CHANDIGARH UNIVERSITY

DEPARTMENT OF
COMMERCE
MASTERS OF COMMERCE
GST [CMA-655]

GST DISCOVER . LEARN .

EMPOWER
 GST

Course Outcome
CO Title Level
Number
CO1 To apply sophisticated knowledge Remember
related to GST rules and regulations  
and analyse and resolve tax
problems

CO2 To analyze, define tax issues Understand

through their understanding,  
knowledge and application of
research methods and databases

CO3 To apply& Recognise relevant Understand

ethical standards as required in tax
practice

2
UNIT- 2 A
 GOODS &
SERVICES TAX
(GST)

4
BASIC CONCEPT OF
GST
• SINGLE TAX PAYABLE “ TAXABLE SUPPLY “ OF GOODS AND SERVICES
• MULTI STAGE & DESTINATION BASED CONSUMPTION TAX
• CHARGES ONLY ON “ VALUE ADDITION “
• NO ( REDUCED ) CASCADING EFFECT
 GST
WORLDWIDE
Country Rate of GST
Country
CounC Rate of ofof
RaRatete GST
Australia
ountrytr 10%
G
ST
G
ST
AuAustr
Australia
y 10%
alistralia
France 10%
19.6%
France
a 1919.
19.6%
France 6%.6
Canada
CaCan
Canada 5%
5%
%
anadad 5%
GermGe
Germany
a 19%
19%
rmGerma 19%
JapJa
Japan
Japan
aan nny yy 5%
5%
19%
pana 5%
SinSingag
Singapore
n 7%
Singapore
apoporere 7%
7%
NeNeww
New Zealand 15%
New
ZeaZeaalndZealand
la nd 15%
15%
 TAXES TO BE SUBSUMED IN
GST
•CENTRAL GST •STATE GST
• EXCISE DUTY • VAT
• ADDITIONAL EXCISE • ENTRY TAX
DUTY • PURCHASE TAX
• SERVICE TAX • LUXURY TAX
• SPECIAL • TAX ON LOTTERY
ADDITIONAL DUTY • STATE CESS
• CENTRAL • STATE
SURCHARGES &
CESSES ENTERTAINMENT
TAX
• COUNTERVAILING
DUTY
LEVI AND COLLECTION OF CGST, SGST,
IGST, UTGST
• GST IS LEVIED ON SUPPLY OF ALL GOODS SERVICES OR SERVICES
OR BOTH EXCEPT SUPPLY OF ALCOHOLIC LIQUOR FOR HUMAN
CONSUMPTION, PETROLEUM.
• (CGST)- CENTRAL GST
• (SGST)- STATE GST
• (IGST)- INTEGRATED GST
• (UTGST)- UNION TERRITORY GST
RATE OF CGST, IGST, SGST,
UTGST
• 0%
• 5%
• 12%
• 18%
• 28%

THESE ARE THE 4 SLABS GIVEN BY THE GOVERNMENT

 CAPITAL GOODS (RS)
Particulars VALUE Tax
• Manufacture of Goods 1,00,000
 Add: Excise Duty (12.5% of 1,00,000) 12,500 12,500
• Ex- factory value 1,12,50
0
 Add: Vat (13.5% of 1,12,500) 15,188 15,188
• Taxable Amount before is charged 1,27,688
Octroi
 Add: Octroi/EntryTax (5.5% of 1,27,688) 7,023 7,023
• Total Transaction Cost 1,34,711 34,711

• Percentage of tax to transaction value= 34,711/100,000*100= 34.71%(Rs.34,711)

• Aggregate of all taxes= 12.5%+13.5%+5.5%= 31.50% (Rs.31,500)
• Cascading effect of tax i.e. tax on tax= 3.21% (Rs.3,211)
 Registration Structure

3 ACTS
BUSINESS VERTICALS
MUTIPLE
•CGST, SGST & IGST
applicable on every •Possible separate
•Single GSTIN; Separate
person. registrations for each
Regn. for each state
business vertical within a
•Total possible State.
registrations for one PAN
•Simultaneous
registration
GSTIN
FORMAT
 Taxable event in GST Regime vs. Existing
regime
TAX TAXABLE EVENT IN EXISTING LAW TAXABLE EVENT
IN GST REGIME
SERVICE TAX Provision of Service

EXCISE DUTY Manufacture of excisable goods

VAT Transfer of title in goods within state

CAT Transfer of title in goods outside state Supply of

goods/serv
ices
PURCHASE TAX Purchase of specified goods

ENTRY TAX Entry of specified goods in the State for sale, use or
consumption
ENTERTAINMENT TAX Provision of entertainment
Essential Elements of Supply

SUPPLY OF GOODS AND SERVICES

SUPPLY IS MADE ON TAXABLE TERRITORY

SUPPLY IS A TAXABLE SUPPLY

SUPPLY IS MADE BY TAXABLE PERSON

 Suppl
y
• Various forms of Supply of Goods or Services - Sale,
Transfer, Barter, Exchange, License, Rental, Lease or
Disposal.
• Import of Services for a consideration whether or not in
the course or furtherance of Business
• Supply without consideration (Schedule 1)
• Activities to be treated as Supply of Goods or Service
(Schedule–II)
• Activities which are neither treated as Goods or Service
(Schedule–III)
 Schedule-I Supply without Consideration

• Supply Between Related or Distinct Person in the course

or furtherance of business.
• Supply by Principal to Agent
• Receipt of Goods by Agent on behalf of Principal
• Import of Service –Related Person - FoB
Schedule II Supply of Goods or Services
• Transfer of title in Goods -SoG
• Right in Goods W/O Title Transfer –SoS
• Transfer of title in Goods -Future Date –HP/EMI -
SoG
• Right in Immovable Property W/O Title Transfer -
SoS
Schedule II Supply of Goods or Services
• Supply of Services:
 Renting
 Construction
 Development, design, Of IT Software.
• Agreeing to obligation to refrain from an act or tolerate an
act
• Works contract, Service of Food
Schedule III – Neither SoG or
SoS
• Service -Employee to Employer – In Relation or Course
• Any Court or Tribunal, Functions – MP, MLA, etc.
• Sale of Land (except Construction of Complex)
• Actionable Claims (except Lottery, Betting, Gambling)
• Case 1: Sale in the final consuming state

Goods are moving from Vadodara to Ahmedabad. Since it is a

sale within a state, CGST and SGST will be levied. The
collection goes to the Central Government and the State
Government as pointed out in the diagram. Then the goods
are resold from Ahmedabad to Rajkot. This is again a sale
within a state, so CGST and SGST will be levied. Sale price is
increased so tax liability will also increase. In the case of
resale, the credit of input CGST and input SGST will be
available and the remaining taxes go to the respective
governments.
 Levy and
Collection
Description Composite Supply Mixed Supply
Naturally bundled Yes No
Supplied together Yes Yes

Can be supplied separately No Yes

One is predominant supply for recipient Yes No
Other supply is not ‘aim in itself’ of recipient Yes No
Each supply priced separately No No

All supplies are goods Yes Yes

All supplies are services Yes Yes
One supply is goods and other supply is services Yes Yes
While, the above tests could be guiding principles in determining as to whether a supply is composite or
mixed supply the end user test could be adopted as one of the criteria; Every supply will have to be
independently analysed.
 Levy and
• Service
Collection
1:
s
• Goods as
Subject
services
2: Supply
• Included
• Implied
• Excluded
3: Place
• Inter-State
• Intra-State
4:
Time
• Specified for goods
• Specified for services
 Levy and
Collection of

CGST
alcoholic – Sec
liquor for human 9
To be levied on all intra-State supplies of goods and / or services, except on
consumption;
 Value determined u/s 15 of CGST Act (Value of taxable supply);
 At the rates notified by Central Government;
 To be paid by every taxable person;
 CGST 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 such date as may be notified by the Government on the
recommendations of the GST Council;
 Central Government has the power to specify the categories of supply of
goods and/ or services on which Reverse Charge shall apply;
 Any supply received by the registered person from an unregistered
person the CGST on such supply will be paid by recipient of such supply
and all the provisions of this Act shall apply to such recipient as if he is
the person liable to pay tax;
 Central Government has power to specify categories of services on which
tax will be paid by e-commerce operators as if such services are supplied
by such operators.
• Case 2: Sale in one state, resale in another state

Goods are moving from Vadodara to Ahmedabad. Since it is a

sale within a state, CGST and SGST will be levied. The
collection goes to the Central Government and the State
Government. Later the goods are resold from Ahmedabad to
Mumbai (outside the state). Therefore, IGST will be levied.
Whole IGST goes to the central government.
Composition
Levy
 Composition Levy – Sec 10
of CGST Act
Availe
d

Available Allowed

Manufacturer –
1% Supplier
Eligible covered under Compliance
Sch. II, Para 6(b) –
2.50%
Others – 0.50%
 Composition Levy –
Sec 10
 Optional Scheme
of CGST Act
 Pay an amount in lieu of tax; minimum rate to be:
 1% of the turnover in case of manufacturers ( other than
specified);
 2.50% of the turnover in case of suppliers covered under Sch. II,
Para 6(b) such as Restaurants or Caterers
 0.50% of the turnover in other cases
 Note: State GST rate in addition expected to be equal.

 No tax to be collected; No Input Tax Credit available

Not economically viable for Business to Business Transactions

 Composition Levy –
Sec 10 of CGST
 Conditions for Composition:
Act
• Permission of Proper Officer required
• Registered persons
• Aggregate Turnover < Rs. 75 Lakhs* in the preceding FY (all-India basis
for taxable persons having same PAN – who shall also opt for
composition)
• No stock of goods imported or interstate.

* Turnover Limit is Rs. 50 lakhs for Arunachal Pradesh, Assam, Manipur,

Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh
 – Sec 10
Composition Levy

of CGST Act
• No composition option in the following specific cases:
• Services supplied:
 Any / all services (includes goods treated as supply of
services by Sch. II), other than services covered under
Sch. II, Para 6(b) such as Restaurants or Caterers
• Goods supplied:
 Non-taxable goods
 Inter-State outward supplies
 Through e-commerce operators
 Notified goods manufactured by the supplier
 • Manufacture Of:
 Ice cream edible ice, whether or not
containing
and cocoa
other
 Pan masala
All goods, i.e. Tobacco and manufactured
tobacco substitutes

• If aggregate turnover (all India basis) of preceding FY exceeds 75

Lakhs (If during the FY, the aggregate turnover exceeds 75 Lakhs,
no composition from the following day.)
 – Rule 3 of
Composition Levy

CGST Rules
•Intimation for Composition Levy:
• File intimation electronically in Form GST CMP-01 prior to
appointed day or within 30 days after the said day or further
period as may be extended by the Commissioner;
• If intimation filed after the appointed day then no tax to be
collected and issue bill of supply;
• Any person applying for registration, if he opts to pay tax
under Composition in the Form GST REG-01 then it shall be
considered as an intimation;
• Composition Supplier shall intimate in Form GST CMP-02
prior to commencement of financial year and also furnish
Form GST ITC-3 giving details of ITC within 60 days from the
commencement of relevant financial year;
• Composition Supplier shall furnish in GST CMP-03, details of:
o Stock
oInward supply of goods received from unregistered person
held as on the preceding day from which he opts
for composition, within 60 days from the date
from which option is exercised or such further
period as may be extended by the
Commissioner;
 Composition Levy –
Rule 4 of CGST
Rules
• Effective date for Composition Levy:
• If Composition scheme is opted from the appointed date then
effective date would be the appointed date

• If Composition scheme is opted by already registered person then

effective date would be from the beginning of the financial year

• If the registered person has applied for Composition then the

intimation shall be considered only after the grant of registration
to the applicant
Conditions and Restrictions
for Composition Levy –
Rule• Conditions
5 of CGST Rules
and Restrictions for Composition Levy: Person opting
for Composition shall comply with the following -
• He is neither a casual taxable person nor a non-resident taxable person
• If a person has opted for composition from the appointed day then the
goods held in stock by him on the appointed day have not been
o purchased in the course of inter-State trade or commerce, or
o imported into India, or
o received from his branch situated outside the State or from his agent
or principal outside the State
• Goods held in stock have not been purchased from an unregistered person
and where purchased tax has been paid under reverse charge
• He shall pay tax under reverse charge on inward supplies received from
unregistered persons
• He was not engaged in the manufacture of notified goods
during the preceding financial year
• He shall mention words “composition taxable person, not
eligible to collect tax on supplies” at the top of the bill of
supply issued by him
• He shall mention the words “composition taxable person”
on every notice or signboard displayed at a prominent
place at his place of business and at every additional place
or places of business
• Registered person who has opted for Composition may not
file fresh intimation every year and may continue to pay tax
under composition
Composition Levy –
Rule 6 of CGST
Rules
• Validity of Composition Levy:
• Option once exercised shall remain valid so long as he satisfies
all the conditions prescribed
• The person shall be liable to pay tax under normal levy if he
ceases to satisfy the conditions prescribed and has also filed an
intimation for withdrawal from the scheme in Form GST CMP-
04 within 7 days of occurrence of such event
• A registered person who wants to opt out of Composition
Scheme can also intimate in Form GST CMP-04
• If proper officer has reasons to believe that a person is not
eligible for Composition or contravened any of the
provisions then he may issue notice and a reply has to be
filed by such person and based on such reply the proper
officer may either accept the reply or deny the option to pay
tax under Composition
• Upon an option to pay under Composition becoming invalid
the person shall furnish details of the stock of inputs and
inputs contained in semi-finished or finished goods held in
stock
• Any intimation of withdrawal of option or denial of the
option in respect of any place of business in any State or
Union territory shall be deemed to be an intimation in
respect of all other places of business registered on the
same PAN
Exempt supplies, non-
taxable supplies and zero-
rated supplies
 Section 2(47) – “exempt supply” means supply of any goods and/
or services
• which attract nil rate of tax; or
• which may be exempt from tax under Section 11 or Section 6
of IGST Act
• and includes non-taxable supply

• Section 2(78) – “non-taxable supply” means a supply of goods

and/or services which is not leviable to tax under this Act or IGST
Act
 Section 16(1) of IGST Act – “zero-rated supply” means any of
the following supplies of goods and/or services, namely -
a) Export of goods and/or services
b) Supply of goods and/or services to a SEZ developer or an SEZ unit
 Power to grant exemptions
– Sec 11 of CGST Act Central or State Government, based on the recommendation of the Council
S.11 (3)

On taxable goods and/ or services of any specified description Considers it necessary

Is satisfied that it is necessary, For the purpose of clarifying the scope

in the public interest or applicability of A or B
S.11 (1) S.11 (2)
By Notification
By Notification - A By Special Order – B

Exempt Generally Exempt Insert an explanation in A or B, as

the case may be, within 1 year (such
clarification to have retrospective
• Absolutely (not optional); effect)
Under exceptional
or circumstances, explicitly
• Subject to conditions specified in such Order

• Whole Tax; or Whole Tax

• Part tax
THANK YOU

For queries
Email: [email protected]