Goods and service tax
Gst
Goods and service tax
Synopsis
 Introduction & History of GST
 Background of GST
 Structure of GST council
 What are the types of GST available before implementing GST
 Difference between existing tax structure and previous tax
structure
 Types of GST
 Features of GST
 Challenge in GST
 Who is liable to register under GST
 How to register under GST
Goods and Service Tax
Synopsis
 Terms used in GST
 Time of supply of Goods
 Benefits of GST
 Revised GST
 Types of GST returns
 Composition Scheme
 Zero Rated Supply
 Who can opt for composition scheme
 Due dates for filling GST Returns
 Penalty for late filing
 How to register under GST
 Workings
An Introduction on History of GST
 GST or Goods and Services Tax came into
use from July 1, 2017 replacing number of
other taxes that was applied till June 30,
2018. The discussions of GST Bill has been
in process process for more than two
decades and the bill was passed to
implement GST from July 1, 2017 by the
Prime Minister of India and his Finance
Minister Arun Jaitley. GST was launched on
the midnight of July 1, 2017.
An Introduction on History of GST
• The single GST replaced several taxes and
levies which included: central excise duty,
services tax, additional customs duty,
surcharges, state-level value added tax and
Octroi. We follow the dual GST system i.e.
GST for State and Central named SGST
and CGST, respectively. Let us have an
overview on the history of GST from the
content below as an eye-opener.
Background of GST
2006
2009
2011
2014
2016
Sep 2016
• First announcement of GST was made by the Union Minister during
the 2006-2007 budget, that it would be introduced on April 1, 2010.
• Empowered Committee released the first Discussion Paper.
• Empowered Committee released the first Discussion Paper.
• 122nd Amendment Bill was introduced in LokSabha
• One Hundred and First Amendment Act was enacted
• The first GST Council Meeting was conducted
Background of GST
March
2017
• CGST, SGST, IGST, UTGST and Compensation Cess Act was
recommended by GST Council.
April
2017
• CGST, SGST, IGST, UTGST and Compensation Cess Act were passed
July
2017
• GST laws, Goods and Services Tax was launched all over India.
Structure of GST Council
Chairperson
The Union Finance minister, Government of India
Vice - Chairperson
The members of the Goods and Services Tax council
referred to in sub-clause © of clause (2) shall, as soon as
many be, choose one among GST themselves to be the
vice- chairperson of the Council for such period as they
may decide.
Member
The Union Minister of state in charges of Revenue Finance.
Members
The Minister in charge of finance or Taxation or any other
Minister nominated by each state Government.
What were the Taxes available Before
the Implementation of GST?
 State Value Added Tax (VAT), Central Excise Tax, Services
Tax, Central Sales Tax, etc are all replaced by the single entity
called GST (Goods and Services Tax)
 Value Added Tax was mainly for the taxes at State level across all
states in India.
 Now on introduction of GST, VAT is replaced by State GST or
SGST and the State VAT department will be simply converted to
SGST Departments.
 Central Excise Tax that is the central tax for the goods and services
are now replaced with Central GST or CGST.
Difference between previous tax structure and existing Tax (GST)
Previous tax structure
Existing tax structure (GST)
Cascading Effect of Taxes not eliminated
It will be eliminated being credit allowed on
completely (CST, additional customs duty,
all the components of taxes
surcharges, luxury tax, entertainment tax,
etc…)
Value-added chain in the distribution trade
below the manufacturing not captured fully .
It will be taken care
Assessable Value for diff. taxes is Diff. i.e.
Excise – sec-4 (transactional value) VATSale value (Including excise duty) ,
Service Tax- Gross realization value
Assessable value for all the taxes cont..2
Difference between existing tax structure
and GST
Different Authorities for diff. taxes i.e. Excise
Duty – Custom & Excise Deptt. Service Tax – Service tax Comm.
VAT – Diff authorities at state levels & Other
Taxes-Various authorities at local level
Only two authorities i.e. one for SGST & One for
CGST
Difference between previous tax structure and existing Tax (GST)
Previous tax structure
Existing tax structure (GST)
Difficulties in filling
-various documents with diff. authorities
- documents at various point of time
Documents will be reduced a lot
Too many returns under different statute i.e.
Excise Returns, Service tax Returns, Sales tax
return etc..
Common format is proposed.
Difficult to manage annual calendar for
compliance under various laws.
It will be manageable to some extent
Tax on Tax - CENVAT load on the goods remains
included in the value of goods to be taxed under
State VAT
It will be taken care as same value be the
base for CGST/SGST
What are the Types of GST?
GST has brought a reform in the taxation in India.
Various types of indirect taxes replaced by GST is
categorized under four categories. The four types are
GST
Intra-state
movement
Central GST
(CGST)
State GST
(SGST)
Inter- state
movement
Integrated
GST
(IGST)
Types of GST
 CGST - CGST is a Central Goods and services tax. It is applicable on
suppliers dealing within the state. Taxes which are collected will be
shared with the central authority body.
 SGST - SGST is a state Goods and services tax. It is applicable to
suppliers who dealing within the state. Taxes which are collected will
be shared to state authority body.
 IGST - IGST stands for an Integrated Goods and services tax. It is
applicable to suppliers who dealing interstate business and import
transaction. Taxes which are collected will be shared to central and
state authority body.
 UTGST - If the transaction is related to any union territory.
Features of GST
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Dual GST mode : ‘Dual GST’ Model, taxes will be levied by both
central and state on goods and services.
Destination based consumption Tax: GST will be a destination based
tax. This implies that all SGST collected with ordinarily accrue to the
state where the consumer of the goods or services sold resides.
Taxes to be subsumed: Central and state indirect taxes and levies
listed below would be subsumed under the GST:
Central excise duty
Additional excise duty
Service tax
Additional customs Duty commonly know as countervailing
duty(CVD)
Cesses
Surcharges
Features of GST
4. GST on Export and Import: Export will not be subject to GST.
Integrated Goods and services tax(IGST) will be levied on
import of goods and services into the country.
5. Computation of GST on the basis of invoice credit method:
The liability under the GST will be invoice credit method i.e.,
CENVAT credit will be allowed on the basis of invoice issued
by the suppliers.
6. Payment of GST: The CGST and SGST are to be paid to the
accounts of the central and states respectively.
7. Goods and Services Tax Network
8. Administration of GST
9. GST Council
Challenges for GST
 It is difficult to estimate accurately gain for States from
service tax and loss on account of removal of cascading effects,
payment of input tax credit and phasing out of CST.
 Estimate for Compensation to states on A/c of loss of
Purchase Tax
 How to tackle existing Multiple rate structure.
 Constitutional Amendments for empowering the - Centre
to levy tax on sale of goods, - States for levy of service tax
and tax on imports,
 - approvals from State Legislatures for Debiting
Consolidated Funds 283(2) of Constitution)
 Co-Operation among the states (b2c transactions)
 It may face opposition from Local Dealers as they have to
pay CGST in addition to SGST directly.
Why GST?
Free Movement of
Goods and services
Removal of
Cascading
Effect of Taxes
Wider coverage of
Input put tax, Sales
tax, service tax, Set
-off
One Tax
One Nation
Rationalize structure
Of Indirect
Taxation
Continuous chain of
set-off till the
consumer
What is GST Registration
 In the GST Regime, businesses whose turnover exceeds Rs.
20 lakhs (Rs 10 lakhs for NE and hill states) is required to
register as a normal taxable person. This process of
registration is called GST registration.
 For certain businesses, registration under GST is mandatory.
If the organization carries on business without registering
under GST, it will be an offence under GST and heavy
penalties will apply.
 GST registration usually takes between 2-6 working days.
Who is liable to register under GST?
Individuals registered under the Pre-GST law (i.e.,
Excise, VAT, Service Tax etc.)
Businesses with turnover above the threshold limit of Rs.
20 Lakhs (Rs. 10 Lakhs for North-Eastern States, J&K,
Himachal Pradesh and Uttarakhand)
Agents of a supplier & Input service distributor
Those paying tax under the reverse charge mechanism
Person who supplies via e-commerce aggregator
Every e-commerce aggregator
Person supplying online information and database access
or retrieval services from a place outside India to a
person in India, other than a registered taxable person.
Who is liable to register under GST?
 Every person who is registered under an earlier law (i.e., Excise,
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VAT, Service Tax etc.) needs to register under GST, too.
When a business which is registered has been transferred to
someone/demerged, the transferee shall take registration with
effect from the date of transfer.
Anyone who drives inter-state supply of goods
Casual taxable person (see below)
Non-Resident taxable person (see below)
Agents of a supplier
Those paying tax under the reverse charge mechanism
Input service distributor (see below)
E-commerce operator or aggregator
Person who supplies via e-commerce aggregator
How to register under GST
Documents required for GST
Registration
 PAN of the Applicant
 Aadhaar Card
 Proof of business registration or Incorporation certificate
 Identity and Address proof of Promoters/Director with
Photographs
 Address proof of the place of business
 Bank Account statement/Cancelled cheque
 Letter of Authorization/Board Resolution for Authorized
Signatory
 Digital signature
What are the benefits of registering
under GST?
1.
A. For normal registered businesses:

Take input tax credit
 Make interstate sales without restrictions
 To know more about the Benefits of GST
2. . For Composition dealers:
 Limited compliance
 Less tax liability
 High working capital
 To know more about composition scheme
3. For businesses that voluntarily opt-in for GST registration (Below
Rs. 20 lakhs)
 Take input tax credit
 Make interstate sales without restrictions
 Register on e-commerce websites
 Have a competitive advantage compared to other businesses
 To know more about voluntary registrations
Offences
There exist 21 offences under GST, which are subject to a fine/penalty of
Rs. 10,000 or more depending on the tax amount. Below mentioned are
some of the major offences under GST Act.
 Providing a bill without supplying goods and/or services.
 Collecting tax but failing to submit it to the government within 3
months.
 Collecting full or part input tax credit without having the original bill of
the goods/services.
 Obtaining tax refund by fraudulent means.
 Producing false financial records to file a false return.
 Providing incorrect information during the registration.
 Failing to deposit tax returns to the government.
 In any of the above cases under Sec.122 failing to provide correct
information will be liable to pay penalties up to Rs. 25,000.
Time of Supply of Goods
Time of supply of
goods
General provision
for goods
Earlier of:
Date of issue of
invoice
Date of receipt of
payment
Reverse charge
for goods
Earlier of:
Date of receipt of
goods
Date on which
payment is made
Date immediately
following 30 date
of invoice
Terms used in GST
 Aggregate Turnover: It means the aggregate value of all taxable
supplies (excluding the value of inward supplies on which tax is
payable by a person on reverse charge basis), exempt supplies,
exports of goods or services or both and inter-state supplies of
person having the same PAN , to be computed on all India basis
but excludes central tax, state tax, Union territory tax, integrated
tax and cess.
 Goods and Services Tax Network (GSTN) - is a nonprofit, public-private partnership company. Its main purpose is to
provide IT infrastructure and services to Central and State
Governments, taxpayers, and other stakeholders to facilitate the
implementation of GST.
Terms used in GST
 Harmonized System Nomenclature (HSN) Code - is a
numeral used to classify goods for taxation purposes provided by the
World Customs Organization.
 Input Tax Credit - is the credit against the tax already paid on
inputs (purchases) can be claimed back to pay the liability of output
taxes (on sales). It is called input tax credit or ITC.
 Composite Supply- refers to a supply made by a taxable person to
a recipient consisting of two or more taxable supplies of goods or
services or both, or any combination thereof, which are naturally
bundled and supplied in conjunction with each other in the ordinary
course of business, one of which is a principal supply.
Example: Supply of laptop and carry case
Supply of equipment and installation of the same
Supply of health care services along with medicaments.
Terms used in GST
Mixed Supply - refers to two or more individual supplies of
goods or services, or any combination thereof, made in
conjunction with each other by a taxable person for a single price
where such supply does not constitute a composite supply.
 Inward Supply - refers to the receipt of goods and/or services,
whether by purchase, acquisition, or any other means, and with or
without any consideration.
 Outward Supply - refers to the supply of goods and/or
services, whether by sale, transfer, barter, exchange, licence,
rental, lease, or disposal, or any other means made or agreed to be
made during business.
 Casual Taxable person- is a person who occasionally
undertakes transaction involving supply of goods or services or
both in the course or furtherance of business whether as principal,
agent or in any other capacity, in a state or a union territory where
he has no fixed place of business.
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Terms used in GST
 Non resident person: means any person who occasionally
undertakes transaction involving supply of goods or services
or both, whether as principal or agent or in any other
capacity, but who has no fixed place of business or residence
in India.
 Reverse charge: Reverse charge means the liability to pay
tax by the recipient of supplying of goods or services or both
instead of the supplier of such goods or services or both
under sub-section (3) or sub section (4) of section 9 or under
sub-section (3) or under sub-section(4) of section 5 of the
integrated Goods and services tax Act
 Zero-Rated Supply -means supply of any goods and/or
services including export of goods or services or both or
supply of goods or services or both to a Special Economic
Zone developer or a Special Economic Zone unit.
Zero rated supply under GST
 What is Zero rated supply?
GST is not applicable in India for exports. Hence, all export
supplies of a taxpayer registered under GST would be
classified as zero rated supply. According to Section 16 of the
IGST Act, zero rated supply means any of the following
supplies of goods or services:
 Export of goods or services or both;
 Supply of goods or services or both to a Special Economic
Zone developer
 Supply of goods or services or both to a Special Economic
Zone unit.
GST Refund for Zero rated supply
 As exports are zero rated supply, the supplier will be eligible
to claim input tax credit in respect of goods or services used
for the supplies even though they might be non-taxable or
even exempt supplies.
 To claim GST refund for exports, the taxpayer can export
under bond or LUT and claim refund or export on payment
of IGST and claim refund.
Details to be Furnished in GST Return
 In GSTR 3B return and GSTR-1, all taxpayers must furnish
details of all zero rated supply. In the following table showing
GSTR 3B return, the taxpayer must provide details of all
export supply in row B.
Revised GST Rates
0% GST Rate
5% GST Rate
12% GST Rate
18% GST Rate
28% GST Rate
fresh meat, fish chicken, Eggs, Milk, butter milk, Curd,
natural honey, fresh fruits and vegetables, flour, besan, bread,
Prasad, Salt, BindiSindoor, Stamps, judicial papers, printed
books, Newspapers, Bangles, handloom etc.
Fish fillet, Cream, skimmed milk powder, branded paneer, frozen vegetables,
Coffee,Tea, Spices, pizza bread, Rusk, Coal, Medicines, Stent,
Frozen meat products, Butter, Cheese, Ghee, dry fruits in packaged form, animal
fat, Sausage, fruit juices, Aurvedic medicines, tooth powder, colorings books,
sewing machine, and cell phones
Flavored refined sugar, Pasta, pastries and cakes, preserved vegetables, sauces,
Soups, ice cream, instant food mixes, mineral water, Tissues, Envelopes,
Tampons, notebooks, steel products, printed circuits, Camera,
chocolate not containing cocoa, aerated water, Paint, Deodorants, shaving creams,
after shave, hair shampoo, Dye, Sunscreen,Wallpaper, ceramic tiles, water heater,
Benefits of implementation of GST
To Traders
• Reduction in multiplicity of Tax
• Mitigation of cascading/ double taxation
• More neutralization of taxes especially for exports
• Development of common national market
• Simpler tax regime
• Simpler tax regime fewer rates and exemptions.
Benefits of implementation of GST
To Government
• Simpler tax system
• Broadening of Tax base
• Improved compliance and revenue collections
• Efficient use of resources.
• Automation of compliance procedures to reduce errors and
increase efficiency.
• A unified common national market to boost foreign investment
and “make in India” campaign.
• Improving the overall investment climate in the country which
will benefit the development of states.
Benefits of implementation of GST
To the Citizens
• Simpler tax system
• Reduction in prices of goods and services due to elimination
of cascading effects.
• Uniform prices throughout the country.
• Transparency in taxation system.
• Increase in employment opportunities.
Types of GST Returns
 (GSTR-1)
Monthly Statement of Outward Supplies to be furnished
by all normal and casual registered taxpayers making outward supplies
of goods and services or both and contains details of outward supplies
of goods and services
 (GSTR-2) Monthly Statement of Inward Supplies to be furnished by all
normal and casual registered taxpayers making inward supplies of
goods and services or both and contains details of inward supplies of
goods and services
 (GSTR-3) A simplified summary return and the purpose of the return
is for taxpayers to declare their summary GST liabilities for the tax
period and the discharge of these liabilities in a timely manner
Types of GST Returns
 (GSTR-4) An auto-drafted and read only form and is auto created on
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basis of data from the saved/submitted/filed Form GSTR-1/5 and
filed Form GSTR-7 of the taxpayers, where composition dealer is the
recipient.
(GSTR-5) A return to be filed by all Non- Resident Taxpayer in cases
he doesn’t wish to avail ITC on local procurements
(GSTR-6) A monthly return to be filed by all the Input Service
Distributor’s (ISD) for distribution of credit (ITC) amongst its units.
(GSTR-7) Returns filed by a Tax Deductor
(GSTR-8) Returns to be filed by an e-Commerce Portal
(GSTR-9) Registered Taxable Person
Registered under the Composition
Scheme
GSTR 4
 Quarterly return for
compounding vendors (It contains
the total value of supply made
during the period covered by the
return, along with the details of
the tax paid at the compounding
rate (not more than 1% of
aggregate turnover) for the period
along with invoice-wise details for
inward supplies if they are either
imports or purchased from
normal taxpayers).
GSTR 9A
 Annual composition return
form that has to be filed by
every taxpayer who is
enrolled in the
composition scheme.
Who can opt for the composition
scheme
 Supplier of service other than restaurant owners(Serving
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foods and non-alcoholic drinks)
Supplier of non-taxable goods
If the person in engage in the inter-state supply of goods
Supplier supplying goods through E-commerce operator,
who is eligible to collect TCS
Supplier of tobacco, pan masala, and ice cream
Person who can’t opt for the
composition scheme
 Supplier of service other than restaurant owners(Serving
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foods and non-alcoholic drinks)
Supplier of non-taxable goods
If the person in engage in the inter-state supply of goods
Supplier supplying goods through E-commerce operator,
who is eligible to collect TCS
Supplier of tobacco, pan masala, and ice cream
Due dates for GST filing
GSTR 1
Quarterly GST Return
Annual Turnover up to Rs 1.5 crore can opt for quarterly filing
Quarter
Due Date
Oct – Dec 2018
31st Jan 2019
Jan –Mar 2019
30th April 2019
Due dates for GST filing
 (GSTR -2 & GSTR-3) Filing currently suspended
 (GSTR-3B) has been extended to March 2019All businesses
have to file GSTR-3B by 20th of next month until the month
of March 2019.
 (GSTR-4) Due date for the quarter October 2018
to December 2018 is 18th Jan 2019
Due date for the quarter Jan 2019 to Mar 2019 is 18th Apr
2019
Due dates for GST filing
 (GSTR-5A) Those non-resident taxpayers who provide
OIDAR services have to file GSTR-5A by 20th of next
month.
 (GSTR-6) The input service distributors have to file GSTR6 by 13th of next month.
 (GSTR-5) Non-resident taxpayers have to file GSTR-5 by
20th of next month.
Due Date for GST
 For each category of GST Returns, the due date for filing varies. Filing
GST returns before the due dates helps to avoid penalties. The due
dates for GST returns along with the details which are to be filed are
listed in the below table and the due dates are subject to changes
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GSTR- 1 -10Th of every month
GSTR- 2- 15th of every month
GSTR -3- 20th of every month
GSTR- 4- 18th of month succeeding quarter
GSTR- 5-20th of next month
GSTR- 6-13th of next month
GSTR- 7-10th of next month
GSTR- 8-10th of next month
GSTR- 9-31st Dec of next financial year
GSTR- 10-Within three months of date of cancellation
GSTR- 11-28th of the month, following the month for which the statement was filed
Penalty
 What is the Penalty for Late Filing of GST Returns?
GST Returns are to be filed at the stipulated time and any delay
will make one liable to pay both the interest and late fee. Interest
is 18% per annum. It has to be calculated by the taxpayer on the
amount of outstanding tax to be paid. Earlier the late fee would be
Rs.100/day on SGST and CGST calculating to about Rs. 200/day
and no late fee will be charged on IGST. The late fee has been
revised and late fee on GSTR-1, GSTR-3B, GSTR-4, GSTR-5
and GSTR-5A will be Rs. 50 per day of delay and Rs. 20 per day
of delay for nil returns. Late fee for GSTR-5A will be total of Rs.
200 per day of delay and Rs. 100 per day of delay for NIL return.
GST : Working
Levy of Tax under GST framework (@ 10%)
 Suppose a manufacturer purchases a X commodity for Rs. 200 and adds a
value of Rs. 80 into it thus creating the X of Rs. 280.
GST paid by manufacturer will be- Rs. 8 i.e.
(Tax on output- Rs. 28 minus Tax paid on input –Rs. 20)
 Now the second party in the chain, the wholesaler will get this X for Rs. 280
and supposing the value addition by him is Rs. 60.
GST paid by wholesaler will be- Rs. 6 i.e. (Tax on output- Rs. 34 minus Tax paid on
input –Rs. 28)
 The retailer buys the X for Rs. 340 and added a value of Rs. 100 to it.
GST paid by retailer will be- Rs. 10 i.e.
(Tax on output- Rs. 44 minus Tax paid on input –Rs. 34)
 Total GST paid-Rs. 44
Goods and Service Tax
Thank you