do not fully conform to an ideal GST regime. Deferring the levy of GST on
Sources:

5. COMPARISON OF GST IN INDIA WITH OTHER COUNTRIES
COUNTRY TAX APPLICABLE COVERAGE STANDARD RATE
Singapore GST is a consumption
tax levied on imports
of goods and services
Levied nearly to all
imports, exports are 0
rated.
7%
Canada GST applies to supply
of most goods and
services. Sales Tax is
applied in some
provinces.
Applies goods that
include real property
and intangible
personal property.
15%
New Zealand GST levied on most
goods and services.
Includes most
important goods and
certain important
services Goods include
all type of personal
and real property
excluding Money
15%
European Union Value Added Tax on
goods and services
The export goods and
services abroad are
normally not subject to
VAT
15%
Australia GST applies to most
goods. Services and
other items.
Applies to goods and
services that are both
said or consumed in
the country
10%
India GST is applied on
goods and services at
the place where
final/actual
consumption happens
Applies to supply of
goods and services GST
levied on imports. And
exports are zero-rated,
inclusion of petroleum
and petroleum
products, however, to
be decided by the GST
councils
recommendations.
No such standard rate.

6. CHALLENGES FACED WHILE IMPLEMENTING GST
1) Impact on prices. .
2) Lack of automation.
3) Lack of procedural manuals.
4) Lack of skilled officials.
5) Double registration – handling old registration.
6) Poor quality of tax return.
7) No tax system for 100% scrutiny of tax returns and tax audit.
8) Lack of cross verification with other tax administration.
9) Lack of mechanism to control evasion.
FINDINGS
 GST will ensure the uniformity of taxes across the states, regardless of place of manufacture or
distribution.
 It will mitigate cascading and double taxation and enable better compliance through the lowering
of overall tax burden on goods and services.
 It is good for export oriented businesses because it is not applied for goods/services which are
exported out of India.
CONCLUSION
GST is a single national uniform tax levied across India on all goods and services. In GST, all Indirect
taxes such as excise duty, octroi, central sales tax (CST)and value- added tax (VAT) etc. are subsumed
under a single regime. Introduction of The Goods and Services Tax (GST) is a significant step towards
a comprehensive indirect tax reform in the country. It is expected to bring about efficiency and
transparency in the indirect tax mechanism in India. Further it may also encourage an unbiased tax
structure that is neutral to business processes and geographical locations. Given the enormity of the
implication of GST, it required a consensus among all political parties and states. However the
implementation of GST got delayed several times on account of lack of consensus among the States
and Centre on aspects relating to limiting fiscal autonomy of the States. But, History has proved that
many countries have benefited from moving to a GST regime. In India, Implementation of GST would
also greatly help in removing economic distortions caused by previous complex tax structure and will
help in development of a common national market.