GST Final Binding Book

University of Mumbai
“OVERVIEW OF GOODS AND SERVICE TAX ”
A Project Submitted to
University of Mumbai for partial completion of the degree of
Master in Commerce
Under the Faculty of Commerce
By
Pallavi Elangovan
Under the Guidance of
Prof. Babita Kakkar
S.I.E.S (Nerul) College of Arts, Science & Commerce
Plot 1-C, Sector – V,
Nerul, Navi Mumbai – 400706
College Code - 710
Academic year 2017-2018

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Certificate
This is to certify that Ms. Pallavi Elangovan has worked and duly completed her Project
Work for the degree of Master in Commerce under the Faculty of Commerce in the
subject of Advanced Cost Accounting and her project is entitled, “OVERVIEW OF
GOODS AND SERVICE TAX ” under my supervision.
I further certify that the entire work has been done by the learner under my guidance and
that no part of it has been submitted previously for any Degree or Diploma of any
University.
It is her own work and facts reported by her personal findings and investigations.
Seal of the college Name and Signature of

Guiding Teacher
Date of Submission:
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Acknowledgment
To list who all have helped me is difficult because they are so numerous and the depth is
so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.
I would like to thank my Principal, Dr. Milind Vaidya for providing the necessary
facilities required for completion of this project.
I take this opportunity to thank our Coordinator, Dr. Neera Kumar for her moral
support and guidance.
I would also like to express my sincere gratitude towards my Project guide, Prof. Babita
Kakkar whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference books
and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly helped me
in the completion of the project especially my Parents and Peers who supported me
throughout my project.
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Declaration
I the undersigned Miss Pallavi Elangovan here by, declare that the work embodied in
this project work titled “Overview Goods and Service Tax ”, forms my own
contributions to the research work carried out under the guidance of Prof. Babita
Kakkar is a result of my own research work and has not been previously submitted to
any other University for any Degree/ Diploma to this or any other University.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.
Name and Signature of the Learner
Certified by
Name and Signature of the Guiding Teacher
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Index
Sr. No. Contents Page No

1. Introduction 6-63
2. Research Methodology 64-75
3. Literature Review 76-77
4. Data Analysis, Interpretation and Presentation 77-84
5. Conclusions and Suggestions 85-86
Bibliography 87
CHAPTER NO 1 - INTRODUCTION OF GST

WHAT’S GST TAX?
GST is a comprehensive indirect tax on manufacture , sale and consumption of goods and
service at national level .One of the biggest taxation reforms in India the GST is all set to
integrate State economic and boost overall growth . Currently companies and businesses
pay lot of indirect taxes such as VAT service tax , sales tax , entertainment tax, octroi and
luxury tax. Once gst is implemented all these tax would be cease to exist. There would be
only one tax , that to at the national level ,monitored by the central government .GST is
expected to create a business friendly environment as a price levels and hence inflation
rates would come down overtime as a uniform tax rate is applied .It will also improve
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government 's fiscal health as the tax collection system would be come more transparent ,
making tax evasion dificult .
It is a consolidated on the basis of the uniform rate of tax and will affix the pay at the end
of final destination or point of consumption. The tax will make a coalition between
Central and State levels and reform the taxation regimes. It will provide a basic single
and cooperative linkup between the Indian market which in turn will boost the economy
as a whole.
India is considered to be a home of taxes, especially indirect taxes. Today in India both
central government and state governments have imposed indirect taxes on any
transactions of goods and services. For instance: excise duty is levied on manufactured
goods, VAT is charged at the time of sale of goods, customs duty is charged on the import
of goods, sales tax is charged on the inter-state sale of goods and lastly service tax is
charged on services provided for.France was the first country to introduce GST in 1954.
INDIA was the country to introduce GST in the year 2000.Today, India has introduced a
new indirect tax legislation called the GST which has been implemented in India from
July 1st, 2017 by honorable P.M. Shri Narendra Modi Ji.
THOSE WHICH ARE LEVIED BY CENTRAL GOVERNMENT;
1. Central Excise duty

2. CVD ie Additional Duties of Customs
3. SAD ie Special Additional Duty of Customs
4. Service tax
THOSE WHICH ARE LEVIED BY STATE GOVERNMENT;
1. VAT
2. Sales Tax
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3. Entertainment and Amusement Tax
4. Tax on lotteries, gambling, and betting
GST-HOW GST WORKS IN INDIA?
The GST system is based on the same concept as VAT .Here set-off is available in respect
of taxes paid in the previous level against the GST charged at the time of sale. The GST
model has some aspects which are as follows:-
Components: GST will be divided into 2 components namely Central Goods and Service
Tax and State Goods and Service
Applicability: GST will be applicable to all Goods and Service sold or provided in India
except from the list of exempted goods which fall outside its purview
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Payment-GST will be charged and paid separately in case of Central and State
Level,Input Tax.
Credit- The facility of Input Tax Credit at Central Level will only be available in respect
of Central Goods and Service tax.In other words , the ITC of central goods and service
tax shall not be allowed as a setoff against State Goods and Service tax and Vice -Versa
Impact of GST on Indian Economy

The Goods and service tax bill is expected to have wide ranging ramification for the
complicated taxation system in the country .It is likely to `
GST RATES IN INDIA
GST Rates slabs are at fixed at 5 bands i.e 0, 5, 12, 18 and 28%. Besides that, new
category too have been launched with tax slab pegged at anywhere between 40 to 65%
and that will be levied only on luxury goods and items like pan masala, high-end cars,
tobacco products and aerated drinks. The 0% slab include only fewer items which are
essential in every household such as Fresh Vegetables, Salt , Eggs, Milk and unbranded
atta among others. Learn more about GST Rates in India by visit the link given as follow.
TYPES OF GST IN INDIA
There are three types of taxes will be started under GST.
1. State Goods and Services Tax – State GST (SGST)

2. Central Goods and Services Tax – Central GST (CGST)
3. Integrated Goods and Services Tax – Integrated GST (IGST)
Central GST and State GST will be levied for transactions that are intrastate government
whereas Integrated GST will be levied on transactions which are the inter-state
government.
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HISTORICAL BACKGROUND OF GST:
The reform process of India's indirect tax regime was started in 1986 by Vishwanath
Pratap Singh , Finance Minister in Rajiv Gandhi’s government, with the introduction of
the Modified Value Added Tax (MODVAT). Subsequently, Prime Minister P V Narasimha
Rao and his Finance Minister Manmohan Singh, initiated early discussions on a Valua
Added Tax(VAT) at the state level. A single common "Goods and Services Tax (GST)"
was proposed and given a go-ahead in 1999 during a meeting between thePrime Minister
Atal Bihari Vajpayee and his economic advisory panel, which included three former RBI
governors IG Patel,Bimal Jalan Patel,Bimal and C Rangarajan .Vajpayee set up a
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committee headed by the Finance Minister of West Bengal ,Asim Dasgupta to design a
GST model.
The Ravi Dasgupta committee was also tasked with putting in place the back-end
technology and logistics (later came to be known as the GST Network, or GSTN, in
2017) for rolling out a uniform taxation regime in the country. In 2002, the Vajpayee
government formed a task force under Vijay Kelkar to recommend tax reforms. In 2005,
the Kelkar committee recommended rolling out GST as suggested by the 12th Finance
Commission
After the defeat of the BJP-led NDA government in the 2004 Lok Sabha Election and the
election of a Congress-led UPA government, the new Finance Minister P
Chidambaram in February 2006 continued work on the same and proposed a GST rollout
by 1 April 2010. However, in 2010, with the Trinamool Congress routing CPI(M) out of
power in West Bengal, Asim Dasgupta resigned as the head of the GST committee.
Dasgupta admitted in an interview that 80% of the task had been done.
In the 2014 Lok Sabha Election , the Bharatiya Janata Party led NDA government was
elected into power, this time under the leadership of Narendra Modi. 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 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 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. Over the next 15 to 20 days, 18 states
ratified the Constitution amendment Bill and the President Pranab Mukherjee gave his
assent to it.
A 22-members selected committee was formed to look into the proposed GST laws. After
GST Council approved the Central Goods and Services Tax Bill 2017 (The CGST Bill),
the Integrated Goods and Services Tax Bill 2017 (The IGST Bill), the Union Territory
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Goods and Services Tax Bill 2017 (The UTGST Bill), the Goods and Services Tax
(Compensation to the States) Bill 2017 (The Compensation Bill), these Bills were passed
by the Lok Sabha on 29th March, 2017. The Rajya Sabha passed these Bills on 6th April,
2017 and were then enacted as Acts on 12th April, 2017. Thereafter, State Legislatures of
different States have passed respective State Goods and Services Tax Bills. After the
enactment of various GST laws, Goods and Services Tax was launched all over India
with effect from 01 July 2017. the Jammu and Kashmir state legislature passed its GST
act on 7 July 2017, thereby ensuring that the entire nation is brought under an unified
indirect taxation system. There was to be no GST on the sale and purchase of securities.
That continues to be governed by Securities Transaction Tax (STT)
LAUNCH OF GST:
The Goods and Services Tax was launched at midnight on 1 July 2017 by the then
President of India, Pranab Mukherjee, and the Prime Minister of India Narendra
Modi .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 to for the middle and lower class Indians. 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
jubiliees of that occasion. After its launch, the GST rates have been modified multiple
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times, the latest being on 18 January 2018, where a panel of federal and state finance
ministers decided to revise GST rates on 29 goods and 53 services.[
Members of the Congress boycotted the GST launch altogether. They were joined by
members of the Trinamool Congress, Communist Parties of India and the DMK. The
parties reported that they found virtually no difference between the GST and the existing
taxation system, claiming that the government was trying to merely rebrand the current
taxation system. They also argued that the GST would increase existing rates on common
daily goods while reducing rates on luxury items, and affect many Indians adversely,
especially the middle, lower middle and poorer classes. The GST model of India has been
modeled on the taxation system of France.
TAXES TO BE SUBSUMED UNDER GST
THE FOLLOWING TAXES LEVIED AT CENTRE WILL GET SUBSUMED UNDER

GST:-
i. Central Excise Duty
ii. Additional Excise Duties
iii. The Excise Duty levied under the Medicinal and Toiletries Preparation Act
iv. Service Tax
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v. Additional Customs Duty, commonly known as Countervailing Duty (CVD)
vi. Special Additional Duty of Customs - 4% (SAD)
vii. Surcharges, and
viii. Cesses.
THE FOLLOWING STATE TAXES AND LEVIES WOULD BE, TO BEGIN

WITH, SUBSUMED UNDER GST:
i. VAT / Sales tax
ii. Entertainment tax (unless it is levied by the local bodies).
iii. Luxury tax
iv. Taxes on lottery, betting and gambling.
v. State Cesses and Surcharges in so far as they relate to supply of goods and
services.
vi. Entry tax not in lieu of Octroi.
TAXES TO BE KEPT OUT OF PURVIEW OF GST
However following taxes are proposed to be kept out of purview of GST due the reasons
as detailed:-
 Purchase tax: Some of the States felt that they are getting substantial revenue
from Purchase Tax and, therefore, it should not be subsumed under GST while
majority of the States were of the view that no such exemptions should be given.
The difficulties of the foodgrain producing States was appreciated as substantial
revenue is being earned by them from Purchase Tax and it was, therefore, felt that
in case Purchase Tax has to be subsumed then adequate and continuing
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compensation has to be provided to such States. This issue is being discussed in
consultation with the Government of India.
 Tax on items containing Alcohol: Alcoholic beverages would be kept out of the
purview of GST. Sales Tax/VAT could be continued to be levied on alcoholic
beverages as per the existing practice. In case it has been made Vatable by some
States, there is no objection to that. Excise Duty, which is presently levied by the
States may not also be affected.
 Tax on Tobacco products: Tobacco products would be subjected to GST with

ITC. Centre may be allowed to levy excise duty on tobacco products over and
above GST with ITC.
 Tax on Petroleum Products: As far as petroleum products are concerned, it was

decided that the basket of petroleum products, i.e. crude, motor spirit (including
ATF) and HSD would be kept outside GST as is the prevailing practice in India.
Sales Tax could continue to be levied by the States on these products with
prevailing floor rate. Similarly, Centre could also continue its levies. A final view
whether Natural Gas should be kept outside the GST will be taken after further
deliberations.
GST ON EXPORT
 Zero Rating of Exports-Exports would be zero-rated. Similar benefits may be
given to Special Economic Zones (SEZs). However, such benefits will only be
allowed to the processing zones of the SEZs. No benefit to the sales from an SEZ
to Domestic Tariff Area (DTA) will be allowed.
 GST on Imports: The GST will be levied on imports with necessary

Constitutional Amendments. Both CGST and SGST will be levied on import of
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goods and services into the country. The incidence of tax will follow the
destination principle and the tax revenue in case of SGST will accrue to the State
where the imported goods and services are consumed. Full and complete set-off
will be available on the GST paid on import on goods and services.
 Special Industrial Area Scheme -industrial incentives should be converted, if at

all needed, into cash refund schemes after collection of tax, so that the GST
scheme on the basis of a continuous chain of set-offs is not disturbed. Regarding
Special Industrial Area Schemes, it is clarified that such exemptions, remissions
etc. would continue up to legitimate expiry time both for the Centre and the
States. Any new exemption, remission etc. or continuation of earlier exemption,
remission etc. would not be allowed. In such cases, the Central and the State
Governments could provide reimbursement after collecting GST.
FEATURES OF GST
1. Levy of GST : The centre will levy Central GST (CGST) and the states will levy State
GST (SGST) on the supply of goods and services within a state. The centre will levy
IGST in the case of (i) inter-state supply of goods and services, (ii) imports and exports,
and (iii) supplies to and from special economic zones.
2. Exemptions from GST: The centre exempt certain goods and services from the
purview of GST through a notification. This will be based on recommendations of the
GST Council.
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3. Turnover limit under GST and tax right over low turnover entities: GST is applied
when turnover of the business exceeds Rs 20lakhs per year (Limit is Rs 10lakhs for the
North-Eastern States). Traders who would like to get input tax credit should make a
voluntary registration even if their sales are below Rs 20 lakh per year. Traders supplying
goods to other states have to register under GST, even if their sales is less than Rs 20
lakh. There is a composition scheme for selected group of tax payers whose turnover is
up to Rs 75 lakhs a year.
4. The four-tier rate structure: The GST proposes a four-tier rate structure. The tax
slabs are fixed at 5%, 12%, 18% and 28% besides the 0% tax on essentials. Gold is taxed
at 3%. The center has strictly demanded and got an additional cess on demerit luxury
goods that comes under the high 28% tax. Essential commodities like food items are
exempted from taxes under GST.
Other consumer goods which are common items will be taxed at 5%.4. The new GST
seems to have two standard rates – 12% and 18%. GST rate structure for the goods and
services are fixed by considering different factors including luxury/necessity nature.
5. Tax revenue appropriation between the center and states: The center and states will
share GST tax revenues at 50:50 ratio (except the IGST). This means that if a service is
taxed at 18%, 9% will go to the center and 9% will go to the concerned state.
6. Input tax credit: Every taxpayer while paying taxes on outputs may take credit for
taxes paid earlier by the supplier on inputs. However, this will not be applicable on
supplies related to: (i) motor vehicles when used for personal consumption, (ii) supply of
food, health services, etc. unless they are further used to make a supply.
7. Taxable amount (value of supply): The GST levied on the supply of goods and
services, whose value will include: (i) price paid on the supply, (ii) taxes and duties
levied under other tax laws, (iii) interest, late fee, penalties for delayed payments, among
others.
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8. Refunds and welfare fund: Any taxpayer may apply for refund of taxes in cases
including: (i) payment of excess taxes, or (ii) unutilised input tax credit. The refund may
be credited to the taxpayer, or to a Consumer Welfare Fund under certain circumstances.
9. Returns: Every taxpayer should self-assess and file tax returns on a monthly basis by
submitting: (i) details of supplies provided, (ii) details of supplies received, and (iii)
payment of tax. In addition to the monthly returns, an annual return will have to be filed
by each taxpayer.
10. Apportionment of IGST revenue: The IGST collected will be apportioned between
the center and the state where the goods or services are consumed. The revenue will be
apportioned to the center at the CGST rate, and the remaining amount will be apportioned
to the consuming state.
11.Comprehensive: GST will subsume all of the current indirect taxes. Plus, by bringing
in a unified taxation system, across the country, it will ensure that there is no more
arbitrariness in tax rates.
12)Multi-stage: GST is levied each stage in the supply chain, where a transaction takes
place. Value-addition: This is the process of addition to the value of a product/ service at
each stage of its production, exclusive of initial costs. Under GST, the tax is levied only
on the value added. This is done through
13)Destination-based consumption: Unlike the current indirect taxes, GST will be

collected at the point of consumption. The taxing authority with appropriate jurisdiction
in the place where the goods/ services are finally consumed will collect the tax
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TAXABILITY OF GST
The GST Council, on the second day of its 2-day meeting in Srinagar, has considered and
finalised GST to be applicable for different types of services. Some key aspects related to
services of the meeting have been captured below:
 As against expectations, the government has finalised four tax rates that will
apply to services, namely 5%, 12%, 18% and 28%.
 Education and Healthcare services to be exempt under GST
 Transportation services to be taxed at 5%
 Aggregators like Ola and Uber to be taxed at 5%
 Economy class air travel to attract 5% GST and business class 12%
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 Complications which currently exist at the time of charging tax on Works
Contract should be eased with Works Contract set to be taxed at 12%.
 5 Star and AC restaurants to attract higher taxes:
o Restaurants with a turnover of INR 5 million or less will levy 5% GST

o Restaurants without a liquor license and with a turnover higher than INR 5
million will be charged 12% GST.
o AC restaurants and restaurants with a liquor license to fall under the 18%
tax slab.
o 5 Star hotels to levy 28% GST
o Hotels with tariff below INR 1000 to be exempt
o Hotels with tariff of INR 1000-2500 will levy 12% GST
o Hotels with tariff above INR 2500 but below INR 5000 would attract 18%
GST.
o Hotels with tariff above INR 5000 to charge 28% GST.
 Telecom and Financial services to attract 18% GST
 The highest tax slab i.e. 28% would be reserved for luxury services like cinemas,
betting, etc.
 No consensus on the fixation of rate on gold
 List of exemptions which are in existence as per the current legislation being
grandfathered are likely to continue in the GST regime
INPUT TAX CREDIT UNDER GST

Input Credit Helps in Determining the Correct Amount of Working Capital at any
Given Point of Time.
“Input Tax” in relation to a taxable person, means the Goods and Services Tax charged
on any supply of goods and/or services to him which are used or are intended to be used,
during furtherance of his business. Fulfillment of Input Tax Credit under GST –
Conditions To Claim is one of the most critical activity for every business to settle its tax
liability.
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ITC being the backbone of GST and a major matter of concern for the registered persons,
conditions for eligibility to ITC and eligible ITC have been prescribed which in majority
in line with pre- GST regime. These rules are also quite particular and stringent in its
approach.
Input Tax Credit under GST – Conditions To Claim
A registered person will be eligible to claim Input Tax Credit (ITC) on fulfillment of the
following conditions:
1. Possession of a tax invoice or debit note or document evidencing payment

2. Receipt of goods and/or services
3. goods delivered by supplier to other person on the direction of registered person
against a document of transfer of title of goods
4. Furnishing of a return
5. Where goods are received in lots or installments ITC will be allowed to be availed
when the last lot or installment is received.
6. Failure to the supplier towards supply of goods and/or services within 180 days
from the date of invoice, ITC already claimed will be added to output tax liability
and interest to paid on such tax involved. On payment to supplier, ITC will be
again allowed to be claimed
7. No ITC will be allowed if depreciation have been claimed on tax component of a
capital good.
8. Common credit of ITC used commonly for
 Effecting exempt and taxable supplies

 Business and non-business activity
ITEMS ON WHICH CREDIT IS NOT ALLOWED
 Motor vehicles and conveyances except the below cases

 Such motor vehicles and conveyances are further supplied i.e. sold
 Transport of passengers
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 used for imparting training on driving, flying, navigating such vehicle or
conveyances
 Transportation of goods
 food and beverages, outdoor catering, beauty treatment, health services, cosmetic
and plastic surgery
 But if the goods and/or services are taken to deliver the same category of services
or as a part of a composite supply, credit will be available Example: Mr. Dev
purchases cosmetic creams to supply it to a customer, then credit of ITC paid on
purchases will be allowed.
 Sale of membership in a club, health, fitness centre.
 rent-a-cab, health insurance and life insurance except the following:

a)Government makes it obligatory for employers to provide it to its employees
b)goods and/or services are taken to deliver the same category of services or as a
part of a composite supply, credit will be available Example: Mr. Dev takes the
service of rent-a-cab to supply to Mr. Manoj, a customer, then credit of ITC paid
on purchases will be allowed.
 9.travel benefits extended to employees on vacation such as leave or home travel

concession.
 Works contract service for construction of an immovable property (except plant &
machinery or for providing further supply of works contract service)
 Goods and/or services for construction of an immovable property whether to be

used for personal or business use
 Goods and/or services where tax have been paid under composition scheme
 Goods and/or services used for personal use
 Goods or services or both received by a non-resident taxable person except for

any of the goods imported by him.
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 Goods lost, stolen, destroyed, written off or disposed of by way of gift or free
samples
 ITC will not be available in the case of any tax paid due to non payment or short
tax payment, excessive refund or ITC utilized or availed by the reason of fraud or
willful misstatements or suppression of facts or confiscation and seizure of goods.
REVERSE CHARGE UNDER GST:
Good and service tax, popularly known as gst is the new tax regime that will replace
many of the current indirectly taxes and will remove the complexities of it.The finance
Ministry department has set the target date of 1st July 2017, to get gst implemented to the
whole nation
The GST enrollment procedure for the migration has already started for the proposed tax
regime .While in india , the current tax system is origin based ,gst will be destination
based tax system .It will be replaced a total of 17states such as Service tax,vat ,excide
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duty ,counter veiling duty ,sad , entry tax, purchase tax etc,central govt has enacted 4 gst
bill until now
Cgst(central gst)
Igst(integrated gst)
UTGST(Union territory gst)
Bill to compensate states
A well designed GST will not only eliminate cascading effect and double taxation but
will also smoothen the functioning of the business .it is projected that india will have an
increased growth by 2% and will boost revenues for the government because it will
affect both manufacturing and service sector
India is a country where there are organized , partly organized and unorganized sector
which require continuos monitoring for better tax compliance and coverage .To carry out
this function smoothly ,the government has introduced REVERSE CHARGE
MECHANISM
Under present scenario ,the reverse charge is there in service tax and is applicable to only
service and not goods.under service provider are liable to collect and deposit
tax,Although the incidence of the tax is placed on consumers ultimately ,it is the duty of
the supplier to deposit the tax
However in certain cases , charge ability gets reversed from the supplier to the receipt
which is why it is called reverse charge .There are 15services in which reverse charge is
applicable under service tax such as Insurance agent ,Manpower supply ,Goods Transport
Agency etc
WHAT IS REVERSE CHARGE?
Typically, taxes are collected by business owners on behalf of the customers, which is
then paid to the government. Reverse charge is when the buyer pays the tax directly to
the government.
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The responsibility of reverse charge can either rest completely on the buyer or in certain
special cases, it can be partially/jointly borne both by the buyer and the seller.
WHEN IS REVERSE CHARGE APPLICABLE?
Reverse charge is applicable on both, goods and services. The following are the situations
in which reverse charge will be applicable:
 A registered business owner receiving goods or services from an unregistered

vendor. Example: A registered wholesaler or a retailer buying farm produce (for the
purpose of selling it to other vendors/consumers) from unregistered vendors, has to pay
the GST associated with the purchase to the government.
 Services offered by an aggregator or e-commerce operator.
 The following list of goods and services specified by Central Board of Excise and
Customs (CBEC).
Note: Reverse charge in case of unregistered vendors has been suspended till June 30,
2018.
Tariff item, sub- Recipient of supply

heading, Description of (the person who
S.No Supplier of goods
heading or supply of Goods pays tax on reverse
chapter charge)
Cashew nuts, not Registered taxable

1. 0801 Agriculturist
shelled or peeled person.
Bidi wrapper Registered taxable

2. 1404 90 10 Agriculturist
leaves (tendu) person.
Registered taxable
3. 2401 Tobacco leaves Agriculturist
person.
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Tariff item, sub- Recipient of supply
heading, Description of (the person who
S.No Supplier of goods
heading or supply of Goods pays tax on reverse
chapter charge)
Any person who

manufactures silk yarn Registered taxable
4. 5004 to 5006 Silk yarn
from raw silk or silk person.
worm cocoons.
State Government, Union

Lottery distributor or
5. — Supply of lottery Territory or any local
selling agent.
authority.
List of services applicable to be taxable under reverse charge from the 14th GST council
meet. Here the receiver of such services is liable to pay GST on reverse charge
Recipient of supply
(the person who pays
S.No Service Service provider
GST on reverse
charge)
Services provided by a person in a Supplier in non-

1. Registered taxpayer
non-taxable territory taxable territory
Goods Transport
2. Transport of goods by road Registered taxpayer
Agency
3. Legal services Legal firm or Registered taxpayer
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Recipient of supply
GST on reverse
charge)
advocate
Services provided by an arbitral

4. Arbitral Tribunal Registered taxpayer
tribunal
Corporate or partnership
5. Sponsorship services Individual or business
firms
Services provided by government or

local authority (excludes renting of
immovable property, postal
services, insurance and agency Government/Local
6. Registered taxpayer
services, services provided to an authority
aircraft or ship in an Indian air port
or port and transport of
goods/passengers)
Services offered by a director or

Director or corporate The company to which
7. corporate body to their own
body they offer their services
company
8. Services of an insurance agent Insurance agent Insurance company
Banking
9. Recovery agent services Recovery agent
company/Financial firm
10. Transport of goods by a vessel from Transporting agency Importer of goods
26
Recipient of supply
GST on reverse
charge)
overseas to a customs office in India
Transfer/Giving permission to
Artist, musician or
11. copyrighted content (as according to Publishing company
any creative person
section 13(1) of copyright act 1957)
Taxi services through an e-

12. Taxi driver E-commerce operator
commerce operator
REQUIREMENTS UNDER THE REVERSE CHARGE MECHANISM
 The recipient of goods/services must be registered under GST.
 Every registered business owner should maintain accurate records of supplies that
would incur reverse charge.
 Wherever reverse charge applies, the supplier must clearly mention on the invoice
that the tax payable for that specific transaction is through reverse charge. Similarly, the
same should be mentioned on receipt vouchers and refunds vouchers.
 Advance paid on supplies that incur reverse charge is taxable under GST. The
taxpayer making advance payment should pay tax on reverse charge basis.
TIME OF SUPPLY FOR GOODS AND SERVICES UNDER REVERSE CHARGE
The time of supply for a transaction is the date on which taxes are levied upon the
supplies. The time of supply under reverse charge will be the earliest of the following
dates:
27
 date of receipt of goods or
 date of payment or
 the date immediately after 30 days from the invoice date for goods and 60 days
from the invoice date for services.
.
ITC ON REVERSE CHARGE
Input tax credit can be claimed by the buyer as long as they use the goods and services
they bought on reverse charge basis for business purposes only.
Also, a supplier cannot claim ITC on the tax paid on goods/services that were used to
make supplies that incur reverse charge.
SELF-INVOICING
Under reverse charge mechanism, self-invoicing is done when a business owner

purchases supply from an unregistered supplier. This is done, as the unregistered supplier
cannot issue an invoice.
EXEMPTIONS UNDER REVERSE CHARGE
A registered business owner is exempted from paying GST through reverse charge on
intra-state purchases from unregistered sellers, as long as the total value of the
supply received per day is less than or equal to Rs.5,000/-.
28
COMPOSITION SCHEME :
The GST regime has brought in many changes along with the following:
 Increase in the number of GST returns

 Payment of tax on a monthly basis
 Small and new taxpayers will find it difficult to comply with so many rules.
Hence, the government has introduced the concept of Composition Scheme. Composition
Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get
rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can
be opted by any taxpayer whose turnover is less than Rs. 75 lakh.
Now there is an option for small and new taxpayer to opt for Composition scheme and
have lesser compliance. Also, a taxpayer opting for composition scheme has to pay tax at
a nominal rate.
29
A taxpayer whose turnover is below Rs 75 lakhs can opt in for Composition Scheme. In
case of North-Eastern states and Himachal Pradesh, the limit is Rs 50 lakh.
The following people cannot opt for the scheme:
1. Supplier of services other than restaurant related services

2. Manufacturer of ice cream, pan masala, or tobacco
3. Casual taxable person or a non-resident taxable person
4. Businesses which supply goods through an e-commerce operator
ReuterThe following conditions must be satisfied in order to opt for composition scheme:
1. No Input Tax Credit can be claimed by a dealer opting for composition scheme
2. The taxpayer can only make intra-state supply (sell in the same state) i.e. no inter-
state supply of goods
3. The dealer cannot supply GST exempted goods
4. Taxpayer has to pay tax at normal rates for transactions under Reverse Charge
Mechanism
5. If a taxable person has different segments of businesses (such as textile, electronic
accessories, groceries, etc.) under the same PAN, they must register all such businesses
under the scheme collectively or opt out of the scheme
6. The taxpayer has to mention the words ‘composition taxable person’ on every
notice or signboard displayed prominently at their place of business
7. The taxpayer has to mention the words ‘composition taxable person’ on every bill
of supply issued by him.
Composition scheme: To opt in for composition scheme a taxpayer has to file Form GST
CMP-01 or GST CMP-02 with the government. This can be done online after logging
into the GST portal. This intimation should be given at the beginning of every Financial
Year by a dealer wanting to opt for Composition Scheme.
A composition dealer cannot issue tax invoice. This is because a composition dealer
cannot charge tax from their customers. They need to pay tax out of their own pocket.
Hence, the dealer has to issue a Bill of Supply. The dealer should also mention
30
“composition taxable person, not eligible to collect tax on supplies” at the top of the Bill
of Supply.
GST rates for a composition dealer
COMPOSITION SCHEME –Applicable GST rate
Type of Business CGST SGST Total GST
Manufacture 1% 1% 2%
Traders(Goods) 0.5% 0.5% 1%
Supply of food or 2.5% 2.5% 5%

drinks for human
consumption(without
Alcohol)
Service Providers Cannot opt for Consumption scheme
GST Payment has to be made out of pocket. It means that a dealer opting for
Composition Scheme cannot charge GST in their Invoice. The consumer/ the receiver of
supplies will not be liable to pay GST to the supplier who has opted for Composition
Scheme.
A dealer is required to file a quarterly return GSTR-4 by 18th of the month after the end
of the quarter. Also, an annual return GSTR-9A has to be filed by 31st December of next
financial year. Also, note that a dealer registered under composition scheme is not
required to maintain detailed records.
The following are the advantages of registering under composition scheme:
1. Lesser compliance (returns, maintaining books of record, issuance of invoices)

2. Limited tax liability
3. High liquidity as taxes are at a lower ra
31
The disadvantages of registering under GST composition scheme: A limited territory of
business. The dealer is barred from carrying out inter-state transactions
1. No Input Tax Credit available to composition dealers

2. The taxpayer will not be eligible to supply goods through an e-commerce portal
Registration
1. Background
Model GST law provides for registration of various persons in different situations. This
article aims at enlightening readers about the persons who are required to take
registration and other provisions related to registration.
2. Threshold Limit
In order to provide relaxation to small suppliers it is provided that every supplier shall be
liable to be registered under this act in the State form where it makes a taxable supply of
goods or services if its aggregate turnover in a financial year exceeds ₹ 9 lacs. However,
this limit is ₹ 4 lacs for the persons conducting business in NE states including Sikkim.
Here, aggregate turnover means the aggregate value of all taxable and non-taxable
supplies, exempt supplies and exports of goods and/or services of a person having the
same PAN, to be computed on all India basis and excludes taxes, if any, charged under
the CGST Act, SGST Act and the IGST act, as the case may be. But aggregate turnover
does not include the value of supplies on which tax is levied on reverse charge basis and
the value of inward supplies.
32
3. Persons requiring registration
Following are the persons required to take registration under this act –
(a) Persons making inter-state supply, irrespective of any threshold limit
(b) Casual taxable persons, irrespective of the threshold specified
(c) Persons who are required to pay tax under reverse charge
(d) Non resident taxable persons
(e) Persons who are required to deduct tax under section 37 (TDS)
(f) Agents
(g) Input service distributor
(h) Supply of goods or services through electronic commerce operator, other than
branded services
(i) Every electronic commerce operator
(j) Aggregator who supplies service under his brand name or his trade name
(k) Other notified persons
In the situation other than above–
(l) Suppliers liable to be registered where it makes a taxable supply of goods of services
if its aggregate turnover in a financial year exceeds ₹ 9 lacs.
33
(m) Supplier liable to be registered where it makes a taxable supply of goods of services
if its aggregate turnover in a financial year exceeds ₹ 4 lacs. (for NE states including
Sikkim)
(n) Persons who were already registered under the earlier law subject to point (l) and (m)
above.
(o) Transferee in case where business is transferred.
5. Time limit for registration

Person liable to take registration under this act shall be liable to take registration within
thirty days from the date on which he becomes liable to registration.
Input service distributor, registered in the erstwhile law is not required to re-register
subject to the procedure to be followed by it as prescribed
6. Other aspects
 Option available for separate registration for each business vertical
 Option of voluntary registration is available
 Every person applying for registration should b having PAN number
 Non resident person may be granted registration on any other documents as
prescribed ion absence of PAN number.
 Unique Identity number will be allotted to the assessees.
7. Special provisions relating to casual taxable person and non-resident taxable

person
 Registration certificate issued will be valid for 90 days from the date of
registration.
 This period could be further extended to 90 days.
Such taxable persons are required to deposit tax in advance on the basis of estimated tax
liability.
34
Following table will make some situations regarding registration
Situation
Nature of supply Registration required
1
Taxable inter-state supply Yes
2
Exempted inter-state supply No
3
Intra-state supply (upto ₹ 9 lacs) No
4
Intra-state supply (exceeding ₹ 9 lacs) Yes
Intra-state supply (upto ₹ 9 lacs)

5 Exempted inter-state supply of any value
No
6
Casual Taxable person Yes
7
Reverse charge – for personal use upto prescribed limit No
8
Reverse charge – for personal use beyond prescribed limit Yes
9
Reverse charge – Other than personal use Yes
10
Non-resident persons Yes
11 Persons required to deduct TDS providing intra state supply

upto ₹ 9 lacs Yes
12
Input service distributor Yes
13 Agent or the like Yes
35
Intra-state supply upto ₹ 9 lacs
14 As an agent
Yes
15
Electronic commerce operator Yes
16 Supply through electronic commerce operator – Branded or

otherwise Yes
17
Aggregator – supplying services Yes
Yes
Intra-state supply – Exempted ₹ 5 lacs As the aggregate turnover exceeds ₹ 10
18 Intra-state supply – Taxable ₹ 5 lacs lacs.
HOW TO REGISTER FOR GST?

As of July 1, 2017, any seller who wants to sell across India needs to enrol for GST
(Goods and Services Tax), except if the seller sells goods or services under exempt
categories. The GST registration process is entirely paperless which means that it will
take place online or digitally. There will not be any hard copies or physical print outs
required for the enrolment.
.
Part I: Generate your GST Application form
The first step is to obtain the Temporary Registration Number (TRN). To obtain this, you
need a valid mobile number (an India number), email address and PAN (Permanent
Account Number) for the business.
1. Go to official GST portal - https://www.gst.gov.in/ and under the services tab,
choose Services > Registration > New Registration.
36
2. On the Registration page, enter all the requested details (including your PAN
number), email address and mobile number.
3. After entering the details, click proceed. You will receive two different OTPs on
your mobile and on your email for verifying the mobile number and the email id. OTP
is valid only for 10 minutes. If required, you can regenerate the OTP.
Your Temporary Reference number will be generated at the end of this process.
4. To use this number, either click Proceed or Services > Registration > New
Registration option and select theTemporary Reference Number (TRN) radio button
to login using the TRN.
5. In the Temporary Reference Number (TRN) field, enter the TRN generated and
enter the captcha text as shown on the screen.
6. After this you will be asked to verify OTP again. This is different from the
previous OTP generated, please enter the new OTP received. The same OTP will be
received on the verified mobile number and email id.
7. This will take you to your “My Saved Application” page. You will have to fill in
all the form details and submit within 15 days. After this, your number and saved
form will be deleted. Click the Edit button and proceed to Part II.
Part II: Filling in your GST Application form

The form contains 10 sections / tabs. Please click each tab to enter that section. Please
consult your CA/Tax Consultant/GST Practitioner before submitting the form.
For this process, you need scanned copies of the following documents and some
additional personal information:
 Valid Bank Account Number and IFSC Code.
 Proof of constitution / incorporation of business
1. In case of a Partnership Firm – Deed of Partnership
2. For Others- Registration Certificate of the business entity.
 Proof of primary place of business.
37
 Photo of promoter, director, partner, karta of Hindu undivided family (HUF)
(whichever is applicable).
 Proof of appointment of Authorised Signatory.
 Photo of Authorised Signatory.
 Front / first page of bank passbook / statement containing bank account number,
branch address, address of account holder and latest transaction details.
Once you have all the above-mentioned documents in place, follow the steps below to
start the enrolment process:
Steps to follow (as shown in the above PPT). If you are logged out, you can log in again
using your TRN number in previous section:
Step 1 – Fill in all the tabs, with instructions as provided in the slides above. Click Save
& Continue to ensure you all information you filled in is saved.
Step 2 – Complete the details in the 'Business' and the 'Promoters / Partners' tabs, with at
least the mandatory fields that have been highlighted. Ensure you provide proof of
constitution of business.
Step 3 - Fill in the 'Authorized Signatory' information. Please note that, in case you wish
to e-sign the form, the mobile/email of the Authorized Signatory will be used. If you wish
to sign with DSC, the PAN of your Authorized Signatory must be linked to the DSC.
Step 4 – Further instructions on how to fill the remaining tabs such as 'Primary Place of
Business' (PPOB) Tab, 'Goods & Services' Tab, 'Bank Accounts' Tab are mentioned in the
above slides.
Part III: Registering your Digital Signature Certificate

In order to verify your GST application, you would need to digitally sign the form. Please
note that:
 DSC is compulsory for Companies and LLPs.
 You can only register and use the digital signature of the Authorized Signatory
specified in the registration form.
 If you wish to verify the form by other available methods (rather than by the use
of DSC), please refer to Part IV.
38
 If you wish to sign the document using Digital Signature Certificate (DSC),
please follow instructions below: Please ensure you have DSC software installed on
your computer.
 If you wish to get a DSC, you can contact any one of the certifying authorities
mentioned on http://www.cca.gov.in/cca/.
 One you get the DSC software installed, you should also have the DSC Dongle
with you (which you will receive with the DSC software).
 To sign the GST form, you need to also install Emsigner. You can download and
install the DSC Signer from emsigner.com.
Part IV: Verify and Submit Your GST Application

You can submit the application by choosing any one of the 3 verification methods:
 Verification with DSC: Please refer to earlier section.
 Verification with e-signature: Refer to the section below.
 Verification with EVC: Refer to the section below.
On completion, an Application Reference Number (ARN) will be generated and sent to
your mobile number and email id. You can use this to track your application status
(Services > Registration > Track Application).
Once your Application Status" shows “Approved”, an email and SMS will be received
intimating that the GSTIN is generated and providing a temporary user name (which will
be your GSTIN number) and password to login to the GST website.
While logging into the GST portal using the temporary user name and password received,
you will have to go to the "Login" page and then click on “First time login” option,
which will be available at the bottom of the login page. After you input the temporary
user name and password provided to you and click on "Login" option, it will ask you to
change the username and password for future use.
You will be able to Download your Registration Certificate within 3-5 days. To download
your Registration Certificate, log in using your valid credentials on the www.gst.gov.in
website to access your dashboard, go to Services > User Services > View or Download
Certificates and click the Download button.
39
Introduction In any tax system, registration is the most fundamental requirement for
identification of tax payers ensuring tax compliance in the economy. Registration of any
business entity under the GST Law implies obtaining a unique number from the
concerned tax authorities for the purpose of collecting tax on behalf of the government
and to avail Input Tax Credit for the taxes on his inward supplies. Without registration, a
person can neither collect tax from his customers nor claim any input Tax Credit of tax
paid by him.
NEED AND ADVANTAGES OF REGISTRATION
Registration will confer the following advantages to a taxpayer: • He is legally

recognized as supplier of goods or services. • He is legally authorized to collect taxes
from his customers and pass on the credit of the taxes paid on the goods or services
supplied to the purchasers/recipients. • He can claim Input Tax Credit of taxes paid and
can utilize the same for payment of taxes due on supply of goods or services. • Seamless
flow of Input Tax Credit from suppliers to recipients at the national level
Liability to register GST being a tax on the event of “supply”, every supplier needs to get
registered. However, small businesses having all India aggregate turnover below Rupees
20 lakh (10 lakh if business is in Assam, Arunachal Pradesh, J&K, Himachal Pradesh,
Uttarakhand, Manipur, Mizoram, Sikkim, Meghalaya, Nagaland or Tripura) need not
register. The small businesses, having turnover below the threshold limit can, however,
voluntarily opt to register. The aggregate turnover includes supplies made by him on
behalf of his principals, but excludes the value of job-worked goods if he is a job worker.
But persons who are engaged exclusively in the business of supplying goods or services
or both that are not liable to tax or wholly exempt from tax or an agriculturist, to the
extent of supply of produce out of cultivation of land are not liable to register under GST.
Standardisation of procedures
40
A total of 30 forms/formats have been prescribed in the GST registration rules. For every
process in the registration chain such as application for registration, acknowledgment,
query, rejection, registration certificate, show cause notice for cancellation, reply,
cancellation, amendment, field visit report etc, there are standard formats. This will make
the process uniform all over the country. The decision making process will also be fast.
Strict time lines have been stipulated for completion of different stages of registration
process.
An application has to be submitted online through the common portal (GSTN) within
thirty days from the date when liability to register arose. The Casual and Non-Resident
taxable persons need to apply at least five days prior to the commencement of the
business. For transferee of a business as going concern, the liability to register arises on
the date of transfer. The Proper Officer has to either raise a query or approve the grant of
registration within three working days failing which, registration would be considered as
deemed to have been approved. The applicant would have to respond within seven
working days starting from the fourth day of filing the original application. The Proper
Officer would have to grant or reject the application for registration within seven working
days thereafter.
Amendment of registration
Except for the changes in some core information in the registration application, a taxable
person shall be able to make amendments without requiring any specific approval from
the tax authority. In case the change is for legal name of the business, or the State of place
of business or additional place of business, the taxable person will apply for amendment
within 15 days of the event necessitating the change. The Proper Officer, then, will
approve the amendment within the next 15 days. For other changes like the name of day-
to-day functionaries, e-mail IDs, mobile numbers etc. no approval of the Proper Officer is
required, and the amendment can be affected by the taxable person on his own on the
common portal.
41
Cancellation of registration
The GST law provides for two scenarios where cancellation of registration can take
place; the one when the taxable person no more requires it (voluntary cancellation), and
another when the Proper Officer considers the registration liable for cancellation in view
of certain specified defaults (Suo-motu cancellation) like when the registrant is not doing
business from the registered place of business or if he issues tax invoice without making
the supply of goods or services. The taxable person desirous of cancellation of
registration will apply on the common portal within 30 days of the event warranting
cancellation. He will also declare in the application, the stock held on the date with effect
from which he seeks cancellation. He will also work out and declare the quantum of dues
of payments and credit reversal, and the particulars of payments made towards discharge
of such liabilities. In case of voluntary registration (taken despite not being liable for), no
cancellation is allowed until expiry of one year from the effective date of registration. If
satisfied, the Proper Officer has to cancel the registration within 30 days from the date of
application or the date of reply to notice (if issued, when rejection is concluded by the
officer).
Revocation of cancellation
In case where registration is cancelled suo-motu by the Proper Officer, the taxable person
can apply within 30 days of service of cancellation order, requesting the officer for
revoking the cancellation ordered by him. However, before applying, the person has to
make good the defaults (by filing all pending returns, making payment of all dues and so)
for which the registration was cancelled by the officer. If satisfied, the proper officer will
revoke the cancellation earlier ordered by him. However, if the officer concludes to reject
the request for revocation of cancellation, he will first observe the principle of natural
justice by way of issuing notice to the person and hearing him on the issue.
42
Physical verification for registration
Physical verification is to be resorted to only where it is found necessary in the subjective

satisfaction of the proper officer. If at all, it is felt necessary, it will be undertaken only
after granting the registration, and the verification report along with the supporting
documents and photographs, shall have to be uploaded on the common portal within
fifteen working days.
RETURNS UNDER GOODS AND SERVICES TAX (GST) INDIA
Who Needs to File Return under GST?
 All the registered dealers irrespective of whether they do any business activity or
not. A nil return will be required in case of no business activity.
 Those PSUs or government entities which are not dealing in GST supplies.
 Those persons who deal with nil-rated or non-GST or exempted goods.
 UN agencies, etc. will file return but only for the month in which they make
purchases.
.
Key Features of GST Returns
 GST returns can only be filed online.

 You will be able to generate & prepare forms offline but they need to be filed
online.
 A common return will be required for CGST, IGST, SGST & additional tax.
 At GST common portal, you will be able to file return yourself or authorise
someone to do it on your behalf.
 Revision of returns once filed will not be allowed. You will be required to
accommodate changes in next return.
43
Types of Returns under GST
In the table given below, we have mentioned all the different return forms from (GSTR-1
to GSTR-11) prescribed under model GST law. The table will give an idea about the
purpose of filing them as well as the time of filing each return.
Below are the details of the Form name ,Purpose of filing and the due dates
GSTR-1- To provide details of supplies made outward (compounding and ISD taxpayers are
exceptions)
GSTR-1A- To provide details of additions, corrections or deletions made by the recipient

in the outward supplies
GSTR-2- To provide details of supplies made inward (compounding and ISD taxpayers
are exceptions)
GSTR-2A- To furnish details of inward supplies received by the recipient which are based
on Form GSTR-1 filed by the supplier
GSTR-3- It is a return to be filed on monthly basis (compounding and ISD taxpayers are
exceptions)
GSTR-3A- It is a notice sent to a registered taxable person who fails to file return under
section 27 and section 31
GSTR-4- It is a return to be filed by Compounding Taxpayer
GSTR-4A- To furnish details of inward supplies received by the recipient registered under
composition scheme which are based on Form GSTR-1 filed by the supplier
GSTR-5- This is a periodic return to be filed by Non-Resident Foreign Taxpayer
GSTR-6- It is a return to be filed by Input Service Distributor (ISD)
GSTR-6A- To furnish details of inward supplies received by the ISD recipient which are
based on Form GSTR-1 filed by the supplier
44
GSTR-7- It is a return to be filed for Tax Deducted at Source
GSTR-7A- It is a TDS Certificate
GSTR-8- It is statement to be filed by E-Commerce Operators
GSTR-9- It is the annual return of GST
GSTR-9A- It is a simplified version of annual return of GST for Compounding taxable

persons
GSTR-10- It is the final return of GST to be filed after surrender or cancellation of

registration
GSTR-11- To provide details of inward supplies if person having UIN wants to claim
refund
Form Name Due Date
GSTR-1 10th day of the subsequent month
GSTR-1A 15th day of the subsequent month
GSTR-2A 15th day of the subsequent month

GSTR-3A
GSTR-4 18th day of the month next to quarter
GSTR-4A Every quarter
GSTR-5 Due on last day of registration

GSTR-6A

GSTR-7A
45
GSTR-8
GSTR-9 Due by 31st December of subsequent F.Y.
GSTR-9A Due by 31st December of subsequent F.Y.
GSTR-10 Within 3 months of date of surrender or cancellation
GSTR-11 Due by 28th day of the subsequent month
RETURNS TO BE FILED BY REGULAR TAXPAYERS
Normal taxpayers (including casual taxpayers) would have to file the following
returns out of the returns mentioned above:
 GSTR-1 (monthly)
 GSTR-8 (annual return)
Normal or regular taxpayers who have more than one registration for business in a
state would have to file the following returns:
 GSTR-8 (annual return)
Note: First three forms, i.e. GSTR-1, GSTR-2 & GSTR-3 need to be filed separately for
each registration while GSTR-8 is a common return. Those taxpayers who must get their
account audited u/s 44AB of I-T Act should also file a reconciliation statement certified
by a CA.
RETURNS TO BE FILED BY COMPOUNDING TAXPAYERS
46
Compounding taxpayers, i.e. those who are registered under composition scheme are
required to file the following return:
 GSTR-4 (quarterly)
 Simple annual return (form to be prescribed)
Note: Compounding taxpayers can opt out of compounding scheme to take benefit of
ITC.
RETURNS TO BE FILED BY CASUAL AND NON-RESIDENT TAXPAYERS
Casual and Non-Resident taxpayers other than foreigners are required to file the
following returns for the period they are registered:
 GSTR-1
 GSTR-2
 GSTR-3
Non-Resident taxpayers who are foreigners need to file the following returns for the
period they are registered:
 GSTR-5
Note: Monthly returns must be filed if registration period exceeds one month.
47
Types of GST Returns:
S.No Return Particulars
1. GSTR-1 Details of outward supplies of taxable goods or services or both

effected
2. GSTR-2 Details of inward supplies of taxable goods or services or both

claiming input tax credit
3 GSTR-3 Monthly return on the basis of finalization of details of outward

supplies and inward supplies along with the payment of amount
of tax
4 GSTR-4 Quarterly Return for compounding taxable persons
5 GSTR-5 Return for Non-Resident foreign taxable persons
6 GSTR-6 Input Service Distributor return
7 GSTR-7 Return for authorities deducting tax at source
48
8 GSTR-8 Details of supplies effected through e-commerce operator and the
amount of tax collected as required under sub-section (52)
9 GSTR-9 Annual Return
10 GSTR-9A Simplified Annual return by Compounding taxable persons

registered under section 10
DUE DATES
Due Dates for Filing of Return in GST:
S.No Return Form Due Date

th
1. GSTR-1 10 of Next Month
2. GSTR-2 After the 10 but before 15th of Next Month
th
3 GSTR-3 20th of Next Month

4 GSTR-4 18th from end of the Quarter
5 GSTR-5 20th from end of the month or within 7 days after the last day of
validity of registration whichever is earlier
9 GSTR-9 31st December of Next Financial Year
10 GSTR-9A 31st December of Next Financial Year
Since the introduction of the Goods and Services Tax (GST) on July 1, 2017 , one issue
that has continually been in the limelight is returns filing. GST introduced a host of new
requirements for returns, and mistakes or noncompliance result in interest and penalties
for businesses, as well as negative GST ratings.
49
The GST Council in its 23rd meeting at Guwahati released several new compliance and
return filing procedures. To help clarify some of these new compliance procedures, let’s
look at various GST returns (GSTR) and the forms that will facilitate filing them.
GSTR-1
Form GSTR-1 contains details of outward supplies (sales) of taxable goods and/or
services. GSTR-1 can either be filed quarterly or monthly.
Quarterly return
Registered persons with an aggregate turnover up to Rs. 1.5 crore may opt for quarterly
return filing
Period (quarterly) Due dates
July – Sept. 2017 Jan. 10, 2018
Oct. – Dec. 2017 Feb. 15, 2018
Jan. – March 2018 April 30, 2018
Monthly return
Registered persons with aggregate turnover of more than 1.5 crore must file a monthly
return. For those with aggregate turnover of less than 1.5 crore, the monthly return
is optional.
Period (monthly) Due dates
50
July – Nov. 2017 Jan. 10, 2018
Dec. 2017 Feb. 10, 2018
Jan. 2018 March 10, 2018
Feb. 2018 April 10, 2018
March 2018 May 10, 2018
Businesses need to be careful to file correctly. This is especially important right now
because there have been several due date extensions that require taxpayers to upload GST
returns for multiple periods at once, and choosing the correct period is very important.
Businesses need to be careful to avoid duplicating invoices. Further, it is important to

correctly categorise goods under the correct HSN codes and make sure to charge the
correct tax rate. Mentioning the right tax type, i.e., CGST, SGST, IGST, is also important.
Further, details of aggregate turnover in the previous year and a valid digital signature
will also be required when filing GSTR-1.
GSTR-2 and GSTR-3
For the time being, the GST Council has suspended the requirement to file forms GSTR-
2 and GSTR-3. Filing is expected to resume after March 31, 2018.
GSTR-2 will contain details of inward supplies (purchases) of taxable goods and/or
services that affect the input tax credit (ITC) claimed. This form will need to be filed by
the 15th of the following month.
Form GSTR-2 will require the following details:
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 Invoice-wise details of all interstate and intrastate supplies received from
registered or unregistered persons
 Goods that have been imported and services rendered
 Debit and credit notes, if any, received from supplier
 Amount of ineligible ITC on inward supplies when the taxable status of the
supplies could not be determined at the invoice level in form GSTR-2
GSTR-3, a monthly return, will finalize the details of outward and inward supplies and be
sent along with payment of tax. The form must be filed by the 20th of the following
month.
GSTR-3 is divided into two parts, i.e., part A and part B.
 Part A will be electronically generated based on information furnished in forms

GSTR-1 and GSTR-2, as well as other liabilities of preceding tax periods
 Part B will contain the tax liability, interest, and penalty paid and refund claimed
from a company’s cash ledger, if any. The system will compute the tax liability
based on GSTR-1, minus any ITC claimed in GSTR-2
GSTR-3B
All businesses are required to file a simple GST return in form GSTR-3B through March
2018. It is required to be filed by the 20th of the next month.
Period (monthly) Due dates
Dec. 2017 Jan. 20, 2018
Jan. 2018 Feb. 20, 2018
Feb. 2018 March 20, 2018
March 2018 April 20, 2018
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GSTR-4
Composition dealers are required to file a quarterly GST return using form GSTR-4 by
the 18th of the month following the quarter for which the return is being filed.
Period (quarterly) Due dates
July – Sept. 2017 Dec. 24, 2017
Oct. – Dec. 2017 Jan. 18, 2018
Jan. – March 2018 April 18, 2018
GSTR-5
GSTR-5 is a return for non-resident foreign taxable persons. This return is to be filed on a
monthly basis by the 20th of the following month.
The due date for the period July – Dec. 2017 is Jan 31, 2018.
GSTR-6
This return is for input service distributors. It is to be filed monthly by the 13th of the
following month. At this point the GST portal has facilitated GSTR-6 filing only for the
month of July 2017.
Soon-to-be required returns
GSTR-7: Applies to authorities deducting tax at the source. It will need to be filed on a
monthly basis by the 10th of the following month.
GSTR-8: To be filed by ecommerce operators on a monthly basis by the 10th of the next
month.
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GSTR-9: Every dealer will need to furnish this annual return by 31 December after the
end of the financial year. The first annual return under GST for the period April 2017 to
March 2018 will need to be filed by Dec. 31, 2018.
GSTR-10: To be filed only when a taxpayer’s registration is cancelled or surrendered,

within three months after the cancellation.
GSTR-11: This return is for UIN holders to report details of inward supplies to be
furnished by a person having UIN and claiming a refund. It must be furnished by the
28th of the month following the month for which the statement is being filed.
LATE FILING:-
The GST Act mandates filing returns. In cases where there are no transactions for a
particular period, taxpayers will still need to file a nil GST return. Missed returns cannot
be filed in a subsequent month or quarter. Therefore late filing will have a cascading
effect leading to heavy fines and penalty.
Pursuant to the GST Act, late fees of Rs. 100 per day per return will be levied on
companies in cases of late filing. This means total late fees of Rs. 200 per day (100 under
CGST and 100 under SGST), subject to a maximum of Rs. 5,000 for a particular period.
There are no late fees for IGST returns.
The GST Council has waived late fees for GSTR-3B for July, August, and September.
Any late fees paid for these months will be credited back to the company’s electronic
cash ledger under ‘Tax’ and can be utilized to make future GST payments.
In addition, the GST Council reduced the fees for filing GSTR-3B and GSTR-4 returns
after their due dates to:
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 Rs. 50 per day of delay in normal cases
 Rs. 20 per day of delay for taxpayers having nil tax liability for the month
Interest on delayed tax payments is charged at 18 percent per annum on the amount of
outstanding tax and is calculated from the day following the missed due date until the
actual date of payment.
Using GST compliance software can greatly assist businesses in filing returns accurately
and on time.
Avalara is an experienced application service provider (ASP) and partner of authorized

GST Suvidha Providers (GSPs). To understand how our cloud-based application, Avalara
TrustFile GST, can help you with GSTR-1 to -9, contact us
through https://www1.avalara.com/in/en/products/gst-returns-filing.html.
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OFFENCES & PENALTIES
OFFENCES
Offence in general means a breach of Law or Act or any illegal act and penalty is defined
as the punishment for committing an offence.Section 122 to 138 of the GST Act defines
Offences and Penalties under GST There are 21 offenses under GST. We have mentioned
a few here. For the entire list of 21 offenses please go to our main article on offenses.
The major offenses under GST are:
 Not registering under GST, even though required by law. (Read our article for the
list of those who have to register mandatorily under GST)
 Supply of any goods/services without any invoice or issuing a false invoice
 The issue of invoices by a taxable person using the GSTIN of another bona fide
taxpayer
 Submission of false information while registering under GST
 Submission of fake financial records/documents or files, or fake returns to evade
tax
 Obtaining refunds by fraud
 Deliberate suppression of sales to evade tax
 Opting for composition scheme even though a taxpayer is ineligible
The GST Act lists 21 offences in section 122 which are subject to a penalty of 10,000
rupees or the amount of tax involved, whichever is higher.
Nature of Offence
Where a taxable person who –
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1. Supplying goods and/or services without issuing an invoice or issuing an incorrect
or false invoice
2. Issuing an invoice without supplying goods and/or services
3. Collecting tax but failing to remit it to the government within three months of the
due date
4. Collecting tax in contravention of law but failing to remit it to the government
within three months of the due date
5. Failing to deduct tax or deposit the tax with the government
6. Failing to collect tax or collecting tax lesser than the amount required to be
collected and failing to pay the tax to the government
7. Taking full or partial input tax credit without actual receipt of goods and/or
services
8. Obtaining a refund of tax by fraud
9. Distributing an input tax credit other than in the manner prescribed
10. Falsifying or substituting financial records, producing fake accounts and/or
documents, or furnishing a false return
11. Failing to obtain registration (if registration is required)
12. Furnishing false information during registration
13. Obstructing an officer from the discharge of duties
14. Transporting taxable goods without documents
15. Suppressing turnover leading to evasion of tax
16. Failing to maintain books of accounts and documents
17. Failing to furnish information to CGST/SGST officers or furnishing false
information
18. Supplying and/or storing goods which one has reason to believe are liable for
confiscation
19. Issuing an invoice or document by using the identification number of another
person
20. Tampering with material evidence
Tampering with any goods that have been detained, seized, or attached
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PENALTIES UNDER GST
Penal provisions have been prescribed for all kinds of offences (under GST) in Model
GST law. The law also mentions certain principles on which these penalties should be
based.
For any person who:
 Aids or abets any of the 21 offences mentioned in Section 122(1)

 Acquires possession of or conceals himself in transporting, depositing, keeping,
concealing, supplying or purchasing goods which are liable to confiscation.
 Receives or is in any way concerned with the supply of services which are in
contravention of this act.
 Fails to appear before the officer.
 Fails to issue invoice or fails to account for the an invoice in his books of
accounts.
Shall be liable to penalty which may extend upto 25,000 rupees.
Punishments as a Result of Prosecution
If fraud is ascertained, then apart from the above amounts, the following shall also apply:
Amount of Tax Evaded Punishment
1. Between Rs.100 lakh and Rs.200 lakh 1 year imprisonment + fine
2. Between Rs.200 lakh and Rs.500 lakh 3 years imprisonment + fine
3. More than Rs. 500 lakh 5 years imprisonment + fine
The respective authority shall issue a Show Cause Notice to the taxable person and offer
him a reasonable time for being heard. The authority shall have to justify the imposition
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of such penalty as well as the nature of the offense committed. Where a taxable person
intentionally discloses an offense committed by him, it is within the powers of the
respective authority to reduce the amount of penalty to be imposed.
Prosecution Under GST
Where a person commits the following offenses with a deliberate intention to cause fraud,
becomes liable to prosecution under GST, i.e., face criminal charges..
 Claiming refund of CGST/SGST by fraud

 Submission of fake documents or returns
 Issuing any invoice without making a supply of goods or services
 Abetting in the fraud under GST
Appeals In GST
A person unhappy with any decision or order passed against him under GST can appeal
against such decision. The first appeal against an order by an adjudicating authority goes
to the First Appellate Authority.
If the taxpayer is not happy with the decision of the First Appellate Authority they can
appeal to the National Appellate Tribunal, then to the High Court, and finally to the
Supreme Court.
All appeals shall only be entertained provided the same is filed as per prescribed forms,
and minimum fees are paid. The fee for an appeal shall be:
 100% of the tax amount, interest, fee, penalty, arising from such challenged order
AND
 10% of the disputed amount.
The above amount of 10% can increase up to 25% of the disputed amount, where the
disputed tax amount is above INR 25 Crores. On the other hand, where the Commissioner
of GST or an officer is the appealing person, then no such prepayment of fees is required.
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Inspection, Search/Seizure under GST
Where the Joint Commissioner CGST/SGST has sufficient reason to believe that a
taxable person is deliberately suppressing transaction to evade taxes or has claimed
excessive Input Tax Credit, then he can order an officer of GST to inspect the locations of
such person.
Similarly, The Joint Commissioner of SGST/CGST can order for a search. He will order
a search on the basis of results of inspection (or other reason) if he has reasons to believe
–
 There are goods which might be confiscated

 Any documents or books or other things which are hidden somewhere. Such items
can be useful during proceedings.
Such incriminating goods and documents can be seized.
General Principles for Imposing Penalties:
1) No penalty for minor breach:
Often a person can make mistakes which may appear as fraud or an attempt to evade tax.
Sometimes, these mistakes are committed unknowingly or without any malicious
intention. The reason could be poor understanding of tax laws or carelessness in
following procedures.
Therefore, to save innocent persons from hassles of penalties or associated processes, the
model GST law has laid down some guidelines.
 If the error in taxes is Rs. 5,000 or less, then the breach should be considered
minor & no penalty should be imposed.
 If the mistake committed by the person is easily rectifiable, then the breach should
be considered minor & no penalty should be imposed.
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2) Penalty should align with severity of breach
Severity of breach of law should be established by analysing the facts & situations &
penalty should be imposed accordingly.
3) Reason behind penalty should be disclosed
Model GST law asks the tax authorities to ensure that the person on whom penalty is to
be imposed has been provided all the relevant information before being penalised. The
concerned person should be informed why he is being penalised.
4) Lower penalty on voluntary disclosure of breach
Penal provisions of model GST law are lenient for those who voluntarily disclose the
breach they committed. This will give encourage offenders to admit their wrongdoings
without worrying about the repercussions. As per clause 68(5) of model GST law, a tax
official may consider this action while establishing penalty. However, this provision will
not be applicable in cases where the law prescribes a fixed amount or fired percentage of
money as penalty as per clause 68(6) of model GST law.
Cognizance of Offences:
The law specifies that any court is not allowed to take cognizance of any offence without
proper sanction from concerned authority. Any court which holds a lower position than a
Magistrate of the First class cannot hold trial against an offence under GST.
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Presumption of “Mens Rea” or Guilty Mind:
When prosecuting an offender, the court shall assume that the accused had a guilty mind
or the law was broken with the intention to break it. The accused shall have the liberty to
prove it otherwise.
Offences and penalties under GST is likely to be rational and transparent which will
decrease the litigation as it is provided with Explanation wherever there is confusion.
CHAPTER NO 2-RESEARCH METHODOLOGY
OBJECTIVES OF GST
 One Country – One Tax

 Consumption based tax instead of Manufacturing
 Uniform GST Registration, payment and Input tax Credit
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 To eliminate the cascading effect of Indirect taxes on single transaction
 Subsume all indirect taxes at Centre and State Level under
 Reduce tax evasion and corruption
 Increase productivity
 Increase Tax to GDP Ratio and revenue surplus
 Increase Compliance
 Reducing economic distortions
 To study the concept of Goods and Service tax and its impact on the Indian
Economy
 To Understand how GST will work in India
 To know the advantage and the Challenges of GST in the Indian Content
 To study scope of gst
 To understand the concept of goods and service tax
 To know the benefits of goods and service tax to economy ,business ,industry and
consumer
 To Examine the feature of goods and service tax
 To understand Key issue and analysis of GST
 To collect information of current tax system and analysis of tax by GST
 To study challenge before GST in India
SCOPE OF GST
 GST is applicable on the supply of goods and services.
 Alcoholic liquor for human consumption is exempt from GST.
 Initially ,GST will not apply to
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a)petroleum crude
b)high speed diesel
c)motor spirit (petrol)
d)natural gas
e)Aviation turbine fuel
 The GST council will decide when GST will be levied on them
 Tobacco and Tobacco products will be subject to GST
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ADVANTAGES OF GST TAX
 Simplicity at its Best – Goods and Service Tax (GST) will replace the existing
form of indirect tax in the nation. It will prove a substitute for the 17 indirect laws
pertaining to the nation and will subsidize it with the new GST Tax. That shall
come across as a simpler term to envision.
 Boosting of Revenue – With the new GST in the nation, there won’t be more of
an evasion as what is happening with the current tax laws. Such simpler term of
taxation will make more suppliers in a mood to pay the tax amount which in turn
marks the boost in revenue levels.
 Lesser cost of Logistics and Inventory – As the GST tax will mark the end of 17
other indirect laws, there won’t be much of logistics and inventory costs as of
now. Also, the slow movement across the state levels of goods carrier will be
stopped with the transit speed increasing tenfold.
 Quite an Investment Boost – With the new GST Tax laws, one can avail input
tax credit on the capital goods. That way, the investment might surge up quite a
bit with an expected 6% increase.
 Lift for the Lesser Developed States – The normal rules stay put as the 2%
interstate-levy with the major chunk of production kept within the state itself.
However, with the change in rules, the tax amount can be dispersed across the
nation to offer a greater lift for the lesser-developed
 Help in better understanding - GST will reduce numbers of indirect taxes. With
GST the customer will be able to find out exactly how much tax is being paid on a
product or service.
 Equal Divisions- Under GST the obligation of tax will be divided equally
between the manufacturers and services providers.
 Transparency-In GST system prices of some manufactured goods and services
will go down which in turn will bring down the inflation and benefit the middle
class.In GST there will be no hidden taxes and costs involve in doing Business.
Hence, GST will bring transparency in all taxes.
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 Economic Growth and Development-It will promote exports of the country
that will not only boost economic growth but also generate employment. It is
predicted that GST will also indirectly increase the country's GDP.
 GST eliminates the cascading effect of tax-GST is a comprehensive
indirect tax that was designed to bring the indirect taxation under one
umbrella. More importantly, it is going to eliminate the cascading effect of
tax that was evident earlier. Cascading tax effect can be best described as
‘Tax on Tax’
 Higher threshold for registration-Earlier, in the VAT structure, any business with a
turnover of more than Rs 5 lakh (in most states) was liable to pay VAT. Also,
service tax was exempted for service providers with a turnover of less than Rs 10
lakh.Under GST regime, however, this threshold has been increased to Rs 20 lakh,
which exempts many small traders and service providers.
o Tax o Threshold Limits
 Excise  1.5 crores
 VAT  5 lakhs in most states
 Service Tax  10 lakhs
 GST  20 lakhs (10 lakhs for NE states)
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 Composition scheme for small businesses-Under GST, small businesses (with a
turnover of Rs 20 to 75 lakh) can benefit as it gives an option to lower taxes by
utilizing the Composition scheme. This move has brought down the tax and
compliance burden on many small businesses.
 Simple and easy online procedure-The entire process of GST

(from registration to filing returns) is made online, and it is super simple. This
has been beneficial for start-ups especially, as they do not have to run from pillar
to post to get different registrations such as VAT, excise, and service tax.
 The number of compliances is lesser-Earlier, there was VAT and service tax, each
of which had their own returns and compliances. Under GST, however, there is
just one, unified return to be filed. Therefore, the number of returns to be filed has
come down. There are about 11 returns under GST, out of which 4 are basic
returns which apply to all taxable persons under GST. The main GSTR-1 is
manually populated and GSTR-2 and GSTR-3 will be auto-populated.
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DISADVANTAGES OF GST
Increased costs due to software purchase-
 Businesses have to either update their existing accounting or ERP software to

GST-compliant one or buy a GST software so that they can keep their business
going. But both the options lead to increased cost of software purchase and
training of employees for an efficient utilization of the new billing software.
 ClearTax is the first company in India to have launched a ready-to-use

GST software called Cleartax GST software. The software is currently available
for free for SMEs, helping them transition to GST smoothly. It has truly eased the
pain of the people in so many ways.
Being GST-compliant
 Small and medium-sized enterprises (SME) who have not yet signed for GST
have to quickly grasp the nuances of the GST tax regime. They will have to issue
GST-complaint invoices, be compliant to digital record-keeping, and of course,
file timely returns. This means that the GST-complaint invoice issued must have
mandatory details such as GSTIN, place of supply, HSN codes, and others.
 ClearTax has made it easier for SMEs with the ClearTax BillBook web
application. This application is available for FREE until the end of September and
is an easy solution to this problem. This will help every business to issue GST-
compliant invoices to their customers. These same invoices can then be used for
return filing through the ClearTax GST platform.
GST will mean an increase in operational costs
 Business will have to employ tax professionals to be GST-complaint. This will

gradually increase costs for small businesses as they will have to bear the
additional cost of hiring experts.
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 Also, businesses will need to train their employees in GST compliance, further
increasing their overhead expenses.
GST came into effect in the middle of the financial year
 As GST was implemented on the 1st of July 2017, businesses followed the old tax
structure for the first 3 months (April, May, and June), and GST for the rest of the
financial year.
 Businesses may find it hard to get adjusted to the new tax regime, and some of
them are running these tax systems parallelly, resulting in confusion and
compliance issues.
GST is an online taxation system
 Unlike earlier, businesses are now switching from pen and paper invoicing and
filing to online return filing and making payments. This might be tough for some
smaller businesses to adapt to.
 Cloud-based GST billing software like the ClearTax GST Billing

Software is definitely an answer to this problem. The process for return filing on
ClearTax GST is very simple. Business owners need to only upload their invoices,
and the software will populate the return forms automatically with the information
from the invoices. Any errors in invoices will be clearly identified by the software
in real-time, thus increasing efficiency and timeliness.
SMEs will have a higher tax burden
 Smaller businesses, especially in the manufacturing sector will face difficulties

under GST. Earlier, only businesses whose turnover exceeded Rs 1.5 crore had to
pay excise duty. But now any business whose turnover exceeds Rs 20 lakh will
have to pay GST.
 However, SMEs with a turnover upto Rs 75 lakh can opt for the composition
scheme and pay only 1% tax on turnover in lieu of GST and enjoy lesser
compliances. The catch though is these businesses will then not be able to claim
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any input tax credit. The decision to choose between higher taxes or the
composition scheme (and thereby no ITC) will be a tough one for many SMEs.
 Registration in the Many States Required–As per GST, the seller would require
registering in all the states that it does business in and that would increase the
complexity for the seller. The government should have created a provision for
centralized registration of State GST as this would have helped many sellers
during the rollout.
 Impact on Discounts – GST has also had an impact on discount and reward
programs as well. The product is being taxed at the rates pre-discount
whereas the products were earlier taxed at post discount prices. Most of the
companies have also suspended reward programs on temporary basis
because of complexities of GST
 Disability Tax – As many of the things related to disabled people which were
earlier Tax-Free are now included in GST Taxation. Prior to implementation of
GST, brail paper, typewriter, hearing aid and motorized wheelchair were tax-free
whereas these things are being taxed now.
 Complexity for the Businessmen – According to the proposal of the GST Tax,
the control on business will be rendered to Central and State Governments with
businessmen binding by-laws. As such complexity may arise for many
businessmen across the nation.
 Costlier Service – The current Service Tax stands at 15% as of now which will
increase to 18%-20% when GST is levied. As such many services will be on the
costlier side with telecom, airline and banking affected majorly. In fact, insurance
and petroleum are also said to be majorly affected by the enactment of GST Tax.
 New Name but Existing System-GST which includes CGST, SGST, and IGST is
nothing but just a new name in accordance with the existing tax systems.
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DISADVANTAGES OF GST FOR THE GOVERNMENT:
1. An increase in Revenue: The expansion of the tax base will automatically

result into increase in revenue to the governments. The low GST rate will
induce the business and consumers to pay the taxes and cut down more on
cash transactions. The scrapping of various concessions and exemptions will
ultimately result into increase in tax collection for the government. Not only at
the central government, the state government will also expect to see an
increase in revenues.
2. Streamlining of Administration: Bringing all the indirect taxes under one
umbrella will ensure the streamlining of all administration procedures as well.
GST offers a good opportunity to link ADHAR cards and Pan cards with the
bank account for the government in order to ensure streamlined and
standardized administrative procedures.
DISADVANTAGES OF GST FOR THE BUSINESSES:
1. Possible reduction of tax costs: Businesses in India can expect a reduction in

tax costs depending upon the products. Where one product was loaded with
numerous indirect taxes such as excise, customs, VAT, sales tax amounting to
30 – 35 %, will now considerably reduce to one single rate. GST rates range
from 12% to 18% which goes maximum to 28%. GST will also support the
reduction in tax due to the full utilization of input tax credit thereby reducing
and eliminating the cost of the tax on tax.
2. Optimization of Resources, Cost and Time: The time consuming and
cumbersome nature of the indirect tax legislation for the business will be
reduced with the implementation of GST. GST, with its simplified procedures
and compliance framework, will drastically reduce the need for resources as
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well as cost and time spent by businesses on the management of the various
indirect taxes.
3. Reduced Litigation: Another advantage of GST – one country one tax – is
that the numerous legislations of various indirect taxes which leads to various
litigations will be cut down considerably. These litigations have to be fought
for decades before a final verdict is expected. GST with fewer and simplified
legislations will ensure the reduction of compliance and self-assessment will
further reduce the queries and objections raised by the Department.
4. Efficient Structuring of Operation: GST with its structure neutral effect and
commonality of tax laws across the country will organize and operate feasibly
for the businesses rather than organizing operations based on the requirements
of the various indirect tax legislations.
5. Self-Assessment: GST offers a more comprehensive self-assessment, unlike
the earlier indirect taxes self-assessments, with lesser intervention by the
department. Furthermore, automation of procedures and compliances would
pave a way to the true self-assessment and businesses would ultimately benefit
from the reduced intervention from the government authorities.
DISADVANTAGES OF GST FOR THE CONSUMERS:
 Possible Cheaper goods and Servies: Over a period of time, with the
implementation of GST, the prices of the goods and services will be reduced.
This is because goods that cost taxes of 30 – 35% will see a reduction a tax
rate of 12 to 28% which in turn will bring down the cost of the goods and
services. Reduction in prices has the potential to increase the consumption of
goods and services.
 Improved Service Levels: With the implementation of GST, there will be the
simplification of procedures and removal of check post verifications
procedures while traveling by road. This will ensure faster delivery of goods to
the consumers and improve the service levels offered by the businesses.
 Access to goods and services: Under GST, with the standardization of taxes
and simplification of documentation and procedures, traders, dealers and
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service providers who currently operate in smaller areas will be benefited to
expand their operations across the country. The dealer from one state need not
worry about the legislations and GST rules of another state while transferring
the goods as GST is paid to the Central Government or to his own state
government. This will bring about easy access to goods and services to the
consumers.
DISADVANTAGES OF GST ON THE REAL-STATE MARKET
GST Tax would swell negative remarks on the real-estate As perceived, GST will
increase the cost of the new homes by 8% which in turn will cease the demand by 12%.
 Old Wine in a New Bottle – According to the experts, terms such as GST which
includes CGST, SGST and IGST is nothing but just a new name in accordance
with the existing tax systems. Kind of old wine in a new bottle.
 Costlier Service – The current Service Tax stands at 15% as of now which will
increase to 18%-20% when GST is levied. As such many services will be on the
costlier side with telecom, airline and banking affected majorly. In fact, insurance
and petroleum are also said to be majorly affected by the enactment of GST Tax.
 Complexity for the Businessmen – According to the proposal of the GST Tax,
the control on business will be rendered to Central and State Governments with
businessmen binding by-laws. As such complexity may arise for many
businessmen across the nation.
 Income Tax Credit Mismatch – As the change in tax guard will take place, the
first few instances of application would mean high tax paying at the start. That
said, they will only be able to exercise the tax input on the latter stages when the
loop is exercised. With that in place, there would be ITC mismatch during the
early uses of GST Tax.
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IMPORTANCE OF GOODS AND SERVICE TAX:
Importance of GST can be enlisted as follows.
 Unlike erstwhile indirect tax such as VAT, GST law is common across India.
 GST will give boost to ‘Make in India’ initiative.
 GST follows a continuous linked chain for claiming Credit of GST paid
earlier.
 GST also provides tax credit for inter state supply unlike erstwhile system.
As a result GST will boost inter state supply.
 No more like CST, GST will not form part of cost of supply as GST on
interstate supply is also eligible for Input credit.
 GST Compliance is made easy with a special purpose vehicle called GSTN
which allows its users to enjoy hassle free compliance support.
 GST is based on Value added concept.
 GST will help to reduce tax evasion at every level of goods cycle i.e from
manufacturer to retailer.
 It is the transparent tax system that provides the flow of tax in a clear
manner.
 GST will boost earnings of both State and Central Government.
 Once GST gets settled, will accelerate indian economy growth.
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CHAPTER NO 3 - LITERATURE REVIEW
Dr R Vasanthagopal (2011) studied GST in India .A Big Leap in the indirect Taxation
System and found that the positive impacts are dependent on a neutral and rational design
of the gst balancing the conflicting interests of various stakeholders , full political
commitment for a fundamental tax reform with a constitutional amendment the method .
Different new articles, Books and Web were used which were enumerated and recorded.
Switch over to flawless gst would be a big leaf ion the indirect taxation system and also
give a new impetus to India ‘s economic change. It is also noted that , buyed by the
success of gst , more than 160 countries have introduced GST in some form to other and
is fast becoming the preferred form of indirect tax in the Asian Pacific region.
The Honorable Minister of Finance ,corporate Affairs and Broadcasting Government of

India further mentioned that the implementation of the gst will be pegged as one of the
biggest game changing reforms of the Indian govt .It will help India become an
economically integrated economy ,will help reduce business costs and facilitate seamless
movement of the goods and services eliminating local charge.It would reduce tax
cascading eliminating tax on tax and hence help reach a situation where revenue would
be benefited and GDP would improve.
Jai Prakash (2014) in his research study , mentioned that the GST at the Central and the
State level are expected to give more relief to industry , trade ,agriculture and consumers
through a more comprehensive and wider coverage of input tax set-off and service tax
set-off , subsuming of service taxes in the GST and phasing out of GST. Response of
Trade and also of industry have been encouraging. Thus GST offers us the best option to
broaden our tax base and we should not miss this opportunity to introduce it when the
circumstances are quite favourable and economy is enjoying steady growth with only
mild inflation.
Saravanan Venkadasalam (2014) has analysed the post effect of the goods and service tax
(GST) on the national growth on ASEAN states using Least squares dummy variable
model (LSDVM) in his research paper .He stated that seven of the 10 ASEAN nations are
75
already implementing the GST . He also suggested the household final consumption
expenditure and general government consumption expenditure are positively significantly
related to the gross domestic product as required and support the economic theories .But
the effect of the post GST differs in countries , Phillipiness and Thailand show significant
negative relationship with their nations development .Meanwhile , singapore shows a
significant positive relationship.
It is undeniable that those countries whom implementing GST always encouter grows
.Nevertheless the extent of the impact varies depending on the governance ,compliance
cost and economic distortion .A positive Impact of GST depends on a neutral and rational
design of the GST such a way it is simple , transparent and significant enhances
involuntary compliance. It must be actual , not presumptive , prices and compliance
control would be exercised through an auditing System.
76
CHAPTER NO 4 -DATA ANALYSIS ,INTERPRETATION
AND PRESENTATION
COMPARISON BETWEEN MULTIPLE INDIRECT TAX

LAW AND PROPOSED ONE LAW
WITHOUT WITH
PARTICULARS GST GST
RS RS
Manufacture to Wholesaler
Cost of Production 5,000.00 5,000.00
Add: Profit Margin 2,000.00 2,000.00
Manufacturer Price 7,000.00 7,000.00
Add: Excise Duty @ 12% 840 0.00
Total Value(a) 7,840.00 7,000.00
Add: VAT @ 12.5% 980
Add: CGST @ 12% 0 840
Add: SGST @ 12% 0 840
Invoice Value 8,820.00 8,680.00
Wholesaler to Retailer
COG to Wholesaler(a) 7,840.00 7,000.00
Add: Profit Margin@10% 784 700
Total Value(b) 8,624.00 7,700.00
Add: VAT @ 12.5% 1,078.00 0
Add: CGST @ 12% 0 924
Add: SGST @ 12% 0 924
Invoice Value 9,702.00 9,548.00
Retailer to Consumer:
COG to Retailer (b) 8,624.00 7,700.00
Add: Profit Margin 862.4 770
Total Value(c) 9,486.40 8,470.00
Add: VAT @ 12.5% 1,185.80
Add: CGST @ 12% 1,016.40
Add: SGST @ 12% 1,016.40
Total Price to the Final
consumer 10,672.20 10,502.80
Cost saving to consumer 169.4
% Cost Saving 1.59
77
Notes:·
 Input tax credit available to wholesaler is Rs.980 and Rs.1,680 in case of without
GST and with GST respectively.
 Likewise Input tax credit available to Retailer is Rs.1,078 and Rs.1,848 in case of
without GST and with GST respectively.
 In case, VAT rate is also considered to be 12%, the saving to consumer would be
1.15%.
EXAMPLE –2 (INPUT TAX CREDIT)
Shiva, a registered dealer had input tax credit for CGST and SGST Rs.750/- and
Rs.1,050/- respectively in respect of purchase of inputs and capital goods. He
manufactured 1800 liters of finished products. 200 liters was normal loss in the process.
The final product was sold at uniform price of Rs.10 per liter as follows:-Goods sold
within State – 800 liter.Finished product sold in inter-State sale – 650 liter.Goods sent on
stock transfer to consignment agents outside the State – 350 liter.Further, CGST and
78
SGST rate on the finished product of dealer is 5% and 7% respectively. Further IGST rate
is 12%. Calculate tax liability of SGST and CGST to be paid after tax credit.
SOLUTION-
OUTPUT TAX CALCULATION

SALES STOCK INTER
WITHIN TRANSFER STATE
PARTICULARS THE STATE OUTSIDE STATE SALES TOTAL
Qty. Sold 800 350 650
Price per unit 10 10 10
Value of Goods
Sold 8,000 3,500 6,500 18,000
Tax Amount:
Tax Amount –
CGST(5%) 400 400
Tax Amount –
SGST(7%) 560 560
Tax Amount – 780
IGST(12%) 420 1,200
Calculation of Tax Payable:
Calculation of Tax Payable

Particulars CGST SGST IGST TOTAL
Tax Payable Amount 400 560 1200
Less: Input Tax Credit
CGST 400 350 750
SGST 560 490 1050
Balance Payable 360 360
EXAMPLE –3 (INPUT TAX CREDIT)
Now, continuing with the above example 2, suppose the dealer purchases goods interstate
and have input tax credit of IGST available is Rs.2,000/-.
Compute the tax payable.
79
Solution:
Calculation of Tax Payable
Particulars CGST SGST IGST TOTAL
Tax Payable Amount 400 560 1200
Less: Input Tax Credit
CGST
SGST
IGST 400 400 1200 2000
Balance Payable 160 160
EXAMPLE-4 (IMPORT)
Shri Shiva imported goods for Rs. 10,000/- and incurred expenses to produce final saleable
goods. BCD @ 10 % was chargeable on imported goods. These manufactured goods were sold
within the state at Rs. 45,000 plus applicable GST. Rate of CGST and SGST is 5% and 7%
respectively. Compute Cost, Sale value and tax payable for the transaction.
Solution:
80
Calculation of Net cost of imported goods
Calculation of Sale value after import
Particulars Amount(Rs)
Sale Value (before tax) 45,000
Add: CGST on Import @ 5% 2,250
Add: SGST on Import @ 7% 3,150
Sales Value 50,400
Tax Payable Calculation

Particulars
CGST SGST
(Rs.) (Rs.)
Output tax 2,250 3,150
Less: Input tax credit
CGST 550
SGST 770
Net tax payable 1,700 2,380
EXAMPLE 5-COMPARISON BETWEEN VAT AND GST
VAT
MANUFACTURE
ITEM QUANTITY RATE MARGIN TOTAL TOTAL
KEYBOARD 4 100 50 150
MOUSE 5 40 10 50
MONITOR 6 1500 100 1600
81
TOTAL BILL 1800
VAT 10% 180
BILL 1980
MARGIN OTHER
STATE 1000 2980
CST 10% 298 3278
GST
MANUFACTURE
ITEM QTY RATE MARGIN TOTAL TOTAL
KEYBOARD 4 100 50 150
MOUSE 5 40 10 50
MONITOR 6 1500 100 1600
TOTAL BILL 1800
GST= SGST+ CGST
10%= 5% 5% 10% 180% 1980%
MARGIN OTHER
STATE 1000 2980
IGST 10% 298 3278
IGST-
GST 118 RETURN
EXAMPLE 6- CALCULATION OF COMPOSITION SCHEME
NORMAL TAX TAX

PAYER PAYER
PURCHASE 20000
TAX 5% 1000
INVESTMENT 20000
PROFIT 10% 2000
SALE VALUE 22000
TAX 5% 1100
TOTAL PRICE OF
GOODS 23100
COMPOSITION SCHEME
PURCHASE 20000
TAX 5% 1000
82
INVESTMENT 21000
PROFIT 10% 2100
TOTAL PRICE OF GOODS 23100
TAX 1% (COMPOSITION
SCHEME) 230(APPROX)
PROFIT 2100
TAX 230
NET PROFIT 1870
CHAPTER NO 5 :CONCLUSION AND SUGGESTIONS
The conclusion from the study under GST is Tax policies play an important role on the
economy through their impact on both the efficiency and equity . The ongoing tax
reforms on moving to a goods and service tax would impact the national economy
,International trade ,firms and the consumers .There has been a good deal of the criticism
as well as appraisal of the proposed goods and services tax regime .It is considered as the
major improvement over the pre existing central excise duty at the national level and the
sales tax system at the state level , the new tax will be further significant breakthrough
and the next logical step towards a comprehensive indirect tax reforms in the country
.GST is not simply VAT plus service tax ,but a major improvement over the previous
system of VAT and disjointed service tax – a justified step forward .A single rate would
help maintain simplicity and transparency by treating all goods and services as equal
without giving special treatment to some special goods and/or services. This will reduce
litigation on classification issues. It is also expected that implementation of GST in the
Indian framework will lead to commercial benefits which were untouched by the VAT
system and would essentially lead to economic development. Hence GST may usher in
the possibility of a collective gain for industry , trade , agriculture , and common
consumers as well as for the Central Government and the State Government .
83
Goods and Service Tax, with end-to-end IT-enabled tax mechanism, is likely to bring
buoyancy to government revenue. It is expected that the malicious activity of tax theft
will go away under Goods and Service Tax regime in order to benefit both governments
as well as the consumer. In reality, that extra revenue that the government is expecting to
generate won’t come from the consumers’ pocket but from the reduction of tax theft
SUGGESTIONS FOR EFFECTIVE IMPLEMENTATION

Some suggestions for better administrative machinery to handle the implementation of
Goods and Services Tax Act in India are:
 Standardization of systems and procedures.

 Tax relief in case of branch transfer
 Well defined procedures in case of Job works
 Uniform dispute settlement machinery.
 Adequate training for both tax payers and tax enforcers.
 Re-organization of administrative machinery for GST implementation.
 Building information technology backbone – the single most important initiative
for GST implementation.
 Uniform Implementation of GST should be ensured across all states (unlike the
staggered implementation of VAT) as many issues might arise in case of
transactions between states who comply with GST and states who are not
complying with GST.
84
Biblography
 profit books
 gst.gov.in
 does goods and service tax (gst) leads to indian economic development ?
 gst: what is a composition scheme? who can opt for it? what are the rates? a
cleartax explainer
 gst returns in 2018: due dates, requirements, and penalties- goods and services
tax (25 january, 2018 | ca priya madrecha (ca,cs))
 registration under gst http://www.cbec.gov.in/resources//htdocs-cbec/gst/regn-
goodsandservicetax-fourfold-
02june2017.pdf;jsessionid=8a0b8732fdf2bca7bba8d0c21affca49
 https://www.slideshare.net/iosrjce/does-goods-and-services-tax-gst-leads-to-
indian-economic-development
 https://www.slideshare.net/iosrjce/does-goods-and-services-tax-gst-leads-to-
indian-economic-development
85
 https://www.gstindia.com/goods-and-service-tax-a-detailed-explanation-with-
examples-2
 https://www.gstindia.com/goods-and-service-tax-a-detailed-explanation-with-
examples-2/
 source: https://www.taxmanagementindia.com/visitor/detail_article.asp?
articleid=6892&kw=gst-registration
 https://www.reachaccountant.com/erp-software-pos-software-blog/offences-and-
penalties-under-gst
86

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University of Mumbai

“OVERVIEW OF GOODS AND SERVICE TAX ”

University of Mumbai for partial completion of the degree of

Under the Faculty of Commerce

Under the Guidance of

Prof. Babita Kakkar

S.I.E.S (Nerul) College of Arts, Science & Commerce

Plot 1-C, Sector – V,

Nerul, Navi Mumbai – 400706

College Code - 710

Academic year 2017-2018

Seal of the college Name and Signature of

Name and Signature of the Learner

Name and Signature of the Guiding Teacher

Sr. No. Contents Page No

2. Research Methodology 64-75

3. Literature Review 76-77

4. Data Analysis, Interpretation and Presentation 77-84

5. Conclusions and Suggestions 85-86

CHAPTER NO 1 - INTRODUCTION OF GST

THOSE WHICH ARE LEVIED BY CENTRAL GOVERNMENT;

1. Central Excise duty

THOSE WHICH ARE LEVIED BY STATE GOVERNMENT;

GST-HOW GST WORKS IN INDIA?

Impact of GST on Indian Economy

GST RATES IN INDIA

TYPES OF GST IN INDIA

There are three types of taxes will be started under GST.

1. State Goods and Services Tax – State GST (SGST)

TAXES TO BE SUBSUMED UNDER GST

THE FOLLOWING TAXES LEVIED AT CENTRE WILL GET SUBSUMED UNDER

ii. Additional Excise Duties

iv. Service Tax

vi. Special Additional Duty of Customs - 4% (SAD)

vii. Surcharges, and

THE FOLLOWING STATE TAXES AND LEVIES WOULD BE, TO BEGIN

i. VAT / Sales tax

ii. Entertainment tax (unless it is levied by the local bodies).

iii. Luxury tax

iv. Taxes on lottery, betting and gambling.

vi. Entry tax not in lieu of Octroi.

TAXES TO BE KEPT OUT OF PURVIEW OF GST

 Tax on Tobacco products: Tobacco products would be subjected to GST with

 Tax on Petroleum Products: As far as petroleum products are concerned, it was

 GST on Imports: The GST will be levied on imports with necessary

 Special Industrial Area Scheme -industrial incentives should be converted, if at

13)Destination-based consumption: Unlike the current indirect taxes, GST will be

o Restaurants with a turnover of INR 5 million or less will levy 5% GST

INPUT TAX CREDIT UNDER GST

Input Tax Credit under GST – Conditions To Claim

1. Possession of a tax invoice or debit note or document evidencing payment

 Effecting exempt and taxable supplies

ITEMS ON WHICH CREDIT IS NOT ALLOWED

 Motor vehicles and conveyances except the below cases

 Sale of membership in a club, health, fitness centre.

 rent-a-cab, health insurance and life insurance except the following:

 9.travel benefits extended to employees on vacation such as leave or home travel

 Goods and/or services for construction of an immovable property whether to be

 Goods and/or services used for personal use

 Goods or services or both received by a non-resident taxable person except for

REVERSE CHARGE UNDER GST:

UTGST(Union territory gst)

Bill to compensate states