1. Goods & Services Tax
(GST)
Presenters-
Abhilash Shah 001
Anup Palarapwar 008
Gaurav Korgaonkar 017
Aditya Kondejkar 101
Gautam Bandigare 111
Group 4

2. “ What is GST?
GST is one indirect tax for whole
nation, which will make India one
unified common market.

3. Why do we want GST?
▸GST will greatly increase the revenues available at the
states’ and Centre's disposal by expanding the tax
base
▸GST will facilitate ‘Make in India’ by converting the
geographical landscape of the country into a single
market.
▸GST would improve tax governance in two ways
a) It is a self-collecting and self-enforcing tax.
b) It is difficult to evade tax
3

4. Objectives of GST
▸ One Country – One Tax
▸ Consumption based tax
instead of Manufacturing
▸ Uniform registration,
payment and Input Credit
▸ To eliminate the cascading
effect of Indirect taxes on
single transaction
4
▸ Subsume all indirect
taxes at Centre and State
Level under
▸ Reduce tax evasion and
corruption
▸ Increase Compliance
▸ Reducing economic
distortions

5. Tax being subsumed into GST
5
Center Level
• Central Excise Duty
• Additional Excise Duty
• Service Tax
• Additional Excise Duty
• Special Additional Duty of
Customs
State Level
• State VAT/Sales Tax
• Entertainment Tax
• Octroi & Entry Tax
• Purchase Tax
• Luxury Tax
• Tax on Lottery & Gambling

6. GST Timeline
6
2000 – GST
discussions begin –
Mr. Asim Dasgupta
Feb 2006 – GST
Announcement
Nov 2009 - GST
discussion paper is
published
Feb 2010 - Project
launched to
computerize
commercial taxes
Mar 2011 -
Congress introduces
the GST bill in Lok
Sabha
Nov 2012 – FM set
deadline to resolve
problems related to
the transition to GST
Aug 2013 - Standing
committee suggests
amendments to the
bill
Dec 2014 - The GST
bill was reintroduced
to the Lok Sabha
May 2015 - Lok
Sabha passes the
GST bill

7. GST Timeline
7
Aug 2015 - The GST
bill is introduced in
Rajya Sabha
Aug 2016 - The GST
Bill is passed in
Rajya Sabha
Sept 2016 - 16
States ratify the GST
bill
Sept 2016 - The
GST bill gets the
presidential assent
Sept 2016 - First
meeting of GST
Council held
Oct 2016 - Madhya
Pradesh to serve as
the country's supply
hub
Nov 2016 - Four Tier
GST Tax Structure
Finalized
Nov 2016 - GST
portal has become
live
Jan 2017 – Eights
Meeting of GST
Council Held

8. GST Structure in India
8
SGST CGST IGST
DualGST
Structure
1) State – State Goods & Service Tax (SGST)
2) Central –
a) Center Goods & Service Tax (CGST)
b) Integrated Goods and Service Tax (IGST) 5% 12%
18% 28%
GST Rate in India

9. GST Structure in India
9

10. Worldwide GST
10
Country Rate of GST
France (First Country – 1954) 19.6%
Canada (Dual GST System) 5%
Brazil (Dual GST System) 17%
Australia 10%
Germany 19%
Japan 5%
Singapore 7%
New Zealand 15%

11. How GST Works Within State
11

12. How GST Works in Inter-State Transfer
12

13. States Concern over GST
▸ Worry of manufacturing states -Tamil Nadu, Maharashtra and
Gujarat
▸ Destination-based tax (Benefit to state with more consumption)
▸ Losses of revenues on movement of goods made to states
▸ Compensation for losses suffered in the first five years
whereas states want it for 10 years
▸ First three years 100 %, forth year 75 % , fifth year 50 %
▸ Additional tax of up 1 % on inter-state trade of goods for two
years or longer period
13

14. Overall Impact of GST
14
GST will lower
effective taxes
Organized sector
to gain
Logistics costs to
fall
Heralding
transparency,
reducing
cascading effects
Services will
become more
expensive

15. Sectoral Impact - Automobiles
▸ Small Cars (Sub 4 Meter Segment) - No Positive Impact on Car Prices with
28% GST Cess. Infact, Small Cars would likely be expensive by 1% to 2%
▸ Mid Sedan, Mid SUV Range (> 4 Meter, But Engine < 1.5 Litre) - Prices would
likely Increase by 2% to 3% as is expected that GST + Additional Luxury Cess will
make up for 40% Tax
▸ Luxury High End Cars (Engine > 1.5 Litre) - Prices would go up as GST+ Addl.
Cess will be imposed o these items
▸ In all - There would not be any benefit post GST - to the passenger car Sector.
It was earlier anticipated for 20% Cess - but with 28% GST on Cars - it will likely
be detrimental for Automobile sector - which was eagerly awaiting for GST and
buyers who deferred purchase call for 2017
15

16. Sectoral Impact - Automobiles
16

17. Sectoral Impact – Media & Entertainment and Cement
17
Media&Entertainment
In the media & entertainment
sector, current blended indirect
tax is in the range of 27-40%.
GST implementation will bring
down effective indirect tax
although the exact rate of GST
on Media and entertainment is
not yet finalized
Cement
Cement industry currently suffers
from high taxation structure along
with multiple taxes
It is expected that cement industry
may be kept at a standard rate of
18%
A lower rate along with the
elimination of cess and increase in
credits should have an overall
positive impact on the industry

18. Sectoral Impact – Retailing and Restaurants & QSRs
18
Retailing
Currently Service Tax as well
as VAT are imposed without
any set-off
Introduction of GST will:
a) Reduction of Indirect costs
b) Will bring unorganized and
organized players on the
same page thus reducing the
price gap
Restaurants&QSRs
GST rate will be higher than
current service tax rate and
hence prices will go up
With 18% GST, the impact will
be negative
Also as aerated drinks are kept
under luxury goods category the
GST for the same is 28% plus
addl. Cess which will further
increase the negative impact.

19. Sectoral Impact - Renewable Energy & Steel
19
RenewableEnergy
Implementation of GST,
assuming 18% rate, will
increase solar power project cost
by 13-15%
However, given strong
government thrust to promote
renewable energy, the GST
Council could exclude / provide
a concessional rate renewable
energy from the regime.
Steel
The overall tax incidence on the
sector to potentially remain same
Currently, indirect taxes in the
sector are close to 15-18%
depending upon whether the sales
are within or outside the state
If the GST is levied at 18% the
effective tax rate will remain at
similar levels and there will be no
visible impact on the steel sector

20. Sectoral Impact - Oil & Gas and Hotels
20
Oil&Gas
Crude, natural gas, ATF,
diesel and petrol are
excluded from the coverage
of GST for the initial years
Remaining petroleum
products (for eg kerosene,
naphtha, LPG, etc) are
covered within the coverage
of GST. But impact will be
known once the rate for
these products is finalized
Hotels
Hotel rooms currently attract
Service tax and Luxury tax
Currently Service tax stands at
8.7% and luxury tax varies
between 5-12.5%
Thus the impact of GST on
hotels will be negative or
positive depending on the rate
as well as the state in which
the property is located

21. Sectoral Impact – Real Estate
▸ If the current service tax + VAT outgo is higher than the effective GST rate, it
will provide some relief to the consumer
▸ Leasing of residential properties does not attract service tax and so will have
no impact of the implementation of GST
▸ Leasing of commercial properties attracts service tax and will be impacted by
GST. Again, the impact will depend on the effective rate of GST
▸ From the developer’s point of view, implementation of GST will results in lower
construction costs. However, it needs to be seen if these benefits shall be
passed on to the customers
21

22. Sectoral Impact – Coal
▸ End-users of coal are expected to witness an increase in fuel costs with
implementation of GST
▸ Excise duty on coal is levied at 6%, whereas VAT is levied at 5%. Assuming a
GST rate of 18%, delivered cost of coal is likely to increase by 5-6% per tonne of
coal
▸ The increase in fuel costs are not expected to have any impact on the
profitability of power generation companies
▸ The impact of the increase in power purchase costs on retail tariffs will vary
on a state-to-state basis, depending upon existing tariff structure and subsidy
levels
22

23. Expert Opinion - Vijay Kelkar, Satya Poddar & V. Bhaskar
Former finance secretary and tax expert Vijay Kelkar had termed the
four-tier structure as “disappointing”. According to him it “robs the GST
of its efficiency enhancing potential”
"One rate is a crucial part of the structure. It would enable the levy of a
single low rate on a very broad and comprehensive base, eliminating
litigation and rent-seeking on classification disputes, promoting
voluntary compliance and ensuring simple and effective
implementation,"
23

24. Expert Opinion - Abhishek Jain & Mr. Deshpande
"This was a specific task of the oil & gas industry as this would have
enabled availability of inputs GST credits in relation to these products.”
"In the earlier GST Council meetings there were some indication that
services which have abatement today may fall under the 12 percent
bracket; however no further clarity emerged on that post the GST Council
meeting on Thursday,”
"Uncertainty rates for gold is not warranted as gold is a key determinant
of the rate structure," Deshpande of Deloitte says
24

25. Positive Impact of GST on GDP
25
▸ According to research by NCAER, GST could increase the GDP by 0.9 to 1.7
percent.
▸ Exports which grew at 13 per cent CAGR during 2010 and 2013 is expected to
increase at around 6-8 per cent due to implementation of GST thereby further adding
to GDP.
▸ In long run, GST will be positive for the economy over the longer term as it
simplifies the tax structure, increasing compliance, reduces tax evasion, expands tax
base and significantly improves the functioning of the logistics network.
▸ Currently, companies sourcing capital goods for capacity expansion cannot claim
tax credit on capital goods purchased; this will change with the GST regime. Because
of GST, capital goods prices would become effectively 12-14 per cent cheaper as
companies avail tax credit. This is likely to increase investments and could lead to
incremental GDP of 0.5 per cent.

26. Negative Impact of GST on GDP
26
▸ As the proposed GST rate is 18% which is higher than current service tax rate i.e.
15% (including cess), so the services will become costlier and it will lead to inflation
for a short period.
▸ GST will impact the Real Estate business negatively as it will add up the additional
8 to 10 percent to the cost and reduce the demand about 12 percent.
▸ According to the government's estimates, excise tax exemptions result in
foregone revenues of Rs. 1.8 lakh crore. The comparable figure for the states is
about Rs. 1.5 lakh crore. Together, India loses about 2.7 per cent of GDP because of
exemptions.

27. 27
THANKS!
Any questions?