GST - Overview & Levy

Present Tax Structure
Excise Duty
Central Levies
Service Tax
CVD/SAD
CST
State VAT
State Levies
Entry Tax
Octroi/LBT
Luxury/
Entertainment
tax
GST
Cesses &
Surcharges Purchase Tax

Issues of Present Tax Regime
 Complex tax structure due to multiple Acts & compliances
 High compliance cost
 Tax cascading, Restrictions on tax credits
 Inefficient tax administration
 Lack of uniformity in valuation basis & assessments
 Difficulty in determination of nature of transactions, for example:
• Restaurant Services
• Works Contract
• Right to use movable goods
• Software
• IPR

Need for GST
 Simplified & Unified tax system
 Less Compliance cost
 Avoid double taxation & cascading effect
 Efficient tax administration
 Simple collection system
 Reduction in interface with different tax departments
 One nation one market
 Ease of doing business
 Boost to make in India

GST Model World wide
National
GST
Tax levied
by centre
with
provisions
for sharing
with states
Australia /
China
State GST
Tax levied
by states
USA
Non
Concurrent
Dual GST
GST on
goods
levied by
state & on
services
levied by
centre
Concurrent
Dual GST
Tax levied
by centre &
state on
both goods
& services
Brazil,
Canada &
India
Quebec
Model
Separate
legislation
for federal /
provinces –
tax
collection,
admin,
enforcemen
ts etc. by
provinces

Model GST Law-Supply Chain Model
Outside
India
Gujarat Rest of
India
Customer
Supplier
Local OGS
Supplier
Factory
Distributor
Consumer Warehouse
Distributor
Warehouse
Consumer
Supplier
Export
BCD (Cost)
IGST(Credit)
SGST/CGST
SGST/
CGST
SGST/
CGST
IGST
IGST
SGST/
CGST

Definition of GST
GST
Tax on supply
of goods
Tax on supply
of services
Tax on supply of
alcoholic liquor for
human
consumption

Levy & Collection of GST
 GST shall be levied on SUPPLY of all goods & services EXCEPT alcoholic liquor for
human consumption – State duties to continue.
 GST shall be levied on supply of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas and aviation turbine fuel with effect from
date to be notified.
 Government may (on recommendations of GST Council) specify the categories of
supply of goods or services or both to be governed by Reverse charge basis.
 GST shall be governed by reverse charge basis in case of supply from unregistered
person to registered person.

Levy & Collection of GST
 Government may (on recommendations of GST Council) specify categories of services
the tax on supply of which shall be paid by electronic commerce operator if such
services are supplied through it.
 Provided if such operator does not have physical presence in taxable territory then any other
person representing such person shall be liable to pay tax
 Provided further if such person does not have physical presence in taxable territory & does
not have a representative then such operator should appoint person in taxable territory.
 In case of composite or mixed supply, supply shall be as follows :
 On the basis of principal nature of supply: and
 Particular supply which attracts highest rate of tax

Supply Includes:
all forms of supply of goods &/or services or both such as sale, transfer, barter,
exchange, licence, rental, lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance of business
import of services for a consideration whether or not in the course or furtherance of
business
the activities specified in Schedule I, made or agreed to be made without a
consideration:
- Permanent trf/disposal of business asset (if ITC has been availed)
- Supply between related persons or distinct persons (if made in course/furtherance of
business except gifts <=50K in FY by employer to employee)
- Agency transactions (Principal to agent & Agent to Principal)
- Import of services by a taxable person from a related person or from any of his other
establishments outside India(If made in the course or furtherance of business)

Supply Includes:
the activities to be treated as supply of goods or supply of services as referred to in
Schedule II: (As per Note-1)
Supply Excludes:
Notwithstanding anything contained in above, following shall not be considered as
supply:
- Activities / transactions specified in Schedule III: (As per Note-2)
- Such activities / transactions undertaken by Central govt, state govt or local authority
(engaged as public authorities) as may be notified.
Subject to above provisions:
Govt. may (on recommendations of GST Council) specify, by notification, the transactions
that are to be treated as:
- a supply of goods and not as a supply of services; or
- a supply of services and not as a supply of goods.

Note-1: the activities to be treated as supply of goods
or supply of services as referred to in Schedule II
 Transfer:
 any transfer of the title in goods is a supply of goods;
 any transfer of right in goods or of undivided share in goods without the transfer of title
thereof, is a supply of services;
 any transfer of title in goods under an agreement which stipulates that property in goods
shall pass at a future date upon payment of full consideration as agreed, is a supply of goods
(Commonly known as Hire purchase).
 Land & Building
 any lease, tenancy, easement, licence to occupy land is a supply of services (use of Land);
 any lease or letting out of the building including a commercial, industrial or residential
complex for business or commerce, either wholly or partly, is a supply of services (use of
Building).
 Any Treatment or process applied to another person's goods is a supply of services

 Transfer of business assets
 Goods forming part of business assets are transferred or disposed off so that such goods shall
not form part of business assets, whether or not for consideration.
 Goods are used for personal use other than a purpose of business, whether or not for
consideration.
 Goods forming part of business assets immediately before any person ceases to be taxable
person shall be deemed to be supply unless:
• Business is transferred as going concern to another person
• Business is carried on by personal representative who is deemed to be taxable person.
 Supply of Services
 Renting of immovable property
 Construction services EXCEPT entire consideration is received after BU permission
 Intellectual Property Right (IPR)
 Information Technology Software (IT)
 agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do
an act
 Transfer of right to use any goods

 Composite Supply: Treated as supply of Services
 Works Contract
 Restaurant Services
 Supply of Good by any unincorporated association or body of persons to a member

Note-2: the activities/Transactions shall never to be
treated as supply of goods nor supply of services as
referred to in Schedule III
 Services by employee to employer in course of or in relation to employment
 Services by court or tribunal
 Functions performed by MP, MLA, Members of Panchayats/Municipalities/Local
authorities
 the duties performed by any person who holds any post in pursuance of the provisions
of the Constitution in that capacity
 the duties performed by any person as a Chairperson or a Member or a Director in a
body established by the Central Government or a State Government or local authority
and who is not deemed as an employee before the commencement of this clause
 Services of funeral, burial, crematorium or mortuary including transportation of the
deceased
 Sale of land subject to construction services
 Actionable claims, other than lottery, betting and gambling.

Composition Levy Scheme
 Rate of Tax of Composition Levy
 Eligible: Person Dealing only in Goods & Restaurant Services
 Threshold Limit: ₹ 50 Lakh
 Maintain Details Records: No
 Avails ITC: No
 Issue tax Invoice: No
 Tax Collection from Customer: No
 Inter State Supplies opt this scheme: No, only Intra State supplies availed
Sl. NO Category of Registered Person Rate of tax (CGST)
1 Manufacturers 1 %
2 Restaurant Services Suppliers 2.50 %
3 Any other suppliers 0.50 %

Thank You
Jaydip Desai & Company
D-813, Titanium City Centre,
100 Ft. Road, Prahladnagar,
Ahmedabad – 380 015.
Cell No.: 94281 24591
Email: cajd19@gmail.com
facebook.com/cajd19

GST - Overview & Levy

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