Basics of GSTGanesh Pathuri

Background of Indian GST

The Constitution (115th Amendment) Bill, 2011

The Constitution (122nd Amendment) Bill, 2014

Introduced in Lok Sabha on December 19, 2014. It

was passed in that House on May 6, 2015.

Referred to a Select Committee of Rajya Sabha on

May 14, 2015.

Finally the bill is passed in Rajya Sabha on August

4, 2016.

See, How happy Hon’ble Finance Minister is !!

Highlights of the Bill[The Constitution (122nd Amendment) Bill, 2014]

Amends the Constitution to introduce GST

Power to make laws and levy

Exemptions from the purview of GST

GST will apply to five petroleum products at a later date

(a) petroleum crude,

(b) high speed diesel,

(c) motor spirit (petrol),

(d) natural gas, and

(e) aviation turbine fuel

Highlights of the Bill[The Constitution (122nd Amendment) Bill, 2014] Continues…

Empowers the centre to impose an additional tax of up to 1%

Parliament may, by law, provide compensation to states for any loss of

revenue from the introduction of GST

Formation of GST Council

GST Council

The GST Council consists of:

(a) the Union Finance Minister (as Chairman),

(b) the Union Minister of State in charge of Revenue or Finance, and

(c) the Minister in charge of Finance or Taxation or any other Minister, nominated

by each state government.

All decisions of the GST Council will be made by 3/4th majority of

the votes cast.

GST Council Continues…

The GST Council makes recommendations on:

(a) taxes, cesses, and surcharges to be subsumed under the GST;

(b) goods and services which may be subject to, or exempt from

GST;

(c) the threshold limit of turnover for application of GST;

(d) rates of GST;

(e) model GST laws, principles of levy, apportionment of IGST and

principles related to place of supply;

(f) special provisions with respect to the 8 north eastern states,

Himachal Pradesh, Jammu and Kashmir, and Uttarakhand; and

(g) related matters.

Additional Tax of 1%

o Levied by centre

o In the course of inter-state trade or commerce

o Only on the supply of goods

o The tax will be collected by the Centre and

o Accrues to the states from where the supply originates.

o This tax will be levied for 2 years, or for a longer period as recommended by

the GST Council.

o The central government may exempt certain goods from such additional tax.

The idea behind GST(Destination based Tax)

Subsume all existing central and state indirect taxes

No differentiation between a Good or Service, whether as an input or as a

finished product.

Under GST, tax paid on inputs is deducted from the tax payable on the output

produced.

This input credit set off operates through the manufacturing and distribution

stage of production.

The tax is collected only at the place of consumption.

This design addresses cascading of taxes.

Reducing economic distortions caused by inter-state variations in taxes.

Model GST Law

GST – A New Era

Taxable event under GST is ‘Supply’

GST would be levied on ‘supply’ of goods and services

The ambit of ‘supply’ is quite wide and covers supply of goods and services

without consideration from one taxable person to another.

Under the GST tax reform, all forms of 'supply' of goods and services like

transfer, sale, barter, exchange, and rental will have a CGST (central levy)

and SGST (state levy).

Benefits to be derived from GST

Proposed Tax Structure under GST

Current Indirect Taxes to be Subsumed

Illustration for showcase of

Tax Benefit under GST

Present System of Indirect Taxes

(Intra-State Trade of Goods)

Under GST Scenario (Intra-State Trade

of Goods)

Registration under GST

Registration under GST is PAN based Registration,

Every supplier, whose aggregate TurnOver of Supply of Goods and Services

exceeds Rs. 9 (Nine) Lakhs in a Financial Year has to get registered under GST

Regime.

upon successful Registration of the Supplier, 15 Digit GST Identification

Number (GSTIN) will be issued.

the stucture of GST Identification Number (GSTIN) would be:

State

Code

PAN Entity

Code

Blank (For

future use)

Check

Digit

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Returns under GST

Outward Supplies Made by Tax Payer (other than compounding Tax payer and

ISD)

Inward Supplies received by Tax Payer (other than compounding Tax payer and

ISD)

Monthly Return (other than compounding Tax payer and ISD)

Quarterly Return for Compounding Tax Payer

Periodic return by Non Resident Foreign Tax Payer

Return for Input Service Distributor

Return for Tax Deducted at Source

Annual Return

Steps for Return Filing

Input Tax Credit under GST

ITC can be availed prior to

filing of annual return or

return for the month of September,

whichever is earlier

Utilization of ITC

CGST can be utilized against CGST and IGST (in that order).

SGST can be utilized against SGST and IGST (in that order).

IGST can be utilized against IGST, CGST and SGST (in that order).

Note: Input tax credit of CGST cannot be utilized towards payment of SGST and

similarly input tax credit of SGST cannot be utilized towards payment of CGST.

ITC Reversal

Proportionate ITC shall be reversed in case –

goods / services are used for business and non-business purpose –

Credit shall be allowed with respect to taxable supply including zero rates

supply.

Thank you so Much

Ganesh Pathuri

9840380501

ganeshpathuri12@gmail.com

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