These slides shows about the Goods and Service Tax

Basic knowledge about the goods and service tax

1. Dr. Priyanka Jayaraj Associate Professor Department of Commerce IT Sri Ramakrishna College of Arts and Science Coimbatore - 641 006 Tamil Nadu, India Goods and Services Tax (GST)

2. GST – Introduction The Government of any country needs money for its functioning and taxes are a major source of revenue for a Government. GST Act was passed in India on 29 th March 2017 Came into effect on 1 st July 2017 Present Chairman of GST The Union Finance Minister Mr. Arun Jaitley is the chairperson First State of implementing GST in India Assam – August 2016 GSTIN 15 digits unique code 1 st two digits represent the state code Example: 29GGGGG1314R9Z6

3. GST – Meaning Goods and Services Tax (GST) Indirect Tax or Consumption Tax Value Added Tax levied at all points in the supply chain – Multi stage destination Imposed on the supply of goods and services Paid by consumers Remitted to Government

4.   The Goods and Services T ax (GST) is “a tax on goods and services with value creation in every phase with a comprehensive and continuous chain of benefits from service providers point to the retailer level where only the end consumers should bear the tax”. The GST is a destination-based consumption tax levied on several production distribution stages of goods and services. It combines various taxes like state and local tax, entertainment tax, excise tax, surcharges, and octroi. It applies to the transaction value that includes packaging, commission, and other costs during the sale. A salient feature of GST would be goods and services considered to be the same, and within the supply chain, they are taxed once until customers can access them. GST – Definition

5. GST Rates Rates for various Goods and Services – divided into 4 slabs

6. Indirect Taxes before GST

7. Constitutional framework of Indirect Taxes – before GST Single tax that replaces multiple other taxes T he following central level duties have been recommended to be subsumed in GST at the initiation of GST in India: A. Central Excise Duty; B. Additional Excise Duties; C. The Excise Duty levied under the Medicinal and Toiletries Preparation Act; D. Service Tax; E. Additional Customs Duty, commonly known as Countervailing Duty (CVD); F. Special Additional Duty of Customs – 4% (SAD); G. Surcharges; and H. Cesses-an estimate of income and expenditure for a set period of time

8. Constitutional framework of Indirect Taxes – before GST T he following state level duties have been recommended to be subsumed in GST: A. VAT/ Sales Tax B. Entertainment Tax (unless it is levied by the local bodies like Municipality or Village Panchayat) C. Luxury Tax-tax placed on goods considered expensive, unnecessary and non-essential. Such goods include expensive cars, private jets, yachts, jewellery , etc. Luxury tax is “an indirect tax that increases the price of a good or service and is only incurred by those who purchase or use the product”. D. Taxes on lottery, betting and gambling E. State Cesses and Surcharges in so far as they relate to supply of goods and services F. Entry Tax not in lieu of Octroi

9. Value Added Tax (VAT) Introduced in India on 1 st April 2005. At each stage, the amount of value addition is identified and tax is levied. VAT is paid by the producers of goods and services. Consumer bears the entire tax as the tax is imposed at the time of purchasing goods and services as they pay for it. VAT is also known as consumption tax. Charged by the Central Government on the sale of goods and services to consumers.

10.   Value Added Tax is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. If the ultimate consumer is a business that collects and pays to the government VAT on its products or services, it can reclaim the tax paid. It is similar to, and is often compared with, a sales tax. VAT rates are percentage based, which means the greater the price, the more the consumer pays. The Goo ds and Services TAX (GST) which has replaced the Central and State indirect taxes such as VAT, excise duty and service tax, was implemented from 1st July 2017.  Value Added Tax (VAT) Meaning and Concept

11. VAT= Output Tax – Input Tax For instance: A dealer purchases goods of Rs 100 and pays a 10% VAT (Rs 10) on the same. You then purchase the goods at Rs 150 from the dealer, and she/he collects 10% VAT (Rs 15) from you. Here, the output tax is Rs 15 and the input tax is Rs 10. Value Added Tax (VAT) Meaning

12. TAXES SUBSUMED UNDER STATE GOODS AND SERVICES TAX ACT 2017 - 1.   Subsuming of State Value Added Tax/Sales Tax, 2.   Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States), 3.   Octroi and Entry tax, 4.   Purchase Tax, 5.   Luxury tax, and 6.   Taxes on lottery, betting and gambling. TAXES SUBSUMED UNDER CENTRAL GOODS AND SERVICES TAX ACT 2017. At the Central level, the following taxes are being subsumed: 1.   Central Excise Duty, 2.   Additional Excise Duty, 3.   Service Tax, 4.   Additional Customs Duty commonly known as Countervailing Duty, and 5.   Special Additional Duty of Customs.

13. Structure of GST The GST tax structure comprises of the following: State Goods and Services Tax (SGST) Central Goods and Services Tax (CGST) Integrated Goods and Services Tax (IGST) Union Territory Goods and Services Tax (UTGST)