GOODS SALES TAX

EXPLANATION WITH REAL LIFE EXAMPLES

SUBMITTED BY-JAGTESHWAR
SUBMITTED TO –Mrs. PRABHJOT
 WHAT IS GST
• GST is known as the Goods and Services Tax. It is an indirect
tax which has replaced many indirect taxes in India such as the
excise duty, VAT, services tax, etc. The Goods and Service Tax
Act was passed in the Parliament on 29th March 2017 and
came into effect on 1st July 2017.
• In other words,Goods and Service Tax (GST) is levied on the
supply of goods and services. Goods and Services Tax Law in
India is a comprehensive, multi-stage, destination-based
tax that is levied on every value addition. GST is a single
domestic indirect tax law for the entire country.
HOW WAS IT BEFORE GST
 PURPOUSE BEHIND
COMING OF GST
• India established a dual GST structure in 2017,
which was the biggest reform in the country's
tax structure in decades. The main objective
of incorporating the GST was to eliminate tax
on tax, or double taxation, which cascades
from the manufacturing level to the
consumption level.
 RATE OF GST ON DIFFERENT
PRODUCTS
• Tax RatesProducts
• 0.25%-Cut and semi-polished stones are included under this tax
slab.
• 5%-Household necessities such as edible oil, sugar, spices, tea, and
coffee (except instant) are included. Coal, Mishti/Mithai (Indian
Sweets) and Life-saving drugs are also covered under this GST slab.
• 12%-This includes computers and processed food.
• 18%-Hair oil, toothpaste and soaps, capital goods and industrial
intermediaries are covered in this slab.
• 28%-Luxury items such as small cars, consumer durables like AC
and Refrigerators, premium cars, cigarettes and aerated drinks,
High-end motorcycles are included here.
 EXEMPTED GOODS
• Though edible items like sugar, tea and coffee
are included in the 5% slab, milk does not
attract any tax under the new GST regime. The
idea behind this is to ensure that basic food
items are available for everyone but instant
food is kept out of this category
 AMMENDMENTS
• Basic household items like toothpaste and hair oil, which
currently attract 28% tax, will be taxed at 18% only.
• Sweets will also be taxable at 5%.
• Tax rates on coal has also been reduced from 11.69% to just
5% in order to relieve the pressure on power industries.
• GST also gives a major push to domestic industries as they
will be able to procure seamless input credit for capital
goods. Make in India campaign is set to flourish after this
reform.
 TYPES OF GST
• There are particularly three types of GST-
• SGST(state goods and services tax)
• CGST(central goods and services tax)
• IGST(interated goods and services tax)
 DISADVANTAGES OF GST
• DISADVANTAGES OF GST IN INDIA-
• 1. Additional Software Expense
• Most businesses use ERP or accounting software to manage their day-to-day operations. These solutions were developed as per the
traditional tax laws in the country. The implementation of GST required the businesses to switch to GST-compliant solutions or
standalone GST software to keep up with the new tax laws.

This not only increased the operational expenses but also required the business to offer additional training to the employees to use
the new software effectively.

2. Online Tax Regime

• GST is an online tax system. From GST registration to filing GST returns, every aspect of this new tax regime is done online. While
businesses are gradually shifting to digital solutions, small businesses are still not very well-versed with such modern technologies
and solutions.

While the government has made the online system very simple, there is still a learning curve which can be challenging for many
businesses.

3. Higher Taxes for SMEs

• If you are looking for what are the disadvantages of GST, you will come across how it has increased the tax liabilities for small and
medium enterprises (SMEs). This is because, in the past, the excise tax was only paid by businesses with an annual turnover of above
Rs. 1.5 crores. However, with the new tax regime, any business with an annual turnover of above Rs. 20 lakhs is required to pay GST.

However, there is a composition scheme for SMEs that have a turnover of up to Rs. 1 crore (Rs. 75 lakhs in specified states). With this
scheme, such SMEs can pay only 1% tax on their turnover. But if you use this composition benefit, you cannot claim the input tax
credit.
 ADVANTAGES OF GST
• Advantages of GST
• GST eliminates the cascading effect of tax. ...
• Higher threshold for registration. ...
• Composition scheme for small businesses. ...
• Simple and easy online procedure. ...
• The number of compliances is lesser. ...
• Defined treatment for E-commerce operators. ...
• Improved efficiency of logistics. ...
• Unorganized sector is regulated under GST.
 EXAMPLES

• Transaction TYPE OF GST

• ApplicableExample-
• Intra-state (i.e. sale within the same state)
----CGST + SGST
Example-A dealer in Delhi makes a sale to
another dealer in Delhi. GST rate is 18%, so
CGST of 9% and SGST of 9% will be applicable.
THANK YOU