Concept of GST:

Goods and Services Tax (GST) is based on the concept of ‘one nation one tax’. Its virtues
are that it applies to the whole country. The new tax unified 1.3 billion people and the $2
trillion economy of the country into one unified market. GST is a single tax that is levied
on the supply of goods and services or both, right from the manufacturer/service provider
to the consumer. It is a destination-based consumption tax. ITC is paid at each stage and is
available at subsequent stages of value addition. It is a tax that is charged only on value
addition at each stage. Thus, the final consumer bears only the tax charged by the dealer in
the supply chain along with set-off benefit at previous stages. The main objective of GST
is to have one tax and for each assessee to have one assessing officer. It is completely based
on IT which will help to end ‘inspector raj’. It subsumed a number of taxes and cesses to
create a uniform market. In its first discussion paper on GST in India, the EC had explained
how GST would work, using a hypothetical example. Suppose there are three parties in the
manufacturing and trading process—one producer (P), one wholesaler (W) and one retailer
(R). They are producing a product on which the GST rate is 18 per cent. The producer sells
his goods to the wholesaler in the supply chain. The wholesaler sells the goods to retailer.
The producer buys raw materials of 10,000 and pays tax of 1,800 (18% of 10,000). He adds
value of 3,000 on his purchase of 10,000 in the production process. Then the producer will
pay GST of 540 after setting off 1,800 as GST paid on his inputs (ITC) from a gross GST
value of 2,340 when the producer sells the goods to the wholesaler. When the wholesaler
sells the same goods with a value addition of 2,000, he will pay net GST of 360 only
because ITC of 2,340 will be set off from the gross GST of 2,700 to the producer. Similarly,
the retailer will sell the same goods with value addition of 1,000. He will pay net GST of
180 only, as he will also set off 2,700 from the gross GST of 2,880 paid to wholesaler.

Primarily, GST has been conceptualized as ‘one nation, one tax’ since its inception. It was
introduced with the hope that it would convert all indirect taxes into one tax. But instead,
we have (i) CGST Act, 2017, (ii) IGST Act, 2017, (iii) UTGST Act, 2017, (iv) Goods and
Services Tax (Compensation to States) Act,2017 and (v) 30 SGST Act with the effect from
1 July 2017.
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Differences between VAT and GST:
VAT was a precursor of GST. While VAT was levied at different stages of production of
an article, GST is being levied on the supply of goods and services. However, VAT was
applicable only to the goods sold. It did not apply to services; services came under service
tax. GST is applicable to both goods and services at a uniform rate. The differences
between VAT and GST are as follows:

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CGST Act,2017: The CGST Act, 2017 came into existence on 12 April 2017. It extends to the
whole of India except Jammu and Kashmir to which it was extended later. The act makes
provisions for the levy and collection of tax on intra-state supply of goods and services or both
within the boundary of a state by the central government. There are 21 chapters in the Act along
with 174 sections and three schedules.

IGST Act, 2017: The IGST Act, 2017 came into existence on 12 April 2017. It extends to the
whole of India except the state of Jammu and Kashmir to which it was extended later. The act
makes provision for the levy and collection of tax on inter-state supply of goods and services or
both by central and state governments. There are 9 chapters in the act along with 25 sections.

UTGST Act, 2017: This Act came into existence on 12 April 2017. It extends to the Union
Territories of Andaman and Nicobar Islands, Dadra and Nagar Haveli, Lakshadweep, Daman and
Diu, Chandigarh and other union territories. The act makes provision for the levy and collectio n
of tax on intra-state supply of goods and services or both within the union territories. There are 9
chapters in the act along with 26 sections.

The Goods and Services Tax (Compensation to States) Act, 2017: The Goods and Services Tax
(Compensation to States) Act too came into existence on 12 April 2017. It extends to the whole of
India. The act makes provisions to provide compensation to states for the loss of revenue incurred
on account of implementation of GST. There are 14 sections along with one schedule in the act.

State Goods and Services Tax:

Subsequently, all the other states and union territories with legislatures have also enacted their
SGST Acts (except Jammu and Kashmir). The State of Jammu and Kashmir passed the SGST
Act on 8 July 2017 and subsequently, Government of India extended the CGST Act, 2017 to
Jammu and Kashmir. SGST Acts of respective states were also notified to make provisions for
the levy and collections of tax on intra-state supply of goods or services or both by respective
states. There are 21 chapters in each SGST act along with 174 sections and three schedules. Let
us see the implementation of SGST in the next page.

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The Andhra Pradesh GST, 2017: The Andhra Pradesh GST Act received the assent of the governor
on 5 June 2017. The said act came into existence on 7 June 2017. It extends to the whole of the
state of Andhra Pradesh. The act makes provisions for the levy and collection of tax on intra-state
supply of goods and services or both within the boundary of the state of Andhra Pradesh.

The Arunachal Pradesh GST, 2017: The Arunachal Pradesh GST Act received the assent of the
governor on 15 June 2017. The said act came into existence on 24 June 2017. It extends to the
whole of the state of Arunachal Pradesh. The act makes provisions for the levy and collection of
tax on intra-state supply of goods and services or both within the boundary of the state of
Arunachal Pradesh.

The Assam GST, 2017: The Assam GST Act received the assent of the governor on 24 May 2017.
The said act came into existence on 1 June 2017. It extends to the whole of the state of Assam.
The act makes provisions for the levy and collection of tax on intra-state supply of goods and
services or both within the boundary of the state of Assam.

The Bihar GST, 2017: The Bihar GST Act received the assent of the governor on 8 May 2017.
The said act came into existence on the same day. It extends to the whole of the state of Bihar. The
act makes provisions for the levy and collection of tax on intra-state supply of goods and services
or both within the boundary of the state of Bihar.

The Chhattisgarh GST, 2017: The Chhattisgarh GST Act received the assent of the governor on
14 June 2017. The said act came into existence on the same day. It extends to the whole of the
state of Chhattisgarh. The act makes provisions for the levy and collection of tax on intra-state
supply of goods and services or both within the boundary of the state of Chhattisgarh.

The Delhi GST, 2017: The Delhi GST Act received the assent of the Lt. governor on 8 June 2017.
The said act came into existence on 14 June 2017. It extends to the whole of the state of Delhi.
The act makes provisions for the levy and collection of tax on intra-state supply of
goods and services or both within the boundary of the state of Delhi.

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The Goa GST, 2017: The Goa GST Act received the assent of the governor on 23 May 2017. The
said act came into existence on 26 May 2017. It extends to the whole of the state of Goa. The act
makes provisions for the levy and collection of tax on intra-state supply of goods and services or
both within the boundary of the state of Goa.

The Gujarat GST, 2017: The Gujarat GST Act received the assent of the governor on 9 June 2017.
The said act came into existence on the same day. It extends to the whole of the state of Gujarat.
The act makes provisions for the levy and collection of tax on intra-state supply of goods and
services or both within the boundary of the state of Gujarat.

The Haryana GST, 2017: The Haryana GST Act received the assent of the governor on 7 June
2017. The said act came into existence on 8 June 2017. It extends to the whole of the state of
Haryana. The act makes provisions for the levy and collection of tax on intra-state supply of goods
and services or both within the boundary of the state of Haryana.

The Himachal Pradesh GST, 2017: The Himachal Pradesh GST Act received the assent of the
governor on 22 June 2017. The said act came into existence on 23 June 2017. It extends to the
whole of the state of Himachal Pradesh. The act makes provisions for the levy and collection of
tax on intra-state supply of goods and services or both within the boundary of the state of Himacha l
Pradesh.

The Jharkhand GST, 2017: The Jharkhand GST Act received the assent of the governor on 15 June
2017. The said act came into existence on 19 June 2017. It extends to the whole of the state of
Jharkhand. The act makes provisions for the levy and collection of tax on intra-state supply of
goods and services or both within the boundary of the state of Jharkhand.

The Karnataka GST, 2017: The Karnataka GST Act received the assent of the governor on 27 June
2017. The said act came into existence on the same day. It extends to the whole of the state of
Karnataka. The act makes provisions for the levy and collection of tax on intra-state supply of
goods and services or both within the boundary of the state of Karnataka.

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The Kerala GST, 2017: The Kerala GST Act received the assent of the governor on 22 June 2017.
The said act came into existence on the same day. It extends to the whole of the state of Kerala.
The act makes provisions for the levy and collection of tax on intra-state supply of goods and
services or both within the boundary of the state of Kerala.

The Madhya Pradesh GST, 2017: The Madhya Pradesh GST Act received the assent of the
Governor on 9 June 2017. The said act came into existence on 12 June 2017. It extends to the
whole of the state of Madhya Pradesh. The act makes provisions for the levy and collectio n of tax
on intra-state supply of goods and services or both within the boundary of the state of Madhya
Pradesh.

The Maharashtra GST, 2017: The Maharashtra GST Act received the assent of the governor on 15
June 2017. The said act came into existence on 15 June 2017. It extends to the whole of the state
of Maharashtra. The act makes provisions for the levy and collection of tax on intra-state supply
of goods and services or both within the boundary of the state of Maharashtra.

The Manipur GST, 2017: The Manipur GST Act received the assent of the governor on 14 June
2017. The said act came into existence on the same day. It extends to the whole of the state of
Manipur. The act makes provisions for the levy and collection of tax on intra-state supply of goods
and services or both within the boundary of the state of Manipur.

The Meghalaya GST, 2017: The Meghalaya GST Act received the assent of the governor on 15
June 2017. The said act came into existence on 19 June 2017. It extends to the whole of the state
of Meghalaya. The act makes provisions for the levy and collection of tax on intra-state supply of
goods and services or both within the boundary of the state of Meghalaya.

The Mizoram GST, 2017: The Mizoram GST Act received the assent of the governor on 26 May
2017. The said act came into existence on the same day. It extends the whole of the state of
Mizoram. The act makes provisions for the levy and collection of tax on intra-state supply of goods
and services or both within the boundary of the state of Mizoram.

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The Nagaland GST, 2017: The Nagaland GST Act received the assent of the governor and came
into existence in 2017. It extends to the whole of the state of Nagaland. The act makes provisions
for the levy and collection of tax on intra-state supply of goods and services or both within the
boundary of the state of Nagaland.

The Odisha GST, 2017: The Odisha GST Act received the assent of the governor on 20 June 2017.
The said act came into existence on 21 June 2017. It extends to the whole of the state of Odisha.
The act makes provisions for the levy and collection of tax on intra-state supply of goods and
services or both within the boundary of the state of Odisha.

The Puducherry GST, 2017: The Puducherry GST Act received the assent of the Lt. governor and
came into existence on 1 June 2017. It extends to the whole of the state of Puducherry. The act
makes provisions for the levy and collection of tax on intra-state supply of goods and services or
both within the boundary of the state of Puducherry.

The Punjab GST, 2017: The Punjab GST Act received the assent of the governor on 22 June 2017
and came into existence on 23 June 2017. It extends to the whole of the state of Punjab. The act
makes provisions for the levy and collection of tax on intra-state supply of goods and services or
both within the boundary of the state of Punjab.

The Rajasthan GST, 2017: The Rajasthan GST Act received the assent of the governor and came
into existence on 28 April 2017. It extends to the whole of the state of Rajasthan. The act makes
provisions for the levy and collection of tax on intra-state supply of goods and services or both
within the boundary of the state of Rajasthan.

The Sikkim GST, 2017: The Sikkim GST Act received the assent of the governor and came into
existence in 2017. It extends to the whole of the state of Sikkim. The act makes provisions for the
levy and collection of tax on intra-state supply of goods and services or both within the boundary
of the state of Sikkim.

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The Tamil Nadu GST, 2017: The Tamil Nadu GST Act received the assent of the governor on 22
June 2017. The said act came into existence on 23 June 2017. It extends the whole of the state of
Tamil Nadu. The act makes provisions for the levy and collection of tax intrastate supply of goods
and services or both within the boundary of the state of Tamil Nadu.

The Telangana GST, 2017: The Telangana GST Act received the assent of the governor and act
came into existence in 2017. It extends to the whole of the state of Telangana. The act makes
provisions for the levy and collection of tax on intra-state supply of goods and services or both
within the boundary of the state of Telangana.

The Tripura GST, 2017: The Tripura GST Act received the assent of the governor on 13 June 2017
and came into existence on 16 June 2017. It extends to the whole of the state of Tripura. The act
makes provisions for the levy and collection of tax on intra-state supply of goods and
services or both within the boundary of the state of Tripura.

The Uttarakhand GST, 2017: The Uttarakhand GST Act received the assent of the governor on 25
May 2017 and came into existence on 26 May 2017. It extends to the whole of the state of
Uttarakhand. The act makes provisions for the levy and collection of tax on intra-state supply of
goods and services or both within the boundary of the state of Uttarakhand.

The Uttar Pradesh GST, 2017: The Uttar Pradesh GST Act received the assent of the governor on
18 May 2017 and came into existence on 19 May 2017. It extends to the whole of the state of Uttar
Pradesh. The act makes provisions for the levy and collection of tax on intrastate supply of goods
and services or both within the boundary of the state of Uttar Pradesh.

The West Bengal GST, 2017: The West Bengal GST Act received the assent of the governor on
21 June 2017 and came into existence the very next day. It extends to the whole of the state of
West Bengal. The act makes provisions for the levy and collection of tax on intra-state supply of
goods and services or both within the boundary of the state of West Bengal.

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