GST (Goods and Service Tax) - 15 Mints Seminar Notes

GST (Goods and Service Tax) - 15 Mints Seminar Notes

What is GST?

GST is known as Goods and Service Tax. It is an Indirect tax which has replaced many indirect taxes like Excise Duty, VAT, Service Tax and Etc.

In other words, Goods and Service Tax 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.

History of GST:-

France was the first country to implement GST in 1954. Since then an estimated 160 countries have adopted this Tax system in same form or another. Some of the countries with GST includes Canada, Vietnam, Australia, Singapore, United Kingdom, Monaco, Spain, Italy, Brazil, South Korea and India.

1. The Prime Minister Atal Bihari Vajpayee proposed the idea of GST in the year 2002. A Committee was set up to design a Goods and Service Tax Model for the country.

2. In 2004, Kelkar Task Force on Fiscal Responsibility and Budget Management while proposed a nationwide implementation of fully integrated GST.

3. While presenting the Union Budget of 2007-08, the Union Finance Minister announced the GST launch date as 1st April 2010. However, the lack of political consensus deferred the GST start date several times.

4. On 19th December 2014, the NDA government presented the Constitutional (122nd Amendment) Bill 2014 on GST in Parliament. The Lok Sabha eventally passed the bill on 6th May 2015.

5. On 14th May 2015, the bill was referred to a Joint Committee of both the Houses of Parliament. After incorporation recommendations from the committee, the Rajya Sabha  passed the GST Bill on 3rd August 2016.

6. The Constitution (101st Amendment) Act 2016 came into force after ratification by the required number of State Governments and the approval of the President of India.   

7. Then it was passed in the Parliament on 29th March 2017 and came into an effect on 1st July 2017.

There are four types of GST. They are;

CGST: It is the tax collected by the Central Government on an intra-state sale. (e.g. A transaction happening within Maharashtra)

SGST: It is the tax collected by the State Government on an intra-state sale. (e.g. A transaction happening within Maharashtra)

IGST: It is tax collected by the Central Government for an inter-state sale. (e.g. Maharashtra to Tamil Nadu)

UTGST: It is levied on the supply of product & services in any of the Union Territories in the country. (e.g. Andaman & Nicobar islands, Daman & Diu, Dadra & Nagar Haveli, Lakshadweep)

Now let us see some rate of Taxes;
Rate in Percentage %  -   Products
0%     -  Certain foods, Books, Newspapers, Cotton Cloth.
0.25% -   Cut and Semi-Polished Stones.
5%  -  Aircraft MRO (Maintenance, Repair, Overhaul), Household goods like Sugar, Spices Tea, Coffee.
12%  -  Computer and Processed Food.
18%  -  Hair Oil, Tooth paste, Mobile Phones, Industrial Intermediaries.
28% -   Luxury Products like Refrigerators, Ceramic Tiles, Cars, Motorcycles.

How to Register for GST Number?

    Any company that is eligible under GST must register itself in the GST Portal Created by the Govt of India. The Registered entries will get a unique registration number called GSTIN.

(Eg: 33AAACD7414N1ZN)

GSTIN consists of 15 Digits.

o First 2 digit contains State Code.

o Next 5 digit contains Alphabets.

o Next 4 digit contains Numerical Numbers.

o Next 1 digit contains Alphabet.

o Next 1 digit contains Numerical Number.

o Next 2 digit contains Alphabets.

 

Advantages of GST:-

i. Unified National Market (Single Tax).

ii. Regulation of the Unorganised Sector.

iii. Registration process & Filing of returns became simple.

iv. Benefit to Stakeholders.

v. Automated process.

vi. Reduced compliance of taxpayers.

vii. Increases Economic activity and Investment.

viii. Reduction in compliance costs.

ix. Elimination of multiple Taxes and Double taxation.

x. Increase in Government revenue.

 

Disadvantages of GST:-

i. Increase in tax rate.

ii. Difficult to Adopt.

iii. Risk in registration.

iv. Double Taxation.

 

 

 

 

 

Presented by

Akshaya

Banking Student

Magme School of Banking