*** UNIT I ***

Goods and Services Tax (GST)

1. One Nation, One Tax: GST amalgamates various central and state taxes into a single
tax, making it uniform across the country.
2. Avoidance of Cascading Effect: GST is designed to eliminate the cascading effect by
allowing input tax credit, where businesses can claim credit for the taxes already paid
on inputs.
3. Simplified Compliance: It has simplified the tax filing process with a centralized
system and a uniform rate structure, albeit still facing some implementation challenges.
Key Advantages of GST
 Efficiency: Reduces tax evasion and broadens the tax base.
 Transparency: Makes the tax system more transparent and predictable.
 Ease of Doing Business: Improves ease of doing business by reducing the
multiplicity of taxes and compliance burdens.
Challenges of GST
 Initial Implementation Issues: The rollout faced teething problems, including
technology issues and understanding the new system.
 Multiple Rate Slabs: GST still has multiple rate slabs, which can complicate the
simplicity it's meant to achieve.

1. Meaning of GST IGST

GST (Goods and Services Tax) and IGST (Integrated Goods and Services Tax) are parts
of the tax structure introduced in India to simplify the indirect taxation system.
GST (Goods and Services Tax):
 GST is a comprehensive, multi-stage, destination-based tax levied on the supply of
goods and services in India.
 It replaced various indirect taxes like VAT, service tax, excise duty, etc., to create a
unified tax structure across the country.
 GST is divided into three categories based on the nature of the transaction:
1. CGST (Central GST): Collected by the central government on intra-state
sales.
2. SGST (State GST): Collected by the state government on intra-state sales.
3. IGST (Integrated GST): Collected by the central government on inter-state
sales.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 1
CGST (Central Goods and Services Tax)
CGST is a tax levied by the Central Government on the supply of goods and services within
a state - Example: When a business in Maharashtra sells goods to a customer in
Maharashtra, the Central Government collects CGST.
Key Features of CGST
1. Levied on intra-state supplies (within a state)
2. Collected by the Central Government
3. Applicable to all goods and services, except exempted ones
4. Tax rates vary from 0% to 28%IGST (Integrated Goods and Services Tax)
SGST (State Goods and Services Tax)
SGST is a tax levied by the State Government on the supply of goods and services within a
state. (- Meaning: Tax collected by the State Government on goods and services sold within the state. -
Example: When a business in Maharashtra sells goods to a customer in Maharashtra, the Maharashtra State
Government collects SGST.)
Key Features of SGST
1. Levied on intra-state supplies (within a state)
2. Collected by the State Government
3. Applicable to all goods and services, except exempted ones
4. Tax rates vary from 0% to 28%
Key Difference
- CGST is collected by the Central Government, while SGST is collected by the State
Government.
- Both CGST and SGST are applicable on intra-state supplies (within a state).
IGST (Integrated Goods and Services Tax)
It inter-states transactions, when goods or services move from one state to another.
IGST is a tax levied by the Central Government on the supply of goods and services in the
following cases:
1. Inter-state supplies (across states)
2. Imports
3. Supplies to Special Economic Zones (SEZs)
Features of GST
1. Comprehensive Tax Structure
GST is a single, unified tax system that subsumes multiple indirect taxes like VAT,
excise duty, service tax, octroi, and others. By replacing these with one tax, GST eliminates
the complexities of the earlier multi-tax system and ensures simplicity.
2. Destination-Based Tax
GST is a destination-based consumption tax, meaning the tax is collected at the place
where the goods or services are consumed rather than where they are produced. This
promotes fairness and benefits consuming states.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 2
3. Dual Tax Model
India follows a dual GST model to cater to its federal structure. GST is divided into:
 Central GST (CGST): Collected by the central government on intra-state
transactions.
 State GST (SGST): Collected by state governments on intra-state transactions.
 Integrated GST (IGST): Collected by the central government on inter-state
transactions and imports.
 Union Territory GST (UTGST): Levied by union territories
4. Comprehensive Coverage
o GST is a comprehensive tax that subsumes multiple indirect taxes
o GST is levied on the supply of goods and services
5. Input Tax Credit (ITC) Mechanism
o ITC allows businesses to claim tax credits for taxes paid on inputs
o ITC helps reduce the tax burden and promotes tax compliance
6. Composition Scheme
- Businesses with a turnover below ₹1.5 crores can opt for the composition scheme
- Businesses paying tax at a flat rate of 1% or 5% can opt for the composition scheme
- This reduces compliance and administrative burden
7.GST Network (GSTN)
The GST system is supported by a strong IT infrastructure called the GST Network
(GSTN). It facilitates online registration, return filing, tax payment, and ITC claims, making
compliance digital and hassle-free.
8 GST Rates
- GST rates vary depending on the type of goods or services
- GST rates range from 0% to 28%
- GST rates are divided into five slabs: 0%, 5%, 12%, 18%, and 28% 28%: Luxury
items and sin goods.
9.GST Registration
- Businesses with a turnover exceeding ₹40 lakhs must register for GST
- Businesses with a turnover below ₹40 lakhs can opt for voluntary registration
10. GST Council
- The GST Council is responsible for making recommendations on GST rates, laws, and
procedures
- The GST Council consists of representatives from the central government and state
governments.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 3
2. Scope of GST
1. Applicability across Sectors
 Goods and Services: GST is levied on almost all goods and services except for a few
items like alcohol for human consumption and petroleum products (which may be
included later).
 Manufacturing, Trade, and Services: It covers manufacturers, traders, and service
providers under one tax regime.
2. Uniform Taxation
 Replaces multiple indirect taxes (e.g., VAT, excise duty, service tax) with a single tax
structure.
 Ensures consistent tax rates across the country, reducing tax discrepancies between
states.
3. Uniform Tax Rate Structure
 GST rates are categorized into 0%, 5%, 12%, 18%, and 28%, ensuring predictability
and uniformity in taxation.
 Reduces confusion regarding the applicable tax rates.
4. Broad Coverage of Transactions
 Intra-State Transactions: CGST and SGST are levied on transactions within a state.
 Inter-State Transactions: IGST is applicable for transactions across state borders.
 Imports: IGST is charged on imports to bring them at par with domestic products.
 Exports: Exports are zero-rated under GST, making them competitive in the global
market.
5. Input Tax Credit (ITC) Mechanism
 Allows businesses to claim credit for the tax paid on inputs (raw materials, goods, or
services used in production) against their output tax liability.
 Eliminates the cascading effect of taxes (tax on tax).
6. E-Commerce and Digital Economy
 GST applies to online marketplaces and digital platforms.
 E-commerce operators must collect TCS (Tax Collected at Source) under GST.
7. Impact on Specific Sectors
 Simplifies tax compliance SMEs and Startups
 Transparency in Unorganized Sector
 It impacts Real Estates. Economic Integration
9. Legal and Enforcement Scope
 Governs penalties, audits, and appeals related to non-compliance.
 Monitored by both the Central and State GST authorities.
10. Encourages Competitive Pricing
 Removal of cascading taxes leads to reduced costs for businesses, enabling
competitive pricing in the market.
 Businesses can compete better in both domestic and international markets.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 4
3. Present and Old Tax Regime vs GST Regime
Old Tax Regime GST Regime
There were multiple taxes. GST is a single tax system
No cascading effect as GST is charged
Multiple taxes lead to cascading effect.
on the value-added.
Separate taxes for goods and services. Single tax for goods and services.

Cross set-off of taxes paid on purchases

Cross set-off of taxes possible.
of goods and services not possible.
In 2017, the Goods and Services Tax (GST) replaced several State and Central indirect
taxes. Some of those taxes before GST were:
 VAT
 Service tax
 Sales tax
 Entry tax
 Excise duty tax, etc.
Cascading Effect of Taxes
Cascading tax effect simply means "tax on tax". This happens when a product is taxed at
every stage of its production before it is sold to the final customer. So, the final customer
has to pay a higher price because of all the taxes involved.
Previous Tax Structure
1. Central Excise Duty
a. Levied on goods manufactured in India.
b. Paid by the manufacturer or producer.
2. Customs Duty
a. Levied on goods imported into India.
b. Paid by the importer of goods.
3. Service Tax
a. Levied on services provided in India.
b. Paid by the service provider.
4. Value-Added Tax (VAT)
a. Levied on the sale of goods within a state.
b. Paid by the seller of goods.
5. CENVAT
a. (Central Value Added Tax) was a tax credit scheme that allowed
manufacturers to claim credit for taxes paid on inputs.
b. CENVAT aimed to reduce the cascading effect of taxes and increase the
competitiveness of Indian manufacturers.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 5
 6. Central Sales Tax (CST)
a. Levied on inter-state sales of goods.
b. Paid by the seller of goods.
7. Entry Tax
a. Levied on goods entering a state.
b. Paid by the importer of goods.
8. Octroi
a. Levied on goods entering a local area.
b. Paid by the importer of goods.
9. Luxury Tax
a. Levied on luxury goods and services.
b. Paid by the consumer of luxury goods and services.
10. Entertainment Tax
a. Levied on entertainment services.
b. Paid by the consumer of entertainment services.
11. Countervailing Duty (CVD)
a. Levied on imported goods to counter subsidies.
b. Paid by the importer of goods.
12. Special Additional Duty (SAD)
a. Levied on imported goods to counter excise duty.
b. Paid by the importer of goods.
13. Anti-Dumping Duty
a. Levied on imported goods to prevent dumping.
b. Paid by the importer of goods.
GST Introduction
 Former Prime Minister Late Shri Atal Bihari Vajpayee formed a committee to write
the GST law in 2000. This committee proposed the concept of "one nation, one tax".
 A task force known as the “Kelkar Task Force” was formed in 2004 to strengthen the
taxation system by implementing GST.
 Bill passed in Lok Sabha on 6th May, 2015
 Bill passed in Rajya Sabha on 3rd August, 2016
 GST to be implemented by July 2017
The Different Components of GST
The structure of GST has three important components:
CGST – The Central Government levies it on intra-state sales of the product
SGST – The state Government collects it after an intra-state sale
IGST – The Central Government of India collects it from an inter-state transaction.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 6
4.GST in India vs GST in other Countries
GST in India
 Dual GST Model: India has a dual GST model with Central GST (CGST) and State
GST (SGST) for intra-state transactions, and Integrated GST (IGST) for inter-state
transactions.
 Multiple Rate Slabs: GST rates in India range from 0% to 28%, with additional
cesses on luxury and sin goods.
 Threshold Limits: The threshold limit for GST registration varies between ₹20 lakh
and ₹40 lakh, depending on the state and type of supply.
 Compliance: Monthly and annual returns are required, with a reverse charge
mechanism applicable to both goods and services.
GST in Other Countries
Australia
 GST Rate: 10%
 Implementation: Introduced in 2000, it's a federal tax collected by the Australian
Tax Office and distributed among states.
 Zero-Rated Items: Fresh food, health services, and education are zero-rated.
Canada
 GST Rate: 5%
 Harmonized Sales Tax (HST): Varies from 0% to 15%, depending on the province.
 Threshold: Canadian $30,000 for GST registration.
Singapore
 GST Rate: 7% (increased from 3% in 2007)
 Implementation: Single rate system, applied to most goods and services.
 Threshold: SGD $1 million for GST registration.
New Zealand
 GST Rate: 15%
 Implementation: Single rate system, no GST on residential rents and financial
services.
 Threshold: NZD $60,000 for GST registration.
United Kingdom
 GST Rate: 20%
 Implementation: Known as Value Added Tax (VAT), with reduced rates of 5% and
zero rates for certain items.
 Threshold: £85,000 for VAT registration.
Brazil
 GST Rate: Known as VAT, with rates varying between federal and state levels.
 Implementation: Dual system with federal and state VAT.
Each country's GST system is tailored to its unique economic and administrative needs.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 7
5. Existing Taxes Proposed to be Subsumed Under GST
Subsumed: When we say that certain taxes were subsumed under GST, it means they were
combined into the GST system, replacing those individual taxes with one unified tax.
Under India's Goods and Services Tax (GST) regime, several existing taxes have been
combined into one unified tax system. Here’s a summary of the key taxes that were
subsumed:
 Central Taxes Subsumed:
 Central Excise Duty: Tax on the manufacture of goods within India.
 Additional Excise Duties: Extra taxes on specific domestically manufactured items.
 Service Tax: Tax on the provision of services.
 Additional Customs Duty (Countervailing Duty): Tax on imported goods to equalize
domestic and imported goods.
 Special Additional Duty of Customs: Levied on specific purposes for imported goods.
 Central Sales Tax (CST): Tax on the sale of goods between states.
State Taxes Subsumed:
1. State VAT (Value Added Tax): Tax on the sale of goods within a state.
2. Central Sales Tax (CST): Also subsumed for inter-state sales.
3. Entertainment Tax: Except for local bodies.
4. Luxury Tax: Tax on luxury goods and services.
5. Entry Tax: Tax on the entry of goods into a state.
6. Purchase Tax: Tax on the purchase of goods.
7. Taxes on Lottery, Betting, and Gambling: Taxes on these activities.
8. State Cesses and Surcharges: Additional charges levied by state governments.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 8
6. Principles Adopted for Subsuming the Taxes
The adoption of the Goods and Services Tax (GST) in India involved merging various
existing indirect taxes into a single unified tax system. Here are the main principles
adopted for subsuming the taxes:
1. Elimination of the Cascading Effect
 Objective: To avoid the "tax on tax" scenario and reduce the overall tax burden on
goods and services.
 Approach: By subsuming multiple taxes into GST, the credit of input tax paid at
each stage of the supply chain is passed on to the next stage, thereby eliminating the
cascading effect.
2. Creation of a Common National Market
 Objective: To unify the fragmented markets across states and create a seamless
national market.
 Approach: By subsuming state-level taxes and replacing them with a single GST,
goods and services can move more freely across state borders.
3. Simplification and Transparency
 Objective: To simplify the complex tax structure and make it more transparent.
 Approach: By consolidating multiple taxes into one, the compliance process
becomes more straightforward and transparent for businesses and consumers.
4. Uniformity of Tax Rates
 Objective: To ensure uniformity in tax rates across the country.
 Approach: By subsuming various state and central taxes into GST, the tax rates are
standardized, reducing the disparity across states.
5. Enhancement of Revenue Efficiency
 Objective: To improve the efficiency of tax collection and administration.
 Approach: By reducing the number of different taxes and improving the system's
transparency, the overall efficiency in tax collection is enhanced.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 9
7. Dual GST:
1. Dual Tax Structure
India’s GST is a dual system, meaning it has two components:
 Central GST (CGST): Collected by the central government on intra-state supplies
(within the same state).
 State GST (SGST): Collected by the state government on intra-state supplies.
 Integrated GST (IGST): Collected by the central government on inter-state supplies
(between states) and imports.
2. Purpose of Dual GST
 Revenue Sharing: The dual model ensures that both the central and state
governments receive their share of revenue from taxes.
 Uniformity: Aims to make the tax system more uniform across the country,
reducing the complexity of state-specific taxes.
 Avoiding Cascading Effect: Ensures that the input tax credit can be availed across
the supply chain, thereby avoiding the cascading effect of taxes.
3. Working of Dual GST
 Intra-State Transactions: If a supply of goods or services takes place within a state,
both CGST and SGST are levied. For example, if a product worth ₹100 is sold within
Tamil Nadu, the applicable GST might be 18%, split equally into 9% CGST and 9%
SGST.
 Inter-State Transactions: For transactions between states, IGST is levied, which is
roughly the sum of CGST and SGST. For example, if the same product is sold from
Tamil Nadu to Karnataka, an 18% IGST would be levied, collected by the central
government.
4. Input Tax Credit Mechanism
 Intra-State: Businesses can claim credit for CGST against CGST and SGST against
SGST.
 Inter-State: IGST credit can be utilized against both IGST and CGST, ensuring
seamless flow of credit across state borders.
Benefits of Dual GST
 Reduction in Tax Burden: Helps in reducing the overall tax burden on consumers
by removing the cascading effect.
 Simplification of Tax Structure: Simplifies the tax structure, making it easier for
businesses to comply with tax regulations.
 Improvement in Tax Collection: Enhances the efficiency of tax collection and
reduces tax evasion.

The dual GST model is designed to harmonize the tax system in India, balancing the
revenue needs of both central and state governments while simplifying the overall tax
structure.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 10
8. Benefits of GST
The Goods and Services Tax (GST) has brought several benefits to the Indian
economy and its taxpayers. Here are some of the key advantages:
1. Elimination of Cascading Tax Effect
GST has done away with the "tax on tax" scenario. By allowing for the seamless flow
of input tax credits across the supply chain, it has reduced the overall tax burden on goods
and services.
2. Simplification of Tax Structure
GST has replaced multiple indirect taxes with a single tax, thereby simplifying the
tax system. This has made compliance easier for businesses, reducing the complexity of
adhering to various tax laws.
3. Creation of a Unified National Market
GST has helped in creating a common national market by subsuming various state
and central taxes. This has facilitated the free movement of goods and services across state
borders, boosting trade and commerce.
4. Increase in Revenue Efficiency
With the introduction of GST, there has been an improvement in tax collection
efficiency. The uniform tax rates and reduction in tax evasion have contributed to higher
revenue collections for both the central and state governments.
5. Boost to Manufacturing and Exports
The reduction in the overall tax burden has made Indian products more competitive
in both domestic and international markets. This has provided a boost to the
manufacturing sector and encouraged exports.
6. Enhanced Transparency
The GST regime has brought in greater transparency in the tax administration. The
GST Network (GSTN), an IT platform, ensures that all transactions are recorded
electronically, reducing the chances of tax evasion and corruption.
7. Reduction in Logistics Costs
With the removal of multiple taxes and the creation of a unified market, logistics and
supply chain costs have come down. This has led to more efficient transportation of goods
across the country.
8. Simplified Compliance
The introduction of the GST return filing system has streamlined the compliance
process for businesses. The uniformity in tax rates and regulations across states has also
reduced the compliance burden.
9. Improved Ease of Doing Business
By reducing the complexity of the tax system and creating a more predictable tax
environment, GST has improved the ease of doing business in India. This has attracted
more investments and fostered economic growth.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 11
9.GST Council
The GST Council is a pivotal institution in India's GST regime, established to ensure
smooth and cooperative implementation of GST. Here are some key details about the GST
Council:
1. Composition
 Chairperson: The Union Finance Minister of India.
 Members: The Union Minister of State for Finance and the Finance Ministers of all
the states.
2. Decision-Making Process
 Voting: Decisions are made by a three-fourths majority vote, with the central
government’s vote having a weightage of one-third and the states’ votes having a
weightage of two-thirds.
 Quorum: At least 50% of the total membership of the Council constitutes a quorum
for meetings.
3. Responsibilities and Functions
 Tax Rates: Determine the GST rates for different goods and services.
 Exemptions: Decide which goods and services should be exempt from GST.
 Model GST Law: Recommend changes to the Model GST Law, GST rules, and GST
rates.
 Dispute Resolution: Address issues and disputes arising from the implementation
of GST between states and the centre.
 Other Taxes: Decide on taxes, cesses, and surcharges that can be subsumed under
GST.
4. Key Decisions and Impacts
 Rate Adjustments: Periodic review and adjustment of GST rates based on economic
needs and industry feedback.
 Compliance Measures: Introduction of measures to simplify compliance and
improve tax collection efficiency.
 Anti-Profiteering: Establishment of mechanisms to ensure businesses pass on the
benefits of reduced tax rates to consumers.
Significance
 Cooperative Federalism: The GST Council exemplifies cooperative federalism,
where both the central and state governments work together to make decisions.
 Policy Coordination: Ensures uniformity in tax policies across the country,
promoting a stable and predictable tax environment.

..

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 12
10. GST Network (GSTN)
The Goods and Services Tax Network (GSTN) is a non-profit organization that manages
the IT system of the Goods and Services Tax (GST) portal in India. This portal is crucial for
the implementation of GST, providing a single interface for taxpayers, the central
government, and state governments.
GSTN's primary functions include:
 Providing IT infrastructure and services to the central and state governments,
taxpayers, and other stakeholders.
 Facilitating the registration, return filing, and payment processes for
taxpayers.
 Ensuring the smooth exchange of information among stakeholders, including
taxpayers, state and central governments, accounting offices, banks, and the Reserve
Bank of India (RBI).
Specific aspects of the goods and services tax network (gstn)
1. GSTN Portal
 The GSTN portal is the primary interface for taxpayers to register, file returns, and
make payments. It also provides various services such as tracking the status of
applications, generating e-way bills, and more.
2. IT Infrastructure
 GSTN provides a robust IT infrastructure that ensures the smooth functioning of the
GST system. This includes data centers, disaster recovery systems, and secure
communication channels.
3. Data Security
 GSTN places a high emphasis on data security. It uses advanced encryption
techniques and follows strict protocols to ensure that taxpayer information is
protected from unauthorized access.
4. Collaboration with Banks
 GSTN collaborates with various banks to facilitate seamless payment processes. This
ensures that taxpayers can easily make their GST payments through multiple
banking channels.
5. Support and Training
 GSTN provides extensive support and training to taxpayers and government
officials. This includes help desks, training programs, and user manuals to ensure
that everyone can effectively use the GST system.
6. Analytics and Reporting
 GSTN offers advanced analytics and reporting tools that help the government
monitor GST compliance and detect any irregularities. This helps in improving the
overall efficiency of the tax system.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 13
11.GST Regime
The Goods and Services Tax (GST) regime in India is a comprehensive, multi-stage,
destination-based tax that is levied on every value addition. It was introduced to replace
multiple indirect taxes like excise duty, VAT, and service tax with a single tax system1.
Key Features of the GST Regime:
1. Dual GST Structure: GST is divided into Central GST (CGST) and State GST (SGST)
for intra-state transactions, and Integrated GST (IGST) for inter-state transactions.
2. Destination-Based Tax: GST is levied at the point of consumption, meaning the tax
revenue goes to the state where the goods or services are consumed.
3. Input Tax Credit: Businesses can claim credit for the taxes paid on inputs, which
helps in reducing the overall tax burden and avoiding the cascading effect of taxes.
4. Simplified Compliance: GST has simplified the tax compliance process with a
unified tax system, reducing the need for multiple registrations and filings.
5. GST Rates: The GST rates are categorized into different slabs: 0%, 5%, 12%, 18%,
and 28%, depending on the type of goods or services.
Benefits of the GST Regime:
 Elimination of Cascading Taxes: By allowing input tax credit, GST eliminates the
cascading effect of taxes, reducing the overall tax burden on goods and services.
 Ease of Doing Business: The unified tax system simplifies the tax structure, making
it easier for businesses to comply with tax regulations.
 Increased Revenue: GST has broadened the tax base and improved tax compliance,
leading to increased revenue for the government.
12.Integrated Goods and Services Tax Act- 2017

The Integrated Goods and Services Tax Act, 2017 (IGST Act) is a key legislation under
India's GST regime, governing the taxation of inter-state supply of goods and services.

1. Preliminary (Chapter I)
This chapter includes the short title, extent, and commencement of the Act. It also
provides definitions for various terms used in the Act.
2. Administration (Chapter II)
This chapter deals with the appointment of officers and their powers. It includes
provisions for the authorization of officers of state tax or union territory tax as proper
officers in certain circumstances.
3. Levy and Collection of Tax (Chapter III)
This chapter outlines the levy and collection of IGST on inter-state supplies. It
includes provisions for the determination of the value of supply and the power to grant
exemptions from tax.

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 14
4. Determination of Nature of Supply (Chapter IV)
This chapter defines inter-state and intra-state supplies. It also includes provisions
for supplies in territorial waters.
5. Place of Supply of Goods or Services or Both (Chapter V)
This chapter is crucial as it determines the place of supply for goods and services,
which is essential for deciding whether a transaction is inter-state or intra-state. It includes
specific rules for the place of supply of goods imported into or exported from India and the
place of supply of services where the location of the supplier or recipient is outside India.
6. Refund of Integrated Tax to International Tourists (Chapter VI)
This chapter provides for the refund of IGST paid by international tourists on goods
purchased in India and taken out of the country.
7. Zero-Rated Supply (Chapter VII)
This chapter deals with zero-rated supplies, which include exports and supplies to
Special Economic Zones (SEZs). These supplies are not subject to IGST.
8. Apportionment of Tax and Settlement of Funds (Chapter VIII)
This chapter outlines the apportionment of IGST between the central and state
governments. It includes provisions for the transfer of input tax credit and the settlement
of funds.
9. Miscellaneous (Chapter IX)
This chapter includes various miscellaneous provisions, such as the application of
provisions of the Central Goods and Services Tax Act, the power to make rules, and the
removal of difficulties.
*** Unit - I ***

Mrs. S. HARI ROOPAA M.Com., M.Phil., P.G.D.C.A.

Assistant Professor, Department of Commerce with Computer Applications
Sri Amaraavathi College of Arts and Science. Page 15