GST

The reform of indirect

taxes
By ： shivam
Roll: 1906581
 The journey to GST
First Discussion Paper The Constitution(122nd
was released by the Amendment) Bill was
Empowered Committee introduced in the Lok Sabha
2006 2011

Announcement of GST for the first 2009 Constitution (115th Amendment) Bill 2014
time was made by the then Union introduced and subsequently lapsed
Finance Minister, during budget of
2006-07 that it would introduced
from 1 April 2010

May 2017 April 2017 March 2017 Sep 2016

GST CGST, IGST, UTGST and GST Council 1st GST Council
Council Compensation Cess Acts Recommends the Meeting
recommends passed CGST, SGST, IGST,
All States all the rules UTGST and
except J&K 30th June 2017 Compensation Cess
passed Act
8th July 2017
SGST ACT their 1st July 2017

SGST Act passed by J&K; CGST and

IGST Ordinances promulgated to extend
GST Launched
GST to J&K
TAX structure in India

Tax Structure

Indirect Tax =
Direct Tax GST (Except
customs)

Income Tax Wealth Tax Intra- state Inter State

GST

It was first implemented on 1st july, 2017.

It is a tax on goods and services with value

addition on each stage.

It is collected on value added at each stage

of sale or purchase in supply chain.

The GST is paid by consumers, but it is

remitted to the government by the

businesses selling the goods and services.

Main Features of the GST Act
Concurrent jurisdiction for levy & collection of GST by the Centre (CGST) and
the States (SGST).

Centre to levy and collect IGST on supplies in the course of inter- State
supplies & imports.

Compensation for loss of revenue to States for five years

GST has been introduced as a single, unified tax reform. It has eliminated
many existing indirect centre and state taxes like Central Value Added Tax,
Special Additional Duty of Customs, Service Tax, and VAT and converted them
into a single tax. The elimination of these indirect taxes has not only made tax
compliance easier for businesses but has also helped in making many of the
goods and services more affordable for the consumers.
Why GST?

GST replaced many taxes including

Excise tax,Custom duty,Service tax,VAT,Luxury tax, Octroi,
purchase tax.

GST brings in uniform tax laws across all the states spanning
across diverse industries.

It would become much easier to offer services and goods

uniformly across the nation, since there won’t be any additional
state-levied tax.

Transparent tax system.

Advantages of GST

1 Reduction in Cascading of Taxes

2 Overall Reduction in Prices

3 Common National Market

4 Benefits to Small Taxpayers

5 Self-Regulating Tax System

6 Non-Intrusive Electronic Tax System

7 Simplified Tax Regime

8 Reduction in Multiplicity of Taxes

9 Consumption Based Tax

10 Abolition of CST

11 Exports to be Zero Rated

12 Protection of Domestic Ind. - IGST

Types of GST

CGST is a tax charged on intrastate supply

of goods and services by the central
government.

SGST is one of the components of GST

levied and collected by the respective
state government on intra-state supplies.

IGST is levied when there is an inter-state

transfer of goods and services.
GST Rate and Calculation

GST Amount = ( Original Cost *

GST% ) / 100.

Net Price = Original Cost + GST

Amount.
Prices in Conventional system vs GST
GST Global Scenario

More than 140 countries have already introduced GST.

France was the first country to introduce GST system in 1954.

Standard GST rate in most countries ranges between 15-20%.