For - BBA/B.

COM (H)

BY: BRIJESH KUMAR

B.COM(H), M.COM
BRIJESH KUMAR 1
University of Delhi
 Course Contents:

UNIT-II UNIT-III
UNIT-I
• Assessment of Tax • Demand & Recovery
GST In India- • Inspection
• Tax Invoice
• Provisions of Indirect • Search, Seizure &
• Credit & Debit Note
Tax Arrest
• Accounts & Records
• Basic Concept of • Advance Ruling
• Input Tax Credit
Supply • Appeal & Revisions
• Place & Time of
• Composite & Mix
Supply
Supplies
• Valuation & UNIT- IV
• Services under GST
Exemption • Audit
•Levy & Charges of GST
• Job Work • Offences & Penalties
•Procedure of
• Refund
Registration
UNIT- III • Activities Neither
• Person & Taxable
Supply of Goods nor
Person
• Return & Due Dates Services
• Payment of Tax
• TCS • Role of GST
Practitioner
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Taxes are considered to be the “Cost of living in a SOCIETY”.

Taxes are levied by the Governments to meet the Common welfare expenditure
of the society.

A charge which is mandatory imposed by Government on Income earned

By Individual, Corporate , Goods , Services or any activity in order to revenue

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The reason for levy of taxes is that they constitute the basic source of revenue
to the Government.

Revenue so raised is utilized for meeting the expenses of Government like

Defense, provision of education, health-care, Infrastructure facilities like
roads, dams etc.

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The Constitution of India, in Article 265 lays down that “No tax shall be levied or
Collected except by authority of law .“ Accordingly for levy of any tax, a law needs
to be framed by the government

Constitution of India gives the power to levy and collect taxes, whether direct or
Indirect, to the Central and State Government.

The parliament and State Legislatures are empowered to make laws on the
matters enumerated in the Seventh Schedule by virtue of Article 246 of the
Constitution of India

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Seventh Schedule to Article 246 Contain Three Lists which enumerate the matters
under the Parliament and State Legislatures have the authority to make laws for
the purpose of levy of taxes.

The following are the list:

(i) Union List : Parliament has the exclusive power to make laws on the matter
contained in Union list
(ii) State List : The legislatures of any states has the exclusive power to make laws
on the matter contained in State list
(iii) Concurrent List : Both Parliament & State legislatures have the power to make
laws on the matter contained in Concurrent list

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 Taxes

Indirect
Direct Tax
Tax

Professional
Income Tax Capital Gain VAT CST Excise Import GST
Tax

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 TYPES OF TAXES

DIRECT TAX INDIRECT TAX

Burden of tax is
Burden of tax is borne
shifted to other
by person himself
person

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 Direct Tax

Ø Taxes which are paid directly to the Government are known as Direct Tax
Ø It cannot transferred to another person
Ø Examples of Direct Tax:-
Income Tax,
Corporate Tax,
Capital Gain,
Property Tax Etc.

Ø It is Progressive in Nature

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 Indirect Tax

Taxes which is collected by the intermediary from the person who bears the
burden of tax and then pays the taxes to the government is known as Indirect Tax

It can be transferred to another person i.e. Goods & Service Tax

Indirect taxes are collected by supplier of goods and services and paid by the
consumer of goods and services.

Burden of tax is shifted to the final consumer

It is regressive in Nature

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Feature Indirect Tax

An important source of revenue: Indirect taxes are a major source of tax revenues
for Govt. In India, Indirect taxes contribute more than 50% of the total tax revenues
of Central & State Govt.

Tax on commodities and services: It is levied on commodities at the time of supply

Or manufacture or purchase or sale or Import/export thereof.

Shifting of burden: There is a clear shifting of tax burden in respect of Indirect tax

No perception of direct pinch: Since, value of indirect taxes is generally inbuilt in

the price of the Commodity. Tax payer does not perceive a direct pinch while paying
indirect tax

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 Feature Indirect Tax

Inflationary: Tax imposed on Commodities and services causes an all-round

price spiral. In other words, Indirect taxation directly affects the price of Commodities
And services and leads to inflationary trend.

Wider tax base: Unlike direct taxes, the Indirect taxes have wide tax base. Majority of
The Products & Services are subject to indirect taxes with low thresholds.

Promotes social welfare: Higher taxes are imposed on the consumption of harmful
products such as alcoholic product, tobacco products etc.

Regressive in nature: Generally, the indirect taxes are regressive in nature.

The rich and the poor have to pay the same rate of indirect taxes on certain
commodities of mass consumption.
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 INDIRECT TAXES BEFORE INTRODUCTION OF GST

Central State
Tax Tax

Central Sales Tax Entry Tax

Excise Tax VAT/ Sale Tax

Service Tax Entertainment Tax

Custom Duty Stamp Duty

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Excise Duty

Excise duty is a tax levied on the products manufactured within a country.

Retailers or intermediaries collect this indirect tax from customers and
pay it to the Central Government
This amount is payable when the manufacturers remove goods from their
production area or warehouse and transfer it for selling.

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 VAT

Value Added Tax is imposed on the intrastate sale i.e., when the sale take
place within the sate, under such system both the buyer and the seller of
goods belong to the same state.

VAT is paid by producer to the Govt. but it is actually collected from the
customers or end users who purchase the goods

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 Central Sales Tax

Central Sales Tax (CST) is a tax on sales of goods levied by the Central Govt. of India.
CST is applicable only in the case of inter-state sales.
Inter-state sale is when a sale or purchase constitutes movement of goods from
one state to another.

CST is payable in the state where the goods are sold and movement commences.

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 Service Tax

Service Tax is a tax imposed by Government of India on services providers for

giving services to the customer is known as service tax

The service provider collects the tax and pays the same to the government. It is
charged on all services except the services covered in the negative list

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Tax Before GST

Example-1 ABC Ltd. has purchase raw material for Rs.10000 plus excise duty@10%
Plus VAT@10%. The company has Incurred Rs.3000 being processing charge and sold
the final product at a Profit of Rs.2000 and charged output excise duty @ 10% plus
VAT@10%.
Solution.
Raw material : 10000
Add: Excise@10% : 1000
Total 11000
Add: VAT@10%: 1100
Cost of Purchase : 12100

Cost of Raw material : 12100

Add: Processing Charge: 3000
Profit: 2000
Add: Transaction Value : 17100
Add: Output Excise@10% 1710
Total : 18810
Add: VAT@10% : 1881
Invoice Value : 20691BRIJESH KUMAR 18
Tax After GST

Example-2 ABC Ltd. has purchase raw material for Rs.10000 plus CGST @10%
Plus SGST@10%. The company has Incurred Rs.3000 being processing charge
and sold the final product at a Profit of Rs.2000 and charged output CGST @
10% plus SGST@10%.
Solution.
Raw material : 10000
Output CGST@10 = 1500
Add: CGST@10% : 1000
Input CGST@10% = 1000
SGST@10% : 1000
Payable = 500
Total 12000
Output SGST@10 = 1500
Cost of Raw material : 10000
Input SGST@10% = 1000
Add: Processing Charge: 3000
Payable = 500
Profit: 2000
Add: Transaction Value : 15000
Total Tax Payable = 1000
Add: CGST@10%: 1500
SGST@10%: 1500
Total : 18000

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