GST – an Indirect Tax

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 Snapshot on GST

Act Name : Central Goods and Services Tax Act, 2017

Act Type : Central Act

Coverage : Applicable to Whole of India

Objectives : An Act to enable the Government for the levy and collection of tax
on Inter and Intra State supply of goods or services.

Registration : Based on Threshold Limit as Specified in the Act

Type of Registration : Regular or Composition

Applicability : All Companies , LLPs, Firms, Proprietorships & Individuals dealing

with Products (Manufacturer/Retailer/Wholesaler/Agent/Trader) & all types of
Services registered as “Taxable Person” under this Act
Penal Consequences : Cancellation/Suspension of Registration, Monetary Penalty based on
Non Compliance – Rs.25- Rs.25000/-

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Common Tax

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 Not Under GST
1. Alcohol Manufacturer/ Retailer – Power to tax
remain with States
1. Countervailing Duty(CVD) and Special 2. Petroleum products – crude oil , diesel, petrol,
Additional Duty (SAD) – Customs Act natural gas and ATF – VAT
2. Additional duties of excise(ADE) – Excise Act 3. Entertainment Tax

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Manner of Tax Imposed based on Inter & Intra Sales

GST

Intra State Inter State

( Sale within ( Sale Outside
State) State)

SGST or
CGST IGST
UTGST

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 Central Goods and Services Tax Act, 2017

Registration : Based on Threshold Limit – Aggregate Turnover in a FY

For Supplier Exclusively Engaged in “ Supply For Supplier Exclusively Engaged in “ Supply of Service “ or
of Goods “ Both “Supply of Goods & Services”

• Manipur • Manipur
• Mizoram • Mizoram
• Nagaland
Rs.10 Lakh • Nagaland Rs.10 Lakh • Tirupura
• Tirupura

• Uttarakhand • Uttarakhand
• Assam • Assam
• Meghalaya • Meghalaya
• Rs.20 Lakh • Sikkim
Rs.20 Lakh Sikkim
• Arunachal Pradesh • Arunachal Pradesh
• Puducherry • Himachal Pradesh
• Telangana

• Jammu & Kashmir • Rest States of India ( excluding Rs.10 & Rs.20 Lakhs
Rs.40 Lakh
• Himachal Pradesh Rs.20 Lakh categories Mentioned above)
• Rest States of India ( excluding Rs.10 & Rs.20 Lakhs
categories Mentioned above)

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 Persons who are Ecommerce
required to pay tax Operator
Input
under RCM – (Linked rendering
Service
Persons Making in, Security) Notified Services A person who
Distributor
any Inter-State ( Ola , Uber) supplies on behalf of
taxable Supply some other taxable
person (i.e. Agent of
Some Principal)
Person required to
collect TCS – Person supplying
OIDAR from a
E commerce
place Outside
Platform Provider
India ( Amazon)

Casual
Taxable Other persons or
class of Persons as
Person – No may be notified by
PE the Govt ( TDS)

Non
Resident Registration
Taxable Irrespective of Ecommerce
Person – No Threshold Operator
PE

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 Terms widely used under GST Act
•  A composition dealer cannot issue a tax invoice. This is because a composition dealer
cannot charge tax from their customers. They need to pay tax out of their own pocket.
Composition Dealer • A taxpayer whose turnover is below Rs 1.5 crore can opt for Composition Scheme. In
case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75 lakh.

• Means a person who occasionally undertakes transactions involving supply of goods

Casual Taxable person or services or both in the course or furtherance of business, whether as principal, agent
or in any other capacity, in a State or a Union territory where he has no fixed place of
business. e-g, Participation in Exhibitions
• Means any person who occasionally undertakes transactions involving the supply of
Non Resident Taxable person goods or services, or both, whether as principal or agent or in any other capacity, but
who has no fixed place of business or residence in India.

• Means any person who owns, operates or manages digital or electronic facility or
e-Commerce Operator
platform for electronic commerce. E-commerce means the supply of goods or services
or both, including digital products over digital or electronic network.

• An ISD is an office of the supplier of goods and/or services which receives invoices for

Input Service Distributor services used by its branches. It distributes the tax paid, to such branches on
a proportional basis by issuing an ISD invoice. The branches can have different
GSTINs but must have the same PAN as that of ISD.
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 Mechanism of Levy of GST

Under Normal Mechanism of GST Levy

Remit Payment with GST for Registered Collect GST & Deposit
Receiver with Govt
Government
Goods or Services Supplier

Under Reverse Charge Mechanism of GST Levy

Deposit GST with Govt on behalf of Unregistered Supplier

Un Collect GST & Deposit

Remit Payment without GST Government
Receiver for Goods or Services
Registered with Govt
Supplier

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 Exempted from GST

• Poultry Products
• Dairy Products – Milk, Curd, Unpacked Paneer

Goods
• Fresh Fruits & Vegetables
• Certain Food Items – Natural Honey, pulses, bread, Vegetable Oil,
Common salt
• Cosmetics & Accessories
• Stationery – Stamps, Judicial Papers, Printed books & Newspapers
• Handloom Products

Services
• Hotel, Lodges with room rent less than Rs.1000
• Healthcare ( Excluding Medicines, Few Other Conditions)
• Education ( Subject to Few Condition)
• Services by employee to employer in the course/ relation to
employment

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