Research report on gst

A Short Research on Goods and Services Tax
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RESEARCH REPORT
ON
GOODS AND SERVICE TAX ( G.S.T.)
FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE AWARD OF
MASTER IN BUSSINESS ADMINISTRATION (M.B.A.)
UNDER THE SUPERVISION OF
Mr. Abid Rizvi
SUBMITTED BY
TARA KUMARI
M.B.A. (2016-17)
Enrolment No. 154417072786
CENTRAL INSTITUTE OF MANAGEMENT
AND TECHNOLOGY,
HARDOI – SITAPUR BYPASS, GHAILA ROAD,
LUCKNOW , U.P. 226021

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CERTIFICATE OF THE FACULTY
This is to certify that the work entitled A Research on GOODS AND SERVICE TAX (
G.S.T.) is a piece of research work done by Ms. Tara Kumari under my guidance and
supervision for the degree of M. B. A. from Centarl Institute Of Management And
Technology.
To the best knowledge and belief the report:
(i) Embodies the work of the candidate herself.
(ii) Has duly been completed.
(iii) Fulfills the requirement of the ordinance relating to the M.B.A. degree of the
University and
(iv) Up to the standard both in respect of contents and language for being referred to
the examiner.
Signature of the Faculty
Abid Rizvi
Date

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PREFACE
This Research Report has been prepared in partial fulfillment
of the requirement for the subject: the Research Report on the
topic ‘Goods And services Tax’ in M. B. A. 4th
Sem. in the
academic year 2016-2017.
The rationale behind preparing the project report is to study
What is G.S.T., Concept of G.S.T., Benefit of G.S.T., Importance of
G.S.T. , How it Will be work , Types of G. S.T., Effect of G.S.T. on
Trade Sector or Consumer .

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TABLE OF CONTENT Page no.
Concept of G.S.T.
Introduction , Meaning and Purpose of G.S.T. 6
Types of Catagories Under G.S.T. Rate 7
LESSON NO. 2 HIOSTORY OF G.S.T. - HISTORICAL BACKROUND OF G.S.T. 8
LESSON NO. 3 G.S.T.- DETAIL AND BENIFITS 9
APPLICABILITY & MECHANISM OF G.S.T. 11
G.S.T.-Supply Chain Example 11
Component of G.S.T. 11
Difference Between SGST abd IGST 13
Difference Between IGST abd CGST 14
Difference Between SGST abd CGST 15
G.S.T.IMPACT ACROSS SECTOR 16
Impact on Household Example 19
RULES AND RATES :- ACCORDING TO G.S.T. COUNSIL 20
G.S.T. RATE STRUCTURE 20
Benifits of G.S.T. Bill Implication 22
Challenges for Implimenting G.S.T. System 23
LESSON NO. 7 PROBLEM IN PRESENT STRUCTURE 24
KEY FEATURES OF G.S.T. 27
Tax Layers Under Proposed G.S.T. Model 28
COMPARATIVE ANALYSIS ( INTRA STATE TRADE ) 29
COMPARATIVE ANALYSIS ( INTER STATE TRADE ) 30
CURRENT SCENARIO- Tax Implication Against sales and Stock Transfer by M.N.C. 32
G.S.T. SCENARIO- Tax Implication Against sales and Stock Transfer by M.N.C. 34
G.S.T.RETURNS 36
Salient Feature of G.S.T. Returns 42
Types of G.S.T. Returns 43
E- Filling Of G.S.T. Returns 45
Differnce Between Present tax Structure and G.S.T. 48
G.S.T. IMPACT IN INDIA 51
Impact of G.S.T. On Indian economy 52
LESSON NO. 10
LESSON NO. 11
LESSON NO. 12
TABLE OF CONTENT
LESSON NO. 1
LESSON NO. 4
LESSON NO. 5
LESSON NO. 6
LESSON NO. 8
LESSON NO. 9

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A SHORT RESEARCH ON GOODS
AND SERVICES TAX
( G.S.T.)
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AND SERVICES TAX
( G.S.T.)
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AND SERVICES TAX
( G.S.T.)

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Concept of Goods And Services Tax
G.S.T.
What is GST (Goods & Services Tax) :
Introduction, Meaning and Purpose of GST
Introduction of GST
The reference of GST was first made in the Indian Budget in 2006-07 by the then Finance Minister
Mr. P. Chidambaram as a single centralized Indirect tax. The GST Constitution (One Hundred and
Twenty Second Amendment) Bill, 2014 was introduced on December 19, 2014 and passed on May 6,
2015 in the Lok Sabha and yet to be passed in the Rajya Sabha
The Bill seeks to amend the Constitution to introduce Goods and Services tax vide proposed new
article 246A. This article gives power to legislature of every state and Parliament to make laws with
respect to goods and services tax where the supplies of goods or of services take place. Recently,
Union Minister Mr. Arun Jaitley said that GST could be implemented as early as January 1, 2016
Note: The word “bill” may be interpreted as “the Constitution (122nd Amendment) Bill, 2014
Meaning and purpose of GST
Clause 366(12A) of the Constitution Bill defines GST as “goods and services tax” means any tax on
supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human
consumption. Further the clause 366(26A) of the Bill defines “Services” means anything other than
Goods. Thus it can be said that GST is a comprehensive tax levy on manufacture, sale and
consumption of goods and services at a national level. The proposed tax will be levied on all
transactions involving supply of goods and services, except those which are kept out of its purview.
The two important purposes of GST are

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Single Umbrella Tax Rate:
GST shall replace a number of indirect taxes being levied by Union and State Governments.
Removing Cascading Effect:
GST is intended to remove “Tax on Tax Effect” and provide for common national market for Goods
and Services.
Types of categories under GST rate
The GST tax is levied based on Revenue Neutral Rate (RNR). For the purpose of imposing GST tax in
India, the goods and services are categorised in to four.
These 4 categories of goods and services are as follows:
1. Exempted Categories under GST in India.
The GST and council and other GST authorities notifies list of exempted goods. Such goods are not
fallen under payment of GST tax. The authorities may modify or amend the list time to time by adding
deleting any item if required by notification to public.
2. Essential Goods and Services of GST in India
Essential category of goods and services are charged very lower GST rate. Essential goods and services
are the goods and services for necessary items and items under basic importance.
3. Standard Goods and Services for GST in India
A major share of GST tax payers falls under this category of Standard Goods and Services. A standard
rate of GST is charged against the goods and services under this category.
4. Special Goods and Services for GST tax levy
Under special category of goods and services, GST rates would be high. Precious metals including
luxury items of goods and services fall under special Goods and Services for GST rate implementation.
GST rates in India at a glance:
Exempted categories – 0
Commonly used Goods and Services – 5%
Standard Goods and Services fall under 1
st
slab – 12%
Standard Goods and Services fall under 2
nd
Slab – 18%
Special category of Goods and Services including luxury - 28%

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History of GST, Historical Background of GST
1. Amaresh Baghchi Report, 1994 suggests that the introduction of “ Value Added Tax (VAT) ‘ will
act as root for implementation of Goods and Services Tax in India
2. Ashim Dasgupta, 2000 empowered committee, which introduces VAT System in 2005,
which has replaced old age taxation system in India.
3. Vijay Kelkar Task Force 2004, it strongly recommended that the integration of indirect taxes into
the form of GST in India.
4. Announcement of GST to be implemented by 1
st
April, 2010 after successfully implementation
of VAT system in India and suggestion of various committees and task forces on GST, the Union
Government first time in Union Budget 2006-07 announced that the GST would be applicable from
1
st
April, 2010.
5. The government has formed various Joint Working Groups of state finance ministers to
study the impact of GST on the revenue of various States.
6. The empowered committees of State Finance Ministers after various meetings reached on
amicable formula for implementation of GST in India.
7. Task force of Finance Ministers has submitted their report in December, 2009 on structure of GST
in India.
8. Government of India has issued first discussion paper in November, 2009.
9. Constitution (115
th
Amendment) Bill introduced on 22
nd
March, 2011 and same was referred to
Parliamentary Standing Committee on Finance for discussion.
10. Finance Minister in his speech announced that the GST will be rolled out by April, 2011.
11. In August, 2013 Standing Committee on Finance tabled its Report on GST Bill
12. In December, 2014 revised Constitution Amendment Bill was tabled in Parliament
11. Constitution (122
nd
Amendment) Bill introduced in the Parliament in December, 2014; since
115
th
Amendment Bill has been lapsed due completion of parliamentary terms. The Government of
India has introduced Constitution (122
nd
Amendment) Bill on 19
th
December, 2014 the Lok Sabha
has passed the bill on 6
th
May, 2015 but Bill is pending in Rajya Sabha.
12. On June 14, 2016, the Ministry of Finance released draft Model law on GST in public domain
for views and suggestions.
12. GST Bill Passed in Rajya Sabha on 3rd August 2016 (03-08-2016) On August 03, 2016, the
Constitution (122nd Amendment) Bill, 2014 was passed by Rajya Sabha with certain
amendments.
1. The changes made by Rajya Sabha were unanimously passed by Lok Sabha.
2. After the passage of the Amendment Bill in the Rajya Sabha and the changes
subsequently ratified and passed by the Lok Sabha unanimously, the Bill was adopted by
a majority of State Legislatures wherein approval by at least 50% of the State Assemblies
was required.
3. The final step to the Constitution (122nd) Amendment Bill, 2014 becoming an Act was
taken when the Hon’ble President of India gave his final assent on September 8, 2016.
4. The Constitutional 101st Amendment Act came into force which empowers both the States
and Centre to levy this tax.
13. In 2017 – Four GST related Bills become Act following Presidents assent & passage in
Parliament:
0. Central GST Bill
1. Integrated GST Bill
2. Union Territory GST Bill
3. GST (Compensation to States) Bill
14. In 2017 – GST Council finalizing the GST Rules and GST Rates
15. When GST is Applicable – Modi Government Want to applicable GST Bill From 1st July 2017,
Due to Some Legal Problems GST Bill is not applicable before 1st July 2017.

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Problems In Present Indirect Tax Structure –
Complete Analysis
As soon as the GST rates were announced a huge wave of curiosity hit across industry and
trade bodies. Everyone is evaluating their position as a result of this change. So in, we
bring our analysis of these GST rates.
What is GST (Goods & Services Tax) :
Details & Benefits
The present structure of Indirect Taxes is very complex in India. There are so many
types of taxes that are levied by the Central and State Governments on Goods & Services.
We have to pay ‘Entertainment Tax’ for watching a movie. We have to pay Value Added
Tax (VAT) on purchasing goods & services. And there are Excise duties, Import Duties,
Luxury Tax, Central Sales Tax, Service Tax….
As of today some of these taxes are levied by the Central Government and some are
by the State governments.
What is GST?
It has been long pending issue to streamline all the different types of indirect taxes and
implement a “single taxation” system. This system is called as GST ( GST is the abbreviated
form of Goods & Services Tax). The main expectation from this system is to abolish all
indirect taxes and only GST would be levied. As the name suggests, the GST will be levied
both on Goods and Services.

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GST was first introduced during 2007-08 budget session. On 17th
December 2014, the
current Union Cabinet ministry approved the proposal for introduction GST Constitutional
Amendment Bill. On 19th
of December 2014, the bill was presented on GST in Loksabha.
The Bill will be tabled and taken up for discussion during the coming Budget session. The
current central government is very determined to implement GST Constitutional
Amendment Bill.
GST is a tax that we need to pay on supply of goods & services. Any person, who is
providing or supplying goods and services is liable to charge GST.
How is GST applied?
GST is a consumption based tax/levy. It is based on the “Destination principle.” GST is
applied on goods and services at the place where final/actual consumption happens.
GST is collected on value-added goods and services at each stage of sale or purchase in the
supply chain. GST paid on the procurement of goods and services can be set off against that
payable on the supply of goods or services.The manufacturer or wholesaler or retailer will
pay the applicable GST rate but will claim back through tax credit mechanism.But being
the last person in the supply chain, the end consumer has to bear this tax and so, in many
respects, GST is like a last-point retail tax. GST is going to be collected at point of Sale.
The GST is an indirect tax which means that the tax is passed on till the last stage wherein
it is the customer of the goods and services who bears the tax. This is the case even today for
all indirect taxes but the difference under the GST is that with streamlining of the multiple
taxes the final cost to the customer will come out to be lower on the elimination of double
charging in the system.

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Let us understand the above supply chain of GST with an example:
The current tax structure does not allow a business person to take tax credits. There are lot
of chances that double taxation takes place at every step of supply chain. This may set to
change with the implementation of GST.
Indian Government is opting for Dual System GST. This system will have two components
which will be known as
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 Central Goods and Service Tax (CGST) and
 State Goods and Service Tax (SGST).
The current taxes like Excise duties, service tax, custom duty etc will be merged under
CGST. The taxes like sales tax, entertainment tax, VAT and other state taxes will be
included in SGST.
So, how is GST Levied? GST will be levied on the place of consumption of Goods and
services. It can be levied on :
 Intra-state supply and consumption of goods & services
 Inter-state movement of goods
 Import of Goods & Services
COMPONENT OF G.S.T.
What is the applicable GST rate?

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The rate (percentage) of GST is not yet decided. As mentioned in the above table, there
might be CGST, SGST and Integrated GST rates. It is also widely believed that there will
be 2 or 3 rates based on the importance of goods. Like, the rates can be lower for essential
goods and could be high for precious/luxury items.
How to differentiate SGST and IGST
SGST and IGST are part of GST, Goods and Service
Tax.
SGST expands as State Goods and Service Tax and
IGST is the short form of Integrated Goods and
Service Tax.
Different indirect taxes like State Sales Tax, VAT, Luxury Tax, Entertainment
tax (unless it is levied by the local bodies), Taxes on lottery, betting and
gambling, Entry tax not in lieu of Octroi, State Cesses and Surcharges in so far
as they relate to supply of goods and services etc. are subsumed with SGST.
Under IGST, the taxe for movement of goods and services from one state to
another is collected.
The tax revenue collected under SGST is meant for State Government whereas
the tax revenue of IGST is shared between State government and Central
government as per the rate fixed by the authorities.
Difference between IGST&CGST

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CGST and IGST are part of GST, Goods
and Service Tax.
CGST expands as Central Goods and
Service Tax and IGST is the short form of
Integrated Goods and Service Tax.
Different indirect taxes of Central Excise
Duty, Central Sales Tax CST, Service Tax,
Additional excise duties, excise duty levied under the medical and toiletries
preparation Act, CVD (Additional Customs duty – Countervailing Duty),
SAD (Special Additional Duty of customs) surcharges and cesses are
merged with CGST. Under IGST, the taxes for movement of goods and
services from one state to another are collected.
Major share of tax revenue under CGST is meant for central government
where as IGST tax revenue is shared between State government and
Central government as per the rate fixed by the authorities.
How to differentiate SGST and CGST?
CGST & SGST are part of GST, Goods and
Service Tax.
CGST expands as Central Goods and Service
Tax and SGST is the short form of State
Goods and Service Tax.
Different indirect taxes of Central Excise
Duty, Central Sales Tax CST, Service Tax, Additional excise duties, excise
duty levied under the medical and toiletries preparation Act, CVD
(Additional Customs duty – Countervailing Duty), SAD (Special Additional
Duty of customs) surcharges and cesses are merged with CGST. Under

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SGST, the taxes like State Sales Tax, VAT, Luxury Tax, Entertainment tax
(unless it is levied by the local bodies), Taxes on lottery, betting and
gambling, Entry tax not in lieu of Octroi, State Cesses and Surcharges in so
far as they relate to supply of goods and services etc. are subsumed.
The major share of tax revenue under CGST is meant for central
government where as SGST tax revenue is for state government.
GST Rates on Services
 All services have been fitted into four different rates, which are 5%, 12%, the standard 18% and the
luxury rate of 28%
 Travelling on metro, local train, religious travel, Haj yatra will all be exempt from GST: revenue
secretary, Hasmukh Adhia.
 AC train travel to get cheaper under GST
 Transport services (Railways, air transport) will be under the 5% category because their main input
is petroleum, which is outside GST ambit.
 Service tax on non-AC hotels will 12%, on AC hotels that serve liquor will be 18%. Higher tax rate
for luxury hotels.
 Hotels and lodges with tariff below Rs 1,000 will be exempt. Those with Rs 2,500-5,000 will be
18%. Luxury hotels will face tax of 28%.
 28% tax slab on 5-star hotels, race club betting, cinema.
 18% tax slab for telecom, financial services
 Healthcare and education have been exempted from the service list. Most service structures
will remain as is, said sources. This implies services will become cheaper in some segments
 The council has deferred the decision on the tax rates for gold, and also on bidis and cigarettes, to
its next meeting, which is scheduled for June 3.
 Restaurants with an annual turnover of less than Rs 50 lakh will fall under the 5 percent tax slab,
while non-ACs food joints will be taxed at 12 percent. Air-conditioned restaurants with liquor
licences will be taxed at 18 percent.
 Cinema halls were currently paying a service tax of 15 percent plus a state entertainment tax that
ranged from 28 percent to about 100 percent. All these will be subsumed under the 28 percent GST
rate, bringing out the costs of service significantly, Jaitley said. Casinos will also come under the 28
percent tax bracket.
 Work contract services such as those paid by civil contractors for infrastructure construction
currently pay a central tax of 6 percent, state taxes ranging from one to five percent, but without any
input credit.
 E-commerce players to deduct tax at source before paying suppliers. E-retailers such as Flipkart
and Snapdeal to pay GST
 Mobile phones, fountain pen ink, tooth powder, incense sticks, feeding bottles, Braille paper,
children’s colouring books, umbrellas, pencil sharpeners, tractors, bicycles, contact lenses,
spectacle lenses, utensils, sports goods, fishing rods, combs, pencils and hand paintings have
been placed under the 12% tax rate under GST.
 Cheaper Services after GST – Radio taxi, Movies, Entertainment services , AC train travel, Air
travel, Restaurants, Dhabas

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GST impact across sectors: Take a look
at the winners and losers
1. GST will turn India into one common market, leading to greater ease of doing
business and big savings in logistics costs from companies across all sectors. Some
companies will gain more as the GST rate will be lower than the current tax rates
they pay, others will lose as the rate will be higher than the present effective rate.
While the rate of GST is yet to be decided, industry observers have assumed an 18%
rate recommended by a government panel in making their impact calculations. ET
looks at the likely impact across sectors.
TECH
Positive
GST will eliminate multiple levies. It will also allow deeper penetration of digital services.
Negetive
IT companies can have several delivery centres and offices working together to service a
single contract. With GST, companies might require each centre to generate a separate
invoice to every contracting party. Duty on manufactured goods is going to go up from
existing 14-15% to 18%, which means the cost of electronics from mobile phones to
laptops- will rise
FMCG
Positive
Companies could generate substantial savings in logistics and distribution costs as the need
for multiple sales depots will be eliminated. FMCG companies pay nearly 24-25% including
excise duty, VAT and entry tax. GST at 17-19% could yield significant reduction in taxes.
Warehouse rationalisation and reduction of overall tax rates, is expected to generate saving
which could cumulatively range between 200-300bps.
Key beneficiaries : Hindustan Unilever, Colgate, GSK, Asian Paints

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Negative
If the recommended 40% "sin/demerit" GST for aerated beverages and tobacco products is
levied, then prices may increase by over 20%. Food companies: many see increase in
effective tax as many companies enjoy concessional rate of excise.
ECOMMERCE
Positive
GST will help create a single unified market across India and allow free movement and
supply of goods in every part of the country. It will also eliminate the cascading effect of
taxes on customers which will bring efficiency in product costs.
Negative
The tax collection at source (TCS) guidelines in the GST regime will increase administration,
documentation workload for ecommerce firms and push up costs.
TELECOM
Positive
Handset prices likely to come down/even out across states. Manufacturers are also likely to
pass on to consumers cost benefits they will get from consolidating their warehouses and
efficiently managing inventory. For handset makers, GST will bring in ease of doing business
as they may no longer need to set up state specific entities and transfer stocks to them and
invest heavily into logistics of creating warehouses in each state across the country.
Negative
Call charges, data rates will go up if tax rate in the GST regime exceeds 15%. Tower firms
won't be able to set off their input duty liabilities if petro-products continue to stay outside
GST framework. Negative for Bharti Airtel, Idea and Reliance Comm.
AUTOMOBILES
Positive
On-road price of vehicles could drop by 8%, as per a report by Motilal Oswal Securities.
Lower prices can be construed as indirect stimulus to boost volumes. Key beneficiaries:
Maruti Suzuki, M&M; Eicher Motors' margins may expand.
Negative
Demand for commercial vehicles may be hit in the medium term. GST will subsume local
taxes, reduce time at check-posts, ease logistics hurdles. With fleet productivity increasing,
operators may not feel the need to expand mid-term.
MEDIA
Positive
DTH, film producers and multiplex players are levied service tax as well as entertainment
tax, GST will bring major change and uniformity in businesses. Taxes could go down by 2-
4%.
Multiplex chains will save on revenues as there will be a more uniform tax, unlike current
high rate of entertainment tax levied by different states. It may lower the average ticket price,
and increase the footfalls in multiplexes.
GST will be a big boon to film producers and studios that currently pay service tax on most
of their cost, but cannot charge input credit on creative services (payments to artists etc) as
they fall under the negative list. Under GST, they will be able to claim credit of these
services also, which will help is lowering the overall cost.

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Key beneficiaries : Dish TV, PVR.
INSURANCE
Negative
Insurance policies: life, health and motor will begin to cost more from April 2017 as taxes will
go up by up to 300 basis points.
AIRLINES
Negative
Flying to become expensive, as service tax will be replaced by GST. Service tax on fares
currently range between 6% and 9% (depending on the class of travel). With GST, the rate
will surpass 15%, if not 18%, effectively doubling the tax rate.
CEMENT
Positive
The effective rate of tax for cement companies is now 25%. If GST rates are fixed at 18-20%
then the overall tax incidence will be lower GST IS expected to lead to savings in
transportation cost, which currently comprises up to 20-25% of total revenue. One common
market will bring down the number of depots in the country. Ultratech states that its depots
will come down to 100 from 550 at present.
Key beneficiaries : Pan India players such as UltraTech, ACC, Ambuja and Shree Cement.
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INSURANCE
Negative
AIRLINES
Negative
CEMENT
Positive
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INSURANCE
Negative
AIRLINES
Negative
CEMENT
Positive

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: A four-tier GST tax slabs have been decided by the Finance ministry. Below are the details;
 Zero Tax rate : There won’t be any tax on almost 50 % of items in the Consumer Price
Index basket, including grains used by the common man.
 5% Tax slab : This is applicable on items of mass consumption used by common people.
 There would be two standard rates of 12% and 18% under the GST regime.
 All the items (especially luxury items) which are now taxed at around 30% will fall
under28% GST rate slab.
 An additional cess would also be levied on luxury cars, tobacco products & aerated drinks
besides the highest tax rate (28%).
 The tax rate proposal will now be placed in Parliament for its approval.

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We already know that the GST slabs are pegged at 5%, 12%, 18% & 28%. According to the
latest news from the GST council, the tax structure for common-use goods are as under:
GST Rates Structure
Tax Rates Products
5% Edible oil, sugar, spices, tea, coffee (except instant)
Coal (instead of current 11.69%)
Mishti/Mithai (Indian Sweets)
Life-saving drugs
12% Computers, Processed food
18% Hair oil, toothpaste and soaps (currently at 28%)
Capital goods and industrial intermediaries (big boost to local industries)
28% Small cars (+1% or 3% cess)
Consumer durables such as AC and fridge
Luxury & sin items like BMWs, cigarettes and aerated drinks (+15%
cess)
High-end motorcycles (+15% cess)
Beedis are NOT included here
In addition to the above, a few other items were mentioned in the Council’s
announcement of rates. These items, and the applicable rates on them are as
follows:
 Sugar, Tea, Coffee and Edible oil will fall under the 5 per cent slab, while cereals,
milk will be part of the exempt list under GST. This is to ensure that basic goods are
available at affordable prices. However, instant food has been kept outside this
bracket so, no relief for Maggie lovers!
 The Council has set the rate for capital goods and industrial intermediate items at 18
per cent. This will positively impact domestic manufacturers as seamless input credit
will be available for all capital goods. Indeed, it is time for “Make In India”.
 Coal to be taxed at 5 percent against current 11.69 per cent. This will prove
beneficial for the power sector and heavy industries which rely on coal supply. This
will also help curb inflation. Expect a good run for Coal India tomorrow.

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 Toothpaste, hair oil, and soaps will all be taxed at 18 percent, where currently they
are taxed at 28 percent. Most of the cosmetics and fast moving consumer goods
(FMCG) brands should get the benefit of this tax reduction. After all, Fair and Lovely
might seem fairer in its pricing from now on!
 The ‘mithai’ from the neighbouring sweet shop might lose some of its flavour as
Indian sweets will now be taxable at 5 per cent. If you have a sweet tooth, this could
hurt your pocket a wee bit in the coming days.
Plus, it was announced that:
 for restaurants serving alcohol, the tax bracket will be 18 per cent
 education, healthcare are going to be exempted from GST
 services on Non-AC restaurants will be 12 per cent
Recently GST Rate is Decided by Finance Ministry, Recently GST Council Decide 4 GST Rates Slabs
for India, Now GST Rates are finalised i.e GST Rates in India is 5%, 12%, 18% & 28%. Union and
state finance officials met for two days in New Delhi to resolve their differences over the rates as well
as the administration of the tax.
Benefits of GST Bill implementation
 The tax structure will be made lean and simple
 The entire Indian market will be a unified market which may translate into lower business
costs. It can facilitate seamless movement of goods across states and reduce the
transaction costs of businesses.
 It is good for export oriented businesses. Because it is not applied for goods/services
which are exported out of India.
 In the long run, the lower tax burden could translate into lower prices on goods for
consumers.
 The Suppliers, manufacturers, wholesalers and retailers are able to recover GST incurred
on input costs as tax credits. This reduces the cost of doing business, thus enabling fairer
prices for consumers.

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 It can bring more transparency and better compliance.
 Number of departments (tax departments) will reduce which in turn may lead to less
corruption
 More business entities will come under the tax system thus widening the tax base. This
may lead to better and more tax revenue collections.
 Companies which are under unorganized sector will come under tax regime.
Challenges for implementing Goods & Services Tax system
 The bill is yet to be tabled and passed in the Parliament
 To implement the bill (if cleared by the Parliament) there has to be lot changes at
administration level, Information Technology integration has to happen, sound IT
infrastructure is needed, the state governments has to be compensated for the loss of
revenues (if any) and many more..
 GST, being a consumption-based tax, states with higher consumption of goods and
services will have better revenues. So, the co-operation from state governments would be
one of the key factors for the successful implementation of GST
Since GST replaces many cascading taxes, the common man may benefit after implementing it.
But it all depends on ‘what rate the GST is going to be fixed at?’ Also, Small Traders (based on
Annual Business turnover) may be exempted from it.
France was the first country to introduce this system in 1954. Nearly 140 countries are following
this tax system. GST could be the next biggest tax reform in India. This reform could be a

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continuing process until it is fully evolved. We need to wait few more months for more details on
Goods & Services Tax system.
Latest update (06-Apr-2017) : Rajyasabha passes GST bill. Now, the state assemblies would
consider and pass their respective State GST (SGST) law.
Latest news on GST (30-Mar-2017) : GST Bill has been passed in Loksabha.
Latest update on GST Bill implementation date (28-Feb-2017) : All States now agree to roll out
GST by July 2017.
Problems In Present Indirect Tax Structure: Taxes Central Excise, Service Tax, VAT etc., is levied
by the Central and State Governments are multistage value added taxes. Before introduction of VAT
in Sales Tax and CENVAT in Central Excise and Service Tax, the tax system is very complex and has
cascading effect. The product or services are taxed on various stages or destinations. The tax levied
at one destination is also be taxed on another destination. In recent past there is much significant
progress in the taxation scenario, which not only improved the tax structure by using new and
improved technologies.
Many changes held on taxation front such as single point sale has been replaced by Value Added
Tax, service tax has been introduced by the Central Government. In Central Excise government has
introduced CEVAT by allowing set off taxes paid on inputs, while producing output products. The
introduction of VAT System in India is a progressive step towards implementation of Goods and
Services Tax in India. There are some deficiencies in the Current System of Taxation. now check
more details for “Problems In Present Indirect Tax Structure” from below…

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Problems In Present Indirect Tax Structure
1. The CENVAT (Excise Duty) is levied on the products manufacturer or produced in India. But there
are various definitions related to manufacture and various ruling given by the courts. There are also
various disputes regarding valuation of products. The issue related to the applicability of CENVAT
(Excise Duty) only at manufacturing level, which is an impediment to an efficient and neutral flow o
tax credit. Various countries have replaced VAT system by implementing GST.
2. The Constitution of India has bifurcated the power of taxation between Central Government
and the State Government. The State Government has power to levied taxes on all matters or
items falling under State List. Now in case of Service Tax the Central Government has power
to levy tax on Services but in case of Work Contracts the State Government also has power
to levy tax. This type of system creates difficulties and disputes in revenue generation and
distribution.
3. The distinctions between goods and services are getting closer due to improvement in technology
and innovation. The copyrights, patents, software etc., are not considered as goods and falling
under domain of State Government. So the goods are getting colours of services and their
classification becomes more complicated by the tax authorities. Let us consider an example in case
of Leasing of Equipments, without transfer of machinery and control to the lessee, would this be
taxable as Service or Sale. There are various cases, where disputes raised in present taxation
scenario.

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4. The Service Sector is growing rapidly and Central has exclusive power to levy tax on services. The
State Government is losing its revenue by not levying tax of services under the State.
5. There is some shortcoming in CENVAT system of Government of India is because of non-inclusion
of several central taxes in the overall framework of CENVAT. Many taxes such as Additional
Customs Duty, Surcharge etc., are not included in CENVAT System. There are various services
such as Oil, Gas Production, Mining, Agriculture, Wholesale and Retail Trade, Real Estate
Construction has been kept out of range of CENVAT Credit. These taxes are included in the output
services and products are producing cascading effects. In VAT system also various taxes such as
Entry tax, Octroi, Luxury Tax, Entertainment tax are kept outside of VAT Scheme.
6. In case of CST on Inter State Sales, no set off is allowed, which also increase cascading effect.
7. The Central and State Government are using new and modern technologies to administer the
taxes, but more improvement required. The present system, the dispute resolution system is
complex and more time and money consuming. These difficulties should be addressed.
8. There are various tax forms and returns are required to be filed related to various duties under
various taxation laws and rules. These returns are complex and lengthy, and these should be
simplified.
9. There is lack of cross verification of returns filed under various State as well as Central Taxation
Rules and there are different in detailed filed by the assessed by paying Central and State taxes
simultaneously.
10. At present there are more than fifteen taxes under Indirect Tax System. All these taxes are of
different rates and required to be filed through different forms and returns.
11. The State Government are levying Entry Tax and Octroi and compliance to it are time consuming.
The transporters are required to wait more than four hours on border of a state, while entering in
other state.
12. The tax structure in India is complex and burden sum. There are various definitions of the same
transaction in different States as well as Central Laws. These should be addressed.

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Key Features of GST, Benefits of GST or Main
Features of GST
The following are the key features of the proposed GST model:-
1. Dual Goods and Service Tax : CGST and SGST
2. Inter-State Transactions and the IGST Mechanism:The Centre would levy and collect the
Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. The
IGST mechanism has been designed to ensure seamless flow of input tax credit from one State to
another. The inter-State seller would pay IGST on the sale of his goods to the Central Government
after adjusting credit of IGST, CGST and SGST on his purchases (in that order). The exporting
State will transfer to the Centre the credit of SGST used in payment of IGST. The importing dealer
will claim credit of IGST while discharging his output tax liability (both CGST and SGST) in his own
State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST.
3. Destination-Based Consumption Tax:GST will be a destination-based tax. This implies that all
SGST collected will ordinarily accrue to the State where the consumer of the goods or services sold
resides.
4. 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.
5. Payment of GST: The CGST and SGST are to be paid to the accounts of the central and states
respectively.
6. Goods and Services Tax Network (GSTN):A not-for-profit, Non-Government Company called
Goods and Services Tax Network (GSTN), jointly set up by the Central and State Governments will
provide shared IT infrastructure and services to the Central and State Governments, tax payers and
other stakeholders.
7. INPUT TAX CREDIT (ITC) SET OFF : ITC for CGST & SGST will be taken for taxes allowed
against central and state respectively.
8. GST on Imports : Centre will levy IGST on inter-State supply of goods and services.Import of
goods will be subject to basic customs duty and IGST.
9. Maintenance of Records : A taxpayer or exporter would have to maintain separate details in
books of account for availment, utilization or refund of Input Tax Credit of CGST, SGST and IGST.
10. Administration of GST : Administration of GST will be the responsibility of the GST Council ,
which will be the apex policy making body of the GST. Members of GST Council comprised of the
Central and State ministers in charge of the finance portfolio.
11. Goods and Service Tax Council: The GST Council will be a joint forum of the Centre and the
States. The Council will make recommendations to the Union and the States on important issues

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like tax rates, exemption list, threshold limits, etc. One-half of the total number of Members of the
Council will constitute the quorum of GST council.
Benefits of GST :-
To Traders:-
 Reduction in multiplicity of taxes
 Mitigation of cascading /double taxation.
 More neutralization of taxes especially for exports.
 Development of common national market.
 Simpler tax regime.
To Government :-
 Simpler Tax System
 Broadening of Tax base
 Improved compliance & revenue collections
 Efficient use of resources.
 Automation of compliance procedures to reduce errors and increase efficiency.
Tax layers under proposed GST Model with
Examples
Raju Choudhary January 25, 2017
Tax layers under proposed GST Model with Examples, Tax Structure of New GST Model, It is a Dual-
GST structure proposal wherein the Central Government and State Government will simultaneously
charge GST on the same economic supply. Recently we provide complete details for GST Current
Tax Structure and proposed GST Regime.
Tax layers under proposed GST Model
Inter-state transactions or supplies to be charged an Integrated GST (IGST) which is a combination of
Central-GST (CGST) and State-GST (SGST) rates
Unique input tax credit mechanism; as illustrated below:
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Benefits of GST :-
To Traders:-
To Government :-
Examples
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Benefits of GST :-
To Traders:-
To Government :-
Examples

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Comparative Analysis (Intra-State Trade)
(Assumed Rates for Excise Duty, CGST & SGST @12%, VAT @12.5%)
Transaction
Current
Scenario (Rs.)
GST Scenario (Rs.)
Cost of Raw Materials to Input Manufacturer 100 100
Profit Margin @ 25% 25 25
Assessable Value 125 125
Add: Excise Duty @12% | CGST @ 12% 15 15
Add: VAT@12.5% | SGST@12% 18 15
Invoice Value (Input Manufacturer to
Output Manufacturer)
158 155
Cost of Goods to Output Manufacturer (Net
of ITC)
100 100
Add: Value Addition @ 40% on Cost (incl. of
Profit Margin)
40 40
Assessable Value (Manufacturer to
Wholesaler)
140 140
Add: Excise Duty @12% | CGST @ 12% 16.80 16.80
Add: VAT@12.5% | SGST@12% 19.60 16.80
Invoice Value (Manufacturer to Wholesaler) 176.40 173.60
Cost of Goods to Wholesaler (Net of ITC) 156.80 140.00

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Add: Profit Margin of Wholesaler @10% 15.68 14.00
Add: VAT@12.5% | SGST@12% 21.56 18.48
Invoice Value (Wholesaler to Retailer) 194.04 190.96
Cost of Goods to Retailer (Net of ITC) 172.48 154.00
Add: Profit Margin of Retailer @10% 17.25 15.40
Add: VAT@12.5% | SGST@12% 23.72 20.33
Final Price to be paid by Consumer 213.44 210.06
Cost Saving to Consumer 3.39
Comparative Analysis (Inter-State Trade)
(Assumed Rates for Excise Duty, CGST & SGST @12%, CST @ 2% each)
Transaction
Current
Scenario (Rs)
GST Scenario(Rs)
Cost of Raw Materials to Input Manufacturer 90 90
Profit Margin Rs.10 10 10
Assessable Value 100 100
Add: Excise Duty @12% I CGST @ 12% 12 12

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Add: Vat 12.5% I SGST@12% 14 12
Invoice Value (Input to Output Manufacturer) 126.00 124
Cost of Goods to Output Manufacturer (Net of
ITC)
100 100
Add: Value Addition @ 40% on Cost (incl. of
Profit Margin)
40 40
Assessable Value (Manufacturer to Wholesaler) 140 140
Add: Excise Duty @12% I CGST @ 12% 16.80 0
Add: CST@2% I IGST@24% 3.14 33.60
Add: Additional Tax @1% 0 1.40
Invoice Value (Manufacturer to Wholesaler) 159.94 175.00
Cost of Goods to Wholesaler (Net of Input
Credit)
159.94 141.4
Add: Excise Duty @12% I CGST @ 12% 0 18.66
Add: VAT@12.5% I SGST@12% 21.99 18.66
Invoice Value (Wholesaler to Retailer) 181.93 178.73
Cost of Goods to Retailer (Net of Input Credit) 175.93 155.54

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Add: Excise Duty @12% I CGST @ 12% 0 20.53
Add: VAT@12.5% I SGST@12% 24.19 20.53
Final Price to be paid by Consumer 217.71 212.16
Cost Saving to Consumer 5.56
Current Scenario – Tax Implications against Sales and Stock Transfers by an MNC
(Assumed Rates for Excise Duty @12%, VAT@12.5%, CST @ 2% each)
Particulars Basis Amt. (in Rs.)
Purchase of Raw & Packing Materials 20000 Kgs. @
Rs.50
1000000
18000 Kgs. (Intra-state) A 900000
2000 Kgs. (Inter-State) B 100000
Input Credit of Excise on Intra-State Purchase @
12%
C=A x 12% 108000
Input Credit of VAT on Intra-State Purchase @
12.5%
D=A x 12.5% 126000
Input Credit of Excise on Interstate Purchase @
12%
E=B x 12% 12000
Input Credit of CST on Inter-state Purchase 2% F=B x 12% 2240

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FG sold within State-A (200 Kgs. @ Rs.75 ) G 15000
Excise Duty Payable @ 12% H=G x 12% 1800
VAT Payable @ 12.5% I =G x 12.5% 2100
FG Stock Transfer to State -B (17000 Kgs. @ Rs.65
(TDR))
J 1105000
Excise Duty Payable @ 12% K=J x 12% 132600
VAT Payable @ 12.5% on Local Sales by Depot L=J x 12.5% 159375
Reversal of ITC of VAT (ITC x 3/12.5) M= D x 3/12.5 30240
FG Inter-State Sales to State -C (2800 Kgs. @ Rs.75 ) N 210000
Excise Duty Payable @ 12% O=N x 12% 25200
CST @ 2% P=N x 2% 4704
Net Excise Duty Payable after Cenvat Credit Q=(H+K+O-C) 39600
Net VAT Payable after Vat Input Credit R=(I+L+M-D) 65715

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Net CST Payable after CST Input Credit S=(P-F) 2464
Net Liability of Duties & Taxes T=(Q+R+S) 107779
GST Scenario – Tax Implications against Sales and Stock Transfers by an MNC
(Assumed Rates for SGST & CGST @12%, IGST @ 24%, Add. Tax @ 1%)
Particulars Basis Amt. (in Rs.)
Purchase of Raw & Packing Materials 20000 Kgs. @
Rs.50
1000000
18000 Kgs. (Intra-state) A 900000
2000 Kgs. (Inter-State) B 100000
Input Credit of CGST on Intra-State Purchase @
12%
C = A x 12% 108000
Input Credit of SGST on Intra-State Purchase @
12%
D=A x 12% 108000
Input Credit of IGST on Inter-State Purchase@ 24% E = B x 24% 24000
Additional Tax @1% on Inter-State Purchase F = B x 1% 1000
Total Credit of GST Available to Unit-A G = (C+D+E) 240000
FG sold within State-A (200 Kgs. @ Rs.75 ) H 15000
CGST Payable @ 12% I=(H x 12%) 1800

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SGST Payable @ 12% J=(H x 12%) 1800
FG Stock Transfer to State -B (17000 Kgs. @ Rs.65
(TDR))
K 1105000
IGST Payable @ 24% L =K x 24% 265200
Additional Tax@1% M= K x 1% 11050
FG Inter-State Sales to State -C (2800 Kgs. @ Rs.75 ) N 210000
IGST Payable @ 24% O=N x 24% 50400
Additional Tax@1% P=N x 1% 2100
Balance of CGST Input Credit to be adjusted
against IGST Payable
Q= C – I 106200
Balance of SGST Input Credit to be adjusted
against IGST Payable
R= D – J 106200
Net IGST Payable against Stock transfers and
Interstate Trade
S=(I+J+L+O-G) 79200
Non-Vatable Add. Tax to be retained by respective
State Governments
T 14150
Total of Duties and Taxes Payable U=S+T 93350
Savings in Net Tax Payable (1,07,779-93,350) 14,429

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GST Returns :-
GST Monthly Returns
Based on the category of registered person such as monthly return is to be filed by Regular, Foreign
Non Residents, ISD and Casual Tax Payers whereas Compounding/Composite tax payers has to file
quarterly returns:
GST Returns Others
1. Every registered person who is required to get his accounts audited shall furnish, electronically, the
annual return (FORM GSTR- 9) along with a copy of the audited annual accounts and a reconciliation
statement, reconciling the value of supplies declared in the return furnished for the financial year with
the audited annual financial statement.
2. Registered person who is required to furnish a return as above and whose registration has been
cancelled shall furnish a FINAL RETURN within three months of the date of cancellation or date of
order of cancellation, whichever is later, in FORM GSTR-10.
3. Every person, who has been issued a UIN(Unique Identity Number) and claims refund of the taxes
paid on his inward supplies, shall furnish the details of such supplies of taxable goods or services or
both in FORM GSTR-11 along with application for such refund claim.

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How to File Your GST Returns
Every registered taxable person has to furnish outward supply details in Form GSTR-
1 (GST Returns-1) by the 10th
of the subsequent month. On the 11th
, the visibility of inward
supplies is made available to the recipient in the auto-populated GSTR-2A. The period from
11th
to 15th
will allow for any corrections (additions, modifications and deletion) in Form
GSTR-2A and submission in Form GSTR-2 by 15th
of the subsequent month.The
corrections (addition, modification and deletion) by the recipient in Form GSTR-2 will be
made available to supplier in Form GSTR-1A. The supplier has to accept or reject the
adjustments made by the recipient. The Form GSTR-1 will be amended according to the
extent of correction accepted by supplier.
On 20th
, the auto-populated return GSTR-3 will be available for submission along with the
payment. After the due date of filing the monthly return Form GSTR-3, the inward supplies
will be matched with the outward supplies furnished by supplier, and then the final
acceptance of input tax credit will be communicated in Form GST ITC-1.

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Also, the mismatch input tax credit on account of excess claims or duplication claims will
be communicated in Form GST ITC-1. Discrepancies not ratified will be added as output
tax liability along with interest. However, within the prescribed time, if it is ratified, the
recipient will be eligible to reduce this output tax liability.
Let us understand GST return filing process with an example.

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Returns Under GST, Returns Under Goods and
Service Tax
Who needs to file Return in GST regime ?
 Every registered dealer is required to file return for the prescribed tax period. A Return needs to
be filed even if there is no business activity (i.e. Nil Return) during the said tax period of return;
 Government entities / PSUs , etc. not dealing in GST supplies or persons exclusively dealing in
exempted / Nil rated / non –GST goods or services would neither be required to obtain registration
nor required to file returns under the GST law.
 However, State tax authorities may assign Departmental ID to such government departments /
PSUs / other persons and will ask the suppliers to quote this ID in the supply invoices for all inter-
State purchases being made to them.
What is GST return?
Every person registered under GST Act has to periodically furnish the details of sales, purchases
and tax paid and collected theron by filing return with GST Authorities. Before filing any return
payment of tax due is pre requisite otherwise such return will be invalid.
Steps for filing GST return:

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GST return can be filed in different forms depending upon the nature of transaction.Return Forms
that are applicable for Normal Tax payers and their due dates
☞Monthly Details of inward supplies in FORM GSTR-1 by the 10th of next month.
☞Monthly Details of outward supplies in FORM GSTR-2 by the 15th of next month..
☞ Monthly Filing of Return in FORM GSTR-3 by the 20th of next month.
☞ Annual Filing of Return in FORM GSTR-8 by 31st December of next financial year.
GST return filing process
Types of returns under GST
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There are multiple return under the GST regime. The most common used return will be GSTR 1, 2 ,3,
4 & 9. GSTR 1, GSTR 2 & GSTR 3 will be submitted by all businesses on a monthly basis. GSTR 4 is
submitted on a quarterly basis and GSTR 9 on an annual basis.
Salient Features of GST Returns
 Filing of returns would only be through online mode. Facility of offline generation and preparation
of returns will also be available. The returns prepared in the offline mode will have to be uploaded.
 There will be a common e-return for CGST, SGST, IGST and Additional Tax.
 A registered Tax Payer shall file GST Return at GST Common Portal either by himself or through
his authorised representative;
 There would be no revision of Returns. Changes to be done in subsequent Returns

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Types of GST Returns
Eight different types of Returns are prescribed viz. GSTR 1 to GSTR 11; Types of taxpayers for every
return and the periodicity of return for different categories of taxpayers is as follows..
Return For Due Date
GSTR
1
Outward supplies made by taxpayer (other than
compounding taxpayer and ISD)
10th of the next
month
GSTR-
1A
Details of outward supplies as added, corrected or deleted
by the recipient
GSTR
2
Inward supplies received by a taxpayer (other than a
compounding taxpayer and ISD)
15th of the next
month
GSTR-
2A
Details of inward supplies made available to the recipient on
the basis of FORM GSTR-1 furnished by the supplier
GSTR
3
Monthly return (other than compounding taxpayer and ISD)
20th of the next
month
GSTR-
3A
Notice to a registered taxable person who fails to furnish
return under section 27 and section 31
GSTR
4
Quarterly return for Compounding Taxpayer
18th of the month
next to quarter
GSTR-
4A
Details of inward supplies made available to the recipient
registered under composition scheme on the basis of FORM
GSTR-1 furnished by the supplier
GSTR
5
Periodic return by Non-Resident Foreign Taxpayer
Last day of
registration
GSTR
6
Return for Input Service Distributor (ISD)
15th of the next
month
GSTR- Details of inward supplies made available to the ISD

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6A recipient on the basis of FORM GSTR-1 furnished by the
supplier
GSTR
7
Return for Tax Deducted at Source
10th of the next
month
GSTR-
7A
TDS Certificate
GSTR
8
Statement for E-Commerce Operators —-
GSTR
9
GST Annual Return
By 31st
December of next
FY
GSTR
9A
Simplified Annual return by Compounding taxable persons
registered under section 8
GSTR
10
GST Final Return
GSTR
11
GST Inward Supplies Statement for UIN
TRP-1 Application for enrolment as Tax return preparer
TRP-2 Enrolment certificate as Tax return preparer
TRP-3 Show cause to as Tax return preparer
TRP-4 Order of cancelling enrolment as Tax return preparer
TRP-5 List of Tax return preparers
TRP-6 Consent of taxable person to Tax return preparer

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ITC-1A GST ITC Mismatch Report
GST Return Process, E-Filing of GST Returns
 How to File GSTR 1, GST Return Filing Process at GST Portal
 How to File GSTR 2, GST Return Filing Process at GST Portal
 How to File GSTR 3, GST Monthly Return Filing Process at GST Portal
Normal/ Regular Tax Payers
 Normal / Regular taxpayers (including casual taxpayers) would have to file
 GSTR-1 (details of outward supplies)
 GSTR-2 (details of inward supplies) and
 GSTR-3 (monthly Return) for each registration.
 GSTR-9 (Annual return)
Normal / Regular taxpayers with multiple registrations (for business verticals) within a State
would have to file GSTR-1, GSTR-2, GSTR-3 and GSTR-9 (Annual return) for each of the
registrations separately.
A separate reconciliation statement, duly certified by a Chartered Accountant, will have to be
filed by those taxpayers who are required to get their accounts audited under section 44AB of
Income Tax Act 1961
GST Annual Return
(1) Every registered person, other than an Input Service Distributor, a person paying tax under section
51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual
return as specified under sub-section (1) of section 44 electronically in FORM GSTR-9 through the
Common Portal either directly or through a Facilitation Centre notified by the Commissioner:
Provided that a person paying tax under section 10 shall furnish the annual return in FORM GSTR-
9A.
(2) Every registered person whose aggregate turnover during a financial year exceeds one crore
rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall
furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM
GSTR-9B, electronically through the Common Portal either directly or through a Facilitation Centre
notified by the Commissioner.
GST Final Return
Every registered person required to furnish a final return under section 45, shall furnish such return
electronically in FORM GSTR-10 through the Common Portal either directly or through a Facilitation
Centre notified by the Commissioner.
Compounding Tax Payers
Compounding taxpayers would have to file a quarterly return called GSTR-4. Taxpayers otherwise
eligible for the compounding scheme can opt against the compounding and file monthly returns and
thereby make their supplies eligible for ITC in hands of the purchasers. Compounding taxpayer will
also file a simple Annual return (GSTR-9)
Casual/ Non – Resident Taxpayers

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 Casual/ Non – Resident Taxpayers (other than foreigners) would have to file GSTR-1, GSTR-2 and
GSTR-3 returns for the period for which they have obtained registration. The registration of
Casual/Non –Resident taxpayers will be done in the same manner as that of Normal / Regular
taxpayers.
 Non- Resident Taxpayers (foreigners) would be required to file GSTR-5 return for the period for
which they have obtained registration within a period of seven days after the date of expiry of
registration. In case registration period is for more than one month, monthly return(s) would be filed
and thereafter return for remaining period would be filed within a period of seven days as stated
earlier. For these taxpayers the registration format to be used will be the same as that for UN
Bodies/Embassies
Difference Between Present Tax Structure &
GST, GST VAT Difference
Present Regime vs. GST Regime. GST vs VAT
Issues Present Regime GST Regime
Broad scheme
There are separate laws for
separate levy. For e.g.
Central Excise Act, 1944,
respective State VAT laws.
There will be only one such law
because GST shall subsume various
taxes as specified above.
Tax rates
There are separate rates.
For e.g. Excise 12.36 %
and Service Tax 14%.
There will be one CGST rate and a
uniform rate of SGST across all states.
Cascading effect
This Problem arises
because credit of CST and
This situation will not arise as CST
concept is being eliminated with

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many other taxes not
allowed.
introduction of IGST.
Tax burden
Under present scenario, tax
burden on tax payer is high.
Under this, tax burden is expected to
reduce since all taxes are integrated
which make it possible the burden to
be split equitably between
manufacturing and services
Cost Burden on
Consumers
Due to presence of
cascading effect, certain
taxes become part of cost.
As GST mechanism removes such
effect by providing credit, cost burden
is reduced.
Concurrent
Power
At present, there is no such
power to both Centre and
State on same subject tax
matter
Both Centre and State are vested with
the power to make law on GST by
virtue of proposed Article 246A of the
Constitution
Compliance
Tax compliance is complex
because of multiplicity of
laws and their provisions to
be followed.
Tax compliance would be easier as
only one law subsuming other taxes
need to be followed
Transparent Tax
Administration
Presently, tax is levied at
two stages in broad manner
i.e. 1. When product moves
out of factory. 2. At retail
outlet.
GST is to be levied only at final
destination of consumption and not at
various points. This brings more
transparency and corruption free tax
administration.
Tax Structure of GST, Goods and Service Tax Taxation
Structure
 CGST – Central Goods and Service Tax
 SGST – State Goods and Service Tax
 IGST – Integrated Goods and Service Tax/ (CGST+SGST)
Additional Tax (upto 1%) to be levied in case of inter-state supply of goods, which is a non-vatable
item. Hence, no input credit available on such.
Frequently Asked Questions
1. Who has to file GST Return?
Every entity registered under GST will have to file a GST Return. A nil return has to be filed even if no
purchase sales activity has been carried out during the return period.
2. What is the periodicity of filing return?

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Depending upon the type of registration and trasactions different periods have been
specified.Monthly Return has to be filed by Regular, Foreign Non Residents, ISD and Casual Tax
Payers whereas compounding tax payers have to file quaterly returns
3. What if i do not file the return on time?
If the return is not filed within the due date then the tax payer is penalized with late fee of
Rs 100 per day upto a maximum of Rs. 5000/-
4. Do different return forms have to be filed for CGST, SGST, IGST?
No, the return forms are common for CGST, SGST, IGST
5. What is GSTR-1 return?
GSTR-1 return will include details of the outward supplies or sales by the tax payer. This
return form would capture the following information:
• Basic details like business name along with GSTIN, period for which the return is being
filed etc.
• Details of invoices issued in the previous month and the corresponding taxes paid.
• Details of advances received against a supply which has to be made in future.
• Details of revision in relation to outward sales invoices pertaining to previous tax periods.
GSTR-2 return will include details of the purchases by the tax payer. GSTR-2 is prefilled for
a taxpayer based on the GSTR-1 filed by his supplier. You just have to validate this
prefilled information and make modifications if required. For example, if you are buying good
from company B, then company would have filed its GSTR-1 and included your name as
the buyer. Now the same information will be reflected in your GSTR-2 as purchases which
you need to validate. GSTR-2 will include the following details:
• The details of purchases auto-populated by the department
• Invoices on which partial credit has been availed earlier has to be submitted in a
separate table.
One can say that GSTR 3 is a combined version of GSTR 1 and GSTR 2. As in case of
GSTR-2, GSTR-3 is also prefilled for a taxpayer based on the GSTR-1 and and GSTR-3.

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You just have to validate this prefilled information and make modifications if required.
GSTR-3 return will include the following details:
• Information about ITC ledger, cash ledger and liability ledger
• Details of payment of tax under various tax heads of CGST, SGST, IGST
• Taxpayer will have the option of claiming refund of excess payment
8. What is GST quarterly Return (GSTR-4)?
Small taxpayer has the option to opt for the composition scheme. In such a case he would
be required to pay taxes at fixed rate. Although no input tax credit facility would be
available. A taxpayer opting for the composition scheme would be required to file a
simplified quarterly return that is GSTR-4. He is required to provide only the following
details:
• The total value of supply made during the period of return
• Details of payment of tax in the return
• Declare invoice-level purchase information.
9. What is GST Annual Return (GSTR-8)?
All the normal taxpayers would be required to submit annual return under GST. This is
intended to provide complete visibility about the activities of the taxpayer.
• It will be a detailed return and will capture details of all the income and expenditure of
the taxpayer and will regroup them in accordance with the monthly returns.
• A major advantage of this return will be that it will provide the opportunity to correct for
any short reporting of activities undertaken supply wise.
• Due date for the return is 31 December following the end of the financial year for which
it is filed. And the same has to be filed along with the audited copies of the Annual
Accounts.
10. Can i pay the taxes due after filing the return?
No taxes due have to be paid before filing the return for that period otherwise the return
will be invalid.
11. Can return be revised?
Yes the return can be revised.

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Taxes to be subsumed under GST Structure:
Post implementation, the following Central and State indirect taxes would be subsumed in GST and
existing indirect taxes takes the form of CGST, SGST and IGST as per above proposed model.
Central taxes to be subsumed in GST
 Central Excise Duty
 Additional Excise Duties,
 Excise Duty levied under the Medicinal and Toilet Preparations (Excise Duties) Act 1955
 Service Tax,
 Additional Customs Duty (Countervailing Duty)
 Special Additional Duty of Customs – 4% (SAD),
 Central Surcharges and Cesses in the nature of taxes on goods/services like cess on rubber, tea,
coffee, national calamity contingent duty etc
State taxes to be subsumed in GST
 State VAT/Sales Tax,
 Entertainment tax (unless it is levied by the local bodies),
 Luxury Tax,
 Taxes on lottery, Betting and gambling.
 Tax on advertisements,
 State Cesses and Surcharges in the nature of taxes on goods/ services
 Octroi and Entry Tax
 Purchase tax
Some of the taxes that would be continued under GST regime are Basic customs duty, property tax,
stamp duty, vehicle tax etc.
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 Service Tax,
 Luxury Tax,
 Purchase tax
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 Service Tax,
 Luxury Tax,
 Purchase tax

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Alcoholic liquor for human consumption is exempted from the purview of GST and tobacco products
would be subject to separate excise duty in addition to GST. Further, the petroleum products would
be continued to be taxed as per the existing laws and would be transitioned into GST regime from a
future date to be notified by the GST Council.
GST Impact in India, Impact of GST on Various
Sectors 2017 (Detailed)
GST Impact in India, Impact of GST: GST Bill has been passed in the Lok Sabha on March 29,
2017 and Rajya Sabha on April 13, 2017, it seems certain that it will meet its July 1, 2017 deadline
for implementation. The GST is being touted as the game changer it would replace several taxes,
cesses, and surcharges at one go. The Various Sectors expecting to benefit from the GST rollout, in a
major way. Incidentally,
With the passage of India’s biggest tax reform in decades, we will become a unified market, with one
tax for all goods and Services. Once GST implemented will significantly ease the ambiguity
Investment and stimulate overall growth of the economy.
Experts believe that in the present tax system, there are a lot of different taxes that one has to pay,
like VAT, Excise duty, Service tax, or the local body taxes. GST will subsume all these taxes into it.
Instead of paying various taxes, at various states and cities like we have to pay ‘Entertainment Tax’
for watching a movie. We have to pay Value Added Tax (VAT) on purchasing goods & services and
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there are Excise duties, Import Duties, Luxury Tax, Central Sales Tax, and Service Tax of today some
of these taxes are levied by the Central Government and some are by the State governments after
implementation of GST we would only one tax that is GST.
Impact of GST on Indian Economy, GST Impact in
India
GST Impact on India
(a) Increased FDI: The flow of Foreign Direct Investments may increase once GST is implemented as
the present complicated/ multiple tax laws are one of the reasons foreign Companies are wary of
coming to India in addition to widespread corruption.
(b) Growth in overall revenue: It is estimated that India could get revenue of $15 billion per annum by
implementing the Goods and Services Tax as it would promote exports, raise employment and boost
growth. Over a period, the dilution of the principles may see that only part of this is accruing.
(c) Single point taxation: Uniformity in tax laws will lead to single point taxation for supply of goods or
services all over India. This increases the tax compliance and more assesses will come into tax net.
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India
GST Impact on India
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India
GST Impact on India

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(d) Simplified tax laws: This reduces litigation and waste of time of the judiciary and the assessee due
to frivolous proceedings at various levels of adjudication and appellate authorities. Present law
appears to be much worse and an amalgam of the bad parts of VAT/ ST/ CE.
(e) Increase in exports and employment- GST could also result in increased employment, promotion
of exports and consequently a significant boost to overall economic growth and factors of production -
land labour and capital.
Impact of GST on Indian Economy
 Reduce tax burden on producers and foster growth through more production. This double taxation
prevents manufacturers from producing to their optimum capacity and retards growth. GST would
take care of this problem by providing tax credit to the manufacturer.
 Various tax barriers such as check posts and toll plazas lead to a lot of wastage for perishable
items being transported, a loss that translated into major costs through higher need of buffer stocks
and warehousing costs as well. A single taxation system could eliminate this roadblock for them.
 A single taxation on producers would also translate into a lower final selling price for the consumer.
 Also, there will be more transparency in the system as the customers would know exactly how
much taxes they are being charged and on what base.
 GST would add to government revenues by widening the tax base.
 GST provides credits for the taxes paid by producers earlier in the goods/services chain. This would
encourage these producers to buy raw material from different registered dealers and would bring in
more and more vendors and suppliers under the purview of taxation.
 GST also removes the custom duties applicable on exports. Our competitiveness in foreign markets
would increase on account of lower cost of transaction.
 The proposed GST regime, which will subsume most central and state-level taxes, is expected to
have a single unified list of concessions/exemptions as against the current mammoth exemptions
and concessions available across goods and services
The introduction of Goods and Services Tax would be a very noteworthy step in the field of indirect
tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax, it
would alleviate cascading or double taxation in a major way and pave the way for a common national

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market. From the consumer point of view, the biggest advantage would be in terms of reduction in the
overall tax burden on goods and services. Introduction of GST would also make Indian products
competitive in the domestic and international markets. Last but not the least, this tax, because of its
transparent character, would be easier to administer. However, once implemented, the system holds
great promise in terms of sustaining growth for the Indian economy.

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RESEARCH SITES:-
1. WWW.GOOGLE .COM
2. comtax.up.nic.in
3. https://www.gst.gov.in
4. www.gstindia.com
5. https://en.wikipedia.org

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