“A STUDY ON THE CHALLENGES AND BENEFITS OF GST AT

GRASIM INDUSTRIES LTD, KARWAR”

AN INTERNSHIP REPORT SUBMITTED TO THE KARNATAK

UNIVERSITY, DHARWAD IN PARTIAL FULFILLMENT OF
REQUIREMENTS FOR THE DEGREE OF

BACHELOR OF COMMERCE

BY

MR. SALMAN SAYED

REGISTER NO: U02JN21C0062

UNDER THE GUIDANCE OF

MS. MALLIKA NAIK

LECTURER OF COMMERCE

KWT’S DIVEKAR COLLEGE OF COMMERCE, KARWAR

KARNATAKA-581301

2023-24
 DECLARATION

I hereby declare that “A STUDY ON THE CHALLENGES AND

BENEFITS OF GST AT ADITYA BIRLA GRASIM INDUSTRIES LTD,
KARWAR” is the outcome of the project work conducted by me under the guidance
and supervision of MS. MALLIKA NAIK, Lecturer in the Department of Studies
and Research in Commerce, KWT’S DIVEKAR COLLEGE OF COMMERCE,
KARWAR.

This internship report is being submitted to Karnatak University, Dharwad,

as partial fulfillment of the requirements for the award of a B.Com. degree.

I also declare that this Report is the outcome of my own efforts and has not
been submitted to any other University or Institute for the award of any other
Degree, Diploma, or Certificate.

Date: 08/07/2024

Place: Karwar
 ACKNOWLEDGEMENT

I would like to express my deepest gratitude to all those who have supported
me throughout the completion of this report.
First and foremost, I am eternally indebted to my PARENTS, whose
unwavering support, encouragement, and sacrifices have shaped my journey and
accomplishments.
I am immensely thankful to GRASIM INDUSRRIES LIMITED,
KARWAR for fostering a comprehensive learning environment and providing
valuable industry exposure, which guided me to the successful completion of this
report
I am sincerely grateful to, MR. SHUBHAM TALEKAR and MS.
MALLIKA NAIK, Lecturers in the Department of Studies and Research in
Commerce, KWT’S DIVEKAR COLLEGE OF COMMERCE, KARWAR for
their steadfast guidance and encouragement throughout this experience.
I would like to express my gratitude to the Esteemed Principal DR.
KESHAVA K.G., KWT’S DIVEKAR COLLEGE OF COMMERCE,
KARWAR, for his kind co-operation and encouragement.
I also extend my sincere gratitude to the teaching and non-teaching staff of the
KWT’S DIVEKAR COLLEGE OF COMMERCE, KARWAR for their support
and encouragement.
Lastly, I owe you all my heartfelt thanks to my Family and Friends for their
continuous support and encouragement throughout this journey. Thank you all for
being a part of this significant milestone in my life.

Date: 08/07/2024

Place: Karwar
 INDEX

Sl. No. CHAPTERS Page. No.

Preliminary pages

1 Introduction 01

2 Company Profile 02-05

3 Introduction to GST 06-20

Step-by-Step Guide to Filing GST

4 21-23
Returns

5 Conclusion 24-26
 INTRODUCTION

Company Profile

The ADITYA BIRLA GRASIM INDUSTRIES LIMITED, CHEMICAL

DIVISION

KARWAR (INDIA) is mainly engaged in the production of two chemicals,

caustic soda (NaOH) and phosphoric acid (H3PO4). The entire plant is thus
divided into Phosphoric plant and Caustic soda plant. Hydrochloric acid and
hypo are some of the by-products which are also sold. The company initially
belonged to the Solaris Chemtech industries Limited. Later the Aditya Birla
group took over the Karwar chemical division to make up a strong foot hold in
the southern region in production of phosphoric acid and caustic soda.

The main objective of the company is,

i. To continually improve the customer satisfaction levels in its targeted

marketed segments.
ii. Environment protection in all activities and ensuring a safe and healthy
working environment at Karwar unit.
iii. Supply of quality products, which meet or exceed customer expectations,
consistently meeting delivery schedules and pro-activate customer
relationship management.
iv. Continual planning and involvement of people the quality improvement,
EMS and OH & S programmes, improvements in processes and open
communication with all stake holders on progress and performance in
quality, environment, OH&S management.
v. Continual improvement of the documented systems by regular review
and monitoring of processes, and taking appropriate correcting action.

1
 ORGANIZATION STRUCTURE

Vision and Mission

Vision: To be clear premium global conglomerate with a clear focus on each

business

Mission: To deliver superior value to our customers, shareholders, employees

and society at large

Policies Quality Policy

i. Ensuring the awareness and skill of environmental and OH & S practices

among external providers and other agencies entering the organizational
premises, to the extent necessary.
ii. Implementation of process approach.

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iii. Addressing external and internal issues and also both risks and
opportunities that can affect organisation’s ability to achieve the intended
results.
iv. Prevention of undesired effects (threats) and
enhancing desirable effects (opportunities) by controlling the
impacts of its activities, products and services.
v. Conservation of resources particularly input materials, water and energy.

Safety Policy

i. Improve health, hygiene and safety of all concerned to the organization

through the concerted effort and active participation of all our employees.
ii. Instilling quality, environment and occupational health & safety policy
awareness among employees.
iii. Prevention of pollution at source, injuries, occupational health, hazard
potentials and incidents.

Products

CAUSTIC SODA:

Another name for the chemical substance known as caustic soda is sodium
hydroxide or lye. It is an alkali salt and white, solid, highly caustic metallic base
that is available in a range of concentrations as prepared solutions, flakes,
pellets, and granules. Lye from Aditya Birla Chemicals is extensively utilised
in zeolite, soap & detergent, alumina refineries, and viscose fibre
manufacturing. In addition, it serves as a raw material for a variety of chemicals
that are utilised in the paper, textile, dye, and refinery sectors, among other
industries. The most often used base in chemical laboratories, caustic soda, is
also utilised in the manufacturing of food additives.

Using safety equipment such as heavy-duty gloves, aprons, goggles, and

face masks is essential while handling caustic soda to avoid mishaps or

3
injuries because caustic soda is toxic and may react with some materials,
such as aluminium and some plastics, it must be transported under tight
controls.

PHOSPHORIC ACID:

Phosphoric acid, also known as orthophosphoric acid, Mon phosphoric

acid, or phosphoric(V) acid, is an inorganic, colourless, odourless solid that
contains phosphorus. Its chemical formula is H3PO4. It is typically found
as an 85% aqueous solution, which is a syrup liquid that is colourless,
odourless, and non-volatile. It is a significant industrial chemical that is
found in a lot of fertilisers. Technical grade phosphoric acid is produced by
Aditya Birla Chemicals (INDIA)'s Karwar chemical division.

Phosphoric acid is mostly produced by the wet method, which involves

treating phosphate rock with sulfuric acid to get phosphoric acid and
gypsum as a byproduct. A substantial amount of the phosphoric acid
produced worldwide is produced using this technique. Moreover, thermal
methods are employed in manufacture, wherein elemental phosphorus is
burned to create phosphorus pentoxide, which is subsequently hydrated to
produce phosphoric acid.

Phosphoric acid has many different and extensive uses. One of its main
use is in fertiliser manufacturing, where it is a vital component of many
phosphate- based fertilisers that support plant development. Phosphoric acid
is used in the food business as an addition to carbonated drinks to provide a
tangy flavour and regulate pH. It's also used as a catalyst in organic
synthesis processes, and in the production of detergents and metal surface
treatments.

4
HYDROCLORIC ACID

Food grade and industrial grade standards are followed in the production
of hydrochloric acid. Food-grade hydrochloric acid is used in the
manufacturing of food additives, ingredients, and the sugar and beer
industries. On the other hand, industrial grade hydrochloric acid is used in the
metal pickling, latex coagulation, dyeing, leather treatment, petroleum
refining, galvanising, and water treatment processes.

Among its characteristics is that it appears as a colourless, transparent

liquid with a relative density of about 1.18 at 20°C. It is produced as a
byproduct of the production of chlorine, together with sodium hydroxide and
sodium hypochlorite, by dissolving hydrogen chloride gas in water. Due to its
vital role in many processes, the acid's adaptability extends across a wide
range of sectors, including chemical, food, steel, water treatment, rubber, and
oil and gas. Since aqua regia, a combination of nitric and hydrochloric acid,
was utilised in the 13th century, hydrochloric acid has had historical
relevance. Humphry Davy and Joseph Priestly, among other scientists, made
significant contributions to the knowledge and use of hydrochloric acid over
time.

5
 Introduction to Good & Service Tax

The government of India imposes an indirect tax known as the Goods and
Services Tax (GST) on each and every link in a supply chain that involves
goods and services. The One Hundred and First Amendment to the Indian
Constitution took effect on July 1st, 2017, and the GST went into effect.

The main feature of GST is that it applies a single, consistent tax law to
certain goods across the whole country of India. With the GST, all state and
federal indirect taxes have been replaced with a single, uniform tax that treats
the entire country of India as a single market. Imported items are furthermore
subject to the goods and Services Tax (GST).

India's products and Services Tax is a unified tax on goods and services that
treats the country as a single market. The multi-level federal and state taxes that
were in place were replaced by the new tax, which went into effect on July 1,
2017. Five tax slabs are used by the GST to categorize goods and services: 0%,
5%, 12%, 18%, and 28%. Nonetheless, the previous tax system is still in place
for goods like electricity, alcohol, and petroleum products.

The governing body that sets the tax rates as well as the laws and
regulations is called the GST Council. Both the nation's finance minister and
the state finance ministers are included. Many indirect taxes that are imposed
at different levels by the federal government and the states are replaced by the
GST, which lowers tax burdens and eliminates tax cascading and lower time
loss. The majority of the goods were in the 26.5% tax band prior to the GST,
but they are now primarily in the 18% tax range.GST views all of India as a
single market with a single tax code applied nationwide, regardless of state.

The final client, or the consumer, is ultimately responsible for paying the
GST even if all registered dealers in a supply chain—raw material suppliers,

6
manufacturers, wholesalers, retailers, and consumers—charge the tax. The
other GST-registered merchants serve as middlemen, obtaining GST from
customers and transferring it to the government in exchange for a tax credit.
The "Input Tax Credit" is a tax credit that is applied to the GST that the dealer
charges the consumer for the items that they are supplying.

According to the legal regulations in this regard, any registered dealer is

also qualified for a tax refund if the input tax credit exceeds the output tax
credit. Furthermore, buying exempt products could not result in the claim of
any GST credit. Certain vegetables, organic manure, contraceptives, printed
books, stamp papers, and agricultural equipment are exempt from the GST.

The central government and all state governments collaborate to form the
dual Goods and Services Tax Council (GST Council), which oversees the
operation of the GST. The council bears the responsibility of setting tax rates,
exemptions, and procedures for resolving disputes.

In the year 2000, the seeds of GST were planted. Acknowledging the
shortcomings of the current tax system, the Kelkar Task Force recommended
its implementation. The current system was based on numerous indirect taxes
imposed by the federal and state governments. These included value-added tax
(VAT), excise duty, service tax, and octroi, which created a cascade effect
where taxes were imposed on top of taxes. This impeded economic growth in
addition to adding complexity to compliance for enterprises.

7
 How GST Works:

Before a product reaches the final customer, it must pass through a number
of steps, and various taxes are due at each stop. But under the GST regime,
things will be different. Here's an illustration to demonstrate how GST works:

Phase1:Production

Consider the manufacturing of clothing as an example, with a 10%

applicable GST.

The manufacturer purchases raw materials for INR 500, which includes INR
50 (or 10% of 500) in GST.

Then, while the materials are being manufactured, he adds his own value of
INR 50. As a result, the product's gross value increases to INR 550.

At this point, the entire tax paid on the clothing output is INR 55 (10% of
550). The manufacturer would have to pay INR 55 in taxes under the present
system, but he can deduct part of that amount under GST as he already paid it
when he bought the raw materials. As a result, the manufacturer's final GST
liability will be INR 5 (the entire tax amount due thus far less the tax he has
already paid), or INR 5 (55-50).

Phase2:Distribution

Here, the clothing is transferred from the producer to the distributor for a
gross value of INR 550, which includes INR 55 (or 10% of 550) in GST. After
that, the wholesaler adds INR 50 for his value, or his margin, bringing the total
to INR 600 (550 + 50).

As a result, the ultimate tax amount is INR 60 (10% of 600). The wholesaler,
like the manufacturer, may deduct this tax amount from the tax he had paid

8
when buying the items from the manufacturer. The wholesaler's total GST
would therefore be INR 5 (60 – 55).

Phase3:Retailer

In the last stage, the retailer purchases the clothing from the wholesaler for
a gross value of INR 600, which includes INR 60 (or 10% of 600) for GST. The
total cost of the products is therefore INR 650 after he adds his value or margin
of INR 50. The retailer can deduct the appropriate GST of INR 65 (10% of 650)
as he has already paid the tax at the time of purchase. The retailer would
therefore have a final GST incidence of INR 5 (65-60).

Ultimately, since the shop would charge INR 650 for the merchandise, the
buyer will only have to pay INR 65 (10% of 650) in GST.

Under our current tax structure, this figure would have been significantly
higher. Therefore, GST has the potential to be a win-win situation that will
facilitate business and consumer needs while benefiting the entire value chain.
Look through our previous articles in the series to learn more about GST.

9
 GST on Exports and Imports.

When products or services are imported or exported, the GST operates

differently. Since imports are regarded as interstate transactions, the IGST is
applicable. When importing products, additional customs duties must be paid in
addition to the appropriate IGST. When products or services are exported, no
tax is due. However, exporters are also eligible to benefit from the input tax
credit.

Imports of Goods and Services:

Under the GST regime, imports of commodities would be subject to social

welfare surcharge (up to 10% charged on the basic custom duty, or BCD), IGST,
and compensatory tax, if applicable. The social welfare surcharge and BCD that
are paid at the time of import are not creditable under GST, so the importer will
always be responsible for paying them.

Service recipients will be required to pay IGST under reverse charge upon
the import of services, much like they were under previous service tax
regulations. Additionally, the government has notified some types of goods and
services, such as legal services and Goods Transport Agency services, on which
the recipient is required to pay GST under reverse charge.

In CIF contracts, importers are not required to pay IGST on ocean freight,
according to CBIC's Notification Nos. 11/2023, 12/2023, and 13/2023, dated
September 26, 2023. This is in response to the ruling made by the Supreme
Court in the Ocean Fright case.

Zero-Rated Supplies/ Export of Goods and Services:

Under GST, exports of products and services are zero rated. If the
requirements are met, exporters are eligible to receive a refund of the input tax
credit (ITC) for the materials and services used in the export of products and
services. It is necessary to submit a bond or Letter of Undertaking (LUT) to the

10
relevant tax authorities at the start of each fiscal year in order to be eligible for
the zero rate on exports. As an alternative, the exporter may pay the output tax
and request a refund.

Additionally, under the GST, supplies to a SEZ for approved operations are
zero rated. Under GST, there is a streamlined online method for claiming an
export refund, in contrast to the previous indirect tax scheme that required a lot
of paperwork. The taxpayer must use the GST portal to submit an online refund
application and the necessary supporting documentation.

The GST established the idea of merchant exporter to help small exporters
by facilitating trade. As a result, under certain restrictions, merchant exporters
who purchase goods from domestic suppliers for export will now be required to
pay a nominal GST of 0.1%.

The following are some explanations provided by the government about

refund claims:

1. The Aadhaar registration authentication is now required in order to

be qualified to submit a refund claim.

2. The term "bank account for credit of refund" refers to an applicant's

bank account that is registered in their name and linked to their Permanent
Account Number (PAN).

3. Form RFD-01 has now been modified to allow a taxpayer making

exempt and/or nil-rated supplies to file a refund application without having a
valid LUT number to enter in the refund application. This option allows
taxpayers to file a refund of accumulated ITC by selecting not to have a LUT
number in the refund application.

4. Bunching refund claims over financial years is now permitted to help

exporters. In the past, remittance in foreign exchange had to be received within
a certain amount of time in order to be eligible for a refund of zero- rated

11
delivery of services. This criteria now includes zero-rated supply of
commodities as well.

5. The amount shown in Form GSTR-2A/2B is the maximum amount

that can be refunded for accrued ITC. But now that the restriction is not showing
up in Form GSTR-2A, the department has made it clear that it will not affect
the refund of ITC obtained on import-related invoices and documents, Input
Service Distributor (ISD) invoices, and inward supplies subject to reverse
charge (RCM supplies).

6. It is suggested that exporters be required to realize the consideration

in foreign currency within the timeframes specified by the Foreign Exchange
Management Act (FEMA) rules if unused ITC is claimed as a refund. The
refund plus interest must be sent back to the government if the consideration is
not realized within the allotted time.

7. It is suggested that exporters be required to realize the consideration

in foreign currency within the timeframes specified by the Foreign Exchange
Management Act (FEMA) rules if unused ITC is claimed as a refund. The
refund plus interest must be sent back to the government if the consideration is
not realized within the allotted time.

8. Refunds for incorrectly made payments made via an electronic credit

ledger are permitted; the credit ledger will be refunded with the full amount.
The Special Rupee Vostro Accounts of correspondent banks of the partner
trading country, opened by AD banks, are now used by Indian exporters
engaged in service export to receive export remittances in INR. This would be
deemed to be fulfilling the requirements of service export.

12
 Types of GST:

In India, there are four main kinds of GST that are applied on goods and
services. They are as follows:

The Central Government of India levies the Central Goods and Services Tax
(CGST) on transactions involving products and services that take place within
a state.

State Goods and Service Tax (SGST): In India, state governments impose
the SGST on transactions involving products and services that take place inside
their borders. It is assessed in addition to the CGST.

Union Territory Goods and Services Tax (UGST): In India, the Union
Territories levy the UGST on all transactions involving goods and services that
take place inside their borders. It is assessed in addition to the CGST.

Integrated Goods and Service Tax (IGST): The government would apply
the Integrated GST to transactions involving goods and services that take place
between two states. It applies to both imports and exports. The federal
government and the states split the taxes levied under the IGST.

13
 Objectives of GST:

The following are the main objectives of GST:

• It contributes to the reduction of tax evasion in India and the

establishment of a shared market with a unified tax system. Compared to the
previous indirect tax regulations, the GST laws are significantly stricter. With the
help of the GST, a national monitoring system is intended to make it simpler to
apprehend tax evaders and defaulters.

• It eliminates the indirect taxes' cascading effect on a single transaction.

Additionally, it permits the input tax credit to be used as a set-off for past taxes
associated with the same transactions. Under the GST, taxes are solely levied on
the net value added at every supply chain point.

• By enacting a unified tax like GST, the government hopes to lessen the
requirement for various forms of documentation under the previous taxing system.
The goal is to provide businesses with a simple tax filing process that will increase
their productivity and reduce the total costs of running their operations.

• The majority of indirect taxes have been integrated into a single taxation
system, which facilitates government tax administration and lessens the
compliance burden for taxpayers. This taxation system's primary goals are to
streamline compliance and the entire tax payment process. Nearly every step of the
GST process, including registration, submitting returns, receiving refunds, and
creating e-way bills, has moved online in comparison to the previous indirect taxes.

• Extending India's tax base is one of the main goals of GST. The
threshold requirements for registration for the majority of the former indirect taxes
were determined by a business's turnover. Since GST covers all transactions
pertaining to goods and services in the nation, there is more potential for the
number of businesses to fall under the tax registration ne

14
Features of GST:

1. Single Indirect Tax: With the introduction of the Goods and Services
Tax (GST), various indirect center and state taxes like as the VAT, Central Value
Added Tax, Special Additional Duty of Customs, and Service Tax were repealed
and replaced with a single tax. In addition to making compliance simpler for
companies, the removal of these levies has helped lower the cost of numerous
goods and services for consumers.

2. Input Tax Credit System: The input tax credit is one of the most well-
known aspects of the GST. A manufacturer's or service provider's entire output tax
burden can be reduced if they have previously paid input tax on a purchase. To
benefit from the tax credit, the input and output invoices have to match. This aids
in the elimination of the conventional "tax-on-tax" system and the cascading tax
effect. Additionally, it lessens the amount of tax evasion.

3. GST Composition Scheme: SMEs may voluntarily choose to participate

in the composition program if their yearly sales is up to Rs. 1 crore, or Rs. 75 lakh
in certain states. Businesses can pay a set GST rate of 1% on their turnover under
this program. These companies are consequently unable to benefit from the input
tax credit, though. A company has to decide whether to utilize the input tax credit
feature or the composition scheme.

4. Four – Tier Tax Structure: The four tax tiers of the GST are 5%, 12%,
18%, and 28%. This tax structure is the only one that may be used to tax any
products or services. Food and other necessities are among the many goods that
are GST-free. Two of the main benefits of this 4-tier system are increased
transparency and lower costs for goods and services. By
condensing the intricate network of taxes into a comprehensive, multi- stage
system that incorporates every link in the supply chain and aids companies at every
stage of value addition, the Goods and Services Tax (GST) has completely changed
the way businesses pay taxes.

15
 Importance of GST:

The following are some salient points emphasizing the importance of GST:

1. Unified Market: By eliminating state-level entry taxes and

restrictions, the GST makes India into a single national market. This increases
company efficiency, decreases inefficiencies in logistics, and promotes
interstate trade.

2. Enhanced Competitiveness: The GST levels the playing field for

enterprises across regions by streamlining state-to-state taxes. This stimulates
manufacturing, fosters healthy competition, and pushes companies to optimize
their supply networks.

3. Increased Compliance: Taxpayers' compliance rates are encouraged

to rise by the technology-driven GST system. Businesses find it harder to avoid
taxes when there are transparent procedures and online filing options.

4. Better Input Tax Credit: Businesses can now claim an input tax credit
under the GST for taxes paid at earlier stages of the supply chain. By using this
approach, firms pay less in taxes and are shielded from tax cascades.

5. Boost to Economic Growth: The Goods and Services Tax (GST)

encourages efficiency, lowers tax barriers, and improves commerce, all of
which help to boost the economy. It draws in investment, produces employment,
and boosts the economy as a whole.

6. Formalization of the Economy: Because of the openness and

compliance requirements, the GST encourages enterprises to operate in the
formal economy. This contributes to reducing black money and expanding the
tax base.

16
 7. Government Revenue: The central government and state
governments now have a more reliable and consistent stream of income thanks
to the GST. It makes efficient budgeting and revenue planning easier.

8. Harmonization of Tax Rates: The GST seeks to standardize tax rates

on various goods and services, thereby guaranteeing a more uniform tax system
and easing taxpayers' burdens and confusion.

Benefits of GST:

GST is advantageous to businesses, industries, the government, and

consumers. The Goods and Services Tax has the following benefits:

1. Simple Compliance: India's GST system is based on a robust and

extensive IT infrastructure. All taxpayer services, such as registration, payment,
returns, and more, are available to residents online in order to simplify and
promote transparency in compliance.

2. Uniformity in tax schemes and rates: The Goods and Services Tax
(GST) promotes predictability and streamlines corporate operations by
guaranteeing uniform indirect tax rates and structures. Put another way, because
of the GST, doing business in the nation would be tax-neutral regardless of the
company's location.

3. Improved restrictions on leaks: The strong IT infrastructure that GST

has brought about is another benefit that helps with tax compliance. The GST
has an internal mechanism to incentivize firms to pay their taxes on time, made
feasible by the seamless transfer of input tax credits from one level of the value
addition stream to the next.

17
 Contribution of GST to Manufacturing Business:

India's manufacturing industry has been greatly impacted by the Goods and
Services Tax (GST), which has also brought about a number of perks that have
positively impacted enterprises. This is a thorough summary of the benefits GST
has brought to the industrial sector:

1. Simplifying and Consumption of Taxes: The Goods and Services Tax

(GST) has relieved the burden of the intricate excise duty by consolidating
multiple approaches into a more straightforward tax
framework It has absorbed interstate levies such as central sales tax and control,
lessening the indirect tax burden on producers and final consumers.

2. Corporate Efficiency: The GST's "one nation, one tax" philosophy

has reorganized supply chain taxes, reducing the need for several warehouses
spread across several states and enhancing corporate efficiency.

3. Decreased Production Costs - The Goods and Services Tax (GST)

has lowered production costs and the indirect tax burden on producers and
consumers by offsetting, streamlining, and combining several taxes under a
single framework. Customers can now purchase things at a lower cost because
the cascading effects of taxes like VAT and excise duty have been eliminated

Contribution of GST to Society:

Benefits and drawbacks of the Goods and Services Tax (GST) have both been
felt strongly by society. An outline of the benefits GST has brought to society
is shown below:

GST's advantages for society

1. Streamlining and Tax Reduction: A complicated web of indirect taxes was

replaced by the GST with a single tax system. This has decreased the

18
administrative load and made it simpler for firms to comply with tax
requirements. Because the GST rate is prominently shown on the price tag,
consumers also gain from a more transparent pricing system.

2. Reduced Cost of Products: Taxes were imposed at every level of production

and distribution under the former tax regime. Customers ultimately paid more
for the items as a result of this cascading impact. Because firms can claim credit
for the GST they have paid on inputs, the cascade impact is eliminated by GST.
This may result in cheaper manufacturing expenses and, eventually, cheaper
consumer prices.

3. Removal of Taxes That Cascading: Businesses had to pay numerous

indirect taxes before the introduction of the Goods and Services Tax (GST) by
the federal and state governments at different phases of production and
distribution. The final cost of the items increased as a result of this cascading
effect, increasing their cost to consumers in the states of destination. By
enacting a single tax, GST simplifies this process and enables companies to
claim input tax credit (ITC) on the GST they have already paid. As a result,
production costs and the overall tax burden are decreased

4. Transparency:

• E-invoicing, or electronic invoices: GST requires all firms above a

particular threshold to use electronic invoicing. As a result, a digital trail of
transactions is created, which facilitates government tracking of the flow of
goods and services. Because of this transparency, companies are deterred from
understating sales or falsifying invoices in order to avoid paying taxes.

• System for Input Tax Credits (ITC): When a firm sells products or services
(outputs), they can claim a credit under the GST system for the GST they paid
on purchases (inputs). Because it requires accurate record-keeping and deters
the generation of fictitious invoices in order to claim fraudulent ITC, this
approach promotes openness.

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5. Efficiency:

• Web-based Platform: The GST moved the administration of taxes online.

Companies no longer need to provide physical documents or rely on human
processing when they can register, file returns, and pay taxes online. Businesses
and the government both save time and money as a result of this process
streamlining and decreasing paperwork.

• Decreased Burden of Compliance: Businesses now have a less compliance

burden thanks to GST's simplification of the tax system and automation of
procedures. This frees them up to concentrate on their main business activities
rather than navigating intricate tax laws.

• Enhanced Revenue from Taxes: The government can more successfully

detect tax evaders because to the transparency that GST has brought about. As
a result, taxes are collected more effectively, bringing in more money for the
government to spend on infrastructure projects and public assistance initiative

Types of GST Returns

Under the GST regime, there are several types of returns that taxpayers may
need to file, depending on their category and nature of business:

1. GSTR-1: Details of outward supplies of goods or services

2. GSTR-2A/2B: Auto-populated inward supply details
3. GSTR-3B: Monthly summary return
4. GSTR-4: Composition scheme taxpayers
5. GSTR-5: Non-resident taxable persons
6. GSTR-6: Input Service Distributors (ISD)
7. GSTR-7: Tax Deducted at Source (TDS)
8. GSTR-8: Tax Collected at Source (TCS)
9. GSTR-9: Annual return
10. GSTR-9C: Annual reconciliation statemen

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Step-by-Step Guide to Filing GST Returns

1. GSTR-1 (Monthly/Quarterly)

• Due Date: 11th of the next month (monthly filers) or last day of the month
succeeding the quarter (quarterly filers)
• Process:
• Log in to the GST portal (www.gst.gov.in)
• Navigate to Services > Returns > Returns Dashboard
• Select the relevant financial year and tax period
• Click on "Prepare Online" or "Upload JSON" for GSTR-1
• Fill in the required details of outward supplies
• Validate and submit the form

2. GSTR-3B (Monthly)

• Due Date: 20th of the next month

• Process:
• Log in to the GST portal
• Navigate to Services > Returns > Returns Dashboard
• Select the relevant financial year and tax period
• Click on "Prepare Online" for GSTR-3B
• Fill in the summary details of outward and inward supplies
• Enter the tax liability and input tax credit details
• Validate and submit the form

3. GSTR-9 (Annual Return)

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 • Due Date: 31st December of the next financial year
• Process:
• Log in to the GST portal
• Navigate to Services > Returns > Annual Return
• Select the relevant financial year
• Fill in the consolidated details of supplies, ITC, and taxes paid
• Validate and submit the form

Key Points to Remember

• Timely Filing: Ensure all returns are filed within the due dates to avoid
penalties.
• Accuracy: Cross-verify all data before submission to minimize errors.
• Reconciliation: Regularly reconcile GSTR-1 and GSTR-3B to ensure
consistency.
• ITC Claim: Verify ITC claims in GSTR-3B against GSTR-2A/2B.
• Amendments: Use amendment returns (e.g., GSTR-1A) to correct any
errors in previously filed returns.
• Late Fees: Be aware of late fees for delayed filing (Rs. 50 per day, subject
to a maximum of Rs. 5,000).
• Nil Returns: Even if there are no transactions, file a nil return to maintain
compliance.

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Compliance Calendar

• Maintain a GST compliance calendar to keep track of due dates for

various returns:
• GSTR-1: 11th of next month (monthly) / last day of the succeeding month
(quarterly)
• GSTR-3B: 20th of next month
• GSTR-4: 30th April of the next financial year
• GSTR-9: 31st December of the next financial year

Common Errors and How to Avoid Them

• Mismatch between GSTR-1 and GSTR-3B

• Incorrect classification of goods or services
• Errors in reporting exempt, nil-rated, or non-GST supplies
• Mistakes in reporting advances received
• Incorrect application of reverse charge mechanism

To avoid these errors:

• Maintain accurate books of accounts

• Implement robust internal controls
• Conduct regular reconciliations
• Stay updated with the latest GST notifications and circulars

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 Conclusion

My internship at Aditya Birla Grasim Industries Limited, Chemical Division

Karwar (India) for a time period of 4 weeks was an immense experience. It was
a great learning opportunity and provided valuable exposure to industrial life.
Significant insights into GST practices were gained during this period,
enhancing my understanding of the subject.

The Goods and Services Tax (GST) implementation in India marks a significant
milestone in the country's economic reforms. Introduced on July 1, 2017, GST
has fundamentally transformed the indirect tax landscape, replacing a complex
web of central and state taxes with a unified tax system. This comprehensive
overhaul aims to create a single, seamless national market, fostering economic
growth and enhancing the ease of doing business across the country.

One of the primary objectives of GST is to eliminate the cascading effect of

taxes, also known as "tax on tax." By allowing businesses to claim input tax
credit on most of their purchases, GST has helped in reducing the overall tax
burden on goods and services. This mechanism not only benefits businesses by
lowering their costs but also potentially leads to reduced prices for end
consumers, thereby controlling inflation in the long run.

The implementation of GST has led to increased formalization of the Indian

economy. By creating a digital trail of transactions through its robust IT
infrastructure, GST has made it more difficult for businesses to operate in the
informal sector. This shift towards formalization has broadened the tax base,
potentially leading to increased tax revenues for the government in the long
term. Moreover, it has improved transparency in business operations and
reduced opportunities for tax evasion.

However, the journey of GST implementation has not been without challenges.
The initial years saw numerous teething problems, including issues with the

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GST Network (GSTN), frequent changes in tax rates and rules, and compliance
difficulties faced by small and medium enterprises (SMEs). These challenges
necessitated continuous refinement of the GST framework, with the GST
Council playing a crucial role in addressing concerns and making necessary
adjustments.

One of the significant impacts of GST has been on interstate trade. By replacing
the complex system of Central Sales Tax (CST) and entry taxes with the
Integrated GST (IGST), GST has significantly reduced barriers to interstate
commerce. This has led to faster movement of goods across state borders,
reduced logistics costs, and improved supply chain efficiency. The e-way bill
system, introduced as part of GST, has further streamlined the transportation of
goods, reducing instances of tax evasion during transit.

For businesses, particularly those operating across multiple states, GST has
simplified compliance procedures. The 'One Nation, One Tax' concept has
reduced the multiplicity of tax filings and has standardized processes across the
country. The introduction of the Input Tax Credit (ITC) mechanism has
improved cash flow for businesses and encouraged formal invoicing practices
throughout the supply chain.

However, it's important to note that GST has had varying impacts across
different sectors of the economy. While sectors like manufacturing and logistics
have largely benefited from the streamlined processes, certain services sectors
initially faced challenges due to increased tax rates and compliance
requirements. The government has been responsive to these sectoral concerns,
making adjustments to tax rates and rules to address specific industry issues.

From a macroeconomic perspective, GST has the potential to boost India's GDP
growth in the long term. By creating a more efficient tax system, reducing tax
evasion, and fostering a more competitive business environment, GST is
expected to contribute to increased productivity and economic output. However,

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the full realization of these benefits depends on continued refinement of the
GST system and addressing ongoing challenges.

The GST regime has also significantly impacted the federal structure of India.
The creation of the GST Council, a joint forum of the central and state
governments, represents a unique experiment in cooperative federalism. While
it has fostered collaboration between the center and states on tax matters, it has
also led to debates about the autonomy of states in determining their tax policies.

Filing GST returns accurately and on time is crucial for maintaining compliance
and avoiding penalties. By following this guide and staying informed about
GST regulations, taxpayers can ensure smooth filing of their GST returns.
Remember to seek professional advice for complex situations or when in doubt
about any aspect of GST compliance.

Looking ahead, the future of GST in India will likely involve further
simplification and rationalization of tax rates and procedures. There are ongoing
discussions about bringing currently excluded items like petroleum products
and electricity under the GST umbrella. Additionally, there's a growing
emphasis on leveraging technology to further improve compliance, reduce
fraud, and enhance the overall efficiency of the tax system.

In conclusion, while the implementation of GST in India has been a complex

and challenging process, it represents a transformative reform with far-reaching
implications for the Indian economy. As the system continues to evolve and
mature, its full potential in terms of economic growth, improved compliance,
and enhanced ease of doing business is expected to be realized. The success of
GST will depend on continued cooperation between various stakeholders,
ongoing technological advancements, and the government's responsiveness to
emerging challenges and opportunities in the tax landscape.

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