Table of Content;

1. Introduction of GST in India
2. Concept of GST:
3. Need for GST in India:
4. Framework of GST
5. Dual GST Model
6. CGST/SGST/UTGST/IGST
7. Legislative Framework
8. .Classification of goods and services
9. Composition Scheme
10. Registration
11. BENEFITS OF GST:
12. CONSTITUTIONAL PROVISIONS:
13. Conclusion of GST in India –  CA Intermediate taxtion:

Introduction of GST in India

The Goods and Services Tax (GST) regime in India represents a landmark in the country's tax landscape. With its inception on July 1, 2017, GST replaced a plethora of indirect taxes and aimed to create a unified taxation system across the nation. In this extensive blog, we will delve deep into the genesis, framework, administration, and implications of GST in India.

1. Concept of GST:

2. Need for GST in India:

As per CA intermediaGoods and Service Tax Here are the Five reasons:

3. Framework of GST

1. Dual GST Model

India has adopted a Dual GST model in view of the federal structure of the country. Consequently, the 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 & States are also empowered to tax services. GST extends to whole of India including the Union Territory of Jammu and Kashmir.

2. CGST/SGST/UTGST/IGST

India has adopted a Dual GST model in view of the federal structure of the country. Consequently, the 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 & States are also empowered to tax services. GST extends to whole of India including the Union Territory of Jammu and Kashmir.

3.Legislative Framework

There is single legislation – CGST Act, 2017 - for levying CGST. Similarly, Union Territories without Legislatures [i.e. Andaman and Nicobar Islands, Lakshadweep, Ladakh, Dadra and Nagar Haveli & Daman and Diu and Chandigarh] are governed by UTGST Act, 2017 for levying UTGST. States and Union territories with their own legislatures [i.e. Delhi, Jammu and Kashmir and Puducherry] have their own GST legislation for levying SGST.

4.Classification of goods and services

HSN (Harmonised System of Nomenclature) is used for classifying the goods under the GST. Chapters referred to in the Rate Schedules for goods are the Chapters of the First Schedule to the Customs Tariff Act, 1975. A new Scheme of Classification of Services has been devised wherein the services of various descriptions have been classified under various sections, headings and groups. Each group consists of various Service Codes (Tariff). SAC (Services Accounting Code) is used for classifying the services under the GST like HSN for goods.

5.Composition Scheme

In GST regime, tax (i.e. CGST and SGST/UTGST for intra-State supplies and IGST for inter-State supplies) is payable by every taxable person and in this regard provisions have been prescribed in the law. However, for providing relief to small businesses, manufacturers, service providers, suppliers of food articles, traders, etc., making intra-State supplies, a simpler method of paying taxes is prescribed, known as composition levy.

6.Registration

Every supplier of goods and/ or services is required to obtain registration in the State/UT from where he makes the taxable supply if his aggregate turnover exceeds the threshold limit during a FY. Different threshold limits have been prescribed for various States and Union Territories depending upon the fact whether © The Institute of Chartered Accountants of India 1.14 GOODS AND SERVICES TAX the supplier is engaged exclusively in supply of goods, or exclusively in supply of services or in supply of both goods and services. The threshold limit of aggregate turnover prescribed for various States/UTs are as follows:

6. BENEFITS OF GST:

1. Creation of unified national market: GST aims to make India a common market with common tax rates and procedures and remove the economic barriers, thereby paving the way for an integrated economy at the national level.
2. Boost to ‘Make in India' initiative: GST has given a major boost to the ‘Make in India' initiative of the Government of India by making goods and services produced in India competitive in the national as well as international market. Further, all imported goods are being charged integrated tax (IGST) which is more or less equivalent to CGST + SGST. This brings parity in taxation on local and imported goods or services.
3. Boost to investments and employment: The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input tax on goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. Resultantly, the competitiveness of Indian goods and services in the international market may increase to give boost to investments and Indian exports. With a boost in exports and manufacturing activity, more employment would be generated and GDP would increase.
4. Ease of doing business: Simpler tax regime with fewer exemptions along with reduction in multiplicity of taxes under GST has led to simplification and uniformity in tax structure. The uniformity in laws, procedures and tax rates across the country makes doing business easier. Common definitions, common forms/ formats, common interface through GST portal result in efficiencies and synergies across the board.
5. Certainty in tax administration: Common procedures for registration of taxpayers, refund of taxes, uniform formats of tax return, common tax base, common system of classification of goods or services along with timelines for every activity ensures certainty in tax administration across India.

7. CONSTITUTIONAL PROVISIONS:

Article 265: Article 265 of the Constitution of India prohibits arbitrary collection of tax. It states that “no tax shall be levied or collected except by authority of law”. The term “authority of law” means that tax proposed to be levied must be within the legislative competence of the Legislature imposing the tax.

 1. Article 265:

Article 265 of the Constitution of India prohibits arbitrary collection of tax. It states that “no tax shall be levied or collected except by authority of law”. The term “authority of law” means that tax proposed to be levied must be within the legislative competence of the Legislature imposing the tax.

2. Article 245

Part XI of the Constitution deals with relationship between the Union and States. The power for enacting the laws is conferred on the Parliament and on the Legislature of a State by Article 245 of the Constitution. The said Article provides as under: (1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the legislature of a State may make laws for the whole or any part of the State. (2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation.

3. Seventh Schedule to Article 246

It contains three lists which enumerate the matters under which the Union and the State Governments have the authority to make laws.

Entries 82 to 91 of List I enumerate the subjects where the Central Government has power to levy taxes. Entries 45 to 63 of List II enumerate the subjects where the State Governments have the power to levy taxes. Parliament has a further power to make any law for any part of India not comprised in a State even if such matter is included in the State List.

Conclusion of GST in India –  CA Intermediate taxtion:

In conclusion, GST represents a paradigm shift in India's tax system, aiming to create a transparent, efficient, and unified taxation framework. By understanding the genesis, framework, administration, and implications of GST, stakeholders can navigate the complexities of the tax system more effectively, contributing to the nation's economic growth and development. As India marches forward on its GST journey, collaboration between the government, taxpayers, and other stakeholders will be key to realizing the full potential of this transformative tax reform.