A STUDY ON INDIRECT TAX

A Project Submitted to
University of Mumbai for partial completion of the degree of
Master in Commerce
Under the Faculty of Commerce

By
PRAVEENA MUNUSAMY

Under the Guidance of

PROF. PRADEEP HATHI

Vivek Education Society’s

Vivek College of Commerce
Affiliated to University of Mumbai
Siddharth Nagar, Goregaon West
Mumbai-400104

March 2024 (A.Y. 2024-2025)

 A STUDY ON INDIRECT TAX

A Project Submitted to
University of Mumbai for partial completion of the degree of
Master in Commerce
Under the Faculty of Commerce

By
PRAVEENA MUNUSAMY

Under the Guidance of

PROF. PRADEEP HATHI

Vivek Education Society’s

Vivek College of Commerce
Affiliated to University of Mumbai
Siddharth Nagar, Goregaon West
Mumbai-400104

March 2024 (A.Y. 2024-2025)

 CERTIFICATE

This is to certify that MS/Mr. PRAVEENA MUNUSAMY. Roll No: 09 has worked and duly
completed her / his Project Work for the Degree of Master in Commerce under the faculty of
Commerce in the subject of Direct Tax and his / her project is entitled “A Study On Indirect 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 / his own
work and facts reported by his/ her personal findings and investigations.

Name & Signature Name & Signature

Of Coordinator of Principal

Seal of Name & Signature

College Of guiding Teacher
 DECLARATION BY LEARNER

I the undersigned Ms. / Mr. PRAVEENA MUNUSAMY hereby, declare that the work embodied in
this Project work titled “A Study On Indirect Tax” forms my own contribution to the research work
carried out under the guidance of PROF PRADEEP HATHI is a result of my own Research Work and
has not been previously submitted to any other University for any other 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, hereby further declare that all information of this document has been obtained and Presented in
accordance with rules and ethical conduct.

________________________

________________________

Name and Signature of Learner

Certified by

Name and Signature of Guiding Teacher

Prof ___________________

___________________
 ACKNOWLEDGEMENT

To list who 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. Vijetha Shetty for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Chief Coordinator Prof Anupama Bali, for her support.

I take this opportunity to thank our Coordinator Prof Pradeep hathi, for her moral
Support and guidance.

I would also like to express my sincere gratitude towards my project Guide Prof. Pradeep hathi
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 and directly helped me in the
completion of the project especially my Parents and Peers who supported me throughout
My project
 INDEX

SR.
PARTICULARS PAGE NO.
NO.

CHAPTER - 1 INTRODUCTION

1 Overview of Goods & Service Tax GST 1

1.1 Types of GST Rate 3

1.2 Category of GST Rates 5

1.3 Credit Mechanism Under GST 7

1.4 Draft Reports Joint Committee 9

1.5 Advantages of GST 12

1.6 Disadvantages of GST 16

CHAPTER 2 - RESEARCH METHODOLOGY

2 Payment of GST 19

2.1 Main Features of GST Payment Process 25

2.2 GST Payment of Terms 26

2.3 Tax Deducted at Source (TDS) Under Goods and Service Tax 27

2.4 Tax Collected At Source (TCS) Under Goods and Services Tax 31

CHAPTER 3 – EXCEPTION OF GOODS & SERVICS

3 Service Tax Exemption 35

Service Tax Exemptions to be continued in GST as decided by
3.1 38
GST Council

3.2 List of Goods & Services Exempt Under GST 41

3.3 List of Goods & Services Exempt Under GST with HSN Codes 44
 CHAPTER 4 – INFORMATION ABOUT GST REGISTRATION

4 Registration Under GST Law 55

4.1 Different Types of GST Registration 58

4.2 List of Forms for Registration Under GST 66

5 CHAPTER 5 - LITERATURE REVIEW 69

CHAPTER 6 - DATA ANALYSIS, INTERPRETATION &

6 71
PRESENTATION

7 CHAPTER 7 - CONCLUSION & SUGGESTIONS 84

8 BIBLIOGRAPHY 85

9 APPENDIX 86
 CHAPTER - 1 INTRODUCTION

1. Overview of Goods & Service Tax GST

Currently, the Indirect tax structure in India comprises of several taxes and thus necessitates a number
of compliances. We would first analyses in a capsule form the major Central and the State laws under
the present tax regime:

Entry 83 of Seventh schedule confers the power to Central Government to levy Custom duty (Basic
duty + countervailing duty + Special Additional duty) on Import of goods" in Indian Territory. Exports
are presently exempted from all the duties to promote foreign exchange earnings and to make locally
produced goods competitive in the export market.

Under the Constitution, Entry 84 of List I of Seventh schedule authorises the levy of Central Excise
duty on "Manufacturing activities". The activities deemed to be manufacture also attract the Central
Excise levy in view of residual Entry 97 of Union List.

The levy of Service tax is imposed in exercise of the power conferred by Entry 97 of Union List of the
Seventh schedule of Constitution, which is a residuary power. Sec 66B of Finance Act, 1994 accedes
levy of service tax on all services except for those forming part of Negative list or specifically
excluded by any exemption notification

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Central Sales Tax (CST) is imposed on sale or purchase of goods (other than newspapers) occurring in
the course of inter-state trade or commerce vide powers granted by Entry 92A of List I of Seventh
schedule. No credit is available of CST paid on inter-state purchases.

Value added tax (VAT) is imposed on all intra-state sale or purchase of goods. VAT laws are different
in different states leading to voluminous compliance and procedural requirements for the taxpayer.

The introduction of GST would mark a clear departure from the scheme of distribution of fiscal
powers envisaged in the Constitution.

Goods & Service tax (GST) is the most talked about topic in the field of indirect taxation today in
India. It will be a game changing reform for Indian economy by developing a common Indian market
and reducing the cascading effect of tax on the cost of goods and services. It will impact the Tax
Structure, Tax Incidence, Tax Computation, Tax Payment, Compliance, Credit Utilization and
Reporting leading to a complete overhaul of the current indirect tax system.

GST will simplify and harmonise the indirect tax regime in the country. It is expected to reduce cost of
production and inflation in the economy, thereby making the Indian trade and industry more
competitive, domestically as well as internationally It is also expected that introduction of GST will
foster a common or seamless Indian market and contribute significantly to the growth of the economy.

2
 1.1 Types of GST Rate

A MIX OF ORIGIN BASED AND DESTINATION BASED TAXATION

GST is a consumption based tax. This implies that all SGST collected will ordinarily accrue to the
State where the consumer of the goods or services sold resides. On the other side, revenue from
proposed levy of Additional tax on inter-state supply of goods @1% will be assigned to States from
where supply originates (exporting state). For this purpose, Point of Origin Rules are also proposed to
be framed hence, it will make GST law partly origin based and partly destination based

GST rate can be categorized in the following manner

1) Central Goods & Service Tax (CGST) and State Goods and Service Tax (SGST)

If goods or services or both are supplied in course of intra-state trade or commerce, on invoice CGST
and SGST would be levied Net proceeds from CGST will go to Centre and will be distributed between
Union and States and, net proceeds from SGST will be retained by States.

3
2) Integrated Goods and Service Tax (IGST)

If goods or services or both are supplied in course of inter-state trade or commerce, on invoice IGST
would be levied. Net proceeds from IGST (after setting off any debit and credit balances between the
Centre and States) will be apportioned between Union and States

3) Additional Tax @1% on Inter-State supply of Goods or services or both for two years (AGST)

To compensate the loss arising to Stales on account of phasing out of CST. AGST 1% is proposed to
be levied on inter-state supply of goods for an initial period of 2 years. Revenue from AGST will go to
States from where supply originates Hence; it is an origination based tax. AGST will not be available
as credit for paying output tax. It will form part of Cost.

4
 1.2 Category of GST Rates

There will be 4-5 rates of GST:

 Standard Rate - On all Goods and Services other than mentioned elsewhere.

 Merit Rate-Reduced Rate

 Nil Rate-For negative list services (such as medical services, agriculture related services,
Services provided by Government, educational services, public transport etc.), export of
goods and services, SEZ related.

 Special rate - for precious metals

 Higher Rate - For demerit goods like tobacco, Luxury Goods etc.

 Floor Rate with Band - For SGST only.

SUBSUMES MULTI-LAYERED TAXES

GST has been proposed to bring the taxation of goods and services under one umbrella. It integrates
the federal excise duties, additional customs duties, service tax and state VAT etc, into a single point
levy i.e. GST

It is recommended [1] that the following Central Taxes as well as the State taxes should be subsumed
under the Goods and Services Tax, to begin with:

5
 Central Taxes State Taxes

(i) Central Excise Duty (i) VAT/Sales tax Entertainment tax

(ii) Additional Excise Duties (unless it is levied by the local bodies)

(ii) The Excise Duty levied under the (ii) Luxury tax
Medicinal and Toiletries Preparation Act

(iii) Service Tax (iii) Taxes on lottery, betting and gambling

(iv) Additional Customs Duty, (iv) State Cesses and Surcharges in so far as
commonly known as Countervailing Duty (CVD) they relate to supply of goods and services

(v) Special Additional Duty of Customs (v) Entry tax not in lieu of Octroi
4% (SAD)

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 1.3 Credit Mechanism Under GST

CGST and SGST

Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and
collect the State Goods and Services Tax (SGST) on all transactions within a State. The input tax
credit of CGST would be available for discharging the CGST liability on the output at each stage.
Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output. No
cross utilization of credit would be permitted.

Integrated Goods and Service tax

The IGST mechanism has been designed to ensure seamless flow of input tax credit from one State to
another The inter-State seller would pay IGST on the sale of his goods to the Central Government after
adjusting credit of IGST, CGST and SGST on his purchases (in that order). The exporting State wit
transfer to the Centre the credit of SGST used in payment of IGST The importing dealer will claim
credit of IGST while discharging his output tax liability (both CGST and SGST) in his own State. The
Centro will transfer to the importing State the credit of IGST used in payment of SGST

122nd CONSTITUTIONAL AMENDMENT BILL

After tremendous negotiations and parlaying between the Centre and States on various consensus
issues, the Amendment Bill came on the floor the key structural features of the proposals contained in
this Bill can be summarized below.

1) Insertion of new Article 246A conferring simultaneous power to the Union and the State legislatures
to legislate on GST

2) Article 279A will be inserted for creation of a Goods and Service tax council within sixty days from
the date of commencement of Constitution under the chairmanship of Union Finance Minister for
deciding on the following matters.

a. The threshold limit of turnover below which goods and services may be exempted from goods
And service lax

b. The rates including floor rates with bands of goods and services tax

C. the Goods and Service tax council shall recommend the date on which the goods and service

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 Tax to be levied on:

 Petroleum crude,
 High speed diesel
 Motor spirit
 Natural gas
 Aviation turbine fuel

GST NETWORK

 GSTN would be incorporated as a limited company with strategic control remaining with the
Government and it would have a self-sustaining revenue model by collecting Nominal user charges for
services.

 The GST common portal to be set up before the GST roll out would function as a pass through
portal for GST dealers and for submitting registration applications, filing returns, making payments,
etc.

 GSTN chairman Navin Kumar announced that Infosys, India's second largest IT service exporter
has been selected to build Technology Infrastructure for GSTN

8
 1.4 Draft Reports Joint Committee

Key excerpts from Draft Reports of Joint Committee on Business Processes for GST are mentioned
below:

1) There will be a threshold of Gross Annual Turnover including exports and exempted supplies below
which any person engaged in supply of Goods or Services or both will not be required to take
registration under GST

2) Data will be collected from the registrant as number of fields in GST registration Form would be
120 which are greater in number in comparision to the existing fields. Available data with the states
and CBEC does not comply with Metadata and Data standards of Government of India. Instead of
migrating incorrect and incomplete data, fresh data will have to be collected from the existing tax
payers.

3) Each taxpayer will be allotted a 15 digit PAN based Goods and service tax identification number
(GSTIN).

State code as stipulated in Indian census 2011 will be adopted.

13th digit would be alpha numeric (1-9 and then A-Z) It would be assigned depending upon the number
of registrations which an entity holds in one state. 14 th digit would be kept blank for future use.

4) Normal /Regular taxpayers would be required to file following periodic return:

S.NO. Return Purpose of Return Cut-off Date

1. GSTR 1 Outward supplies made by Taxpayer 10th of the next month

2. GSTR 2 Inward supplies made by Taxpayer 15th of the next month

3. GSTR 3 Monthly Return 20th of the month

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 4. GSTR 8 Annual return BY 31st Dec of next FY

5) It is envisaged that for each mode of payment, the Challan will be generated electronically at the
GSTN and no manual Challan will be used under any mode of payment Other means of payment, such
as payment by book adjustments is presently being allowed by Government of India to some
departments Stats Government would not be allowed.

6) Refund of GST will be allowed in a number of cases

(1) If tax payer has made excess payment by mistake or by inadvertence, which was actually not
required to be paid.

() If the GST Law does not debar suo-motto payments during investigation / audit, process and
ultimately no / less demand arises, then amount already paid can be claimed as refund.

(i) Refund on account of year end or volume based incentives provided by the supplier through credit
notes would be granted on submission of application along with a CA certificate certifying the fact of
non-passing of the GST burden by the taxpayer

LEGISLATIVE COMPETENCE OF MUNICIPALITY OR PANCHAYATS TO COLLECT TAX ON

ENTERTAINMENT AND AMUSEMENTS

The local bodies in India are broadly classified into two categories. The local bodies constituted for
local planning, development and administration in the rural areas are referred as Rural Local Bodies
(Panchayats) and the local bodies, which are constituted for local planning, development and
administration in the urban areas are referred as Urban Local Bodies (Municipalities) and the
Constitution of India gives protection to

Them through various articles:

 Article 243G, 243H and 2431 for Panchayat

 Article 243W, 243X and 243Y for Municipality

As per proposed GST model recommended by GST Council, it is recommended that while drafting the
SGST laws due consideration to the third tier of the Government as has been guaranteed by the

10
Constitution be given and provisions of devolution of taxes to the local bodies be made Further, a
Constitutional commitment has also been given to the States that their losses caused due to
introduction of GST would be compensated for five years.

GST WELCOMED IN LOK SABHA

Government's flagship reform measure, Goods and Services Tax (GST) Bill was passed in Lok Sabha
on 6th May 2015 with 352 votes in favour and stuck in Rajya Sabha due to stiff opposition by the
Congress party. In Lok Sabha session, Principal opposition Congress did not oppose the Bill but
merely walked out of the assembly which enabled the Ruling government along with the support of
allied parties to pass the bill. This ignited the hope among ruling party that GST Bill will muster
sufficient support in the Upper House but this dream has not been realised yet.

FATE OF GST

The proposed goods and service tax (GST), India's biggest revenue shake-up since Independence in
1947, seeks to replace a slew of federal and state levels, transforming the nation of 12 billion people
into a customs union After Parliamentary Affairs Minister Venkaiah Naidu said the government had
agreed to accept the opposition party's demand, Senior Congress leader Kapil Sibal told reporters that
"The government is using optics of meetings and is not serious about GST

Congress wants the government to cap the GST rate at less than 20 percent, scrap a proposed state levy
and create an independent mechanism to resolve disputes on revenue sharing between states. The
political slugfest between the two sides has ensured that Finance minister Arun Jaitely's self-imposed
deadline of April 1 for the GST's launch will be missed.

While Jaitely has yet to set a new date for the rollout, aides say passage of the constitutional
amendment bill in February's budget session of parliament would allow them to implement it by
October.

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 1.5 Advantages of GST

1. 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. Let us take this example to understand
what Tax on Tax is:

Before GST regime:

A consultant offering services for say, Rs 50,000 and charged a service tax of 15% (Rs 50,000 15% =
Rs 7,500).

Then say, he would buy office supplies for Rs 20,000 paying 5% as VAT (Rs 20,000 *5% = Rs 1,000)

He had to pay Rs 7,500 output service tax without getting any deduction of Rs 1,000 VAT already paid
on stationery

His total outflow is Rs 8,500.

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Under GST

GST on service of Rs 50,000 @18% 9,000

Less: GST on office supplies (Rs 20,000*5%) 1,000

Net GST to pay 8,000

2. 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. Please note that this limit differed state-wise. 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.

Let us look at this table below.

Tax Threshold Limits

Excise 1.5 crores

VAT 5 lakhs in most states

Service Tax 10 lakhs

GST 20 lakhs (10 lakhs for NE states)

3. 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

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4. 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.
Our Clear Tax GST software is already on a roll filing GST returns

5. 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.

6. Defined treatment for E-commerce operators

Earlier to GST regime, supplying goods through e-commerce sector was not defined. It had variable
VAT laws. Let us look at this example
Online websites (like Flipkart and Amazon) delivering to Uttar Pradesh had to file a VAT declaration
and mention the registration number of the delivery truck. Tax authorities could sometimes seize goods
if the documents were not produced. Again, these e-commerce brands were treated as facilitators or
mediators by states like Kerala, Rajasthan, and West Bengal which did not require them to register for
VAT.
All these differential treatments and confusing compliances have been removed under GST. For the
first time, GST has clearly mapped out the provisions applicable to the e- commerce sector and since
these are applicable all over India, there should be no complication regarding the inter-state movement
of goods anymore.
Read a more detailed analysis of the impact of GST on e-commerce.

14
7. Improved efficiency of logistics

Earlier, the logistics industry in India had to maintain multiple warehouses across states to avoid the
current CST and state entry taxes on inter-state movement. These warehouses were forced to operate
below their capacity, giving room to increased operating costs.
Under GST, however, these restrictions on inter-state movement of goods have been lessened.
As an outcome of GST, warehouse operators and e-commerce aggregators players have shown interest
in setting up their warehouses at strategic locations such as Nagpur (which is the zero-mile city of
India), instead of every other city on their delivery route
Reduction in unnecessary logistics costs is already increasing profits for businesses involved in the
supply of goods through transportation.
Visit here to read more about the impact of GST on logistics.

8. Unorganized sector is regulated under GST

In the pre-GST era, it was often seen that certain industries in India like construction and textile were
largely unregulated and unorganized.
Under GST, however, there are provisions for online compliances and payments, and for availing of
input credit only when the supplier has accepted the amount. This has brought in accountability and
regulation to these industries.
Let us now look at disadvantages of GST Please note that businesses need to overcome these
disadvantages to run the business smoothly

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 1.6 Disadvantages of GST

1. Increased costs due to software purchase

Businesses have to either update their existing accounting or ERP software to GST- compliant one or
buy 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 Clear tax
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.

2. 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.

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ClearTax has made it easier for SMEs with the ClearTax Bill Book 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 Clear Tax GST platform.

3. GST will mean an increase in operational costs

As we have already established that GST is changing the way how tax is paid, businesses will now
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

Also, businesses will need to train their employees in GST compliance, further increasing their
overhead expenses

4. 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

5. 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 retum 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.

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6. 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 core 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 any input tax credit.

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 CHAPTER 2 - RESEARCH METHODOLOGY

2. Payment of GST

The GST payment process

Indian businesses are in for a learning curve — the payment process under Goods and Services Tax
(GST) differs drastically from current procedures. Namely, each step of the process — like all other
aspects of GST — now occur online within the GST portal.

Section 49 of the Central Goods and Services Tax Act, along with rules published by the Central
Board of Excise and Customs (CBEC), govern the new payment procedures. This whitepaper provides
an overview of what they entail and looks at the following:

 Electronic ledgers
 Manner of utilization and cross-utilisation of input tax credit (ITC)
 Interest on delayed payments
 Electronic payment forms
 Unique identification number for each transaction

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Electronic ledgers

In the GST portal, a taxable person can track his tax liabilities across three ledgers, each maintained in
real-time:

1. Electronic liability ledger (also known as electronic tax liability register): Accounts for a
taxpayer’s gross tax liability — form GST PMT-01 on the GST portal
2. Electronic credit ledger (also known as electronic input tax credit ledger): Records the tax
payments already made during the supply chain e. every claim of ITC is recorded here — form
GST PMT-02
3. Electronic cash ledger: All amounts paid by the taxpayer are reflected here — form GST PMT-05

Let's analyze each one in more detail.

Electronic liability ledger

This ledger records all liabilities of a taxable person including:

 The tax, interest, late fees, or any other amount payable per the return furnished by the taxpayer or
per any proceedings
 The tax and interest payable arising out of any mismatch of ITC or output tax liability
 Any interest that may accrue from time to time
 The reversal of ITC or interest

Taxpayers should settle their liabilities in the following order:

1. Self-assessed tax and other dues, such as interest, penalty, fees, or any other amount relating
to previous tax period returns
2. Self-assessed tax and other dues relating to the current tax period return
3. Any other amount payable under the act/rules (liability arising out of demand notice, proceedings,
etc.)

Electronic credit ledger

Every claim of ITC self-assessed by the taxpayer shall be credited to this ledger. The amount available
in this ledger may be used for payment towards output tax only. Under no circumstance can an entry
be made directly in the electronic credit ledger.

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This ledger may include the following:

 ITC on inward supplies from registered taxpayers

 ITC available based on distribution from input services distributor (ISD)
 ITC on input of stock held/semi-finished goods or finished goods held in stock on the

day immediately preceding the date on which the taxpayer became liable to pay tax, provided he
applies for registration within 30 days of becoming liable

 Permissible ITC on inputs held in stock and inputs contained in semi-finished or finished goods
held in stock on the day of conversion from composition scheme to regular tax scheme

 ITC eligible on a payment made on a reverse charge basis

Electronic cash ledger

Any amount paid by the taxpayer will be reflected in the electronic cash ledger. The amount available
in this ledger may be used for making any payment towards tax, interest, penalty, fees, or any other
amount due under the act/rules in the time and manner prescribed. (It is reiterated that any credit in the
electronic credit ledger can be utilized only for payment of output tax.)

To initiate a payment, taxpayers generate a Challan online using form GST PMT-06, which will be
valid for a period of 15 days. Payment can then be remitted through any of the following modes:

 Internet banking (authorized banks only)

 Credit or debit card (authorized banks only)
 National Electronic Fund Transfer (NEFT) or real-time gross settlement (RTGS) (any bank,
authorized or unauthorized)
 Over-the-counter (OTC) payment (authorized banks only) for deposits up to ten thousand
rupees per Challan and per tax period

The taxpayer is responsible for any commission due on the payment.

The payment date shall be recorded as the date the payment is credited to the appropriate government
account. The date, the payment is debited from the taxpayer's account is not relevant.

Unregistered taxpayers needing to make a tax payment will still use the online GST portal but with a
temporary identification number generated through the portal.
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Manner of utilization and cross-utilization of ITC

The input tax credit available in the electronic credit ledger shall be utilized in the following manner:

Input tax on Utilization (in the order shown)

IGST IGST, CGST, SGST/UTGST

CGST CGST, IGST

SGST/UTGST SGST/UTGST, IGST

From the above table, it is evident that central tax shall not be utilized towards payment of
state tax or union territory tax; and state tax or union territory tax shall not be utilized towards
payment of central tax.

Interest on delayed payments

Per Section 50 of the CGST Act, interest will start accruing on a delayed payment the day after the
payment was due. This applies to both missed payments and payments not made in full.

The payment of interest is automatic and should be made voluntarily, even without a demand. The
interest rate, not to exceed 18 percent, will be determined by the Government on the recommendation
of the GST Council.

In the case of undue or excess claim of ITC, or undue or excess reduction in output tax liability,
interest shall be paid at a higher rate, not to exceed 24 percent, to be notified by the Government.

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GST payment forms

Sr. no. Form no. Short description Purpose

1 GST PMT-01 Electronic tax Any tax, interest, penalty, late fee, or any
liability register other amount will be debited to this register

2 GST PMT-02 Electronic credit Every claim of ITC shall be credited to this
ledger ledger

3 GST PMT-03 Refund to be Refund if rejected the amount debited from

recredited the electronic credit ledger or electronic
cash ledger, as the case may be, will be
recredited by order of a proper officer
4 GST PMT-04 Discrepancy in Discrepancy in electronic credit ledger,
electronic credit communicated to an officer through this
ledger form

5 GST PMT-05 Electronic cash Any tax, interest, penalty, late fee, or any
ledger other amount to be deposited in cash are
credited to this ledger

6 GST PMT-06 Challan for deposit Generate and pay a challan

of tax

7 GST PMT-07 Application for The application is meant for the tax payer
intimating where the amount intended to be paid is
discrepancy relating debited from his account but CIN has not
to payment been conveyed by bank to Common Portal
or CIN has been generated but not reported
by concerned bank (within 24 hours of
debit)”

23
Additional points to ponder

Whenever a payment of any liability is made, the electronic credit ledger or the electronic cash ledger
shall be debited; the electronic tax liability register shall be credited and will display the monthly net
tax liability.

Every person who has paid tax on goods and/or services shall be deemed to have passed on the full
incidence of such tax to the recipient unless he proves the contrary.

The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest,
penalty, fees, or any other amount payable may be refunded from electronic cash or electronic credit
ledger, respectively.

If a refund claim is rejected, either fully or partly, the amount debited, to the extent of rejection, shall
be re-credited to the electronic cash ledger or electronic credit ledger by the proper officer.

Unique identification number for each transaction

Within the online GST portal, a unique identification number shall be generated for each debit or credit
to the electronic cash or credit ledgers, as the case may be. This number shall be indicated in the
corresponding entry on the electronic tax liability register.

To conclude, there is a paradigm shift in the way tax payments will be made in the soon to be in force
GST, as compared to the methods to which we have become accustomed. The shift helps to support
GST's aim to make the entire tax process run smoothly with minimal government involvement all with
the aid of technology.

24
 2.1 Main Features of GST Payment Process?

The payment processes under GST Act(s) have the following features:

 Electronically generated challan from GSTN Common Portal in all modes of payment
and no use of manually prepared Challan
 Facilitation for the tax payer by providing hassle free, anytime, anywhere mode of
payment of tax
 Convenience of making payment online
 Logical tax collection data in electronic format
 Faster remittance of tax revenue to the Government Account
 Paperless transactions
 Speedy Accounting and reporting
 Electronic reconciliation of all receipts
 Simplified procedure for banks
 Warehousing of Digital Challan.

25
 2.2 GST Payment of Terms

GST Payment Due Date – Penalties, Interest & Late Payments

 The due date for GST is 20 days after the end of the month.
 The due date for those registered under the composition scheme will be 18
days following the end of the quarter.

 GSTR-3B or GSTR-4 forms can only be submitted after GST has been paid.

 GSTR-1 can be filed without the payment of GST.

Here are the important GST Filing Due Dates

Based on the type of filing and the forms to be used, please follow the below GST
Filing due dates –

Important Dates

GSTR-3B (Mar, 2022) Apr 20th, 2022 GSTR-3B (Jan- Apr 22nd, 24th,2022
Mar,2022)

GSTR-1 (Mar, 2022) Apr 11th, 2022 IFF (Optional) NA

(Mar,2022)

GSTR-1 (Jan-Mar, 2022) Apr 13th, 2022 CMP-08 (Jan-Mar,2022) Apr 18th, 2022

GSTR-4 (2021-22) Apr 30th, 2022 - -

Others

GSTR-5 (Mar, 2022) Apr 20th, 2022 GSTR-5A (Mar, 2022) Apr 20th, 2022

GSTR-6 (Mar, 2022) Apr 13th, 2022 GSTR-7 (Mar, 2022) Apr 10th, 2022

GSTR-8 (Mar, 2022) Apr 10th, 2022 RFD-10 18 Months after the end of
quarter for which refund is to
be claimed

GST Late Payment Interest & Fees

 If payment is not made by the due date, interest at the rate of 18% p.a. must be paid.

 If a person makes an undue or excessive claim of input tax credit or an undue or

excessive reduction in output tax liability, he must pay interest at the rate of 24% on
such excess claim or excess reduction

26
 2.3 Tax Deducted at Source (TDS) Under Goods and Service Tax

TDS under GST is required to be deducted at the rate of 2% on payments made to the supplier of taxable
goods and/or services by certain notified persons under GST. In this article, we discuss all about TDS
under GST, including the TDS rate under GST, the deduction limit, applicability, forms to be filed,
interest and penalties applicable, and more.
Tax Deducted at Source (TDS) is one of the ways to collect tax based on certain percentages on the
amount payable by the receiver on goods/services. The collected tax is a revenue for the government.

The provision pertaining to TDS under GST is given under Section 51 of the CGST Act to be read with
CGST Rule 66.

Liable to deduct TDS under GST law?

A department or an establishment of the Central Government or State Government; or

Local authority; or
Governmental agencies; or
Such persons or categories of persons as may be notified by the Government.
As per the latest Notification dated 13th September 2018, the following entities also need to deduct
TDS-

An authority or a board or any other body which has been set up by Parliament or a State Legislature or
by a government, with 51% equity (control) owned by the government.
A society established by the Central or any State Government or a Local Authority and the society is
registered under the Societies Registration Act, 1860.
Public sector undertakings.

Liability to deduct TDS under GST and TDS rate

TDS is to be deducted at the rate of 2% on payments made to the supplier of taxable goods and/or
services, where the total value of such supply, under an individual contract, exceeds Rs.2, 50,000. No
deduction of Tax is required when the location of supplier and place of supply is different from the State
of the registration of the recipient.

27
 Here are the scenarios explaining TDS applicability:

Location of place of Type of Place of TDS

Scenario TDS %
supplier supply GST recipient applicability

CGST & 2% (1%

1 Bangalore Bangalore Bangalore Yes
SGST + 1%)

2 Bangalore Chennai IGST Bangalore Yes 2%

3 Bangalore Chennai IGST Delhi Yes 2%

CGST &
4 Bangalore Bangalore Delhi No –
SGST

What are the registration requirements for TDS deductors?

A person who is liable to deduct TDS has to compulsorily register and there is no threshold limit for this.
The registration under GST can be obtained without a PAN and by using the existing Tax Deduction and
Collection Account Number (TAN) issued under the Income Tax Act. Thus it can be said having TAN is
mandatory.

When and to whom should the TDS be paid?

TDS shall be paid within 10 days from the end of the month in which tax is deducted and filed in Form
GSTR-7. The payment shall be made to the appropriate government which means:

 The central government in the case of the IGST and the CGST
 The state government in the case of the SGST

28
What are the provisions relating to the issue of TDS certificates under the GST law?

Similar to the Income Tax Law, the person deducting tax under GST has to issue the TDS certificate in
form GSTR-7A to the concerned person within 5 days of depositing the tax to the government. The GST
portal will automatically make GSTR-7A available to the deductee on the basis of the GSTR-7 filed.

How will the Value of supply on which TDS shall be deducted be considered?

For the purpose of deduction of TDS, the value of supply is to be taken as the amount excluding the tax
indicated on the invoice. This means TDS shall not be deducted on the CGST, SGST or IGST
component of invoice.

For example, supplier A makes a supply worth Rs.5,000 to B. The rate of GST is 18%. When B pays A,
he/she will pay Rs.5,000 (worth of Supply) + Rs.900 (GST) to A and Rs. 100 (RS. 5000*2%) as TDS to
the government. So it can be said that TDS is not deducted on the tax element (GST) of a transaction.

Which form is required to file the TDS return?

The person deducting tax is required to file a TDS return in form GSTR-7 within 10 days from the end
of the month in which the tax has been deducted.

Penalties for not complying with TDS provisions under GST

The below table shows the penalties for not complying with GST TDS provisions:

Scenario
Scenario Penalties
No

Interest is to be paid @ 18% along with the TDS.

1 TDS not deducted Otherwise, the amount shall be determined and

recovered as per the provisions of the law.

TDS certificate has not been

A late fee of Rs.100 per day will be charged (subject
2 issued or delayed beyond 5
to a maximum of Rs.5000) under each Act.
days

29
 Interest is to be paid @ 18% along with the TDS,

TDS is deducted but not calculated beginning from the next day of the

paid to the government or return filing deadline until the actual date of
3
paid after the 10th of the payment. Otherwise, the amount shall be

following month determined and recovered as per the provisions of

the law.

A late fee of Rs.100 per each day of delay will be

4 Late filing of TDS return charged (subject to a maximum of Rs.5000) under

each Act.

How to get TDS Refund under GST?

If any excess amount is deducted and paid to the government, a refund can be claimed as this is not the
tax amount that the government has a right on. However, if the deducted amount is already added to the
electronic cash ledger of the supplier, the amount so added cannot be got back as a refund by the
deductor. Deductee can claim a refund of tax subject to refund provisions of the act.

30
 2.4 Tax Collected At Source (TCS) Under Goods and Services Tax

Tax Collected at Source (TCS) under GST means the tax collected by an e-commerce operator from the
consideration received by it on behalf of the supplier of goods, or services who makes supplies through
the operator’s online platform. TCS will be charged as a percentage on the net taxable supplies. The
provision of TCS under GST is dealt under Section 52 of the CGST Act.

Liable to collect TCS under GST

Certain operators who own, operate and manage e-commerce platforms are liable to collect TCS. TCS
applies only if the operators collect the consideration from the customers on behalf of vendors or
suppliers. In other words, when the e-commerce operators pay the consideration collected to the vendors
they have to deduct an amount as TCS and pay the net amount.

Here are few exceptions to the TCS provisions for the services provided by an e-commerce platform:

 Hotel accommodation/clubs (unregistered suppliers)

 Transportation of passengers – radio taxi, motor cab or motorcycle
 Housekeeping services like plumbing, carpentry etc. (unregistered suppliers)

For example – M/S. XYZ stores (a proprietorship) is selling garments through Flip kart. Flip kart, being
an e-commerce operator, before it makes the payment of consideration collected on behalf of XYZ, will
be liable to deduct TCS.

What is the rate applicable under TCS?

The dealers or traders supplying goods and/or services through e-commerce operators will receive
payment after deduction of TCS @ 1%. The rate is notified by the CBIC in Notification no. 52/2018
under CGST Act and 02/2018 under IGST Act.

This means for an intra-state supply TCS at 1% will be collected, i.e. 0.5 % under CGST and 0.5% under
SGST. Similarly, for a transaction between the states, the TCS rate will be 1%, i.e under the IGST Act.

31
Registration requirements under TCS provisions of GST

The e-commerce operators liable to collect TCS have to compulsorily register under GST and there is no
threshold limit exemption for it. Also, the sellers supplying goods through the online portal of e-
commerce players are also mandatory required to get registered under GST except for a few exceptions.

Registration conditions are as follows:

a. Every e-commerce operator who is required to collect TCS must mandatory register under GST

b. Every person who supplies through an e-commerce operator, except those who make supplies
notified under section 9 (5) of CGST Act.

Section 9 (5) mentions the following supplies – Transporting passengers by a radio-taxi and motorcycle
OR providing accommodation in hotels, guest houses, for residential or lodging purposes (unregistered
suppliers) OR services of house-keeping, such as plumber, carpenter etc( unregistered suppliers).

In all three cases, the e-commerce operator shall pay GST, meet the compliances. Therefore, suppliers
don’t have to register if they provide these services listed in 9 (5), provided they do not cross the Rs.20
lakh (or Rs.40 lakh) threshold for registration.

c. Also, note that suppliers of services making a supply through an e-commerce platform are exempt
from registration if their aggregate turnover is less than Rs.20 lakh or Rs.40 lakh (assuming they do
not make inter-state supplies).

d. Suppliers of goods selling through an e-commerce platform are not exempt from registration.

e. An e-commerce company must register itself in GST in every state it supplies goods or services to.

Due date for depositing TCS

TCS will be deducted during the month in which the supply is made. It will be deposited within 10 days
from the end of the month of supply to the credit of the government.

32
Payment of the tax collected will be made in the following manner:

a. IGST & CGST will be paid to the central government

b. SGST to respective state governments

Which form can one use to file TCS returns

E-Commerce operators have to file GSTR-8 by 10th of the next month in which the tax was collected.
This return will only be filed once the tax collected has been deposited to the respective credit of the
government. For instance, the due date for GSTR-8 for Dec 2021 is on 10th Jan 2022.

Using GSTR-8 data by e-commerce sellers in GSTR-2A

The details submitted by the operators in GSTR 8 will be available to all the suppliers in GSTR 2A. The
supplies will be available GSTR 2A after the due date of filing GSTR-8. Note that these credit details
will not be available in GSTR-2B return. The tax collected will be reflected in the electronic cash ledger
of the respective suppliers. The suppliers can claim the credit accordingly after matching and reconciling
their supplies with the details in GSTR 2A.

GSTR 8 cannot be revised once it is filed. Any discrepancy found while matching and reconciling the
supply data and GSTR 2A will be communicated to the operator and the supplier. If the discrepancy is
not rectified within the given time period, then the tax amount will be added to the liability of the
supplier. The supplier will have to pay the difference along with the interest, if any.

E-Invoicing Impact on TCS and e-Commerce Operators

The e-invoicing system is also available to e-commerce operators (ECO) to report invoices to the Invoice
Registration Portal (IRP), that were raised by them on behalf of their online suppliers.

The e-commerce operators shall follow a detailed procedure to integrate their ERP system with the
sandbox of the IRP. To know more about the details, read our article on “e-Invoicing Impact on TCS and
e-commerce operators under GST”.

33
Impact of the TCS provisions

From the e-commerce operators viewpoint, they must register under GST in every state in which they
operate before 1st Oct 2018, which is the effective date of implementing TCS provisions. The ERP
systems have to be well integrated to apply these provisions in the day to day businesses smoothly.

Moreover, the working capital of the suppliers selling through an e-commerce operator will be blocked
until they file their return and claim the excess taxes paid. This can prevent SME vendors from selling
goods or supplying services on the online portal.

From the government’s viewpoint, tax evasion will significantly reduce since the tax will be collected at
each and every transaction.

34
 CHAPTER 3 – EXCEPTION OF GOODS & SERVICS

3. Service Tax Exemption

The Central Government exempts taxable services of aggregate value not exceeding Rs.10 lakhs in any
financial year from the whole of service tax leviable under Section 66B of the Finance Act, 2013. To be
eligible for service tax exemption, the service provider must satisfy the following conditions in addition
to not exceeding the aggregate value threshold:

Aggregate Value of Taxable Services

Aggregate value not exceeding Rs.10 lakhs in any financial year from the whole of service tax leviable
under Section 66B of the Finance Act, 2013. Aggregate value is the sum total of value of taxable
services charged in the first consecutive invoices issued during a financial year but does not include
value charged in invoices issued towards such services which are exempt from whole of service tax
livable thereon under Section 66B of the Finance Act.

Not Available for Services Provided under Brand or Trade Name

Service tax exemption is not applicable to taxable services provided by a person or business under a
brand name or trade name, whether registered or not. So, those businesses that offer services under a
name that is trademarked, cannot avail service tax exemption. “Brand name” or “trade name” means a
brand name or trade name, whether registered or not, such as a name or a mark, symbol, monogram,
logo, label, signature, or invented word.

35
General Service Tax Exemptions
In general, service providers can avail of the following exemptions, if the services provided
by them meet any of the following criteria:

 Small scale service providers can avail of service tax exemption up to a maximum of
Rs 10 lakhs.
 Any service that is offered to any international organisation or to the United Nations
is exempt from service tax
 Any service that is offered to units of Special Economic Zones or to Special
Economic Zone developers is exempt from service tax
 Any service that is provided or offered free of cost is exempt from service tax
 Taxable services that are provided to diplomats and their family members for official
purposes are exempt from service tax
 Taxable services provided to diplomatic officers as well as their family members for
personal purposes are also exempt from service tax
 Any service that was provided before it was considered to be a taxable service, despite
the fact that payments took place at a later date, is exempt from service tax

Service Tax Exemptions for Small Service Providers

Small service providers whose total turnover value of all taxable services provided by them is not more
than Rs 10 lakhs over the course of a financial year are eligible to avail of service tax exemptions.
However, even though this exemptions can be availed if the total turnover is in excess of Rs 10 lakhs,
small service providers are mandatorily required to place an application for service tax registration
within a time frame of thirty days after his or her turnover goes beyond Rs 9 lakhs.

Some of the other conditions that small service providers are required to fulfil in order to avail of
service tax exemptions are as follows:

 If the total value of the taxable services provided by the small service provider is not in excess of
Rs 10 lakhs for the present financial year as well as the financial year prior to the current one
 Small service providers must not utilise the CENVAT credit that they have received on input
services or capital goods over the period of time during which they are looking to avail of service
tax exemptions
 Small service providers cannot avail of service tax exemptions should a situation arise wherein a
reverse charge may apply

36
  Exemption from service tax cannot be availed If any service that is deemed taxable is provided
by a small service provider operating under a brand or trade name
 If a small service provider offers multiple services through multiple outlets, then service tax
exemption can only be availed of if the total turnover of all services from all outlets is not more
than Rs 10 lakhs

Service Tax Exemptions apply to the following services outlined under the negative list

 Any service that are provided by a government or localised authority, with the exception of the
following:
 Postal service
 Aircraft services in the vicinity of airports
 Vessel services in the vicinity of ports
 Transportation services with regards to goods or passengers
 Any other services provided to organisations carrying on business, but which do not fall under
the services mentioned above
 Any service rendered by the Reserve Bank of India (RBI)
 Any service rendered by a diplomatic mission of foreign origin with operations in India, and
located within the country
 Any service in relation to agricultural operations such as:
 Production
 Harvesting
 Testing
 Cultivation
 Agricultural protection
 Supply of manpower to farms
 Any agricultural process taking place on a farm
 Lease of equipment or land
 Storage of produce
 Agent services
 Agricultural processes such as trimming, curing, cutting, packaging, fumigating, tending,
cooling, grading, drying, sorting etc, which only seek to enhance the marketability of the produce
without changing or altering any of its characteristics

37
 3.1 Service Tax Exemptions to be Continued in GST as Decided by GST Council

SL
Services
NO.

1 Services by Government or a local authority excluding the following services—

(i) services by the Department of Posts by way of speed post, express parcel post, life insurance,
and
agency services provided to a person other than Government;
(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an
airport;
(iii) transport of goods or passengers; or
(iv) Any service, other than services covered under clauses (i) to (iii) above, provided to
business entities.

2 Services by the Reserve Bank of India

3 Services by a foreign diplomatic mission located in India

4 Services relating to cultivation of plants and rearing of all life forms of animals, except the
rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural
produce by way of—

(i) agricultural operations directly related to production of any agricultural produce including
cultivation, harvesting, threshing, plant protection or testing or

(ii) supply of farm labour;

(iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting,
drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk
packaging and such like operations which do not alter the essential characteristics of agricultural
produce but make it only marketable for the primary market;

(iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to
its use;

(v) loading, unloading, packing, storage or warehousing of agricultural produce;

(vi) agricultural extension services;

(vii) Services by any Agricultural Produce Marketing Committee or Board or services provided
by a commission agent for sale or purchase of agricultural produce.

5 Service by way of access to a road or a bridge on payment of toll charges

38
SL
NO. Services

6 Transmission or distribution of electricity by an electricity transmission or distribution utility

7 Services by way of renting of residential dwelling for use as residence

8 Services by way of—

(i) extending deposits, loans or advances in so far as the consideration is represented by way of
interest
or discount (other than interest involved in credit card services);
(ii) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign
exchange or amongst banks and such dealers;

9 Services provided to the United Nations or a specified international organization.

Exemption may be notified by way of issuing notification under section 55 of CGST/SGST Act.

10 Services provided by operators of the Common Bio-medical Waste Treatment Facility to a

clinical
establishment by way of treatment or disposal of bio-medical waste or the processes incidental
thereto;

11 Services by a veterinary clinic in relation to health care of animals or birds;

12 Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by
way of
Charitable activities; [Charitable activities may be defined as presently in notification No
25/2012-ST.

13 Services by a specified organisation in respect of a religious pilgrimage facilitated by the

Ministry of External Affairs of the Government of India, under bilateral arrangement;

14 Services provided by-

(a) an arbitral tribunal to -
(i) any person other than a business entity; or (ii) a business entity with a turnover up to rupees
twenty lakh (ten lakh rupees in a special category state) in the preceding financial year;

39
SL
NO. Services

15 Services provided,-
(a) by an educational institution to its students, faculty and staff;
(b) to an educational institution, by way of,-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored by the Government;
(iii) security or cleaning or house-keeping services performed in such educational
institution;
(iv)services relating to admission to, or conduct of examination by, such
institution;
upto higher secondary.
Provided that nothing contained in clause (b) of this entry shall apply to an
educational institution other
than an institution providing services by way of pre-school education and
education up to higher
secondary school or equivalent

16 Services provided to a recognized sports body by-

(a) an individual as a player, referee, umpire, coach or team manager for
participation in a sporting event
organized by a recognized sports body;
(b) another recognised sports body;

17 Services by way of collecting or providing news by an independent journalist, Press Trust of

India or United News of India;

18 Services of life insurance business provided or agreed to be provided by the Army, Naval and
Air Force Group Insurance Funds to members of the Army, Navy and Air Force, respectively,
under the Group Insurance Schemes of the Central Government

19 Services by an organiser to any person in respect of a business exhibition held outside India;

20 Services by way of slaughtering of animals;

40
 3.2 List of Goods & Services Exempt Under GST

While some goods attract 5% GST, some others attract 12%, 18%, 28%. Some goods, however, are
exempt from GST. All products under GST are listed under the Harmonised System of Nomenclature, or
HSN code. Each of the products has a HSN code number to ensure that the invoicing practices of GST
are in sync with global standards of product nomenclature.

Types of Exemption in GST

The following are the types of GST exemptions applicable:

 Conditional: Some exemptions are applicable on certain conditions, such as services

by clubs, hotels, etc., that comes with accommodation unit less than Rs.1000 per day
are exempted from GST.

 Partial: if the aggregate value of a supply does not exceed Rs.5000 per day, then any
Unregistered persons supplying goods to a registered individual within state can avail
themselves of partial tax exemptions under reverse charge.

 Absolute: Services that are exempted from GST without any conditions, such as
service by RBI.

41
GST Exemption from Registration

Here is the list of categories of taxpayers not registered for GST:

 Ones supplying goods covered under reverse charge

 Non-GST goods and services supplied by a person
 Agriculturists
 Other than the supply of goods or services, taxpayers engaged in various activities

 Exempt suppliers of goods and services

 Individuals exempted from GST registration who belongs to the threshold exemption
limit

Exempted Services under GST

Here is the list of GST exempted services in India:

 Foreign diplomatic and government services

 Labour supply for farms

 Services offered by IRDAI, RBI, NPS, Central and State Government, NPS and
others
 Services like pre-conditioning, waxing, retail packing, etc.
 Auto-rickshaws, public transportation services, metered cabs, metro, etc.
 Transportation of agricultural products and goods outside of India

 Goods transportation where the charges are less than Rs.1500

 Under the Pradhan Mantri Jan-Dhan Yojana (PMJDY), banking services like Basic
Saving Bank Deposit (BSBD) account operable
 Ambulance and charity services and healthcare and educational services such as mid-
day meal catering, VET clinics, paramedics, etc. qualify for exemption under GST
 GST exempt services such as agricultural services, includes warehouse, cultivation,
harvesting, packaging, supply, leasing of machinery, horse rearing, etc.
 Sports organisation, tour guides, religious ceremonies, and libraries are exempted
under GST

 undefined

42
Exempted Goods under GST

Here is the list of GST exempted goods in India:

 Components such as human blood

 Manufacturing parts of hearing aids, such as handloom, chalks, slates, etc.
 Non-GST goods include egg, fish, fresh milk, etc.

 Raw silk, unspun jute fibres, khadi fibre, etc.

 Unprocessed edibles, such as unroasted coffee beans, green tea leaves, melons,
grapes, ginger, ginger, etc.
 Dry and fresh vegetable onions, potato, and other leguminous vegetables
 Food items, such as wheat, corn, hulled cereal grains, rice, etc.

43
 3.3 List of Goods & Services Exempt Under GST with HSN Codes

The following is a list of goods exempted under GST and the HSN chapter under which they
are covered:

Chapter 1: Live Animals

All goods other than live horses

0101: Live asses, hinnies and mules

0102: Live bovine animals

0103: Live swine

0104: Live goats and sheep

0105: Live poultry, like fowls of the species Gallus domesticus, geese, ducks, guinea
fowls and turkeys

0106: Other live animals like birds, mammals, insects

44
Chapter 2: Meat and Edible Meat Offal

All goods other than in frozen state and stored in unit containers

0201: Meat of bovine animals, chilled or fresh

0203: Meat of swine, chilled or fresh

0204 Meat of goats or sheep, chilled or fresh

0205: Meat of horses, mules, asses, or hinnies, chilled or fresh

0206: Edible offal of bovine animals, goats, swine, asses, sheep, horses, hinnies or mules,
chilled or fresh

0207: Meat and edible offal, of the poultry of heading HSN code number 0105, chilled or
fresh

0208: Other meat and edible meat offal, chilled or fresh

0209: Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted,
chilled or fresh

Chapter 3: Dairy, Natural Honey, Bird's Eggs, Edible Products of Animal Origin, Not
Specified Elsewhere

Fish, molluscs, crustaceans and other aquatic invertebrates (prawn / shrimp seeds / fish seeds,
whether or not processed, cured or in frozen state, and all goods, other than processed, cured
or in frozen state

0301: Live fish

0302: Fish, chilled or fresh, not inclusive of fish fillets & other fish meat of heading HSN
code number 0304

0304: Fish fillets and other fish meat, whether or not minced, chilled or fresh

0306: Crustaceans, whether in shell or not, live, chilled or fresh; crustaceans, in shell,
cooked by steaming or by boiling in water, chilled

45
 0307: Molluscs, whether in shell or not, live, fresh, chilled; aquatic invertebrates other
than crustaceans and molluscs, live, fresh, chilled

0308: Aquatic invertebrates other than crustaceans and molluscs, live, chilled or fresh

Chapter 4: Dairy, Natural Honey, Bird's Eggs, Edible Products of Animal Origin, Not
Specified Elsewhere

0401: Fresh milk and pasteurised milk, inclusive of separated milk, milk and cream, not
concentrated nor containing added sugar or other sweetening matter, not including Ultra
High Temperature (UHT) milk

0403: Curd, lassi, butter milk

0407: Eggs Birds' eggs, in shell, fresh, preserved or cooked

0406: Chena or paneer, other than put up in unit containers and bearing a registered brand
name

0409: Natural honey, other than put up in unit container and bearing a registered brand
name

Chapter 5: Products of Animal Origin, Not Elsewhere Included or Specified

0501: Human hair, unworked, whether or not washed or scoured; waste of human hair

0511: Semen inclusive of frozen semen

Chapter 6: Live Trees and Other Plants, Roots, Bulbs, etc.; Ornamental Foliage and
Cut Flowers

All goods under this chapter

Chapter 7: Edible Vegetables, Roots and Tubers

Fresh vegetables, roots and tubers other than those in frozen or preserved state

0701: Potatoes, chilled or fresh

0702: Tomatoes, chilled or fresh

46
 0703: Onions, garlic, shallots, leeks and other alliaceous vegetables, chilled or fresh

0704: Cabbages, kale, kohlrabi, cauliflowers and similar edible brassicas, chilled or fresh

0705: Lettuce (Lactuca sativa) and chicory (Cichorium spp.), chilled or fresh

0706: Turnips, salsify, carrots, salad beetroot, radishes, celeriac & similar edible roots,
chilled or fresh

0707: Gherkins and cucumbers, chilled or fresh

0708: Leguminous vegetables, unshelled or shelled, chilled or fresh

0709: Other vegetables, chilled or fresh

0712: Dried vegetables, sliced, broken, cut, whole or in powder, but not further prepared

0713: Dried leguminous vegetables, shelled, whether or not split or skinned, apart from
those stored in unit container and having a registered brand name

0714: Salep, manioc, Jerusalem Artichokes, arrowroot, sweet potatoes and similar tubers
and roots with high insulin or starch content, chilled or fresh; sago pith0

Chapter 8: Edible Fruit and Nuts; Peel of Citrus Fruit or Melons

Fresh fruits other than in frozen state or preserved

0801: Coconuts, dried or fresh, whether or not peeled or shelled

0802: Other nuts, fresh such as almonds, hazelnuts or filberts (Coryius spp.), walnuts,
chestnuts (Castanea spp.), pistachios, macadamia nuts, kola nuts (Cola spp.), areca nuts

0803: Bananas, inclusive of plantains, fresh or dried

0804: Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh

0805: Citrus fruit, like, mandarins, oranges, inclusive of satsumas and tangerines;
wilkings, clementines and similar citrus hybrids, grapefruit, inclusive of lemons, pomelos,
(citrus limonum, citrus limon) and limes (citrus latofolia, citrus aurantifolia), fresh

47
 0806: Grapes, fresh

0807: Melons (inclusive of watermelons) and papaws (papayas), fresh

0808: Apples, quinces and pears, fresh

0809: Apricots, peaches, cherries (inclusive of nectarines), sloes and plums, fresh

0810: Other fruit such as mulberries, strawberries, blackberries, raspberries and

loganberries, red, black or white currants and cranberries, gooseberries, bilberries and
other fruits of the genus vaccinium, durians, kiwi fruit, pomegranates, persimmons,
sapota (chico), tamarind, custard-apple (ata), litchi, bore, fresh

0814: Peel of citrus fruit or melons (inclusive of watermelons), fresh

Chapter 9: Coffee, tea, mate and spices

All goods of seed quality

0901: Coffee beans, not roasted

0902: Unprocessed green leaves of tea

0910: Fresh ginger and fresh turmeric, other than in processed form

Chapter 10: Cereals

All goods, other than those put up in unit container and bearing a registered brand name

1001: Wheat and meslin

1002: Rye

1003: Barley

1004: Oats

1005: Maize (corn)

1006: Rice

48
 1007: Grain sorghum

1008: Buckwheat, canary and millet seed; other cereals such as jawar, bajra, ragi

Chapter 11: Products of Milling Industry; Starches; Wheat Gluten; Malt; Inulin

1101, 1102, 1105, 1106 (Flour): Aata, maida, besan etc., apart from those stored in unit
container and having a registered brand name

1101: Wheat or meslin flour

1102: Cereal flours other than of wheat or meslin i.e. rye flour, maize (corn) flour, etc.

1103: Cereal groats, meal and pellets, apart from those stored in unit container and having
a registered brand name

1105: Flour of potatoes

1106: Flour of the dried leguminous vegetables of heading HSN code number 0713
(pulses), of sago or of roots or tubers of heading HSN code number 0714 or of the
products of Chapter 8 i.e. of mango flour, tamarind, singoda, etc.

Chapter 12: Oil Seeds and Oleaginous Fruits, Fruits and Seeds; Straw and Fodder;
Medicinal or Industrial Plants; Miscellaneous Grains

All goods of seed quality

1201: Soya beans, whether or not broken

1202: Groundnuts, not roasted or otherwise cooked, whether or not shelled or broken

1204: Linseed, whether or not broken

1205: Rape or colza seeds, whether or not broken

1206: Sunflower seeds, whether or not broken

1207: Other oil seeds and oleaginous fruits (i.e. palm nuts and kernels, castor oil seeds,
cotton seeds, sesamum seeds, saffower (Carthamus tinctorius) seeds, mustard seeds,

49
 melon seeds, ajams, mango kernel, poppy seeds, Niger seed, kokam, whether or not
broken.

1209: Seeds, fruit and spores, of a kind used for sowing

1210: Hop cones, fresh

1211: Plants and parts of plants (inclusive of seeds and fruits), of a kind used primarily in
perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, chilled or fresh

1212: Locust beans, seaweeds and other algae, sugar beet and sugar cane, chilled or fresh

1213: Cereal straw and husks, unprepared, whether or not chopped, ground, pressed or in
the form of pellets

1214: Swedes, fodder roots, mangolds, hay, clover, forage kale, lucerne (alfalfa), lupines,
sainfoin, vetches and similar forage products, whether or not in the form of pellets

Chapter 13: Lac, Resins, Gums and Other Vegetable Extracts and Saps

1301: Lac and shellac

Chapter 14: Vegetable Plaiting Materials; Vegetable Products, Not Elsewhere Included
or Specified

1404: Betel leaves

Chapter 17: Sugar and Sugar Confectionery

1701: Cane jiggery

Chapter 19: Preparations of Cereals, Starch, Flour or Milk; Pastry cooks' Products

1904: Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known
as chira, parched rice, commonly known as khoi, parched paddy or rice coated with sugar
or gur, commonly known as Murki

1905: Pappad, by whatever name it is known, except when served for consumption, and
bread (branded or otherwise), except when served for consumption and pizza bread

50
Chapter 21: Miscellaneous Edible Preparations

2106: Prasadam supplied by places of worship, such as temples, churches, dargahs,

mosques, gurudwaras, etc.

Chapter 22: Beverages, Spirit and Vinegar

2201: Water, other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-
mineralized and water sold in sealed container

2201: Non-alcoholic Toddy, Neera

2202: Tender coconut water stored in unit container and having a registered brand name

Chapter 23: Residues and Waste from the Food Industries; Prepared Animal Fodder

2302, 2304, 2305, 2306, 2309: Aquatic feed, cattle feed and poultry feed, inclusive of
straw, grass and hay, husk and supplement of pulses, additives and concentrates, wheat
bran and de-oiled cake

Chapter 25: Salt; Sulphur; Stone and Earths; Plastering Materials, Cement and Lime

2501: Common salt, inclusive of iodized and other fortified salts, kala namak, sendha
namak [rock salt]

Chapter 30: Pharmaceutical Products

3002: Human blood and its components

3006: All kinds of contraceptives

Chapter 31: Fertilizers

Organic manure, apart from that stored in unit containers and having a brand name

Chapter 33: Essential Oils and Resinoids Perfumery, Toilet or Cosmetic Preparations

3304: Kumkum, sindur, bindi, alta

51
Chapter 38: Miscellaneous Chemical Products

Municipal waste, clinical waste, sewage sludge

Chapter 39: Plastics and Articles Thereof

Plastic bangles

Chapter 40: Rubber and Articles Thereof

4014: Condoms and Contraceptives

Chapter 44: Wood and Articles Thereof, Wood Charcoal

4401: Fuel wood or firewood

4402: Wood charcoal, inclusive of nut or shell charcoal, whether or not agglomerated

Chapter 48: Paper and Paperboard; Articles of Paper Pulp, of Paper or of Paperboard

4802, 4817: Judicial, non-judicial stamp papers, court fee stamps when sold by the
Government Treasuries or vendors authorized by the Government, postal items, such as
postcard, envelope, etc., sold by the Government, rupee notes when sold to the Reserve
Bank of India & cheques, loose or in book form

Chapter 49: Printed Books, Newspapers, Pictures and Other Products of the Printing
Industry, Typescripts, Manuscripts and Plans

4901: Printed books, inclusive of braille books

4902: Newspaper, periodicals and journals, whether or not illustrated or containing

advertising material

4905: Maps and hydrographic or similar charts of all types, inclusive of atlases, globes,
topographical plans and wall maps, printed

Chapter 50: Silk

5001: Silkworm laying, cocoon

5002: Raw silk

52
 5003: Silk waste

Chapter 51: Wool, Coarse or Fine Animal Hair, Horse Hair Yarn and Woven Fabric

5101: Wool, not combed or carded

5102: Coarse or fine animal hair, not combed or carded

5103: Waste of wool or of coarse or fine animal hair

Chapter 52: Cotton

Khadi yarn, Gandhi topi

Chapter 53: Other Vegetable Textile Fibres; Paper Yarn, Woven Fabrics of Paper
Yarns

5303: Jute fibres, processed or raw but not spun

5305: Coconut, coir fibre

Chapter 63: Other Made Up Textile Articles, Sets, Worn Textile Articles and Worn
Clothing; Rags

Indian National Flag

Chapter 69: Ceramic Products

6912: Clay lamps and earthen pots

Chapter 70: Glass and Glassware

7018: Bangles, apart from those made from precious metals

Chapter 82: Tools, Cutlery, Forks and Spoons of Base Metal, Implements; Parts
Thereof of Base Metal

8201: Agricultural implements, animal-driven or manually-operated, and hand tools, like

shovels, hoes, spades, picks, mattocks, rakes and forks; bill hooks, axes and similar
hewing tools; pruners and secateurs of any type; timber wedges, scythes, hay knives,
sickles, hedge shears, and other tools of a kind used in forestry, agriculture or horticulture
53
Chapter 84: Boilers, Nuclear Reactors, Machinery and Mechanical Appliances; Parts
Thereof

Handloom

Chapter 88: Aircraft; Spacecraft and Parts Thereof

8802: Spacecraft, inclusive of satellites and suborbital and spacecraft launch vehicles

8803: Parts of Goods of Heading HSN Code Number 8801

Chapter 90: Photographic, Cinematographic, Optical, Checking, Measuring, Precision,

Surgical or Medical Apparatus and Instruments; Parts and Accessories Thereof

9021: Hearing Aids

Chapter 92: Musical Instruments; Accessories and Parts of Such Articles

Indigenous handmade musical instruments

Chapter 96: Miscellaneous Manufactured Articles

9609: Slate pencils and chalk sticks

9610: Slates

All of the aforementioned goods are exempt from GST.

Reasons for Exemption under GST

The following are the cases under which goods may be exempted from registering under GST according
to the government:

If exemption recommended by the GST council

Under a full exemption, one can supply specific goods on receiving official notification
The government might grant exemption by special order under unforeseen or exceptional situations

Certain exemptions from GST registration that are beneficial to the public may be identified by the
government

54
 CHAPTER 4 – INFORMATION ABOUT GST REGISTRATION

4. Registration under GST Law

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 tax from his Customers and pass on the credit of the taxes paid
on the goods or services supplied to the purchasers/Recipients.

55
 • 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 turnovers below Rupees 20 lakh (10 lakh if business is in Assam,
Arunachal Pradesh, 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.

Nature of Registration

The registration in GST is PAN based and State specific. 3 Supplier has to register in each of such State
or Union territory from where he effects supply. In GST registration, the supplier is allotted a 15-digit
GST identification number called “GSTIN” and a certificate of registration incorporating therein this
GSTIN is made available to the applicant on the GSTN common portal. The first 2 digits of the GSTIN
is the State code, next 10 digits are the PAN of the legal entity, the next two digits are for entity code,
and the last digit is check sum number. Registration under GST is not tax specific which means that
there is single registration for all the taxes i.e. CGST, SGST/UTGST, IGST and cesses. A given PAN
based legal entity would have one GSTIN per State, that means a business entity having its branches in
multiple States will have to take separate State wise registration for the branches in different States. But
within a State an entity with different branches would have single registration wherein it can declare one
place as principal place of business and other branches as additional place of business. However, a
business entity having separate business verticals (as defined in section 2 (18) of the CGST Act, 2017) in
a state may obtain separate registration for each of its business verticals. Further a unit in SEZ or a SEZ
developer needs to necessarily obtain separate registration.

 Those ecommerce operators who are notified as liable for GST payment under Section 9(5) of
the CGST Act, 2017

 TDS Deductor

56
 Input service distributor

 Those supplying online information and data base access or retrieval services from outside
India to a non-registered person in India.

 A person receiving supplies on which tax is payable by recipient on reverse charge basis

 non-resident taxable persons who is not having fixed place of business in India

 A person who supplies on behalf of some other taxable person (i.e. an Agent of some Principal)

 E-commerce operators, who provide platform to the suppliers to make supply through it

 Generally, the liability to register under GST arises when you are a supplier within the meaning
of the term, and also if your aggregate turn over in the financial year is above the exemption
threshold of 20 lakh rupees (10 lakh rupees in special category states except J & K). However,
the GST law enlists

 Inter-state suppliers; However, persons making inter-state supplies of taxable services and
having an aggregate turnover, to be computed on all India basis, not exceeding an amount of
twenty lakh rupees (ten lakh rupees for special category States except J & K) are exempted
from obtaining registration vide Notification No. 10/2017-Integrated Tax dated 13.10.2017.

 Casual taxable person who is not having fixed place of business in the State or Union Territory
from where he wants to make supply. However casual taxable persons making supplies of
specified handicraft goods need not take compulsory registration and are entitled to the
threshold exemption of Rs. 20 Lakh. Handicraft goods are specified in Notification no.
33/2017-Central Tax dated 15.09.2017 as amended by Notification no. 38/2017-Central Tax
dated 13.10.2017

57
 4.1 Different Types of GST Registration

Under the GST Act, GST Registration can be of various types. You must be aware of the different types
of GST Registration before selecting the appropriate one. The different types of GST Registration are:

Normal Taxpayer

Most businesses in India fall under this category. You need not provide any deposit to become a normal
taxpayer. There is also no expiry date for taxpayers who fall under this category.

Casual Taxable Person

Individuals who wish to set up a seasonal shop or stall can opt for this category. You must deposit an
advance amount that is equal to the expected GST liability during the time the stall or seasonal shop is
operational. The duration of the GST Registration under this category is 3 months and it can be extended
or renewed.

58
Composition Taxpayer

Apply for this if you wish to obtain the GST Composition Scheme. You will have to deposit a flat under
this category. The Input tax credit cannot be obtained under this category.

Non-Resident Taxable Person

If you live outside India, but supply goods to individuals who stay in India, opt for this type of GST
Registration. Similar to the Casual Taxable Person type, you must pay a deposit equal to the expected
GST liability during the time the GST registration is active. The duration for this type of GST
registration is usually 3 months, but it can be extended or renewed at the type of expiry.

Online GST Registration Process

The step-by-step procedure that individuals must follow to complete GST Registration is mentioned
below:

Step 1: Visit the GST portal at https://www.gst.gov.in and Click on the 'Register Now' link which can be
found under the 'Services' tab

Step 2: Select 'New Registration' and Fill the below-mentioned details

Part - A

 Under the 'I am a' drop-down menu, select 'Taxpayer'.

 Select the respective state and district.
 Enter the name of the business.
 Enter the PAN of the business.
 Enter the email ID and mobile number in the respective boxes. The entered
email ID and mobile number must be active as OTPs will be sent to them.
 Enter the image that is shown on the screen and click on 'Proceed'.

 On the next page, enter the OTP that was sent to the email ID and mobile
number in the respective boxes and Click on 'Proceed'.

 You will be shown the Temporary Reference Number (TRN) on the screen.
Make a note of the TRN (Which helps in further Steps).

59
Part - B

Step 1: Now, Visit the GST portal again and click on 'Register' under the 'Services' menu.

Step 2: Select 'Temporary Reference Number (TRN)'. Now, Enter TRN number and the captcha details.
Click on 'Proceed' button.

Step 3: You will receive an OTP on your email ID and registered mobile number. Enter the OTP and
click on 'Proceed'.

Step 4: The status of your application will be available on the next page. On the right side, there will be
an Edit icon, click on it.

Step 5: In the Next Step, There will be 10 sections which must be filled and has to submit the required
documents. The list of documents that must be uploaded are:

 Photographs
 Business address proof
 Bank details such as account number, bank name, bank branch, and IFSC
code.
 Authorisation form
 The constitution of the taxpayer.

Submit the documents and move to Next Step.

Step 6: Visit the 'Verification' page and check the declaration, Then submit the application by using one
of the below mentioned methods:

 By Electronic Verification Code (EVC). The code will be sent to the registered
mobile number.
 In case companies are registering, the application must be submitted by using
the Digital Signature Certificate (DSC).
 By e-Sign method. An OTP will be sent to the mobile number linked to
the Aadhaar card.

Once completed, a success message will be shown on the screen. The Application Reference Number
(ARN) will be sent to the registered mobile number and email ID.

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Eligibility to Register for GST
GST Registration must be completed by the following individuals and businesses:

 Individuals who have registered under the tax services before the GST law
came into effect.
 Non-Resident Taxable Person and Casual Taxable Person
 Individuals who pay tax under the reverse charge mechanism
 All e-commerce aggregators
 Businesses that have a turnover that exceeds Rs.40 lakh. In the case of
Uttarakhand, Himachal Pradesh, Jammu & Kashmir, and North-Eastern states,
the turnover of the business should exceed Rs.10 lakh.
 Input service distributors and agents of a supplier.
 Individuals who supply goods through an e-commerce aggregator.
 Individuals providing database access and online information from outside
India to people who live in India other than those who are registered taxable
persons.
 GST registration is mandatory for businesses that have an annual turnover of
Rs.20 lakh and more.

Documents Required for GST Registration

The following is the list of documents required for GST registration:

 PAN card
 Aadhaar card
 Bank account information
 Proof of address
 Digital Signature

 Photograph (JPEG format, maximum size – 100 KB)

 Articles of Association/Memorandum of Association
 Certificate of incorporation issued by Ministry of Corporate Affairs
 Proof of appointment of authorised signatory
 For LLP, the registration certificate/LLP Board resolution

61
New Online GST Registration Fees

No charges are levied to complete the GST registration process.

In case businesses do not complete the registration process, 10% of the amount that is due or Rs.10,000
will be levied. In the case of tax evasion, 100% of the amount that is due will be levied as a penalty.

Once the relevant documents have been uploaded, an Application Reference Number (ARN) will be sent
via SMS and email to confirm the registration.

How to Get GST Number?

In order to get the GST number follow the simple steps:

Step 1: Visit the official GST Portal at www.gst.gov.in.

Step 2: Select 'Services' under Services tab and Click on 'Registration'.

Step 3: Now, Click on "New Registration" and enter all the requested details like valid email address,
mobile number and a PAN for the business.

Step 4: Click on Proceed after submission of details to get GST Registration Number.

How to Check GST Registration Status Online

 Visit GST official portal at https://www.gst.gov.in/

 Click to 'Services' > 'Registration' > 'Track Application Status'.
 Enter your ARN number and Captcha code. Next click on SEARCH button.
 Finally, you will receive any of the following GST registration status on your
screen:
 Provisional status
 Pending for verification status
 Validation against error status
 Migrated status
 Cancelled status

GST Registration Via Authentication of Aadhaar

New businesses can secure their GST registration with the help of the Aadhaar. The process is simple
and quick. The new process came into effect from 21 August 2020. The procedure to opt for Aadhaar
authentication is mentioned below:
62
 1. When you apply for GST registration, you will be provided with an option to
choose Aadhaar authentication.
2. Select 'YES'. The authentication link will be sent to the registered email ID
and mobile number.
3. Click on the authentication link.
4. Enter the Aadhaar number and select 'Validate'.
5. Once the details have been matched, an OTP will be sent to the registered
mobile number and email ID.
6. Enter the OTP to complete the process. You will get the new GST registration
within three working days.

Advantages of GST Registration

Given below are the advantages of GST Registration:

 Your business will be recognised legally.

 Tax is accounted in a uniform manner.

 Your business will be able to avail all the benefits that comes under the GST
rule.

 Authorisation from the law to collect taxes on sales.

GST Registration Exemption

The below-mentioned individuals and entities are exempt from GST registration:

1. Businesses that manufacture supplies that come under reverse charge.

2. Activities that do not come under the supply of goods or services. Examples of
such activities are the sale of a building or land, funeral services, and services
provided by an employee.
3. Businesses that make non-GST/ non-taxable supplies. Examples are aviation
turbine fuel, electricity, natural gas, high-speed diesel, and petrol.
4. Businesses that make exempt/ nil-rated supplies.
5. Businesses that fall under the threshold exemption limit.
6. Agriculturists.

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Features of GST Registration
Some of the features of GST registration are as follows:

 GST registration is PAN-based and state-specific.

 An individual who is registered in one state is termed an ‘unregistered person’

in another state.
 Suppliers must register in every state or union territory from which they
supply services.
 In case a person owns a unit in a Special Economic Zone (SEZ) or is a SEZ
developer and also owns a unit in a domestic tariff area (outside the SEZ)
within the same state, they must register the SEZ unit separately.
 All registered people are expected to display their registration certificates
and GSTIN at their primary place of business and also at every additional
business location.
 A particular PAN-based legal organisation will have one GSTIN per State,
which implies that a business company with branches in many states would
have to register separately in each state. However, a person with several
business locations in a State or Union territory may be given a separate
registration for each location.

 GST registration is not tax-specific, which implies that there is just one
registration for all taxes, including IGST, CGST, SGST/UTGST, and cesses.

Benefits of GST Registration

 Eliminates the Cascading Effect of Tax: GST's comprehensive nature intends to

avoid the cascading tax impact. The cascading effect refers to a tax on tax in
which the tax liability was transferred at each level of the transaction. Due to this,
the cost of the item increases. GST eliminates this cascading effect since the tax
has a direct impact on the price of goods and services.
 Transparent in Nature: GST is a transparent tax system with no costs or hidden
charges for registered retailers. This makes the expenses involved in business
lesser.
 Tax evasion: The input credit is accessible to the receiver if the supplier includes
the data in its return. This encourages the suppliers hence reducing tax evasion.

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 Composition Schemes for Small Firms: Many small businesses are now under less
of a tax and compliance burden. Additionally, small firms, defined as those with a
turnover of Rs.20 lakh to Rs.75 lakh might profit from the use of composition
schemes.
 Higher Registration Threshold: Under previous tax laws, businesses with an
annual turnover of more than Rs.5 lakh were subject to VAT. Various states had
different limits. However, in the GST system, the threshold is raised to Rs.20 lakh
thereby exempting small businesses and service providers.

 Reduced Number of Compliances: Previously, each tax had its own returns
and compliances. However, the compliances have decreased after GST was
implemented. There is only one unified return that must be filed.
 Treatment Guidelines for Online Merchants: The e-commerce industry had no
established definition of the supply of goods prior to the introduction of GST.
A few states would view these as mediators or facilitators, exempting them
from the need to register for VAT. The GST has eliminated all of these
unequal treatment practises.
 Unorganised Sector is Regulated: The textile and construction industries were
mostly disorganised and unregulated. Online compliance and payment options
are covered by the GST. Therefore, these industries will now be held
accountable and regulated.
 Improvement in logistics Efficiency: Due to the GST, which has reduced
obstacles to the free movement of goods between states, logistics efficiency
has grown. Warehouses are choosing to locate their units in major cities rather
than any other location.

65
 4.2 List of Forms for registration Under GST

GST REG-1 -Application for Registration

GST REG-2 –Acknowledgment

GST REG-3 –FORM GST REG-03

GST REG-4 –Clarification/additional information/document for

<<registration/Amendment/Cancellation>>

GST REG-5 -FORM GST REG-05

GST REG-6 -FORM GST REG-6

GST REG-7 -FORM GST REG-7

GST REG-8 -FORM GST REG-8

GST REG-9 -Application for Registration of Non Resident Taxable Person

GST REG-10 –Application for registration of person supplying online information and data base access
or retrieval services from a place outside India to a person in India, other than a registered person.

66
GST REG-11 – Application for extension of registration period by casual / non-resident taxable person

GST REG-12 – Order of Grant of Temporary Registration/ Suo Moto Registration

GST REG-13 – Application/Form for grant of Unique Identity Number (UIN) to UN Bodies/ Embassies
/others

GST REG-14 –Application for Amendment in Registration Particulars

GST REG- 15- Order of Amendment

GST REG -16- Application for Cancellation of Registration

GST REG -17-Show Cause Notice For Cancellation of Registration

GST REG-18 –Reply to the Show Cause Notice issued or cancellation for registration

GST REG-19 -Order for Cancellation of Registration

GST REG-20 -Order for dropping the proceedings for cancellation of registration

GST REG-21 –Application for Revocation of Cancellation of Registration

GST REG-22 –Order for revocation of cancellation of registration

GST REG-23 –Show Cause Notice for rejection of application for revocation of cancellation of
registration

GST REG-24 –Reply to the notice for rejection of application for revocation of cancellation of
registration

GST REG-25 -Certificate of Provisional Registration

GST REG-26 -Application for Enrolment of Existing Taxpayer

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GST REG-27 –Show Cause Notice for cancellation of provisional registration Form GST REG-28 –
Order for cancellation of provisional registration

GST REG-29 -APPLICATION FOR CANCELATION OF REGISTRATION OF MIGRATED

TAXPAYERS

GST REG-30 –Form for Field Visit Report

GST REG-31 -Intimation for suspension and notice for cancellation of registration

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 5 - LITERATURE REVIEW

G. Garg, 6 (2014) analysed the impact of GST on Indian tax scenario. He tried to highlight the objectives
of the proposed GST plan along with the possible challenges and opportunity that GST brings. He
concluded that GST is the most logical steps towards the comprehensive indirect tax reform in our
country since independence. GST is leviable on all supply of goods and provision of services as well
combination thereof. All sectors of economy i.e the industry, business including Govt. departments and
service sector shall have to bear impact of GST. All sections of economy viz., big, medium, small scale
units, intermediaries, importers, exporters, traders, professionals and consumers shall be directly affected
by GST. One of the biggest taxation reforms in India – the Goods and Service Tax (GST) is all set to
integrate State economies and boost overall growth. GST will create a single, unified Indian market to
make the economy stronger.

Pinki et al., 7 (2014) the authors in the paper have explored the concept of GST, the need to introduce it
in India, the hurdles in introducing it in India and suggestions to overcome the same. The paper also
discusses the benefits of introducing GST at the earliest. The authors have discussed the options to
introduce the dual GST in India which could be Concurrent Dual GST, National GST or State GST.
Under the concurrent dual GST the better option was the one where GST is applied on both goods and
services. The other option explored was whether the Central GST would be on goods and services but
state GST would be only on goods since state to collect GST in services is difficult to determine. This
option also recommended one single return with both CGST and SGST details and PAN based
registration. The authors have also discussed the constitutional amendments required if GST is ever to be
introduced since without the amendment taxing both goods and services using one tax is not possible.

N. Kumar, 9 (2014) concluded that GST will help in eradicating economic distortion by current Indian
tax system and is expected to encourage unbiased tax structures which will be indifferent to geo
locations.

Jaiprakash ( 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 setoff, subsuming of several taxes in the GST and
phasing out of CST.

69
Dani, S., 18 (2016) in her research study revealed that GST being a system replacing all indirect taxes
might hamper the progress of the country as the attempt to implement it is not being made whole
heartedly.

Shefalidani, 17 (2016) stated impact of GST on Indian economy in the study in which some benefits of
GST such as one nation one tax, free from cascading effect, increase consumption due to cascading
effect, transparency and GDP growth are studied. Petroleum products, real estate, and liquor are free
from GST.

70
 6. Data Analysis & Interpretation Presentation

1. Occupation?

Occupation Responses percentage

Student 13 92.9%

Employee 01 7.1%

Other 0 0%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is 1 respondent’s employee i.e. 7.1% respondents
 There are 0% respondents other i.e. 0 respondents.
 There are 13% respondents in student 92.9% respondents

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2. Gender?

Gender Responses Percentage

Male 01 7.1%

Female 13 92.9%

Prefer not to say 0 0%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 The Above Diagram Shows That 7.1% Of Respondents Were Male. There Was 1 Male Out Of
14 Respondents.
 The Above Diagram Shows That 92.9% Of Respondents Were Female. There Was 13 Female
out of 14 Respondents.

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3. Age?

Age Responses Percentage

18 - 24 13 86.7%
36 – 50 1 6.7%
50 above 1 6.7%

Total 15 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There are respondents from which 86.7% respondents are between below 18-24 age Group i.e. 13
respondents are between below 18-24 age group.
 There are 6.7% respondents between 30-50 age group i.e. 1 respondents are between 30-50 age
group.
 In the age group of 50 above there are 6.7% respondents i.e. 1 respondent.
 From the above study we conclude the age group of 18-24 has the highest respondents

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 4. Income tax is charged?

Particulars No of Responses Percentage

a) Financial Year 10 71.4%
b) Assessment Year 1 7.1%
c) Previous Year 2 14.3%
d) Accounting Year 1 7.1%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 71.4% respondent and 10 respondents having a Financial Year
 There is a 7.1% respondent and 1 Respondents having an Assessment Year
 There are 14.3% respondents and 2 respondents having a Previous Year
 There are 7.1% respondents i.e. 1 respondent having an Accounting Year

Right answer
Income tax is charged based on the Assessment year. The assessment year is the year following the
financial year in which the income is earned. It is the year in which the taxpayer's income is assessed,
and taxes are calculated based on the income earned during the previous financial year. So, while the
financial year determines the period in which income is earned, the assessment year is when taxes are
assessed and charged based on that income.
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 5. GST Registration?

Particulars No of Responses Percentage

Aadhar based 3 21.4%

A. Passport based 1 7.1%

B. Pan based 9 64.3%
C. None of the above 1 7.1%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 21.4% respondent and 3 respondents having an Aadhar based
 There is a 7.1% respondent and 1 Respondents having a Passport based
 There are 64.3% respondents and 9 respondents having a Pan based
 There are 7.1% respondents i.e. 1 respondent having an None of the above

Right answer
The correct option is PAN (Permanent Account Number) based, as it serves as the primary identification
for businesses and individuals registering for GST in India.

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6. GST is a based tax?

Particulars No of Responses Percentage

Origin 6 42.9%

Destination 4 28.6%
Territory 1 7.1%
None of the above 3 21.4%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 42.9% respondent and 6 respondents having a Origin
 There is a 28.6% respondent and 4 Respondents having a Destination
 There are 7.1% respondents and 1 respondent having a Territory
 There are 21.4% respondents i.e. 3 respondents having a none of the above
Right answer
The correct option is Destination. GST (Goods and Services Tax) is based on the destination principle.
This means that the tax is levied on goods and services at the point of consumption or the place where
the goods or services are ultimately consumed, rather than at the point of production or sale. This ensures
that the tax revenue is collected by the jurisdiction where the consumption occurs, regardless of where
the goods were produced or services provided. Therefore, "Destination" accurately reflects the basis of
GST.
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7. In IGST stands for?

Particulars No of Responses Percentage

Integrated 7 50%

International 5 35.7%
Inter-State 1 7.1%
Indian 1 7.1%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 50% respondent and 7 respondents having a Integrated
 There is a 35.7% respondent and 5 Respondents having a International
 There are 7.1% respondents and 1 respondent having an Inter-State
 There are 7.1% respondents i.e. 1 respondent having an Indian

Right answer
IGST stands for Integrated Goods and Services Tax (IGST) is a type of tax levied under the Goods and
Services Tax (GST) regime in India. It is applicable on the supply of goods and services between
different states or Union territories of India. IGST is governed by the Integrated Goods and Services Tax
Act, 2017.

77
8. Which of the following is an indirect tax in India?

Particulars No of Responses Percentage

Goods and Services
10 71.4%
Tax

Corporation Tax 0 0%
Income Tax 1 7.1%
Capital Gains Tax 3 21.4%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 71.4% respondent and 10 respondents having a Goods and Services Tax
 There is a 0% respondent and 0 Respondents having a Corporation Tax
 There are 7.1% respondents and 1 respondent having an Income Tax
 There are 21.4% respondents and 3 respondents having an Capital Gains Tax
Right answer
The correct option is Goods and Service Tax (GST). The Goods and Services Tax (GST) is a tax on
goods and services. It is an indirect tax that was implemented to replace a variety of other indirect taxes
such as VAT, service tax, purchase tax, excise duty, and so on. GST is a tax applied in India on the
supply of certain goods and services. GST is a multi-stage, all-encompassing tax system that applies to
the sale of goods and services.
78
9. Which of the following tax has been abolished by the GST?

Particulars No of Responses Percentage

Service Tax
8 57.1%
Income Tax 3 21.4%
Corporation Tax 1 7.1%
Wealth Tax
2 14.3%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 57.1% respondent and 8 respondents having a Service Tax
 There is a 21.4% respondent and 3 Respondents having a Income Tax
 There are 7.1% respondents and 1 respondent having a Corporation Tax
 There are 14.3% respondents i.e. 2 respondents having an Wealth Tax

Right answer
The correct answer is Service Tax. GST is a value-added tax levied on most goods and services sold for
domestic consumption. In India, GST Bill was first introduced in 2014 as The Constitution (122nd
Amendment) Bill. This got approval in 2016 and was renumbered in the statute by Rajya Sabha as The
Constitution (101st Amendment) Act, 2016.

79
10. GST is a consumption of goods and service tax based on?

Particulars No of Responses Percentage

Development
4 28.6%
Dividend
0 0%
Destiny
1 7.1%
Destination
9 64.3%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 28.6% respondent and 4 respondents having a Development
 There is a 0% respondent and 0 Respondents having a Dividend
 There are 7.1% respondents and 1 respondent having a Destiny
 There are 64.3% respondents i.e. 9 respondents having a Destination

Right answer
The correct option is Destination. GST (Goods and Services Tax) is based on the destination principle.
This means that the tax is levied on goods and services at the point of consumption or the place where
the goods or services are ultimately consumed, rather than at the point of production or sale. This ensures
that the tax revenue is collected by the jurisdiction where the consumption occurs, regardless of where
the goods were produced or services provided.
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11. Input tax credit is not available for?

Particulars No of Responses Percentage

Services
3 23.1%
Zero rated supplies
7 53.8%
Taxable supplies 2 15.4%
Exempt supplies
1 7.7%

Total 10 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 23.1% respondent and 3 respondents having a Service
 There is a 53.8% respondent and 7 Respondents having a zero rated supplies
 There are 15.4% respondents and 2 respondents having Taxable supplies
 There are 7.7% respondents i.e. 1 respondent having Exempt supplies

Right answer
The correct answer is exempt supplies. Input tax credit is not available for exempt supplies because no
tax is charged on these supplies, so there is no tax to credit against. Exempt supplies are specifically
excluded from the tax system, unlike taxable supplies, zero-rated supplies, and services, where tax is
either charged or applicable.
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12. What kind of tax is GST?

Particulars No of Responses Percentage

Direct Tax 2 14.3%
Indirect Tax 8 57.1%
Depends on the type of
4 28.6%
goods and services
None of the above 0 0%
Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 14.3% respondent and 2 respondents having a Direct Tax
 There is a 57.1% respondent and 8 Respondents having a Indirect Tax
 There are 28.6% respondents and 4 respondents having a Depends on the type of goods and
services
 There are 0% respondents i.e. 0 respondents having an None of the above

Right answer
The correct answer is an Indirect tax. Goods and Services Tax (GST) is an indirect tax (or consumption
tax) used in India on the supply of goods and services. It is a comprehensive, multistage, destination-
based tax: comprehensive because it has subsumed almost all the indirect taxes except a few state taxes.

82
13. Which of the following definition is not related to income tax?

Particulars No of Responses Percentage

Discount 6 42.9%

Simple form 2 14.3%

MODVAT
6 42.9%
(Modified Value Added Tax)

Assessment year 0 0%

Total 14 100%

Analysis & Interpretation

 The pie chart shows that 14% respondents are student of 14 respondents.
 There is a 42.9% respondent and 6 respondents having a Discount
 There is a14.3% respondent and Respondents having a Simple Form
 There are 42.9% respondents and 6 respondents having an MODVAT (Modified Value Added
Tax)
 There are 0% respondents i.e. 0 respondents having an Assessment Year

Right answer
The correct answer MODVAT (Modified Value Added) is not related to income tax.
The MODVAT is related to Excise tax
MODVAT was incorporated into the Indian tax system in the year 1986.
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 7. CONCLUSION & SUGGESTION

GST is the most logical steps towards the comprehensive indirect tax reform in our country Since
independence GST is leviable on all supply of goods and provision of services as well Combination
there of All sectors of economy whether the industry, business including Govt. Departments and service
sector shall have to bear impact of GST. All sections of Economy viz., big, medium, small scale units,
intermediaries, importers, exporters, traders, professionals and Consumers shall be directly affected by
GST. One of the biggest taxation reforms in India – the Goods and Service Tax (GST) is all set to
integrate State economies and boost overall Growth. GST will create a single, unified Indian market to
make the economy stronger Experts Say that GST is likely to improve tax collections and Boost India's
economic development by Breaking tax barriers between States and integrating India through a uniform
tax rate. Under GST, the taxation burden will be divided equitably between manufacturing and services.

SUGGESTION

The Chelliah Committee appointed to examine the structure of direct and indirect taxes and make
recommendations for making the tax system more broad-based, elastic and simplified. Accordingly, the
following suggestions have been drawn up:

(a) Withdrawal of exemption to various saving instruments like NSCs, equity-linked saving-plans, etc.

(b) Introduction of 'estimated income scheme* for the people engaged in brokerage business or working
as commission agents;

(c) Taxing of leave travel allowance, home travel allowance, receipts on retirement and passage money
and allowances paid to legislators.

84
 8. BIBLIOGRAPHY

https://cleartax.in/s/tcs-under-goods-and-services-tax

https://www.indiafilings.com/learn/service-tax-exemption/

https://www.bankbazaar.com/tax/service-tax-
exemption.html#:~:text=Service%20Tax%20Exemptions%20for%20Small,avail%20of%
20service%20tax%20exemptions

https://haryanatax.gov.in/HEX/DownloadPDF?formName=/GST_Helpdesk/List_of_GST
_rates_for_services.pdf

https://www.bankbazaar.com/tax/goods-exempted-under-gst.html

https://www.bankbazaar.com/tax/gst-registration.html

https://www.gstzen.in/a/gst-reg-forms.html

https://www.avalara.com/in/en/resources/whitepapers/gst-payment-
process.html#:~:text=To%20initiate%20a%20payment%2C%20taxpayers,debit%20card
%20(authorized%20banks%20only)

https://ijcrt.org/papers/IJCRT2007505.pdf

85
 9. APPENDIX

1) Occupation?
a) Student
b) Employee
c) Other

2) Your age is between

a) 18 - 24
b) 36 – 50
c) 50 above

3) Your gender?
a) Male
b) Female
c) Prefer not to say

4) Income Tax is charged in –

a) Financial Year
b) Assessment Year
c) Previous Year
d) Accounting Year

5) GST Registration
a) Aadhar based
b) Passport based
c) Pan based
d) None of the above

86
6) GST is a __________________ based tax.
a) origin
b) destination
c) territory
d) None of the above

7) In IGST, I stand for

a) Integrated
b) International
c) Inter-State
d) Indian

8) Which of the following is an indirect tax in India?

a) Goods and Services Tax
b) Corporation Tax
c) Income Tax
d) Capital Gains Tax

9) Which of the following tax has been abolished by the GST?

a) Service Tax
b) Income Tax
c) Corporation Tax
d) Wealth Tax

10) GST is a consumption of goods and service tax based on

a) Development
b) Dividend
c) Destiny
d) Destination

11) Input tax credit is not available for

a) services
b) zero rated supplies
c) taxable supplies
d) exempt supplies
87
12) What kind of Tax is GST?
a) Direct Tax
b) Indirect Tax
c) Depends on the type of goods and services
d) None of the above

13) Which of the following definition is not related to income tax?

a) Discount
b) Simple form
c) MODVAT ( Modified value Added Tax)
d) Assessment year

88