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1. GOODS AND SERVICES TAX
EFFORTS BY -
ABHINAV TIWARI ( 3 )
JAGRIT AHUJA ( 17 )
CLASS XI-D

2. ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to my teacher Mrs.
Rajini Garg as well as principal Mrs. Veena Goel who gave me the golden
opportunity to do this wonderful project on the topic “GOODS AND
SERVICES TAX” which also helped me in doing a lot of research and i
came to know about so many new things. I am really thankful to them.
Secondly i would also like to thank my parents and my fellow partner
who helped me a lot in finishing this project within the limited time.
I am making this project not only for marks but to also increase my
knowledge
THANKS AGAIN TO ALL WHO HELPED ME

3. CERTIFICATE
This is to certify that Jagrit Ahuja and Abhinav Tiwari, students of class XI has
successfully completed the research on project “ GOODS AND SERVICES TAX
(GST)” under the guidance of Mrs. Rajini Garg (Subject teacher) during the
year 2020-21.

4. MEANING
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.

5. PAST 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.

6. METHOD OF TAXATION
● Progressive Tax :
Increasing rate of tax for Increasing Value or Volume.
● Regressive Tax :
Decreasing rate tax for Increasing Value or Volume.
● Proportional Tax :
Fixed rate of tax for every level of income or production.

7. SHORT COMING IN CURRENT TAX
SYSTEM
● Tax Cascading (Tax on Tax)
● Complexity
● Taxation at Manufacturing Level
● Exclusion of Services
● Tax Evasion
● Corruption

8. CASCADING EFFECTS OF
PRESENT TAX SYSTEM
Producer/
Manufacturer
Cost of Output Value of Input Tax Rate Selling Price
Including Tax
Rate
Tax Burden
Producer A -- 100 10% 110 (100+10%
of 100)
10
Producer B 110 150 10% 165 (150+10%
of 150)
15
Producer C 165 200 10% 220 (200+10%
of 200)
20

9. VAT (VALUE ADDED TAX)
● Implemented in April-1/2005
● It is replacement to complex Sales Tax
● It overcomes a Cascading Effect of Tax
● It applied on " Value Added Portion" in sales price

10. PROBLEMS WITH VAT
● It is not uniform in nature.
● VAT is different for different states.
● Different rates of taxation for different good.

11. IMPORTANCE OF ARTICLE 246(A)
1. There is resistance by the SG as VAT is the main source of revenue for the SG.
1. In 246(A) certain power are allocated to the state government.
1. The parliament and legislature f every state will have the power to make the law
with respect to goods and services tax(gst) imposed by union or by the state
government.

12. HISTORY
FORMATION
In the 2014 Lok Sabha election, the Bharatiya Janata Party-led NDA government was
elected into power. With the consequential dissolution of the 15th Lok Sabha, the GST
Bill – approved by the standing committee for reintroduction – lapsed. Seven months
after the formation of the then Modi government, the new Finance Minister Arun Jaitley
introduced the GST Bill in the Lok Sabha, where the BJP had a majority. In February
2015, Jaitley set another deadline of 1 April 2017 to implement GST. In May 2016, the
Lok Sabha passed the Constitution Amendment Bill, paving way for GST. However, the
Opposition, led by the Congress, demanded that the GST Bill be again sent back for
review to the Select Committee of the Rajya Sabha due to disagreements on several
statements in the Bill relating to taxation. Finally, in August 2016, the Amendment Bill
was passed.

13. IMPLEMENTION
The GST was launched at midnight on 1 July 2017 by the President of India, and the
Government of India. The launch was marked by a historic midnight (30 June – 1 July)
session of both the houses of parliament convened at the Central Hall of the Parliament.
Though the session was attended by high-profile guests from the business and the
entertainment industry including Ratan Tata, it was boycotted by the opposition due to the
predicted problems that it was bound to lead for the middle and lower class Indians. The tax
was strongly opposed by the opposing Indian National Congress. It is one of the few
midnight sessions that have been held by the parliament - the others being the declaration
of India's independence on 15 August 1947, and the silver and golden jubilees of that
occasion. After its launch, the GST rates have been modified multiple times, the latest being
on 22 December 2018, where a panel of federal and state finance ministers decided to
revise GST rates on 28 goods and 53 services.

14. HURDLES IN IMPLEMENTATION
● Dispute between Centre and State government over Tax Sharing.
● Highly sophisticated IT infrastructure required.
● Issue of taxing E-Commerce is to be appropriately addressed and integrated.
● Political Imbalance.

15. MODEL OF GOODS AND SERVICE
TAX(GST)

16. PROPOSED GST RATE
ITEMS TOTAL GST RATES (in
%)
CENTRE STATE
GOODS 20 12 8
SERVICES 16 8 8
ESSENTIAL GOODS 12 6 6
Presently it is (26.5 % , CENVAT-14 % and
State VAT 12.5% )

17. ILLUSTRATON OF GST

18. TAXES SUBSUMED
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/destination-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 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.

19. HARMONIZED SYSTEM OF
NOMENCLATURE
India is a member of World Customs Organization(WCO) since 1971. It was originally using 6-digit
HSN codes to classify commodities for Customs and Central Excise. Later Customs and Central
Excise added two more digits to make the codes more precise, resulting in an 8 digit classification.
The purpose of HSN codes is to make GST systematic and globally accepted.
HSN codes will remove the need to upload the detailed description of the goods. This will save
time and make filing easier since GST returns are automated.
If a company has turnover up to INR 15 million in the preceding financial year then they did not
mention the HSN code while supplying goods on invoices. If a company has turnover more than
INR 15 million but up to INR 50 million, then they need to mention the first two digits of HSN code
while supplying goods on invoices. If turnover crosses INR 50 million then they shall mention the
first 4 digits of HSN code on invoices.

20. RATE
The GST is imposed at variable rates on variable items. The rate of GST is 18% 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 28% on commercial
vehicle and private 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.Such
efficient transportation of goods was further ensured by subsuming octroi within the ambit of GST.
The Central Government had proposed to insulate the revenues of the States from the impact of
GST, with the expectation that in due course, GST will be levied on petroleum and petroleum
products. The central government had assured states of compensation for any revenue loss
incurred by them from the date of GST for a period of five years. However, no concrete laws have
yet been made to support such action. GST council adopted concept paper discouraging tinkering
with rates.

21. EWAY BILL
An e-Way Bill is an electronic permit for shipping goods similar to a waybill. It was made
compulsory for inter-state transport of goods from 1 June 2018. It is required to be generated for
every inter-state movement of goods beyond 10 kilometres (6.2 mi) and the threshold limit of
₹50,000 (US$700).
It is a paperless, technology solution and critical anti-evasion tool to check tax leakages and
clamping down on trade that currently happens on a cash basis. The pilot started on 1 February
2018 but was withdrawn after glitches in the GST Network. The states are divided into four zones
for rolling out in phases by end of April 2018.
A unique e-Way Bill Number (EBN) is generated either by the supplier, recipient or the transporter.
The EBN can be a printout, SMS or written on invoice is valid. The GST/Tax Officers tally the e-Way
Bill listed goods with goods carried with it. The mechanism is aimed at plugging loopholes like
overloading, understating etc. Each e-way bill has to be matched with a GST invoice.
Transporter ID and PIN Code now compulsory from 01-Oct-2018.
It is a critical compliance-related GSTN project under the GST, with a capacity to process 75 lakh
e-way bills per day.

22. INTRA STATE EWAY BILL
The five states piloting this project are Andhra Pradesh, Gujarat, Kerala, Telangana and Uttar
Pradesh, which account for 61.8% of the inter-state e-way bills, started mandatory intrastate e-way
bill from 15 April 2018 to further reduce tax evasion. It was successfully introduced in Karnataka
from 1 April 2018. The intrastate e-way bill will pave the way for a seamless, nationwide single e-
way bill system. Six more states Jharkhand, Bihar, Tripura, Madhya Pradesh, Uttarakhand and
Haryana will roll it out from 20 April 18. All states are mandated to introduce it by 30 May 2018.

23. REVERSE CHARGE MECHANISM
Reverse Charge Mechanism (RCM) is a system in GST where the receiver pays the tax on behalf of
unregistered, smaller material and service suppliers. The receiver of the goods is eligible for Input
Tax Credit, while the unregistered dealer is not.
The central Government released Rs 35,298 crore to the state under GST compensation. For the
implementation, this amount was given to the state to compensate the revenue. Central
government has to face many criticisms for delay in compensation.

24. GOODS KEPT OUTSIDE THE GST
● Alcohol for human consumption (i.e., not for commercial use).
● Petrol and petroleum products (GST will apply at a later date), i.e.,
petroleum crude, high-speed diesel, motor spirit (petrol), natural gas,
aviation turbine fuel.

25. GST COUNCIL
GST Council is the governing body of GST having 33 members, out of which 2 members are of centre and
31 members are from 28 state and 3 Union territories with legislation.
The council contains the following members:-
(a) Union Finance Minister (as chairperson).
(b) Union Minister of States in charge of revenue or finance (as member).
(c) the ministers of states in charge of finance or taxation or other ministers as nominated by each states
government (as member).
GST Council is an apex member committee to modify, reconcile or to procure any law or regulation based
on the context of goods and services tax in India. The council is headed by the union finance minister
Nirmala Sitharaman assisted with the finance minister of all the states of India. The GST council is
responsible for any revision or enactment of rule or any rate changes of the goods and services in India.

26. GOOD AND SERVICE TAX NETWORK
The GSTN software is developed by Infosys Technologies and the Information Technology network that
provides the computing resources is maintained by the NIC. "Goods and Services Tax Network" (GSTN)
is a nonprofit organisation formed for creating a sophisticated network, accessible to stakeholders,
government and taxpayers to access information from a single source (portal). The portal is accessible
to the Tax authorities for tracking down every transaction, while taxpayers have the ability to connect for
their tax returns.
The GSTN's authorised capital is ₹10 crore (US$1.4 million) in which initially the Central Government
held 24.5 percent of shares while the state government held 24.5 percent. The remaining 51 percent were
held by non-Government financial institutions, HDFC and HDFC Bank hold 20%, ICICI Bank holds 10%,
NSE Strategic Investment holds 10% and LIC Housing Finance holds 11% .

27. TYPES OF GOODS AND SERVICE TAX
As per the newly implemented tax system, there are 4 different types of GST:
1. Integrated Goods and Services Tax (IGST).
2. State Goods and Services Tax (SGST).
3. Central Goods and Services Tax (CGST).
4. Union Territory Goods and Services Tax (UTGST).
Additionally, the government has fixed different taxation rates under each, which will be applicable
to the payment of tax for goods and/or services rendered.

28. INTEGRATED GOODS AND SERVICES
TAX (IGST)
The Integrated Goods and Services Tax or IGST is a tax under the GST regime that is applied on
the interstate (between 2 states) supply of goods and/or services as well as on imports and
exports. The IGST is governed by the IGST Act. Under IGST, the body responsible for collecting
the taxes is the Central Government. After the collection of taxes, it is further divided among the
respective states by the Central Government. For instance, if a trader from West Bengal has sold
goods to a customer in Karnataka worth Rs.5,000, then IGST will be applicable as the transaction
is an interstate transaction. If the rate of GST charged on the goods is 18%, the trader will charge
Rs.5,900 for the goods. The IGST collected is Rs.900, which will be going to the Central
Government.

29. STATES GOODS AND SERVICE TAX
(SGST)
The State Goods and Services Tax or SGST is a tax under the GST regime which is applicable on
intrastate (within the same state) transactions. In case of intrastate supply of goods and/or services, both
State GST and Central GST are levied. However, the State GST or SGST is levied by the state on the goods
and/or services that are purchased or sold within the state. It is governed by the SGST Act. The revenue
earned through SGST is solely claimed by the respective state government. For instance, if a trader from
West Bengal has sold goods to a customer in West Bengal worth Rs.5,000, then the GST applicable on the
transaction will be partly CGST and partly SGST. If the rate of GST charged is 18%, it will be divided
equally in the form of 9% CGST and 9% SGST. The total amount to be charged by the trader, in this case,
will be Rs.5,900. Out of the revenue earned from GST under the head of SGST, i.e. Rs.450, will go to the
West Bengal state government in the form of SGST.

30. CENTRAL GOODS AND SERVICE TAX
(CGST)
Just like State GST, the Central Goods and Services Tax of CGST is a tax under the GST regime
which is applicable on intrastate (within the same state) transactions. The CGST is governed by
the CGST Act. The revenue earned from CGST is collected by the Central Government. As
mentioned in the above instance, if a trader from West Bengal has sold goods to a customer in
West Bengal worth Rs.5,000, then the GST applicable on the transaction will be partly CGST and
partly SGST. If the rate of GST charged is 18%, it will be divided equally in the form of 9% CGST
and 9% SGST. The total amount to be charged by the trader, in this case, will be Rs.5,900. Out of
the revenue earned from GST under the head of CGST, i.e. Rs.450, will go to the Central
Government in the form of CGST.

31. UNION TERRITORY GOODS AND
SERVICE TAX
The Union Territory Goods and Services Tax or UTGST is the counterpart of State Goods and Services
Tax (SGST) which is levied on the supply of goods and/or services in the Union Territories (UTs) of India.
The UTGST is applicable on the supply of goods and/or services in Andaman and Nicobar Islands,
Chandigarh, Daman Diu, Dadra and Nagar Haveli, and Lakshadweep. The UTGST is governed by the
UTGST Act. The revenue earned from UTGST is collected by the Union Territory government. The UTGST
is a replacement for the SGST in Union Territories. Thus, the UTGST will be levied in addition to the CGST
in Union Territories.

32. DIFFERENCE BETWEEN GST
Types of GST Authority which is
benefitted
Priority of Tax Credit
use
Who is it collected by? Transactions which are
applicable (Goods and
Services)
CGST Central Government CGST IGST Central Government Within a single state,
i.e. intrastate
SGST State Government SGST IGST State Government Within a single state,
i.e. intrastate
IGST Central Government
and State Government
IGST CGST SGST Central Government Between two different
states or a state and a
Union Territory, i.e.
interstate
UTGST/UGST Union Territory (UT)
Government
UTGST IGST Union Territory (UT)
Government
Within a single Union
Territory (UT)

33. WHY DOES INDIA NEED GST
1. GST is being introduced majorly due to 2 reasons:-
a) The current indirect tax structure is full of uncertainties due to multiple rates.
b) Due to multiple rates there are multiple forms.
2. GST the tax complexity in the prevailing tax regime.

34. DISPUTE SETLEMENT
AUTHORITY(DSA)
● Dispute between state and centre will be handled by the DSA.
● Appeal from DSA would be dealt with supreme court.
● Example, if a state receives less revenue in comparison with its previous on than
it can appeal this case to the DSA.

35. ADVANTAGES OF GST
● Transparent Tax System.
● Uniform Tax system Across India.
● Reduce Tax Evasion.
● Export will be more competitive.

36. DISADVANTAGES OF GST
● Increased costs due to software purchase.
● Being GST-compliant.
● GST will mean an increase in operational costs.
● GST came into effect in the middle of the financial year.
● GST is an online taxation system.
● SMEs will have a higher tax burden.

37. GST GLOBAL SCENARIO
● More than 140 countries have already introduced GST/National VAT.
● France was the first country to introduce GST system in 1954.
● Typically it is a single rate system but two/three rate systems are also prevalent.
● Canada and Brazil alone have a dual VAT.
● Standard GST rate in most countries ranges between 15-20%.

38. GST : PROPOSED KEY FEATURES
● Dual GST : central GST and state GST.
● Destination based state GST.
● Uniform classification.
● Uniform forms – returns, challans ( in electronic mode).
● No cascading of central and state taxes.
● Cross credit between centre and state not allowed.
● Tax levied from production to consumption.

39. GST : GLOBAL PROSPECTIVE
● It has been a part of the tax landscape in Europe for the past 50 years.
• It is fast becoming the preferred form of indirect tax in the Asia-pacific
region.
• While countries such as Singapore and new Zealand tax virtually
everything at a single rate, Indonesia has five positive rates, a zero rate.
and over 30 categories of exemptions.
• In china, GST applies only to goods and the provision of repairs,
replacement and processing services.

41. GST CAN WE ADOPT ?
An information network allowing GST Council to crosscheck.
payment information should be developed.
• What is needed is an IT system like the tax information.
network (tin), where the TDS or the vat credit is recorded.
in a central database.
• Paper bills and fraud to be largely eliminated.