1.

GST IN INDIA INTRODUCTION BY- CANOTESCOMMUNITY

Section 1: Short title, extent, and commencement

Tax Enforced payment laid upon individual or property owner to support the government & enacted by
legislative Authority
Types of tax Direct tax Indirect tax
The person paying the tax bears the The person paying tax shift incidence to final
incidence consumer
Progressive in nature Regressive in nature
Income tax GST & Custom Duty
Features of Major source of revenue Shifting of burden Wider tax base
Indirect tax Tax on commodities & services Inflationary Promotes social welfare
No perception of direct pinch
The genesis of 2003: CG forms a task force under the supervision of ‘Vijay Kelkar’
GST in India 2016: Constitution (101st Amendment) Act, 2016 was enacted.
2017: 1st July 2017 - GST was enacted.
Concept of GST Value added tax
No Cascading of Taxes
Burden Born by Final Consumer
A continuous chain of Tax Credits
Need for GST in a. CENVAT & State VAT set off not possible
India b. Cascading effect of taxes
c. Distinction between goods & services blurred
d. Multiple tax & compliances
Framework for Destination-based taxation system
GST in India The revenue of inter-state sales/Exports will be transferred to the Centre, in case of intra-state sale
revenue will accrue (to place of consumption state or UT) on consumption of Goods/services or both.

Legislative framework
1. Union Territory Goods and Services Tax (UTGST)- UT without Legislatures: 1 Act (A&N Islands,
Lakshadweep, Ladakh, Dadra and Nagar Haveli & Daman and Diu, Chandigarh)
2. State Goods and Services Tax Act, 2017 (SGST)- States: 28 + 3 = 31 Acts, UT with Legislatures: 3
(Delhi, J&K, Puducherry)
3. Central Goods and Services Tax Act, 2017 (CGST)- 1 Act
4. Integrated Goods and Services Tax (IGST)- 1 Act
5. Compensation Cess has been imposed under the Goods and Services Tax (Compensation to
States) Cess Act, 2017 on the specified luxury items or demerit goods (TAP). Compensation cess
is leviable with a view to providing compensation to the States for the loss of revenue arising
on account of implementation of the GST.

Intra State: CGST + SGST; Inter State: IGST

- Manipur, Mizoram, Nagaland, Tripura (MMTN) = Always ₹10 Lakhs for both Goods and Services
- Arunachal Pradesh (AP), Uttarakhand (UK), Meghalaya, Sikkim, Pondicherry, Telangana =
Always ₹20 Lakhs for Goods and Services
- Rest of states services always 20 lakhs Otherwise i.e. EXCLUSIVE GOODS = Always ₹40 Lakhs
Goods + Services = Always ₹20 Lakhs
Classification of HSN (Harmonised System of Nomenclature) for Goods
Goods and SAC Service accounting code for services
Service
GST is applicable - Alcoholic Liquor for Human Consumption [state excise+ VAT/CST]
on all goods and - Completed Immovable Property
services EXCEPT - Petroleum Crude, Diesel, Petrol, ATF and Natural Gas [CENTAL EXCISE+ VAT/CST] applicable
from future date to be notified by GST council

JOIN US ON TELEGRAM FOR CA NOTES & UPDATES-CANOTESCOMMUNITY

1
 1. GST IN INDIA INTRODUCTION BY- CANOTESCOMMUNITY

GST as well as 1. Tobacco – GST+ Central excise

old tax 2. Opium/Indian hemp/other narcotics – GST+ State excise
Taxes subsumed Central levies State levies
in GST Excise Entertainment Tax (Except by local bodies)
CVD & Special CVD Luxury Tax
Service tax Rax on lottery betting gambling
Surcharge & cess relating to supply of goods & Purchase tax, VAT/sales tax, tax on
services advertisement
Benefits of GST Benefits to economy Advantages for Trade Easy Tax Compliance Simplified Tax
& Industry Structure
Creation of unified Mitigation of ill effects Automate procedure Ease of doing business
national market of cascading with greater use of IT
boost to make in India Certainty in tax
initiative Reduction in administration
boost to investment compliance cost
export & employment
GST PORTAL WWW.GST.GOV.IN managed by GSTN [Sec 8 company]
Constitutional ARTICLE 265: NO ACT NO TAX
provisions ARTICLE 245: PARLIAMENT & STATE LEGISLATURE CAN MAKE LAWS SUBJECT TO PROVISION OF
CONSTITUTION
ARTICLE 246: 7th SCHEDULE (LIST I, II, III)
- List I (Union List): Matters with respect to which Union (CG) can make Laws. [Entry 82 to 91].
Note: Income Tax (82); Customs (83); Excise (84)
- List II (State List): Matters with respect to which State (SG) can make Laws. [Entry 45 to 63]
- List III (Concurrent List): Matters with respect to which BOTH CG and SG can make Laws
Power to Levy GST doesn’t come under any List
ARTICLE 246A: [Power to make laws with respect to Goods and Services Tax]
ARTICLE 269A: [Levy and collection of GST on inter-State supply]
- Tax collected on inter-state supplies by Central Govt. shall be apportioned between union &
state provided by Parliament on recommendation of GST Council
- Import deemed interstate
- Amount apportioned to states do not form part of Consolidated Fund India

ARTICLE 279A: PRESIDENT CONSTITUTE A JOINT FORUM OF CENTRE AND STATE CALLED GST COUNCIL.
Every decision of the GST Council is taken by
a) Chairperson – union finance minister
b) Members (2- centre [1 – finance minister, 2- union minister of states representing all 5 UTs], 31
States i.e, minister of finance or other minister nominated by state may chose vice-president
among them)
c) Decision - 3/4th of the weighted votes of the members present and voted.
d) weightage of 1/3rd Centre 2/3rd states
e) Quorum – 17 members
GST Council shall - Taxes / Cess/ surcharge to be subsumed in GST.
make - Goods service to be subject to / exempted from GST.
recommendation - Model laws, principles of levy, apportionment of IGST
to Union/States - Threshold limits
on: - Rates of tax
- Special provisions with respect to Special Category States
- Special Rates to raise additional resources during Calamities/ disaster
- Any other matter as Council may decide
CBIC [ Central Board of Indirect Jaxel and Customs]
Administrative Body responsible for administration of GST Law. Also administer levy and collection of excise on Tobacco,
petroleum products and also custom duty

JOIN US ON TELEGRAM FOR CA NOTES & UPDATES-CANOTESCOMMUNITY

2
 1. GST IN INDIA INTRODUCTION BY- CANOTESCOMMUNITY

IMPORTANT TERMS TO LEARN BEFORE WE START

Person individuals, Hindu Undivided Families, companies, firms, LLPs, associations, corporations, co-operative
societies, local authorities, governments, societies, trusts and other artificial juridical persons.
Goods 2(52) Means every kind of movable property,
other than money and securities
includes actionable claim, growing crops, grass and things attached to or forming part of the land which
are agreed to be severed before supply or under a contract of supply.
Money 2(75) It means the Indian legal tender or any foreign currency, cheque, promissory note, bill of exchange,
letter of credit, draft, pay order, traveller cheque, money order, postal or electronic remittance or any
other instrument recognised by the Reserve Bank of India when used as a consideration to settle an
obligation or exchange with Indian legal tender of another denomination,
but shall not include any currency that is held for its numismatic value.
Securities includes shares, scrips, stocks, bonds, debentures, debenture stock, other marketable securities, and
derivatives.
Actionable Claim a claim to any debt, other than a debt secured by a mortgage of immovable property or hypothecation
of any asset.
Services 2(102) means anything other than goods, money and securities
includes activities relating to the use of money or its conversion by cash or by any other mode, from one
form, currency or denomination, to another form, currency or denomination for which a separate
consideration is charged.
Related person 1. Officer/director
2. Employer- Employee
3. Partners
4. Holds >25% voting power (directly/indirectly)
5. A 3rd person controls both of them (directly/indirectly)
6. One of them controls other (directly/indirectly)
7. Such person together controls a third person
8. Member of same family
9. One of them is sole agent/distributor of other
Family u/s 2 (49)
1. Nuclear family - spouse and children Whether dependent or independent
2. Extended family-parent, grandparent, brother, sister of person only if dependent
Business It includes –
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar
activity, whether or not it is for a monetary benefit;
- incidental or ancillary;
- whether or not there is volume, frequency, continuity or regularity of such transaction;

(b) supply or acquisition of goods including capital assets and services in connection with
commencement or closure of business;

(c) provision by a club, association, society, or any such body (for a subscription or any other
consideration) of the facilities or benefits to its members, as the case may be; admission, for a
consideration, of persons to any premises; and

(d) services supplied by a person as the holder of a number office which has been accepted by him in the
course or furtherance of his trade, profession or vocation;

(e) activities of a race club including by way of totalizator or a license to book maker or activities of a
licensed book maker in such club; and”;

(f) any activity or transaction under taken by the Central Government, a State Government or any local
authority in which they are engaged as public authorities.

JOIN US ON TELEGRAM FOR CA NOTES & UPDATES-CANOTESCOMMUNITY

3
 1. GST IN INDIA INTRODUCTION BY- CANOTESCOMMUNITY

Supplier 2(105) Supplier means person who supplies goods or services or both and person who acts an agent on behalf
of supplier.
Recipient 2(93) (a) where a consideration is payable for the supply of goods or services or both, the person who is liable
to pay that consideration,

(b) where no consideration is payable for the supply of goods, the person to whom the goods are
delivered or made available, or to whom possession or use of the goods is given or made available, and

(c) shall include an agent acting as such on behalf of the recipient in relation to the goods or services or
both supplied.
Consideration (a) whether in money or otherwise
2(31) (b) the monetary value of any act or forbearance whether by the recipient or by any other person

but shall not include any subsidy given by the Central Government or a State Government

Provided that a deposit given in respect of the supply of goods or services or both shall not be
considered as payment made for such supply unless the supplier applies such deposit as consideration
for the said supply;
Distinct persons Distinct persons are persons with different GSTINs (registration) belonging to one legal entity (single
PAN) situated within the same state/UT or in two different states/UTs.
Export Taking goods out of India to a place outside india
export of means the supply of any service when, ––
services (i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service in convertible foreign
exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and

⑉⑉⑉⑉⑉⑉⑉⑉༄༄༄⑉⑉⑉⑉⑉⑉⑉⑉⑉⑉
@CANOTESCOMMUNITY
⑉⑉⑉⑉⑉⑉⑉⑉༄༄༄⑉⑉⑉⑉⑉⑉⑉⑉⑉⑉

JOIN US ON TELEGRAM FOR CA NOTES & UPDATES-CANOTESCOMMUNITY

4