BENEFITS

GST BY
SHAIKH HASHIM
history
Intro GST
GST

GOODS & SERVICE TAX

BIGGEST TAX REFORM SINCE
INDEPENDENCE
 • Goods and service tax (GST) is a comprehensive tax
history
levy on manufacture, sale and consumption of

Intro
GST

goods and services at a National level.

 History of GST
• Atal Bihari Vajpayee, our 10th prime
minister was the first to recommended
the idea of adopting GST.

history
• The concept of GST was first introduced

Intro
GST

in feb 2006 and announced the date of its

implementation.
• On November 2009 the government came
out with the first discussion paper on
GST.
• After Enactment of various GST laws,
goods and services tax came into effect on
1st July 2017.
 What is GST ?
• GST is a comprehensive value added tax on goods

history
and services.

Intro
GST
• It is collected on value added at each stage of sale
or purchase in the supply chain.
• It is an indirected tax for the whole country.
• There are around 160 countries in the world which
have GST in place.
• It is destination based tax where tax is collected by
the states where goods are consumed.
ADVANTAGES OF GST
Eliminates the
cascading effect of Simple and easy online
tax. procedure.

Higher threshold Defined treatment for

for registration. e-commerce operators.

Composition
scheme for small
businesses.
 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”
• Before GST:
• 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.

Under GST :
GST on service of Rs 50,000 @18% 9,000
Less: GST on office supplies (Rs
1,000
20,000*5%)
Net GST to pay 8,000
DISADVANTAGES OF GST
Increased cost due to
software purchase. GST is an online taxation
system.

GST will mean an

increase in operational
costs.

It came into effect

in the middle of the
financial year.
Conclusion