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    Goods and Services Tax - Class 1 - 27 AUGUST 2017: ST ND

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    Neeraj V
    GST was first introduced in France in 1954 and has since been adopted by nearly 160 countries. In India, GST was introduced through the 101st Constitutional Amendment Act and Article 246A to give both the central and state governments concurrent powers to levy GST. GST is a comprehensive indirect tax regime that covers both goods and services and is collected on value added at each stage of the supply chain based on the destination principle. The key objectives of GST are to eliminate cascading of taxes, provide seamless tax credits, and simplify the taxation system in India.

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    Goods and Services Tax - Class 1 - 27 AUGUST 2017: ST ND

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    Neeraj V
    42 views5 pages
    GST was first introduced in France in 1954 and has since been adopted by nearly 160 countries. In India, GST was introduced through the 101st Constitutional Amendment Act and Article 246A to give both the central and state governments concurrent powers to levy GST. GST is a comprehensive indirect tax regime that covers both goods and services and is collected on value added at each stage of the supply chain based on the destination principle. The key objectives of GST are to eliminate cascading of taxes, provide seamless tax credits, and simplify the taxation system in India.

    Original Description:

    GST Intro

    Original Title

    An intro to GST

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    GST was first introduced in France in 1954 and has since been adopted by nearly 160 countries. In India, GST was introduced through the 101st Constitutional Amendment Act and Article 246A to give both the central and state governments concurrent powers to levy GST. GST is a comprehensive indirect tax regime that covers both goods and services and is collected on value added at each stage of the supply chain based on the destination principle. The key objectives of GST are to eliminate cascading of taxes, provide seamless tax credits, and simplify the taxation system in India.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    42 views5 pages

    Goods and Services Tax - Class 1 - 27 AUGUST 2017: ST ND

    Uploaded by

    Neeraj V
    GST was first introduced in France in 1954 and has since been adopted by nearly 160 countries. In India, GST was introduced through the 101st Constitutional Amendment Act and Article 246A to give both the central and state governments concurrent powers to levy GST. GST is a comprehensive indirect tax regime that covers both goods and services and is collected on value added at each stage of the supply chain based on the destination principle. The key objectives of GST are to eliminate cascading of taxes, provide seamless tax credits, and simplify the taxation system in India.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    GST was first levied by France in 1954.

    Out of 195 countries in the world,


    almost 160 countries have adopted the concept of GST i.e THE GOODS AND
    SERVICES TAX. Taxation is one of the vital component of development of any
    country. The revenue from taxation is used to finance public goods and
    services such as infrastructure, sanitation,
    transportation and all other amenities, which
    are provided by the government.

    Taxes in India are levied by the Central Government, the State Governments
    and some local authorities such as the Municipality, which levy minor taxes.
    There are two types of taxes which are levied in India and they are; Direct tax,
    which is levied directly to an individual's income in the form of Income Tax and
    Indirect tax, that is paid indirectly by the final consumer of goods and services
    while paying for purchase of goods or for enjoying services.

    Constitution of India is the foundation and source of powers to legislate all


    laws in India. Article 265 of the Constitution of India lays down that no tax shall
    be levied and collected in India only by the authority of law. Article 246 of the
    Indian Constitution, distributes legislative powers including taxation, between
    the Parliament of India and the State Legislatures.

    GST was introduced as 101st Constitutional Amendment Act (The 122nd


    Amendment Bill) and a new Article 246A was introduced.

    Article 246A

    (1) Notwithstanding anything contained in articles 246 and 254, Parliament,


    and, subject to clause (2), the Legislature of every State, have power to
    make laws with respect to goods and services tax imposed by the Union or
    by such State.
    (2) Parliament has exclusive power to make laws with respect to goods and
    services tax where the supply of goods, or of services, or both takes place
    in the course of inter-State trade or commerce.

    1 GOODS AND SERVICES TAX | CLASS 1 | 27TH AUGUST 2017


    Notable Points from Article 246A

     Both Union and States in India now have “concurrent powers” to make
    law with respect to goods & services.

     The intra-state trade now comes under the jurisdiction of both centre
    and state; while inter-state trade and commerce is “exclusively” under
    central government jurisdiction.

    GST is consumption or destination based tax, levied on the basis of the


    “Destination principle.” It is a comprehensive tax regime covering both goods
    and services, and be collected on value-added at each stage of the supply
    chain.

    Indirect taxes can be either origin based or destination based. Origin based tax
    (also known as production tax) is levied where goods or services are produced.
    Destination based tax (consumption tax) are levied where goods and services
    are consumed.

    Simply put, Goods and Services Tax is a tax levied on goods and services
    imposed at each point of supply. Thus GST will be a single comprehensive
    integrated indirect tax on pure value addition at each stage.

    Such GST is on entire goods and services, except some exempted class of goods
    or services or a negative list of goods and services on which GST is not levied.
    GST is a national level tax based on value added principle just like State level
    VAT which was levied as tax on sale of intra-state goods Under the previous
    regime taxable event for various taxes were different. For example, for excise
    duty the taxable event was manufacture or production of goods in India.
    Similarly, for services the taxable event was when a service was provided or
    agreed to be provided. Under CST and VAT it was sale of goods. Thus, all this
    led to lot of confusion in determining taxes to be paid. To replace such multiple
    taxable events, GST has brought a single and uniform taxable event, which is,
    supply and tax will accrue to the taxing authority, which has jurisdiction over
    the place of consumption and will be the place of supply in most cases.

    2 GOODS AND SERVICES TAX | CLASS 1 | 27TH AUGUST 2017


    Origin of GST in India

    Referring to the archives of GST, the idea of national GST was mooted by
    KELKAR TASK FORCE in the year 2004. In 2000, Vajpayee Government started
    discussion on GST by setting up an empowered committee headed by ASIM
    DAS GUPTA (The then Finance Minister of West Bengal).

    After a lot of discussions and passing of bills through the houses of the
    parliament, the following bills got assent of the President on 12th April, 2017.

    Central GST legislations:-

    (a) Central Goods and Services Tax Act, 2017


    (b) Union Territory Goods and Services Tax Act, 2017
    (c) Integrated Union Territory Goods and Services Tax Act, 2017
    (d) GST (Compensation to States) Act, 2017

    All the above said legislations came into effect from 1st July, 2017.

    (a) Central Goods and Services Tax– Levied and collected by the Central
    Government.
    (b) State Goods and Services Tax – Levied and collected by State
    Government
    (c) Union Territory Goods and Services Tax – Levied and collected by Union
    Territories on intra – UT supplies of taxable goods/services
    (d) Integrated Goods and Services Tax – Inter-State supply of taxable
    goods/services will be subject to IGST.
    (e) Goods and Services Tax (Compensation to States) Act, 2017- An Act to
    provide for compensation to the States for the loss of revenue arising on
    account of implementation of the goods and services tax in pursuance of
    the provisions of the Constitution (One Hundred and First Amendment)
    Act, 2016.

    3 GOODS AND SERVICES TAX | CLASS 1 | 27TH AUGUST 2017


    A note on GST Council

    Article 274A of the Constitution of India empowers the President of India to


    constitute a joint forum of the Centre and the States namely, Goods and
    Services Tax Council (GST Council). GST Council came into force with effect
    from 12th September 2016. President Constituted the GST Council on 15th
    September, 2016. GST Council shall consist of the following members.

    1. Chairperson – Union Finance Minister (As of now Shri Arun Jaitley)


    2. Members – State Finance Ministers or any other Minister nominated by
    the State Government

    Tax credit

    GST offers comprehensive and continuous chain of tax credits from the
    Producer’s point/Service Provider’s point to retailer’s level/consumer’s level
    thereby taxing only the value added at each stage of supply chain.

    Ultimate Burden on consumers

    Since GST permits availing of input credit at each stage, hence it can be noted
    that the final burden of GST will be borne by consumer as it is charged by the
    last supplier with set off benefits at all pervious stages.

    No cascading effects of taxes

    As already discussed, the tax structure (before implementation of GST) had


    number of indirect taxes collected both by State and Central Governments.

    Due to such multiple taxes, there was cascading effect overall and double
    taxation. GST now subsumes all the past indirect taxes and will thus, facilitate
    seamless flow of credit resolving the problem of double taxation and cascading
    effect of taxes. This will check cost of goods along with making compliance
    easy and bringing stability in the government’s revenue.

    4 GOODS AND SERVICES TAX | CLASS 1 | 27TH AUGUST 2017


    Taxes to be subsumed in GST

    CENTRAL TAXES STATE TAXES

    Central Excise Duty State VAT/Sales Tax

    Additional duties of excise Central Sales Tax

    Excise duty under Medicinal and Entertainment Tax (Other than


    Toiletries Preparation Act those levied by local bodies)

    Additional duties of customs Luxury Tax

    Service tax Taxes on lottery, betting and


    gambling

    Surcharges and Cesses Surcharges and Cesses

    --------------------------------------------------------------------------------------------

    5 GOODS AND SERVICES TAX | CLASS 1 | 27TH AUGUST 2017

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