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An Introduction To GST: Himanshu Kushwaha Assistant Professor, Malda College, Malda, West Bengal

This document provides an introduction to the Goods and Services Tax (GST) implemented in India. It defines taxes and explains the difference between direct and indirect taxes. GST is described as a comprehensive, multi-stage, destination-based consumption tax levied on the supply of goods and services. India adopted a dual GST model with both central and state governments concurrently levying GST. There are different types of GST including CGST, SGST, UTGST, and IGST depending on intra-state or inter-state transactions. The document outlines the benefits of GST for businesses, governments, and consumers through easier compliance, uniformity, and an overall reduction in taxes.

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89 views18 pages

An Introduction To GST: Himanshu Kushwaha Assistant Professor, Malda College, Malda, West Bengal

This document provides an introduction to the Goods and Services Tax (GST) implemented in India. It defines taxes and explains the difference between direct and indirect taxes. GST is described as a comprehensive, multi-stage, destination-based consumption tax levied on the supply of goods and services. India adopted a dual GST model with both central and state governments concurrently levying GST. There are different types of GST including CGST, SGST, UTGST, and IGST depending on intra-state or inter-state transactions. The document outlines the benefits of GST for businesses, governments, and consumers through easier compliance, uniformity, and an overall reduction in taxes.

Uploaded by

neha pandey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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An Introduction to GST

Himanshu Kushwaha
Assistant Professor, Malda College,
Malda, West Bengal
What is a Tax?
A tax may be defined as a "financial burden laid upon individuals to
support the Government, a payment enforced by legislative authority. A
tax "is not a voluntary payment or donation, but an enforced contribution,
made by the individuals to the government".

in simple words, tax is nothing but money that people have to pay to the
Government, which is used to provide public services.
Direct Taxes and Indirect Taxes
Direct Taxes: A direct tax is a kind of charge, which is imposed directly on the
taxpayer and paid directly to the Government by the persons on whom it is
imposed A direct tax is one that cannot be shifted by the taxpayer to someone
else. A significant direct tax imposed in India is income tax.

Indirect Taxes: If the taxpayer is just a channel and at every stage the tax-
incidence is passed on till it finally reaches the consumer who really bears the
burden of it, such tax is indirect tax. An indirect tax is one that can be shifted by
the taxpayer to someone else.
Features of Indirect Taxes
● An important source of revenue
● Tax on commodities and services
● Shifting of burden
● No perception of direct pinch
● Inflationary
● Wider tax base
● Promotes social welfare
● Regressive in nature
Concept of GST
GST is a comprehensive, multistage, destination based consumption tax
levied at every stage of value addition in the life cycle of a product.

● Comprehensive: GST has replaced almost all indirect taxes. Plus by


bringing in a unified taxation system, across the country. it has ensured
that it there is no more arbitrariness in tax rates.

● Multistage: GST is levied at each stage in the supply chain, where a


transaction takes place.
Concept of GST Contd…
● Value addition: Process of adding the value of a product/service at
each stage of its production, exclusive of initial cost. Under GST the
tax is added only on the value added.

● Destination based consumption: Collected at the point of


consumption unlike earlier indirect taxes. The taxing authority with
appropriate jurisdiction in the place where the goods/services are
finally consumed will collect the tax.
Framework of GST as Introduced in India
Dual GST: India has adopted a Dual GST model in view of the Federal
structure of the country consequently. Centre and States simultaneously
levy GST on taxable supply of goods or services or both, which takes
place within a State or Union Territory. Thus tax is imposed concurrently
by the centre and States i.e. Centre and States simultaneously tax goods
and services. Now the centre also has the power to tax intra-State sales
and States are also empowered to tax Services. GST extends to whole
of India including the state of Jammu and Kashmir.
CGST/SGST/UTGST/IGST
GST is a destination based tax applicable on all transactions involving supply of goods and
services for a consideration subject to exceptions thereof.

▪ Central Goods and Services Tax (CGST) - levied and collected by Central
Government.
▪ State Goods and Services Tax (SGST) - levied and collected by State Government.
▪ Union Territory Goods and Services Tax (UTGST) - levied and collected by Union
Territories without Legislature.
The above taxes (CGST/SGST/UTGST) are applicable in case of intra-State supplies
of taxable goods and/or services.
▪ Integrated Goods and Services Tax (IGST) – IGST is the sum total of CGST and
SGST/UTGST and is levied by centre on all inter-State supplies.
Registration
Benefits of GST
For Business and Industry
▪ Easy compliance
▪ Uniformity of tax rates and structures
▪ Removal of cascading
▪ Improved competitiveness
▪ Gain to manufacturers and exporters
For Central and State Governments
▪ Simple and easy to administer
▪ Better controls on leakage
▪ Higher revenue efficiency
Benefits of GST Contd…
For the Consumer
▪ Simple and transparent tax proportionate to the value of gooda and
services
▪ Relief in overall tax burden

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