A presentation on goods and service tax

1. By:- Siddhant Jain

2. WHAT IS GST?
System of indirect taxation under which the host of
indirect tax such as VAT, ST, central excise duty,
octroi, etc. shall be merged & there will be a single
levy for every service or goods with a single rate of
tax.

3. Reason for Adoption
GST is likely to improve tax collections and boost India's
economic development by breaking tax barriers
between States and integrating India through a uniform
tax rate.

4. Subsuming of Taxes
Centre GST
Central Excise Duty
Additional Excise
Duty
Special Additional
Duty
Countervailing
Duty
Service Tax

5. Subsuming of Taxes
State GST
Lottery Tax Entertainment Tax
Entry Tax
(other than for local body)
Luxury Tax
Value Added
Tax/ Sales Tax

6. Proposed Key Features
Dual GST : Central GST & State GST
Destination based State GST
Common Base
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

7. Proposed Key Features
One Common return for both Central and State GST
Uniform collection procedure for central and state GST
13 digit PAN based Common TIN registration
TINXSYS ( Tax Information Exchange System) to track
transactions
Balance of Fiscal Autonomy to Center and States and
need for Harmonization

8. GST Rate Structure
Two Rate Structure
lower rate for necessary
items and goods of basic
importance
Standard Rate for goods
in general
Note:
• Special Rates also available
•Exports are fully exempted with Zero rates.

9. CGST: Centre GST
Levied by the Centre through a separate statute on all
transactions of goods and services made for a
consideration.
Exceptions would be exempted goods and services,
goods kept out of GST and transactions below prescribed
threshold limits.
CGST would be levied across the value chain.
Rates for CGST would be prescribed appropriately
reflecting revenue considerations and acceptability.

10. SGST: State GST
Levied by the States through statute on all transactions of
goods and services made for a consideration.
Exceptions would be exempted goods and services, goods
kept out of GST and transactions below prescribed threshold
limits.
Basic features of law such as chargeability, taxable event,
measure, valuation, classification would be uniform across these
Statutes as far as practicable.
State GST would be paid to the accounts of the respective
State.

11. Inter State Transactions
Centre would levy IGST which would be CGST + SGST.
IGST would be levied on all inter-State transactions of taxable
goods and services with appropriate provision for consignment
or stock transfer of goods and services.
Inter-State dealer will pay IGST after adjusting available, IGST,
CGST and SGST on purchases.

12. Illustration for IGST

13. Illustration for IGST

14. Credit Utilization
CGST
• CGST credit can be utilized only against CGST liability
SGST
• SGST credit can be utilized only against SGST liability
IGST
• IGST consist of 2 components i.e. CGST & SGST –
Available CGST credit can be utilized against CGST
portion while SGST credit against SGST portion

15. Some Special Cases
Taxes on items containing alcohol and petroleum product are
kept out of GST. They will continue to be taxed as per existing
practices.
Tax on Tobacco products will be subject to GST. But
government can levy the extra Excise duty over and above GST.
Exports are fully exempted with Zero rates.
Imports will be treated as that manufactured in India.
PAN based identification number will be allowed to each
taxpayer to have integration of GST with Direct Tax.

16. Favorable Impact of GST
Seamless credit to trade and industry throughout supply chain will improve
competitiveness
Common Tax Base will eliminate tax cascading
CST phase-out will reduce supply chain cost
Economy in production scale & efficiency in distribution
Simplified structure to reduce transaction cost
Boost up of exports.

17. Major Challenges to GST
Rapid increase in assessee
Legislative challenge
Effective credit mechanism
IT Infrastructure

18. Why are some States against GST; will they
lose money?
•Some States have sought assurances that their existing revenues will
be protected. The central government has offered to compensate States
in case of a loss in revenues.
•Some States fear that if the uniform tax rate is lower than their existing
rates, it will hit their tax kitty. The government believes that dual GST
will lead to better revenue collection for States.
•However, backward and less-developed States could see a fall in tax
collections. GST could see better revenue collection for some States as
the consumption of goods and services will rise.

19. Implementation Scenario
Past Near Past Implementation
National GST Dual GST ????????????

20. Business Man: Sir do you really think that ‘negative list of services’ is a
milestone in the road towards GST ?
CA: Well…..I think it is not a milestone, it seems to be a Pavement to
the GST road.
Business Man: Not understood Sir ……!!
CA: I mean the negative list has a capacity to exist along with Centre-state
disconnects on the services to be covered there under which are
partially forming part of the GST disconnects.
Business Man: Sir………I still could not understand anything.
CA: OK….I will tell you in your language…….states asked for35
services to be included in the negative list….correct?
Business Man: Yes Sir.
CA: And Government kept only 17 services in the list and have not
included therein many services specified by the states. correct?
to be contd…….
GST- HUMOUR

21. GST- HUMOUR
Business Man: Yes Sir.
CA: Now Empowered Committee of states is saying that their demand
was not taken into consideration and negative list will lead to double
taxation and litigation….correct?
Business Man: Yes Sir.
CA: So the negative list of services when implemented will
Complement the Centre -States contended road to GST, and can fit in
as pavement along with that road whenever it comes into
existence….Understood??
Business Man: No Sir……..I mean. Yes Sir……I mean I will think over
it…and am sure that I will understand!!!