GST

(Goods and Services Tax)

Biggest tax reform since independence

Prepared by:
Manish Mishra,
Abhishek Choudhary
and Nikita Bansal

1
 Goods and Services Tax - Meaning
• Goods and Services Tax (GST) is an
indirect tax that is levied on the goods
and services all across the country. It
will only be levied only on the value
added as against tax levied on each
stage separately in pre-GST regime.

• GST is a comprehensive tax levy on

manufacture, sales and consumption of
goods and services at national level.

2
 Tax Structure In India Before GST

• Direct Tax -
Example: Income tax,Corporate tax and Wealth tax

• Indirect tax:
Example: Excise duty, Custom duty, Service tax, Octroi
tax and VAT. (Replaced by GST on 1st July, 2017)
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 Methods of Taxation

• Progressive Tax -
Increasing rate of tax for increasing value or volume.

• Regressive Tax -
Decreasing rate tax for increasing value or volume.

• Proportional Tax -
Fixed rate of tax for every level of income or production. 4
 Taxation powers of States
• VAT/Sales Tax - on purchase and sale of goods other than
newspapers,within the state
• Excise duty- on alcoholic liquor for human consumption
• Rates of Stamp Duty- other than 10 specified instruments
• Land Revenue
• Tax - on agricultural income
• Toll tax
• Taxes on:
a) Land and buildings
b) Vehicles
c) Luxuries,including taxes on entainment,betting and gambling. 5
What went wrong with the Pre-GST
Regime?

6
 A list of Shortcomings in Pre GST Regime

• Tax Cascading (Payment of taxes on tax)

• Complexity
• Taxation at manufacturing level
• Exclusion of services
• Tax Evasion
• Corruption

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 The Cascading Effect
Table 1: Cascading effect of Sales Tax
Producer / Cost of input Value of output Tax rate Selling price Tax burden
Manufacturer including tax
rate

Producer A -- 100 10% 110 10

(100 + 10% of
100)

Producer B 110 150 10% 165 15

(150 + 10% of
150)

Producer C 165 200 10% 220 20

(200 + 10% of
200)
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• Complexity in determining the nature of transaction –
Goods vs. Service Double taxation of a particular transaction
where both Goods and services are provided to the consumer will
be mitigated . For eg- in case of Restaurant , where food in form
of goods and services are provided to customers, both VAT and
Service TAX is levied. Under GST both the components will be
integrated and charged to TAX only once.

• Exemptions & Concessions -

Under the current system, businesses enjoy many kinds of
exemptions & concessions under different levies which break the
chain of VAT and thus create distortion. Also these kinds of benefits
do not create a level playing field especially when the same
commodity is taxed at different rates in different state jurisdictions. 9
• Taxation at manufacturing level -
Under the present indirect tax regime, the manufacturing
sector is able to set-off most input taxes levied in the
production value chain. ... This will result in a reduction of the
cascading effect of taxes and bring down the overall cost of
production
• Corruption -
Revenue administration is often ranked as one of the poorest
performing public sectors in terms of corruption. Tax
administration is an attractive sector for corruption to take
place as the opportunities and incentives to engage in illicit
activity are numerous 10
 An Illustration of Taxes before GST
Producer /
Manufacturer
Cost
of
Value of
output
Tax
rate
Selling
price
Tax
burden • In the previous
input including
tax rate
example,'value added' by B
Producer A - 100 10% 110 10 is only Rs.50(150-100)
- (100 +
10% of
100)
• Tax on producer B would be
Producer B 110 150 10% 165
(150 +
15 only Rs.5 (i.e,10% of Rs.50)
10% of
150)
• The tax paid in previous
Producer C 165 200 10% 220 20
(200 + system was Rs.15 (10% of
10% of
200) Rs.150)
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 Major Problems with previous Taxation
• It is not uniform in nature

• Taxes were different for

different states

• Different rates of taxation

for different goods 12
It was then the Government realized the
need for “One Nation One Tax”.

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 Roadmap to GST

Extend scope to Extend scope to

CST phase out
Inter-state Inter-State Sales

VAT Integrate services, Imports and CENVAT GST

Bring AED items Shift to

Move to single
under VAT destination based
VAT rate of 8%
VAT

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 Why Does India Need GST?
• GST is being introduced majorly for 2 reasons :

1. The current indirect tax structure is full of uncertainties

due to multiple tax rates.

2. Due to multiple rates there are multiple forms.

• GST the tax complexity in the prevailing tax regime.

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 What is GST all about?
• GST is a comprehensive value added tax on goods and
services

• It is collected on value added at each stage of sale or

purchase in the supply chain

• No differentiation between goods and services as GST is

levied at each stage in the supply chain

• Seamless input tax credit throughout the supply chain 16

 Some Facts About GST
• We all will pay GST on every product or service we buy or consume.

• GST has been implemented under Article 279 of the Indian constitution.

• The sellers or service providers collect the tax from their customers.

• There are 5 rates of taxes in GST i.e. 0%, 5%, 12%, 18% and 28%.

• Before depositing the same to the exchequer they deduct the tax they have
already paid.

• The success of GST would rest upon efficiency, equity and simplicity. 17
 GST : Authorities

• CGST - To be administered by Central Government.

• SGST - To be administered by State VAT Department.

• Inter State Transaction - to be adminstered by a common

Centralized authority.

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 Model Of GST

GST Structure

Centre GST State GST Dual GST

GST to be levied by the

GST to be levied by the GST to be levied by the
Centre and the States
Centre State
concurrently

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 Taxes Subsumed In GST
CENTRAL TAXES

1. Excise duty
2. Additional Excise duty
3. Excise duty under medicinal Act
4. Service tax
5. Additional custom duty commonly known as countervailing
duty(CVD), special additional duty (SAD)
6. Surcharge
7. CENVAT 20
 State Taxes
1. Value added tax (VAT)

2. Entertainment tax levied by states

3. Luxury tax

4. Tax on lottery, betting and gambling

5. Entry tax other than for local bodies (Octroi)

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 Products Excluded From GST

• Petroleum Products

• Alcohol

• Tobacco Products

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 Can Imports be taxed?

• Dual GST should be levied on Imports also with the

facility of credit for the tax paid.

• Exports must be zero rated i.e. there should be no Tax

element in the price of goods Exported.

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 Proposed GST Rates

Presently it is 26.5%,CENVAT 14% and State VAT 12.5%

Items Total GST Rates Centre State
(in%)

Goods 20 12 08

Services 16 08 08

Essential 12 06 06
Goods
 An Illustration of GST
• Shiva, a registered dealer had input tax credit for CGST and SGST Rs.750/- and
Rs.1,050/- respectively in respect of purchase of inputs and capital goods. He
manufactured 1800 liters of finished products. 200 liters was normal loss in the
process. The final product was sold at uniform price of Rs.10 per liter as follows:-

• Goods sold within State – 800 liter.

• Finished product sold in inter-State sale – 650 liter.

• Goods sent on stock transfer to consignment agents outside the State – 350 liter.

• Further, CGST and SGST rate on the finished product of dealer is 5% and 7%
respectively. Further IGST rate is 12%.Calculate tax liability of SGST and CGST 25
to be
paid after tax credit.
Sollution:
Particulars Sales Within State Stock Transfer Inter State Sales Total
Outside State

Qty. Sold 800 350 650

Price per unit 10 10 10

Value of Goods 8,000 3,500 6,500 18,000

Sold

Tax Amount:

Tax Amount – 400 – – 400

CGST(5%)

Tax Amount – 560 – – 560

SGST(7%)

Tax Amount – – 420 780 1,200

IGST(12%) 26
 Calculation of Tax Payable
Particulars CGST SGST IGST Total

Tax Payable 400 560 1200

Amount

Less: Input Tax

Credit

CGST 400 – 350 750

SGST – 560 490 1050

Balance Payable – – 360 360

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 Tax Exemptions
• Area based:
To be discountinued after current eligibility period.

• Product based:
To be converted into refund route.

• Limited flexibility:
For Centre and States barring a few exceptions.
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 Is Tax Evasion Possible Under GST?

• To check Tax Evasion, the Task Force has proposed an

IT- intensive 'Risk Intelligence Network' (RIN).

• This would put three set of databases together - what the

firms tells Central Board of Direct Taxes (CBDT), what it
tells Central Board of Excise and Customs (CBEC) and
what it puts forth for the public, including the
shareholders. 29
 Key Features of GST
• Dual GST, Central GST & State GST

• Uniform forms - returns, challans (in electronic mode)

• No Cascading of Central and State Taxes

• Cross credit between Centre and State not allowed

• Tax leived from production to consumption 30

 Benefits of GST
• Transparent Tax System

• Uniform Tax System Across India One Tax

• Product Identification

• Eliminating Tax or Tax effects

• Decrease in price of products

• Easy compliance

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• Reduces Tax Evasion
 GST WORLD WIDE
• In most countries of the world, a single VAT exist which
cover both Goods and Services
• All sectors are taxed with very few
exceptions/exemptions.
• Full Tax credits on inputs - 100% set off
• Canada and Brazil alone have a dual VAT
• The World Banks says, India has most complex GST
structure in the world with not only highest tax rates but
also a number of tax slabs. But, it will boost the GDP as 32
well.
 Global Perspective of GST
S.No. Country Higher Rate(%)

1. Australia 10
2. Austria 20
3. Canada 07

4. China 17

5. Denmark 25

6. Finland 22

7. France 19.6

8. Germany 16

9. Indonasia 10

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 GST Registration
• Who all are liable to enrol?
Liability for GST registration-
GST registraion requires aggregate turnover as below:
Region Aggregate Turnover

Liability To Register Liability for Payment

of TAX
North East India Rs. 9 Lakhs Rs.10 Lakhs

Rest of India Rs.19 Lakhs Rs.20 Lakhs

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 Documents and Information required
Information required for GST registration:
• Provisional identification

• Password

• Valid email address (it should not be off professional-use your own email id)

• Valid mobile number

• Bank account number

• IFSC code
35
 Document required for GST registration-
Proof of consititution of business:
• In case of partnership deed - partnership deed
• In case of others :registration certification of the business
entity
• Photograph of promoters/partners/karta of HUF
• Proof of appointment of authorised signatory
• Signature
• PAN Card

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• Certificate of Incorporation
• Photo of the Authorised Signatory Photo
• Proof of Appointment of Authorised Signatory (Any One) Letter of
Authorisation
• Copy of Resolution passed by BoD/ Managing Committee and Acceptance
letter
• Proof of Principal Place of business (Any One)
• Electricity Bill ( MAIN)
• Legal ownership document
• Municipal Khata Copy
• Property Tax Receipt
• Proof of Details of Bank Accounts (Any One)
• First page of Pass Book
• Bank Statement
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• Cancelled Cheque
 GST - Registration Process
• Steps are as follows -
1. Access the GST Portal ->https://www.gst.gov.in/
2. Click on Services -> Registration > New Registration
option.
3. Generate a TRN by Completing OTP Validation
4. OTP Verification & TRN Generation
5. TRN Generated (Temporary Reference Number)
6. Login with TRN
7. Submit Business Information
8. Submit Promoter Information 38
• Submit Authorised Signatory Information

• Principal Place of Business

• Additional Place of Business

• Details of Goods and Services

• Details of Bank Account

• Verification of Application

• ARN Generated (Application Reference Number (ARN))

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• Business Information -
1. Name of the Business
2. Constitution of the Busines
3. Address
4. Commissionerate Code, Division Code and Range
Code
5. If you would like to opt for the Composition Scheme
6. Input the date of commencement of business
7. Select the Date on which liability to register arises.

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• Promoter Information -
1. Personal details of the stakeholder like name, date of birth, address, mobile
number, email address and gender.
2. Designation of promoter.
3. DIN of the Promoter, only for the following types of applicants:
4. Private Limited Company
5. Public Limited Company
6. Public Sector Undertaking
7. Unlimited Company
8. Foreign Company registered in India
9. Details of citizenship
10. PAN & Aadhar
11. Residential address.
12. Photo of promoter.
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• Principal place of Business-

1. Address place of business.

2. Contact details like Email address, telephone number (with STD
Code), mobile number field and fax number (with STD Code).
3. Select the nature of possession of the premises.
4. For Own premises – Any document in support of the ownership of
the premises like copy of Electricity Bill.
5. For Rented or Leased premises – A copy of the valid Rent / Lease
Agreement with any document in support of the ownership or copy
of Electricity Bill.
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• Details of Goods and Services -

1. Details of top 5 goods and services supplied by

the applicant.

2. For goods supplied, provide the HSN codes

(Harmonized System Nomenclature) and for
services, provide SAC codes (Services Accounting
Codes).
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 Dates of GST Returns
Types of GST Returns Dates
GSTR-3B (May 2018) Jun 20th, 2018
GSTR-5 (May 2018) Jun 20th, 2018
GSTR-6 (Jul'17 - Jun'18) Jul 31st, 2018
GSTR-4 (Apr-Jun, 2018) Jul 18th, 2018
GSTR-5A (May 2018) Jun 20th, 2018
GST TRAN-2 Jun 30th, 2018
Eighteen months after end of the quarter for which refund is to be
RFD-10 claimed.
Quarterly return for registered persons with aggregate turnover up
to Rs. 1.50 Crores
GSTR-1 (Apr-Jun, 2018) Jul 31st, 2018
Turnover exceeding Rs. 1.5 Crores or opted to file monthly Return
GSTR-1 (May 2018) Jun 10th, 2018
GSTR-1 (Apr 2018) May 31st, 2018 44
 About HostBooks
• Introduction :
HostBooks Limited believe that a
contented client is the best benison a
company can ever have. This is
exactly what we strive for -“Customer
Satisfaction and Convenience”.
HostBooks helps its clients by building
accounting applications and software • Website : https://hostbooks.com
that cater to their needs and serve • Headquarters : Mountain View, CA
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crafted with the latest technology and • Company Type : Privately Held
promise an incredible and hassle-free
• Founder: Mr. Kapil Rana &
user experience.
Mr.Amit Mukherji
45
Mission
• To provide speedy, reliable and affordable solutions for
development, consulting & outsourcing. Enhance accounting
support standards. Operate in a transparent fashion. Positively
affect millions of lives through high-quality IT enabled services.

Vision
• We envision a world of hassle-free technology and seamless user
experience. We are constantly working towards achieving our
dream. We toil to transform technology and communication, and
our solutions are shaped to harness maximum potential of
business ventures and enterprises.
46
Competencies of HostBooks

47
 HostBooks Accreditation

• NASSCOM (Certified Member (NASSCOM))

• NSDL (NSDL Approved Service Provide)

• Amazon Web Services (AWS Cloud Consulting Partner)

48
 Nasscom
• NASSCOM, a not-for-profit industry
association, is the apex body for the 154
billion dollar Indian IT BPM industry.

• Prime Minister Shri Narendra Modi,

referred to NASSCOM as a “revolution”,
beyond its time-tested role as an
association. • Chairperson: Rishad Premji
• Headquarters: Noida
• Established in 1988, NASSCOM has
• Founded: 1 March 1988
relentlessly catalysed the Indian IT BPM
industry in its journey towards building an • Membership: 2300+
innovation led growth sector, with • Vice Chairman: Keshav R.
transformative business models,
expanding its value proposition and
Murugesh
becoming a partner of choice for global • Founders: Dewang Mehta, Nandan
businesses. 49
Nilekani
 National Securities Depository Limited (NSDL)
• NSDL stands for National Securities
Depository Limited. It is India’s oldest
and largest depository. The term
“depository” refers to the organization
meant for holding and safeguarding the
securities that are traded in the
securities market.

• Founded : 8 August 1996

• It contains the securities in electronic
form as opposed to the previous
method of recording paper transactions
of shares, bonds, and other financial
instruments.
• Headquarters : Mumbai, India [1]
• Key people : G.V. Nageswara Rao,
Managing Director & CEO [2]
• Website : www.nsdl.co.in
50
 Amazon Web Services

• Amazon Web Services is a

subsidiary of Amazon.com
that provides on-demand • CEO: Andy Jassy (Apr 2016–)
cloud computing platforms • Headquarters: Seattle, Washington,
to individuals, companies United States
and governments, on a • Founder: Amazon.com
• Founded: 2006
paid subscription basis.
• Subsidiaries: Annapurna Labs,
AWS Elemental, Sqrrl, MORE
• Parent organization: Amazon.com
51
 Different type of Software developed by
HostBooks

SOFTWARE

E-way
GST TDS Accounts Tax Payroll
Bill

Electronic Way Bill has been

Tax Deducted at Source (TDS) Payroll is an important tool that
rolled out by the Government on
is a mechanism that has been manages the details like the
February 1, 2018, to facilitate
introduced by the Income Tax total amount of money that is
smooth flow of goods within a 52
Department paid to the employees
state and between the states.
 HostBooks GST Software
• HostBooks GST software provides you with a seamless
GST return filing and billing experience. We aim at
reducing the compliance time by at least 50% which will
consequently cut down the cost by half.

• Being cloud-based and an NSDL approved GST

Application Service Provider (ASP), HostBooks GST will
always be by your side and help you achieve all your
GST endeavors.
53
 Application Service Provider (ASP)
• An application service provider (ASP) is a business providing
computer-based services to customers over a network; such as
access to a particular software application.

• The need for ASPs has evolved from the increasing costs of
specialized software that have far exceeded the price range of
small to medium-sized businesses.

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Simplified Invoicing with HostBooks GST Billing
Software
Generate invoices as per the statutory guidelines with
HostBooks GST billing. We help you focus on your core
business activities by taking care of GST tax calculation,
preparation of comprehensive business reports and
inventory control. Also, HostBooks GST billing software
enables you to print or email invoices as per your
requirements.

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 Effortless Filing with HostBooks GST Return
Filing Software
HostBooks GST facilitates ease of doing business with the
effortless online filing of GST returns. Furthermore, we
strive to simplify the process with easy reconciliation of
invoice mismatches, automatic data validation, inbuilt
HSN(Harmonized System Nomenclature) /SAC (Services
Accounting) codes & tax liability updates. We believe in
adding value to the business by enhancing the credibility of
the client by leaps and bounds.

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 Some Added Benefits to HostBooks GST
Software
• Builds up your clientele with hassle-free GST cloud
solution.
• An easy to use GST accounting software with a rich user-
interface.
• An option to add multiple users in accordance with the
business needs.
• A pool of accountants always at your service with online
remote support.
• Keeps you posted on all the latest happenings taking
place in the GST regime. 57
 NSDL approved GST ASP provider

HostBooks GST is an NDSL approved GST ASP provider. This

accreditation makes HostBooks GST one of the finest GST filing and
billing software in the country. Hence, the authenticity speaks for itself.
Crafted with the latest technology

It doesn’t matter where you are. HostBooks GST, in association with

Amazon Web Services (AWS), has been crafted with the latest cloud
technology. It enables you to easily access your account irrespective of
your location.
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 Minimal manual efforts

HostBooks GST software not only saves your valuable time but also
increases your efficiency by automating almost 80% of the work.
Therefore, it keeps the manual efforts to the minimum and guarantees
accuracy.

The offline mode is always convenient

Is slow internet or no internet access hampering the process of GST

return filing and billing? No worries. HostBooks GST will help you out
with its offline utility that helps you prepare invoices and file returns
without even an internet connection. 59
 Phenomenal user experience

Our GST filing and billing software has been designed with a rich user-
interface that provides the users with an incredible GST return filing &
billing experience. Also, with the 24*6 availability of experts and online
remote support, everything will be taken care of.

Spontaneous import and export of data

With HostBooks GST, you can import or export the files from your
system instantly irrespective of its size. Hence, it simplifies the process
of working on Goods and Services Tax. 60
 Stay updated with respect to your tax liability

HostBooks GST will always keep you posted on your current tax
liability. In addition, it will keep you up-to-date regarding all the latest
happenings in the GST regime. We also have an expert forum for your
convenience.

Easy Reconciliation of invoice mismatches

A mismatch in the invoices can be really troublesome. And, correction

of these mismatches may sometimes cost you a fortune. HostBooks
GST takes care of all the mismatches in a cost-effective manner and
61
makes your job way easier.
 Bank Grade Security

We all prefer that the software we go for should be safe in all respects.
This is what HostBooks GST provides you with TLS 1.2 Transport
Security with AES 256 bit encryption (Https at SSL Level) that keeps
your data safe, secure, and intact just like a bank’s website.

Inbuilt HSN and SAC codes

The Harmonized System of Nomenclature (HSN) code and Service

Accounting Code (SAC) have been inbuilt in HostBooks GST. It ensures
a smooth flow of services as at the time of filing GST returns, you can 62
easily apply these codes.
 Automatic error detection

Our GST filing software is capable of automatic detection of errors like

wrong PAN or TAN details. In case you enter wrong details, the same will
be highlighted right away. So, with automatic data validation feature, you
are already half-way through in your job.

Mobile Application

These days when mobile phones have become a basic necessity of our
lives, a mobile application is what we always look forward to. Therefore,
we bring you HB-GST mobile application. Now, you will be able to access
63
all the important features of HB-GST on your mobile phones too.
 Challenges
• Lack of Clarity on GST Provisions (Rules and Regulation)

• What is needed is an IT system like the Tax Information Network (TIN), where
the TDS or the VAT credit is recorded in a Central database.

• Issues for E-commerce Companies :

E-commerce giants like Flipkart, Amazon also have not escaped the after effects
of GST rollout.

• An Information Network allowing GST council to cross-check payment

information should be developed.

64
 Conclusion

• GST will mainly remove the Cascading effect on the sale

of Goods and Services. Removal of Cascading effect will
directly impact the cost of goods. The cost of goods
should decrease since tax on tax is eliminated in the GST
regime.

• This will speed up the processes and benefical for future.

65
THANK YOU

66