GST
GOODS AND SERVICES TAX
By BusinessWindo.com

AGENDA
What is GST?
Structure of GST Tax Rate
Which Taxes is Replaced by GST?
Who is Liable to Pay GST Under GST Regime?
Types of GST in India
How will Imports be Taxed Under GST?
How will Exports be Treated Under GST?
GST Registration is Compulsory for Whom
Advantages of GST Registration
Benefits of GST

What is Goods and Services Tax
 Goods and Services Tax is commonly known as
GST is proposed to be a comprehensive indirect
tax levy on manufacture, sale and consumption of
goods as well as services at the national level. Its
main objective is to consolidates all indirect tax
levies into a single tax, replacing multiple tax
levies.
 Simply goods and services tax is a tax levied by
the Central and State Government of India on
goods and services imposed at each point of sale
or rendering of service.

Structure of GST Slab Rate
 The GST Council has finalized 4 broad slab rates
for various goods and services such as 5%, 12%,
18% and 28%. Apart from this GST for gold, silver
and processed diamond jewellery taxed at 3% and
rough uncut diamond taxed at 0.25%.
 And out of this, GST regime has exempted (0%)
tax on certain commodities/product and services.

Existing Tax Replaced by GST Regime
GST would replace several taxes levied by the Centre as well
as States.
1) Taxes currently levied and collected by the Centre:
a. Central Excise Duty
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)
f. Special Additional Duty of Customs (SAD)
g. Service Tax
h. Central Surcharges and Cesses, so far as they relate to
supply of goods and services

Contd.. From GST Regime
2) State taxes that would be subsumed under the GST are:
a. Value Added Tax (VAT)
b. Central Sales Tax (CST)
c. Luxury Tax
d. Entry Tax
e. Entertainment and Amusement Tax (except when levied
by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State Surcharges and Cesses, so far as they relate to
supply of goods and services

Who is Liable to Pay GST Under
GST Regime
• Under GST Regime, tax is payable by the taxable
person on the supply of goods and services.
• Liability to pay tax arises when the taxable
person crosses the turnover threshold Rs. 20
lakhs (Rs. 10 lakhs for North East & special
category States).
• The CGST / SGST is payable on all intra-State
supply of goods and services.
• IGST is payable on all inter-State supply of goods
and services.

Types of GST in India
There are mainly 3 types of GST in India i.e. SGST, CGST
and IGST. Apart from this UTGST is there.
1. SGST/UTGST – SGST stands for State Goods and
Services Tax and UTGST stands for Union Territory
Goods and Services Tax. The tax is levied on supply
of goods and services within the intra-state.
2. CGST – CGST stands for Central Goods and Services
Tax. GST is levied on supply of goods and services
within the state by Center.
3. IGST – IGST stands for Integrated Goods and
Services Tax, it is levied on supply of goods and
services from one state to another. IGST is also
applicable on imports.

How will Imports be Taxed
Under GST?
Imports of Goods and Services will be treated as
inter-state supplies and IGST will be levied on
import of goods and services into the country. The
incidence of tax will follow the destination
principle and the tax revenue in case of SGST will
accrue to the State where the imported goods and
services are consumed. Full and complete set-off
will be available on the GST paid on import on
goods and services.

How will Exports be Treated
Under GST?
Exports will be treated as zero rated supplies. No
tax will be payable on exports of goods or services,
however credit of input tax credit will be available
and same will be available as refund to the
exporters. The Exporter will have an option to
either pay tax on the output and claim refund of
IGST or export under Bond without payment of
IGST and claim refund of Input Tax Credit (ITC).

GST Registration is Compulsory
for Whom
As per Section 24 of the CGST/SGST Act, the following
categories of persons shall be required to be registered
compulsorily irrespective of the threshold limit:
a) Persons making any inter-State taxable supply
b) Casual taxable persons
c) Persons who are required to pay tax under reverse
charge
d) Electronic commerce operators required to pay tax under
sub-section (5) of section-9
e) Non-resident taxable persons
f) Persons who are required to deduct tax under section-51

Contd. From Compulsory GST
Registration
g) Persons who supply goods and/or services on behalf of other
registered taxable persons whether as an agent or otherwise
h) Input service distributor (whether or not separately registered
under the Act)
i) Persons who are required to collect tax under section-52
j) Every electronic commerce operator
k) Every person supplying online information and data base
retrieval services from a place outside India to a person in
India, other than a registered person
l) Such other person or class of persons as may be notified by
the Central Government or a State Government on the
recommendations of the Council.

Advantages of GST Registration
What is the advantage of taking registration in GST?
Legally recognized as supplier of goods or services.
Proper accounting of taxes paid on the input goods
or services which can be utilized for payment of GST
due on supply of goods or services or both by the
business.
Legally authorized to collect tax from his purchasers
and pass on the credit of the taxes paid on the goods
or services supplied to purchasers or recipients.
Getting eligible to avail various other benefits and
privileges rendered under the GST laws.

Benefits of GST
For Make in India:
(i) Will help to create a unified common national market for
India, giving a boost to Foreign investment and “Make in
India” campaign.
(ii) Will prevent cascading of taxes as Input Tax Credit will be
available across goods and services at every stage of supply.
(iii) Harmonization of laws, procedures and rates of tax.
(iv) It will boost export and manufacturing activity, generate
more employment and thus increase GDP with gainful
employment leading to substantive economic growth.
(v) Ultimately it will help in poverty eradication by generating
more employment and more financial resources.

Contd. From GST Benefits
(vi) More efficient neutralization of taxes especially for
exports thereby making our products more competitive in
the international market and give boost to Indian Exports.
(vii) Improve the overall investment climate in the country
which will naturally benefit the development in the states.
(viii) Uniform SGST and IGST rates will reduce the incentive
for evasion by eliminating rate arbitrage between
neighboring States and that between intra and inter-State
sales.
(ix) Average tax burden on companies is likely to come down
which is expected to reduce prices and lower prices mean
more consumption, which in turn means more production
thereby helping in the growth of the industries . This will
create India as a “Manufacturing Hub”.

Contd. From GST Benefits
For Ease of Doing Business:
(i) Simpler tax regime with fewer exemptions.
(ii) Reductions in the multiplicity of taxes that are at present
governing our indirect tax system leading to simplification
and uniformity.
(iii) Reduction in compliance costs - No multiple record
keeping for a variety of taxes- so lesser investment of
resources and manpower in maintaining records.
(iv) Simplified and automated procedures for various
processes such as registration, returns, refunds, tax
payments, etc.
(v) All interaction to be through the common GSTN portal- so
less public interface between the taxpayer and the tax
administration.

Contd. From GST Benefits
(vi) Will improve environment of compliance as all
returns to be filed online, input credits to be verified
online, encouraging more paper trail of transactions.
(vii) Common procedures for registration of taxpayers,
refund of taxes, uniform formats of tax return, common
tax base, common system of classification of goods and
services will lend greater certainty to taxation system.
(viii) Timelines to be provided for important activities
like obtaining registration, refunds, etc.
(ix) Electronic matching of input tax credits all-across
India thus making the process more transparent and
accountable.

Contd. From GST Benefits
For Benefit to Customers:
(i) Final price of goods is expected to be lower due to
seamless flow of input tax credit between the
manufacturer, retailer and service supplier.
(ii) It is expected that a relatively large segment of small
retailers will be either exempted from tax or will suffer
very low tax rates under a compounding scheme-
purchases from such entities will cost less for the
consumers.
(iii) Average tax burden on companies is likely to come
down which is expected to reduce prices and lower
prices mean more consumption.