CITY GROUP OF COLLEGES, LUCKNOW

LECTURE
PLAN (UNIT-I)
COURSE: - B.COM SEMESTER: 4TH

PAPER: IV SUBJECT: GST

Concepts and practice
Syllabus: : Concept and types of Indirect Tax; Right to impose indirect tax by
Centre (Union)/State and Union Territory Governments before and after 101st
Amendment of the Constitution of India; Introduction of GST in India.

LECTURE 1 Concept and types of Indirect Tax

LECTURE 2 PART-A Right to impose indirect tax by Centre (Union)/State and

Union Territory Governments before and after 101st Amendment of
the Constitution of India
PART-B Right to impose indirect tax by Centre (Union)/State and
Union Territory Governments before and after 101st Amendment of
the Constitution of India
LECTURE 3 Introduction of GST in India.
 LECTURE 1
Concept and types of Indirect Tax

Meaning of tax
• Tax is a compulsory payment to be made by every resident of India.
• It is a charge or burden laid upon persons or the property for the support of a Government.
• Government decided the rates and the items, on which tax will be charged, like income tax, GST, etc.

The tax structure in India can be classified into two main categories:
1. Direct Tax: It is defined as the tax imposed directly on a taxpayer and is required to be paid to the
government. Also, an individual cannot pass or assign another person to pay the taxes on his behalf.
2. Indirect Tax: It is defined as the tax levied not on the income, profit or revenue but the goods and
services rendered by the taxpayer. Unlike direct taxes, indirect taxes can be shifted from one individual to
another. Earlier, the list of indirect taxes imposed on taxpayers included service tax, sales tax; value added
tax (VAT), central excise duty and customs duty.
Types of Indirect Taxes in India
1. Service Tax
Service tax is applicable on the services provided by a company and paid by the recipient of their services,
collected by and deposited with the central government.
2. Value Added Tax
Value added Tax, popularly known as VAT, is levied on the sale of movable goods or goods sold directly to
the customers. VAT is exacted by the respective state governments on intra-state sales.
3. Excise Duty
Excise duty is levied on the goods produced or manufactured in India, paid by the manufacturers of different
goods. Excise duty is often recovered from the customers.
4. Custom Duty
Custom duty is applicable on the goods which are imported into India from other countries. In some cases, it
is also levied on the goods being transported out of India.
5. Entertainment Tax
Entertainment tax is levied on all financial transactions related to entertainment such as movie shows,
amusement parks, video games, arcades, and sports activities, and is charged by the respective state
governments.
6. Stamp Duty
Stamp duty is levied on the transfer of immovable property located within the state, and is charged by the
State Government and may vary in rates. It is also applicable on all legal documents.
Features of Indirect Tax
1. Charged on Commodities
Indirect taxes are charged on material things such as goods and services. These are not levied on the income
you earn.
2. Shifts the Burden of Tax
Sellers of the goods are required to pay the indirect taxes to the government. But they transfer the liability to
their consumers.
3. Tax Evasion
Indirect taxes are already included in the price of the commodities. Thus, when you buy goods or a service,
you automatically pay your share of the tax. This can thus help to reduce tax evasion.
4. Paid by the Consumer
The liability of indirect tax is passed on by the sellers to the consumers. This tax is thus charged at the point
of sales and is paid by the customers.
5. Revenue for Government
Since this type of tax cannot be easily evaded and is applicable on most of the commodities, it serves as a
major revenue source for the govt. Its contribution is higher than the direct tax.
6. Consumer is not directly affected
The main cause of direct tax evasion is that it is charged on the income directly. Indirect taxes face no such
problem as they are not directly affected.
Advantages of Indirect Tax
1. Collectability: Compared to direct taxes, indirect taxes are simpler to collect. The government
should not worry about the collection of indirect taxes because they are only collected at the time of
making purchases.
2. Convenience: Since indirect taxes are only paid when a purchase is made, they are easy on the
taxpayer and handy
3. Fair contributions: Costs of goods and services and indirect taxes are closely related. This basically
means that luxury things are taxed at higher rates while fundamental requirements are taxed at lower
rates, ensuring that contributions are fair.
4. Reduce Negative Consumption: Products like alcohol, cigarettes, and other comparable ones that
are harmful to human health are subject to the greatest indirect taxation.
Disadvantages of Indirect Tax
1. Regressive: The nature of indirect tax can be regressive. For instance, the salt tax is the same for rich
and poor people, but if a rich person doesn’t pay, there will be bigger fines as well.
2. Financial Burden: There may be cumulative indirect taxes charged at times. As a result, middlemen
in a point-based transaction system are likely to add their own service tax, which could raise the final
price of the goods.
3. Hindrance: Industry-unfriendly indirect taxes exist. Taxes on commodities and raw materials raise
the cost of production, preventing industries from growing because their ability to compete is
constrained.
ONE LINER

1. …………….is a compulsory payment to be made by every resident of India.

2. ………………. decided the rates and the items, on which tax will be charged, like income tax, GST,
etc.
3. ………………….is defined as the tax imposed directly on a taxpayer and is required to be paid to
the government
4. …………………..is defined as the tax levied not on the income, profit or revenue but the goods and
services rendered by the taxpayer.
5. Value added Tax, popularly known as………….., is levied on the sale of movable goods or goods
sold directly to the customers.
6. ……………..is applicable on the goods which are imported into India from other countries.
7. ……………..is levied on the transfer of immovable property located within the state, and is charged
by the State Government and may vary in rates.
8. ……………………….is levied on all financial transactions related to entertainment.
9. ………………………….are charged on material things such as goods and services.
10. …………………………are already included in the price of the commodities
ANSWER

1. Tax
2. Government
3. Direct Tax
4. Indirect Tax
5. VAT
6. Custom duty
7. Stamp duty
8. Entertainment tax
9. Indirect taxes
10. Indirect taxes
 LECTURE 2
PART- A
Right to impose indirect tax by Centre (Union)/State and Union Territory Governments before
and after 101st Amendment of the Constitution of India

Amendment of Indian Constitution for GST

The Constitution contains the Union List and the State List within which the power to levy separate
taxes is given to the Centre and States respectively. GST was to be levied in such a way that both the
Centre and the States received the power to levy and collect it.
Constitution (101st Amendment) Act, 2016
In order to suitably implement the GST legislation, this Act resulted in the insertion, deletion and
amendment of certain Articles of the Constitution. The following matters were dealt with as a result of
these changes:
• The delineation of powers to levy and make laws with respect to GST
• The applicability and scope of the GST law
• The manner of apportionment of revenue from GST among Centre and States
• The constitution, powers and duties of the GST Council
• The discontinuation of existing taxes to give way for GST
• The manner of providing compensation to States for loss of revenue on account of the introduction of
GST.

Commodities kept outside the purview of GST

❖ Alcoholic liquor for human consumption is outside the scope of GST: As per newly inserted clause
12A in Article 366 of the Constitution of India GST means any tax on supply of goods or services except
tax on supply of alcoholic liquor for human consumption.
❖ Specified petroleum goods will be brought within the GST ambit from a date recommended by the
GST Council. Union Excise Duty/VAT will continue to be levied on these goods in a present manner.
Specified petroleum goods are-
1. Petroleum crude;
2. High speed diesel;
3. Motor spirit (commonly known as petrol);
4. Natural gas and
5. Aviation turbine fuel.

History of GST
1. The then Prime Minister Atal Bihari Vajpayee proposed the idea of GST in the year 2002. A
committee was then set up to design a Goods and Services Tax Model for the country.
2. In 2004, Kelkar Task Force on Fiscal Responsibility and Budget Management proposed a nationwide
implementation of fully integrated GST.
3. While presenting the Union Budget of 2007-08, the Union Finance Minister announced the GST
launch date as 1st April 2010. However, the lack of political consensus deferred the GST start date
several times.
4. On 19th December 2014, the NDA government presented the Constitutional (122 nd Amendment) Bill
2014 on GST in Parliament. The Lok Sabha eventually passed the bill on 6th May 2015.
5. On 14th May 2015, the bill was referred to a Joint Committee of both the Houses of Parliament.
After incorporating recommendations from the committee, the Rajya Sabha passed the GST Bill on 3rd
August 2016.
6. September 2016: The Honorable President of India gives his consent for the Constitution
Amendment Bill to become an Act.
7. The Constitution (101st Amendment) Act 2016 came into force after ratification by the required
number of State governments and the approval of the President of India.
 8. On 29th March 2017, after the approval of the GST Council, the Lok Sabha passed the following
Central legislations:
➢ GST Bill, 2017
➢ IGST Bill, 2017
➢ UTGST and SGST Bill, 2017
➢ GST (Compensation to Cess) Bill, 2017
9. All States and Union territories passed their respective SGST and UTGST Acts by 30th June 2017.
Hence the GST implementation date was set as 1st July 2017. It marked the beginning of a path breaking
tax reform in our country
10. 8th July 2017 – SGST Act passed by J&K; CGST and IGST Ordinances promulgated to extend GST
to J&K

ONE LINER
1. was to be levied in such a way that both the Centre and the States received the power to levy and
collect it.
2. As per newly inserted …………………….of the Constitution of India GST means any tax on
supply of goods or services except tax on supply of alcoholic liquor for human consumption.
3. Specified petroleum goods will be brought within the GST ambit from a date recommended by
the……………….
4. The then Prime Minister Atal Bihari Vajpayee proposed the idea of GST in the year ………….
5. In, Kelkar Task Force on Fiscal Responsibility and Budget Management proposed a nationwide
implementation of fully integrated GST.
6. While presenting the Union Budget of 2007-08, the Union Finance Minister announced the GST
launch date as………………...
7. On 19th December 2014, the NDA government presented the Constitutional (……………) Bill
2014 on GST in Parliament.
8. …………………., the bill was referred to a Joint Committee of both the Houses of Parliament.
9. …………………….The Honorable President of India gives his consent for the Constitution
Amendment Bill to become an Act.
10. All States and Union territories passed their respective SGST and UTGST Acts by…………...
11. Hence the GST implementation date was set as ……………..
12. ……………….– SGST Act passed by J&K; CGST and IGST Ordinances promulgated to extend
GST to J&K
ANSWER
1. GST
2. clause 12A in Article 366
3. GST Council.
4. 2002.
5. 2004
6. 1st April 2010
7. 122nd Amendment
8. On 14th May 2015
9. September 2016
10. 30th June 2017
11. 1st July 2017.
12. 8th July 2017
 LECTURE 2
PART-B
Right to impose indirect tax by Centre (Union)/State and Union Territory Governments before
and after 101st Amendment of the Constitution of India

We would refer to each amendment in the Constitutional Amendment Act, 2016 as under:
Article
1. Insertion of Article 246A
Gave power to the Parliament & State Legislatures to make laws on GST levied by Union & States.
Parliament has exclusive power to legislate when supply is in the course of inter-state trade or
commerce.

2. Amendment to Article 268

Omission of power of Central Government to levy duty of excise on medicinal and toilet preparations.

3. Omission of Article 268A

Omission of power of Central Government to levy taxes on services as tax on services has been brought
under GST.
4. Amendment of Article 269
Consequential amendment in view of insertion of Article 269A. Article 269 provides for the taxes levied
and collected by the Union but assigned to States.

5 Insertion of Article 269A

It provides for GST on supplies in the course of inter-state trade or commerce levied & collected by
Central Government and apportion of such tax between Union & States in the manner provided by
Parliament by law on the recommendations of GST Council. It also provides for devising the principles
for determining place of supply and when a supply takes place in the course of inter-state trade or
commerce.

6. Amendment to Article 270

The amendment provides for distribution of GST levied and collected by the Central Government.

7. Amendment to Article 271

The amendment restricts the power of Parliament to impose surcharge on the goods & services on which
GST is levied.

8. Amendment of Article 366

This amendment provides for definition of “Goods & Services Tax”, ‘Services’ & ‘States’. ‘GST’ means
any tax on supply of goods or services or both except on the supply of the alcoholic liquor for human
consumption”. ‘Services” means anything other than goods.

9.Amendment of Article 368

Insertion of Article 279A (GST Council) in clause (a) of Proviso to Article 368(2). Thus, any
modification in GST Council shall require the ratification by the legislatures of one half of the states.

10. Section 18 of the Constitutional (101st Amendment) Act, 2016

It provides for mandatory compensation to states for 5 years for loss of revenue on account of
introduction of GST. This Act deleted the provision for applicability of 1% additional tax on inter-state
transactions.

11. Section 19 of the Constitutional (101st Amendment) Act, 2016.

This section provides a timeframe of 1 year within which subsuming of different indirect taxes into GST
would take place and enable the Competent legislature to amend or repeal their existing laws.
 12. Section 20 of the Constitutional (101st Amendment) Act, 2016
This section provides power to the President to remove difficulties within a period of 3 years.

ONELINER
1. ……………….Gave power to the Parliament & State Legislatures to make laws on GST levied by
Union & States.
2. …………………….Omission of power of Central Government to levy duty of excise on medicinal and
toilet preparations.
3. …………………Omission of power of Central Government to levy taxes on services as tax on services
has been brought under GST.
4. ………………… provides for the taxes levied and collected by the Union but assigned to States.
5. …………….The amendment provides for distribution of GST levied and collected by the Central
Government.
6. …………………The amendment restricts the power of Parliament to impose surcharge on the goods &
services on which GST is levied.
7. ………………Insertion of Article 279A (GST Council) in clause (a) of Proviso to Article 368(2). Thus,
any modification in GST Council shall require the ratification by the legislatures of one half of the
states.
8. ……………It provides for mandatory compensation to states for 5 years for loss of revenue on account
of introduction of GST. This Act deleted the provision for applicability of 1% additional tax on inter-
state transactions.
9. This section provides power to the President to remove difficulties within a period of 3 years.
10. …………………………………….This section provides a timeframe of 1 year within which
subsuming of different indirect taxes into GST would take place and enable the Competent legislature
to amend or repeal their existing laws.

ANSWER

1. Insertion of Article 246A

2. Amendment to Article 268
3. Omission of Article 268A
4. Amendment of Article 269
5. Amendment to Article 270
6. Amendment to Article 271
7. Amendment of Article 368
8. Section 18 of the Constitutional (101st Amendment) Act, 2016
9. Section 20 of the Constitutional (101st Amendment) Act, 2016
10. Section 19 of the Constitutional (101st Amendment) Act, 2016.
 LECTURE 3
Introduction of GST in India
Concept of GST (goods and services tax)
“GST is a tax on goods and services with value addition at each stage having comprehensive and
continuous chain of set of benefits from the producer’s / service provider’s point up to the retailer’s level
where only the final consumer should bear the tax.”
➢ As per newly inserted clause 12A in Article 366 of the Constitution of India “GST means a tax
on supply of goods or services or both except taxes on supply of alcoholic liquor for human
consumption.”
Taxes subsumed in GST
Central Taxes:
1 Central Excise Duty & Additional Excise Duties
2. Service Tax
3. Excise Duty under medicinal & Toilet Preparation Act
4. CVD & Special CVD
5. Central Sales Tax
6. Central Surcharges and Cesses in so far as they relate to supply of goods& services.
State Taxes:
1. Surcharges as Cesses in so far as they relate to supply of goods and services
2. Entertainment Tax (except those levied by local bodies)
3. Tax on lottery, betting and gambling
4. Entry Tax (All Forms) & Purchase Tax
5. VAT/Sales tax
6. Luxury Tax
7. Taxes on advertisements.
TAXES OR DUTIES NOT SUBSUMED IN GST
GST has not subsumed following Central taxes/duties
1. Basic Customs Duty (BCD);
2. Excise duty on tobacco and its products and specified petroleum goods;
3. Specific cesses (other than relatable to supply of goods and services).
4. Sales Tax on alcoholic liquor for human consumption and specified petroleum goods.
GST has not subsumed following State taxes/duties
1. State excise duty on alcoholic liquor for human consumption
2. Taxes on entertainments and amusements to the extent levied and collected by a Panchayat or a
Municipality or a Regional Council or a District Council;
3. Cesses (other than relatable to supply of goods and services)
4. Duty on transfer of immovable property,
5. Tax on consumption or sale of electricity.
Features of GST
1. One Nation, One Tax: GST replaced multiple indirect taxes levied by the Central and State
Governments, such as excise duty, service tax, value-added tax (VAT), and others. It brought
uniformity in the tax structure across India, eliminating the cascading effect of taxes.
2. Dual Structure: GST operates under a dual structure, comprising the Central GST (CGST) levied by
the Central Government and the State GST (SGST) levied by the State Governments.
3. Destination-based Tax: GST is a destination-based tax, levied at each stage of the supply chain,
from the manufacturer to the consumer. It is applied to the value addition at each stage, allowing for
the seamless flow of credits and reducing the tax burden on the end consumer.
4. Value Addition: GST is collected at value addition in each processing stage while manufacturing a
final product. There are various steps from the purchase of raw materials till the product is finally
ready for sale. Additional monetary value is added at every stage where GST is levied.
5. Online Compliance: GST introduced an online portal, the Goods and Services Tax Network
(GSTN), for registration, filing of returns, payment of taxes, and other compliance-related activities.
It streamlined the process and made it easier for taxpayers to fulfill their obligations.
 6. Anti-Profiteering Measures: To ensure that the benefits of GST are passed on to the consumers, the
government established the National Anti-Profiteering Authority (NAA). The NAA monitored and
ensured that businesses do not engage in unfair pricing practices and profiteering due to the
implementation of GST.
7. Increased Compliance and Transparency: GST aims to enhance tax compliance by bringing more
businesses into the formal economy. The transparent nature of the tax system, with the digitization of
processes and electronic records, helps in curbing tax evasion and increasing transparency.
Advantages of GST
1. Eliminates multiple layers of taxation
2. removes cascading effects
3. A common national market
4. Ease of doing business
5. Boosts productivity of logistics
6. Regulates unorganized sector under GST
7. Corruption and tax leakages.
Disadvantages of GST
1. Increases costs due to software purchase
2. Higher Tax Burden of SMEs
3. Increase Burden of Compliance
4. No GST charged on petroleum products
5. GST is an online taxation system
6. IT Infrastructure
ONE LINER

1. GST means a tax on supply of goods or services or both except taxes on supply of
……………………
2. …………………….replaced multiple indirect taxes levied by the Central and State Governments,
such as excise duty, service tax, value-added tax (VAT), and others.
3. …………………brought uniformity in the tax structure across India, eliminating the cascading
effect of taxes.
4. GST operates under a...............…... comprising the Central GST (CGST) levied by the Central
Government and the State GST (SGST) levied by the State Governments.
5. GST is a…………….., levied at each stage of the supply chain, from the manufacturer to the
consumer.
6. GST is collected at value addition in each processing stage while manufacturing a …………………
7. GST introduced an online portal, …………………….for registration, filing of returns, payment of
taxes, and other compliance-related activities.
8. ……………..aims to enhance tax compliance by bringing more businesses into the formal economy.
9. ………………….monitored and ensured that businesses do not engage in unfair pricing practices
and profiteering due to the implementation of GST.
10. NAA full form…………………..

ANSWER
1. alcoholic liquor for human consumption
2. GST
3. GST
4. dual structure
5. destination-based tax
6. Final product.
7. the Goods and Services Tax Network (GSTN)
8. GST
9. The NAA
10. National Anti-Profiteering Authority