INTRODUCTION TO GST

TYBCOM
SEMESTER VI
INDIRECT TAXES
 Index
• Introduction
• Definitions
• Scope of Supply
• Levy & Collection of Tax
• Composition Levy
• Exemption From Tax
• Time of Supply
• Place of Supply
• Value of Supply
• Input Tax Credit
• Registration Under GST
• Payment of Tax
• Computation of Liability & Tax
 Introduction
• Tax – Direct & Indirect Tax
• Features of Indirect Tax
• Advantages of Indirect Taxes
• Disadvantages of Indirect Taxes
• Need for GST
• Features, Scope & Benefit of GST
• GST Laws :- 1.) CGST Act
2.) SGST Act
3.) IGST Act
4.) UTGST Act
5.) GST ( Compensation to States ) Act
 Dual GST Model
CGST + SGST/UTGST
• Centre & State/ UT
• Intra State Supply of G & S
• CGST – Central GST, SGST – State
GST
• CGST – levied when both S & R
located within same country
• SGST – levied when both S & R
located within same state. ( All
States including J&K, Delhi &
Pondicherry )
• UTGST - levied when both S & R
located within same UT.
IGST
• Centre
• Inter State Supply of G & S
• IGST – Integrated GST
• Imports subject to Basic Custom
Duty + IGST
• Exports – Nil Rated (0 % )
• IGST Rate = CGST Rate + SGST
Rate
• Since GST is a destination based
tax, the SGST portion will be
transferred by the exporting
state to CG & then it CG will
transfer it to the importing state.
 Scope of GST
• All Goods & Services

• Alcoholic Liquor for Human Consumption - Outside GST ( State Excise Duty on
Manufacture and CST/Vat on Sale )

• Petroleum products - Petroleum crude, diesel, petrol, ATF & Natural Gas –
currently not leviable to GST (Currently subject to Central Excise duty on
manufacture and VAT/CST on sale)

• Real Estate Sector – Outside GST - Sale/Purchase of Immovable property subject

to Stamp Duty

• Tobacco - Central Govt levies excise duty on manufacturing tobacco products.

Therefore, Tobacco = GST + Central Excise Duty.
 Central Taxes
Subsumed Not Subsumed
• Central Excise Duty • Customs Duty
• Additional Duty of Excise
• Additional Custom Duty ( CVD )
• Special Additional Duty ( SAD )
• Surcharge & Cess
• CST
• Service Tax
 State Taxes
Subsumed Not Subsumed
• VAT • State Excise Duty
• Purchase Tax • Stamp Duty
• Octroi, LBT • Profession Tax
• Entertainment Tax • Electricity Duty
• Luxury Tax • Sales Tax on 5 petroleum
• Betting, Gambling & Lottery Tax products
• Road Tax
 Framework for Implementing GST
1. GST Council – Constitution , Members , Quorum, Recommendations,
Levy on Petroleum products.
2. Goods & Service Tax Network – Set – up, Service Providers , Data
Access, Functions.
3. GST Rates – ( IGST Rates) ( SGST/CGST will be 50% of IGST )
Goods – 0%, 0.25%, 3%, 5%, 12%, 18%, 28%.
Services – 5%, 12%, 28%.
Imports – BCD, Cess , IGST, GST Compensation cess
Exports – Nil rate
4. Classification of Goods & Services
5. Compensation Cess
6. E-Way Bill System
7. Anti – Profiteering Mechanism
 Definitions
• Business
Any activity incidental/ancillary
Any trade/commerce, to it
manufacture, profession, etc even
if there is no monetary benefit Any activity of same nature even
if no volume/ continuity

Supply/acquisition of goods In connection with

including capital goods and commencement/ closure of
services business

Provision of facilities by
club/association etc To its members for consideration
 Admission for consideration To any premises

Services as holder of office Accepted in course/furtherance

of trade, profession

Activities of race club by way of Totalisator or a licence to book

maker in such club

Any activity by Government/ local

As public authorities
authority

Note – 1.) Monetary Benefit is not relevant in deciding whether an activity can be called
business or not. Similarly, profit motive is not relevant in deciding whether an
activity can be called business or not.
2.) Trade means B & S of goods but Commerce means trade and related services like
marketing, distribution,etc.
 Consideration

Payment in money or Monetary value of any act or

otherwise for the supply forbearance for the supply

By recipient or any
Deposit to be other person
considered as
payment

Excluding subsidy
ONLY given by CG/SG

When the supplier

applies such deposit as
consideration for supply
 Goods

MEANS

Every kind of movable property EXCLUDES Money & Securities

INCLUDES

• Actionable Claim
•Growing Crops
•Grass and things forming part of land agreed to be
severed before supply under a contract of supply
 Services

MEANS

Goods
Anything EXCLUDING Money
Securities

INCLUDES

Activities relating to the

Facilitating/ Arranging
use of money or its
Transactions in
conversion for a
Securities
consideration
 Recipient
If consideration is payable for Person liable to pay the
supply of goods and/or services consideration

If no consideration is payable for Person to whom goods or their

supply of goods possession/use is
delivered/given/made available

If no consideration is payable for Person to whom the services is

supply of services rendered

Recipient includes an agent acting on behalf of the recipient in relation to the

goods and/or services supplied

Principal Supply – means he supply of goods or services which constitutes the

predominant element of a composite supply and to which any other supply forming part
of that supply is ancillary.

Taxable Supply – means a supply of goods or services or both which is leviable to tax
under this Act.
 Electronic Commerce Operator
• ECO means any person who owns, operates or manages digital or
electronic facility or platform for electronic commerce
• Aggregators like OLA, UBER, ZOMATO, SWIGGY, URBAN CLAP
• They are neither supplier nor recipient but basically connects the two of
them.
• Compulsory registration for a ECO ( Threshold limit not applicable )

India
• It includes territories of India ( States + UT ) + territorial waters.

Non Taxable Supply

• NTS means supply of G or S or both which is not leviable to tax under this Act
or under IGST Act. Eg. – Alcoholic Liquor for Human consumption / Petroleum
products.
 Person
• An individual, An HUF, Company, Firm, LLP, AOP or BOI, CG or SG, Local Authority
Trust, Artificial Juridical person, Co-operative society

Payment Mechanism

Reverse
Forward Charge Charge ECO

Nether S nor R,
The Supplier has to The recipient has to but the
pay tax to the pay tax to the Aggregator or ECO
Government Government has to pay tax to
the Government
Supplier – A person supplying goods and/or services or both. Supplier is not necessarily
a taxable person or a registered person

Taxable person – A person who is registered or liable to be registered under GST