PRESTIGE INSTITUTE OF MANAGEMENT

AND RESEARCH
DEPARTMENT OF LAW

ASSIGNMENT: TAXATION LAW

SUBMITTED TO- SUBMITTED BY-

ASS. PROF. AYUSH Mayank Saraf

KANSAL
BA.LL. B 9TH SEM
 INDIRECT TAX ASSIGNMENT

Q1. Explain the GST model.

Ans. GST was introduced in the year 2000. On 19th December 2014, 122nd
amendment bill was introduced in the Lok Sabha. On 6th May 2015, the bill was
passed in the Lok Sabha. In 2016, Rajya Sabha passed the bill and in August
2016, the Constitution (101st Amendment) Act was enacted. On July 1, 2017
GST was launched in India.

GST Model

1) Dual GST/ Tax Model

In dual GST model, tax is imposed by centre and states both on intra-state
sale and states are empowered to the tax services. The dual GST is a tax
with one or two Central GST and State GST rates. In the transactions,
both centre and state have been assigned the powers to levy and collect
taxes.

2) CGST/ SGST/ UTGST/ IGST

Under CGST, all goods and services are taxed by the central government
only. Under SGST, the state governments levy GST on the goods and
services. Basically, there are two main GST i.e., CGST and SGST as
 UTGST and IGST are included in the Centre and State Gst. In the inter-
state transactions, IGST is applicable.

3) Classification of Goods and Services

Under GST, goods and services are classified as HSN (Harmonized
System Nomenclature) and SAC (Service Access Code). HSN is a system
of giving unique number to similar products attracting the specified rate
of tax all over India. SAC are codes that classify each service under GST.

4) Registration
Under GST, it is compulsory to register for a supplier or a company
having aggregate turnover in a financial year exceeding the limit of 20
lakhs rupees.

5) Composition Scheme
This scheme under GST is mainly for the small traders to save them from
the business threats. To save the registered traders under GST but
turnover is less than 75 lakhs. Under this, they are not supposed to follow
all the compliances/ guidelines of GST and can directly file a return. The
scheme lowers the tax liability of small businesses. The record of sale is
fixed at 1%.

6) Exemptions
Some products that are in GST but out from tax. The essential products/
items are exempted as they come under GST but are free from other
taxes. This includes salt, fruits, fresh milk, bread, etc.

7) Seamless flow of credit

It is basically an uninterrupted transaction. This is one of the main
objectives of GST. After paying VAT, if any addition of amount is done,
this will result in earning profit. The additional tax is called as Input Tax
Credit.

8) GST common portal

www.gst.gov.in is the portal created by the government for GST. The
common portal for all the taxpayers is known as GSTN where facilities
 like GST registration, GST return filing and other services relevant to
taxpayer registered under GST are available.

9) GSPs/ ASPs
GSP is the GST Suvidha Providers and ASP is the Application Service
Providers. They provide support to the taxpayers in the IT ecosystem of
GST.

10) Compensation cess-goods and service tax (compensation to states)

cess act 2017
GST Compensation Cess is the additional cess levied on certain notified
goods in addition to GST applicable on it. These are applicable on luxury
and demerit goods. Ex- Tobacco, Aerated water, Motor cars, etc.

Q2. Explain the constitutional provisions of GST.

Ans. GST was the 122nd amendment bill and 101st amendment act. There are
certain provisions in the constitution of India which govern the taxation laws
and GST in India.

1) Article 265 – This article says that no tax shall be levied or collected
except by authority of law.

2) Article 246 - 7th schedule to article 246 contains of 3 lists-

 union
 state
 concurrent

3) Article 246A – Special provision with respect to GST

Parliament and the legislature of every state have the power to make laws
with respect to GST imposed by union or by such state.

4) Article 248 - Residuary powers of legislation

5) Article 249 – It gives power to parliament to legislate with respect to a

matter in the state list in the national interest.
 6) Article 250 - Power of parliament to legislate with respect to any matter
in the state list if a proclamation of emergency is in operation.

7) Article 268 - Duties levied by Central Government but appropriated and

collected by states.
 Excise duty on excise
Tax on luxury and demerit goods

8) Article 269A - Levy and collection of GST on inter-state supply or

commerce
Tax imposed and collected by central government, and shall be
apportioned between the union and the states as per manner prescribed
by GST council.

9) Article 270 – The taxes shall be levied and collected by the government
of India and shall be distributed between union and states in the manner
provided.

10) Article 271 – Surcharge on certain duties and taxes for purposes of
the union.
This article gives power to the parliament to increase any duties or taxes
referred under article 269 or 270.

11) Article 366 –

12. “goods” includes all materials, commodities, and articles;
12A. “goods and services tax” means any tax on supply of goods, or
services or both except taxes on the supply of the alcoholic liquor for
human consumption
26A. “services’ means anything other than goods.

12) Article 279A – GST Council

a. Came into force on 12th September 2016

b. Consists of following members-

 Union finance minister-chairperson

  Union minister of state incharge of revenue and finance

 Minister of finance or taxation or any ministry nominated by state

c. They shall make recommendations on-

 Taxes, cesses and surcharges

 Exempted goods

 Principles of levy, model GST law, place of supply

 Threshold limit

 Rates of goods and services

 Special rates in special cases

 Special category states

 Other GST matters

d. GST implementation date for petrol and petroleum products

e. 1/2 of the total number of members of GST council shall constitute the
quorum at its meeting

f. Every decision shall be taken by a majority of not less than 3/4 th of weighted
votes of members present with following principle-

 Vote of Central Government shall have weightage of 1/3rd

 Vote of State Government shall have weightage of 2/3rd

Q3. Write short notes on:

1. 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. 1.5 crore. This scheme under
GST is mainly for the small traders to save them from the business
threats. To save the registered traders under GST but turnover is less than
 75 lakhs. Under this, they are not supposed to follow all the compliances/
guidelines of GST and can directly file a return. The scheme lowers the
tax liability of small businesses. The record of sale is fixed at 1%.

2. Benefits of GST
i. Simplified Tax Structure
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.

ii. Easy Tax Compliance

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.

iii. Unified National Market

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.

iv. Enhanced Investments and Employment

GST creates employment opportunity in India. Increase in
employment will increase consumptions & increase in
consumption helps in build economy.

v. Removal of Cascading effect

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’.

3. GST Council

a. Came into force on 12th September 2016

b. Consists of following members-

 Union finance minister-chairperson

 Union minister of state in charge of revenue and finance

 Minister of finance or taxation or any ministry nominated by state

c. They shall make recommendations on-

 Taxes, cesses and surcharges

 Exempted goods

 Principles of levy, model GST law, place of supply

 Threshold limit

 Rates of goods and services

 Special rates in special cases

 Special category states

 Other GST matters

d. GST implementation date for petrol and petroleum products

e. 1/2 of the total number of members of GST council shall constitute the
quorum at its meeting

f. Every decision shall be taken by a majority of not less than 3/4 th of weighted
votes of members present with following principle-

 Vote of Central Government shall have weightage of 1/3rd

 Vote of State Government shall have weightage of 2/3rd

Q4. Who are the persons required to register themselves under GST? Also
explain the registration process.

Ans. Persons liable for registration (Section 22)

1) A person exceeding the threshold limit by aggregate turnover (taxable +

exempt + exports + inter- state supply)
 Threshold limit of 10 lakhs (for goods & services both) – Manipur,
Mizoram, Nagaland and Tripura
 Threshold limit of 20 lakhs – Arunachal Pradesh, Meghalaya,
Sikkim, Uttarakhand, Puducherry and Telangana.
 Threshold limit of 20 lakhs for services and 40 lakhs for goods
exclusive – J&K, Assam, Himachal Pradesh and all other states.
2) In case of transfer of business or succession.
3) In case of amalgamation or demerger.

Compulsory Registration under GST (Section 24)

1) Persons involved in any inter-state taxable supply.
2) A person receiving supplies on which tax is paid on reverse charge basis.
3) Casual taxable persons who do not have a fixed place of business in state
or UT.
4) E-commerce operators.
5) Non-resident taxable persons.
6) Persons deducting TDS.
7) A person supplying on behalf of other person. Ex- Agent principal
relationship.
8) Person notified by State Government and Central Government.

Where and When to apply for registration

Section 22 or 24 has to get registered in the state or UT liable within 30 days of

liability. A casual taxable person or a non-resident taxable person has to get
registered in state or UT at least 5 days prior to commencement of business.

 Documents – PAN, Mobile number, email id.

 Basic login portal – www.gst.gov.in
 Upload of other documents.
 TRN (Temporary Reference Number) to trace the application
  Application processed to officer in charge.
 Officer examines the documents.
 If found in order, registration certificate will be issued within 3 days from
the date of application.
 If not in order, clarification is called upon within 3 days; if satisfied,
certificate is issued within 7 days, if not then the application is rejected.

Deemed approval of application

If proper officer fails to take any action:

 Within 3 days from the date of application, or

 Within 7 days from the date of clarification,

The application would be deemed to be approved.

Cancellation of registration

Registration can be cancelled by the officer or by own in the following cases-

i. Business [discontinued/ transfer/ amalgamation/ demerger/ by law]

ii. Change in the constitution of business
iii. No longer tax liability for registration
iv. Contravention of provision
v. Voluntarily registered has not started the business within 6 months
from the date of registration.
vi. Registration obtained through frauds wilful misstatement or hidden
facts.

Q5. How can ITC be availed under GST? What are the conditions under
which ITC cannot be availed?

Ans. “Input Tax” in relation to a taxable person, means the Goods and Services
Tax charged on him for any supply of goods and/or services to him, which are
used or are intended to be used, for the furtherance of his business. Input Tax
Credit under GST - Conditions to Claim ITC must be fulfilled and forms one of
the most critical activity for every business to settle its tax liability. ITC is the
backbone of GST and a major matter of concern for the registered persons. ITC
is the credit of the tax paid on purchases against the liability of tax.
A registered person will be eligible to claim Input Tax Credit (ITC) on the
fulfilment 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
a registered person against a document of transfer of title of goods
4) Furnishing of a return
5) Where goods are received in lots or instalments ITC will be allowed to be
availed when the last lot or instalment is received
6) Failure of the supplier towards supply of goods and/or services within
180 days from the date of invoice, ITC already claimed by recipient 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 has been claimed on the tax
component of a capital good
8) Time limit to claim ITC against an Invoice or Debit Note is earlier of
below dates:

The due date of filing GST Return for September of next financial year
OR
Date of filing the Annual Returns relevant for that financial year

9)  Common credit of ITC used commonly for

 Effecting exempt and taxable supplies
 Business and non-business activity

 ITC can be claimed only for business purposes. ITC will not be available for
goods or services exclusively used for: 

 Personal use 
 Exempt supplies 
 Supplies for which ITC is specifically not available

ITC can be availed only on goods and services for business purposes. If they are
used for non-business (personal) purposes, or for making exempt supplies ITC
cannot be claimed. Apart from these, there are certain other situations where
ITC will be reversed.
  Non-payment of invoices in 180 days– ITC will be reversed for invoices
which were not paid within 180 days of issue.
 Credit note issued to ISD by seller– This is for ISD. If a credit note was
issued by the seller to the HO then the ITC subsequently reduced will be
reversed.
 Inputs partly for business purpose and partly for exempted supplies or
for personal use – This is for businesses which use inputs for both
business and non-business (personal) purpose. ITC used in the portion of
input goods/services used for the personal purpose must be reversed
proportionately.
 Capital goods partly for business and partly for exempted supplies or for
personal use - This is similar to above except that it concerns capital
goods.
 ITC reversed is less than required- This is calculated after the annual
return is furnished. If total ITC on inputs of exempted/non-business
purpose is more than the ITC actually reversed during the year then the
difference amount will be added to output liability. Interest will be
applicable.

Q6. What are the different types of (Explain in brief)

1. Returns under GST

i. GSTR-1
GSTR-1 is the return to be furnished for reporting details of all outward
supplies of goods and services made, or in other words, sales
transactions made during a tax period, and also for reporting debit and
credit notes issued. Any amendments to sales invoices made, even
pertaining to previous tax periods, should be reported in the GSTR-1
return.
GSTR-1 is to be filed by all normal taxpayers who are registered under
GST. It is to be filed monthly, except in the case of small taxpayers with
turnover up to Rs.1.5 crore in the previous financial year, who can file
the same on a quarterly basis.
ii. GSTR-2A
GSTR-2A is the return containing details of all inward supplies of goods
and services i.e. purchases made from registered suppliers during a tax
 period. The data is auto-populated based on data filed by the suppliers in
their GSTR-1 return. GSTR-2A is a read-only return and no action can
be taken.
iii. GSTR-2
GSTR-2 is the return for reporting the inward supplies of goods and
services i.e. the purchases made during a tax period. The details in the
GSTR-2 return are auto-populated from the GSTR-2A. Unlike GSTR-
2A, the GSTR-2 return can be edited. GSTR-2 is to be filed by all
normal taxpayers registered under GST, however, the filing of the same
has been suspended ever since the inception of GST.
iv. GSTR-3
GSTR-3 is a monthly summary return for furnishing summarized details
of all outward supplies made; inward supplies received and input tax
credit claimed, along with details of the tax liability and taxes paid. This
return is auto-generated on the basis of the GSTR-1 and GSTR-2 returns
filed. GSTR-3 is to be filed by all normal taxpayers registered under
GST; however, the filing of the same has been suspended ever since the
inception of GST.
v. GSTR-3B
GSTR-3B is a monthly self-declaration to be filed, for furnishing
summarized details of all outward supplies made, input tax credit
claimed, tax liability ascertained and taxes paid. GSTR-3B is to be filed
by all normal taxpayers registered under GST.
vi. GSTR-4 / CMP-08
GSTR-4 is the return that was to be filed by taxpayers who have opted
for the Composition Scheme under GST. CMP-08 is the return which has
replaced the now erstwhile GSTR-4. The Composition Scheme is a
scheme in which taxpayers with turnover up to Rs.1.5 crores can opt into
and pay taxes at a fixed rate on the turnover declared. The CMP-08
return is to be filed on a quarterly basis.
vii. GSTR-5
GSTR-5 is the return to be filed by non-resident foreign taxpayers, who
are registered under GST and carry out business transactions in India.
The return contains details of all outward supplies made, inward supplies
received, credit/debit notes, tax liability and taxes paid. The GSTR-5
return is to be filed monthly for each month that the taxpayer is
registered under GST in India.
viii. GSTR-6
GSTR-6 is a monthly return to be filed by an Input Service Distributor
(ISD). It will contain details of input tax credit received and distributed
by the ISD. It will further contain details of all documents issued for the
distribution of input credit and the manner of distribution.
ix. GSTR-7
GSTR-7 is a monthly return to be filed by persons required to deduct
TDS (Tax deducted at source) under GST. GSTR 7 will contain details
of TDS deducted, the TDS liability payable and paid and TDS refund
claimed, if any.

x. GSTR-8
GSTR-8 is a monthly return to be filed by e-commerce operators
registered under the GST who are required to collect tax at source (TCS).
GSTR-8 will contain details of all supplies made through the E-
commerce platform, and the TCS collected on the same. The GSTR-8
return is to be filed on a monthly basis.
xi. GSTR-9
GSTR-9 is the annual return to be filed by taxpayers registered under
GST. It will contain details of all outward supplies made, inward
supplies received during the relevant previous year under different tax
heads i.e. CGST, SGST & IGST and HSN codes, along with details of
taxes payable and paid. It is a consolidation of all the monthly or
quarterly returns (GSTR-1, GSTR-2A, GSTR-3B) filed during that year. 
GSTR-9 is required to be filed by all taxpayers registered under GST,
except taxpayers who have opted for the Composition Scheme, Casual
Taxable Persons, Input Service Distributors, Non-resident Taxable
Persons and persons paying TDS under section 51 of CGST Act.
xii. GSTR-9A
GSTR-9A is the annual return to be filed by taxpayers who have
registered under the Composition Scheme in a financial year. It is a
consolidation of all the quarterly returns filed during that financial year.
xiii. GSTR-9C
GSTR-9C is the reconciliation statement to be filed by all taxpayers
registered under GST whose turnover exceeds Rs.2 crore in a financial
year. The registered person has to get their books of accounts audited by
a Chartered/Cost Accountant. The statement of reconciliation is between
these audited financial statements of the taxpayer and the annual return
 GSTR-9 that has been filed. GSTR-9C is to be filed for every GSTIN,
hence, one PAN can have multiple GSTR-9C forms being filed.
xiv. GSTR-10
GSTR-10 is to be filed by a taxable person whose registered has been
cancelled or surrendered. This return is also called a final return and has
to be filed within 3 months from the date of cancellation or cancellation
order, whichever is earlier.
xv. GSTR-11
GSTR-11 is the return to be filed by persons who have been issued a
Unique Identity Number (UIN) in order to get a refund under GST for
the goods and services purchased by them in India. UIN is a
classification made for foreign diplomatic missions and embassies not
liable to tax in India, for the purpose of getting a refund of taxes. GSTR-
11 will contain details of inward supplies received and refund claimed.

2. Rates under GST

The GST rate in India for various goods and services is divided under 4
slabs; these are 5% GST, 12% GST, 18% GST, and 28% GST. However,
there are some products that do not carry any GST rate.
 GST Slab of 5%

Under this slab, the goods of basic amenities are covered such as sugar,
oil, spices, coffee, coal, fertilizers, tea, ayurvedic medicines, agarbatti,
sliced dry mango, cashew nuts, sweets, handmade carpets, lifeboats, fish
fillet, unbranded namkeen, and life-saving drugs are covered.

The services under this slab include railways, airways, takeaway food,
AC and Non-AC restaurants, hotel rooms with a tariff less than ₹ 7,500,
and special flights for pilgrims.

 GST Slab of 12%

Under this slab, products like cell phones, sewing machine, umbrella,
jewellery box, along with processed foods like frozen meat, fruit juices,
butter, cheese, ghee are covered.

The services under this slab include business class flight tickets and
movie tickets below ₹ 100.

 GST Slab of 18%

Under this slab products like hair oil, safety glass, pasta, pastries, ice-
cream, mineral water, hair shampoo, oil powder, water heaters, washing
machine, detergent, scent sprays, leather clothing, cookers, oil powder,
cutlery, binoculars, artificial flowers, wristwatches, suitcase, briefcase,
shaving, after-shave, furniture, stationery items, mattress monitors,
television screen, lithium-ion batteries, video games are covered.

The services under this slab include restaurants within hotels whose
tariffs are above ₹ 7,500, actual hotel bill below ₹ 7,500, movie tickets
above ₹ 100.

 GST Slab of 28%

Under this slab, over 200 products are covered like cars, cigarettes,
durable consumer products, high-end motorcycles, pan masala, weighing
machine, cement are covered.

The services under this slab include racing, betting in casinos, the actual
bill of hotel stay above ₹ 7,500.

A special rate of 0.25% is levied on semi-polished and cut stones

 3. Documents under GST

i. Tax Invoice
It is an invoice in which the amount of tax has been charged. Tax invoice
is issued by a registered person.

ii. Bill of Supply

It is an invoice with all the same details of the tax invoice except for the
amount or rate of tax. It is issued by an unregistered person, person opted
for composition scheme or a person involved in business of exempted
goods or services.

iii. E-way Bill

It is a bill required during the transport of goods or in transit over a
specified distance and a specified amount.
In case of supply of goods, the bill is issued in triplicate and in case of
services, the invoice is issued in duplicate.
Consolidated tax invoice – value of supply is less than Rs. 200, recipient
is unregistered, and recipient does not require the invoice.

iv. Receipt Voucher

When a receipt gives any amount of advance to a supplier, the supplier
gives a document called a receipt voucher.

v. Refund Voucher
In case of non-fulfilment of supply or issue of any tax invoice, a refund
is initiated to return the amount received.

vi. Credit Note

It is issued in the following cases-
 When goods are returned to the supplier
 When goods or service is deficient
 Tax value > Tax payable

vii. Debit Note

It is issued in the following cases-
 Tax value < Tax payable
  Amount charged < Amount payable

Q7. What do you understand by customs? Explain its types and levy of
customs.

Customs Duty refers to the tax that is imposed on the transportation of goods
across international borders. It is a kind of indirect tax that is levied by the
government on the imports and exports of goods. Companies that are into the
export-import business need to abide by these regulations and pay the customs
duty as required. Put differently, the customs duty is a kind of fees that are
collected by the customs authorities for the movement of goods and services to
and from that country. The tax that is levied for the import of products is
referred to as import duty, while the tax levied on the goods that are exported to
some other country is known as export duty. The primary purpose of customs
duty is to raise revenue, safeguard domestic business, jobs, environment and
industries etc. from predatory competitors of other countries. Moreover, it helps
reduce fraudulent activities and circulation of black money.

Types of Customs Duty

Customs duties are levied on almost all goods that are imported into the
country. On the other hand, export duties are levied on a few items as
mentioned in the Second Schedule. Customs duties are not levied on life-saving
drugs, fertilizers and food grains. Customs duties are divided into different
taxes, such as:

1) Basic Customs Duty

This is levied on imported items that are part of Section 12 of the
Customs Act, 1962. The tax rate is levied as per First Schedule to
Customs Tariff Act, 1975.

2) Additional Customs Duty

It is levied on goods that are stated under Section 3 of the Customs Tariff
Act, 1975. The tax rate is more or less similar to the Central Excise Duty
charged on goods produced within India. This tax is subsumed under
GST now.
3) Protective Duty
This is levied for the purpose of protecting indigenous businesses and
domestic products against overseas imports. The rate is decided by the
Tariff Commissioner.

4) Education Cess
This is charged at 2%, with an additional higher education cess 1%, as
included in the customs duty.

5) Anti-dumping Duty
This is levied if a particular good is being imported is below fair market
price.

6) Safeguard Duty
This is levied of the customs authorities feel that the exports of a
particular good can damage the economy of the country.