1. PRESENTED BY:
RITIK KIRTI

2. WHAT IS GST?
• The GST is an indirect tax that brings most of the taxes
imposed on most goods and services, on manufacture, sale
and consumption of goods and services, under a single
domain at the national level.
• GST will be levied only at the final destination of
consumption based on VAT principle and not at various points
(from manufacturing to retail outlets).

3. TAXES TO BE COVERED IN GST
CENTRAL GST STATE GST
• Value Added Tax/Sales Tax.
• Entertainment Tax (other than the tax
levied by the local bodies).
• Central Sales Tax.
• Octroi and Entry Tax.
• Purchase Tax.
• Luxury Tax
• Taxes on lottery, betting and gambling
• State cess and surcharges in so far as they
relate to supply of goods and services.
• Central excise duty.
• Services tax.
• Additional excise duty.
• Excise Duty levied under the Medicinal
and Toilet Preparations (Excise Duties) Act,
1955.
• Additional Duty and Special Additional
Duty of Customs.
• Central cess and surcharges in so far as
they relate to supply of goods and
services.
*Notes:
Alcoholic beverages for human consumption are proposed to be kept out of the purview of GST.
GST on petroleum products would be levied from a notified date recommended by the GST council

4. DUAL GST MODEL
• SGST – State GST, collected by the State Govt.
• CGST – Central GST, collected by the Central Govt.
• IGST – Integrated GST, collected by the Central Govt.
TRANSACTION NEW SYSTEM OLD SYSTEM COMMENTS
Sale within the state SGST & CGST VAT & EXCISE/ST Under the new
system, a transaction
sale within the state,
shall have two taxes.
Sale outside the state IGST CST & EXCISE/ST Under the new
system , a transaction
sale from one state to
another will have only
one type of tax.
*CGST, SGST & IGST would be levied at rates to be mutually agreed upon by the Centre and the
States under the ward of the Goods & Services Tax Council.

5. PAYMENT MECHANISM OF GST
• The taxpayer would need to submit periodical returns, in
common format as far as possible, to both the Central GST
authority and to the concerned State GST authorities.
• Each taxpayer would be allotted a PAN-linked taxpayer
identification number with a total of 14/15 digits. This would
bring the GST PAN-linked system in line with the prevailing
PAN-based system for Income tax, facilitating data exchange
and taxpayer compliance.

6. NEED FOR GST TO ECONOMY
• It would improve manufacturing and distribution efficiency by removing cascading
effect of taxation.
• Cascading effect of taxes: It is also, logically, referred to as “taxes on taxes”. It is
simple to illustrate – say A sells goods to B after charging sales tax, and then B re-
sells those goods to C after charging sales tax. While B was computing his sales tax
liability, he also included the sales tax paid on previous purchase, which is how it
becomes a tax on tax.

7. Pros & Cons
Pros
• An end of Cascading Effect
• Growth of Revenue in States and
Union
• One Point Single Tax
• Reduces the corruption
• Reduce after Tax burden
• Reduces transaction costs and
unnecessary items.
Cons
• A domination Centre
• Not a Good choice for some states
• Dual GST
• Requires Strong Information &
Technology.

9. GST IMPACT ON CONSUMER
• Goods likely to get cheaper
For manufactured consumer goods, the current tax regime means
the consumer pays approximately 25-26% more than the cost of
production due to excise duty (peak of about 12.5%) and value
added tax. While there hasn’t been any indication of a GST rate,
experts suggest between 18% and 22%. Given this, basic goods are
likely to become marginally cheaper.
• Processed food will continue to be taxed, but the applicable GST is
likely to be lower than the current combined tax on such products.
Hence, expect these to become slightly cheaper.
• Heavy vehicles such as SUVs and large cars that have an excise
duty of 27-30% will see a marked drop in prices if GST is
implemented in the expected range of 18-22%.

10. GST IMPACT ON CONSUMER
• Goods likely to get costlier
• small cars, which have an excise duty of only 8%, the impact of GST
will most likely be opposite—these can get more expensive.
• Petroleum has been proposed to keep this out of the GST umbrella
for at least the first two years, which means petroleum prices aren’t
likely to change with the advent of GST and the variance in prices
across states could also continue.

11. Services
• Services that could get costlier
• Service tax rate at present is 14% and it applies to almost all services
other than essential ones such as ambulance services, cultural activities,
certain pilgrimages, sporting events, among others.
• If GST is implemented, this rate will increase (given the expectation that
GST will be 18-22%) making services more expensive.
• Investment management and insurance premiums(financial services),
which attract a service tax currently, will also become costlier with the
higher rate of GST.

12. GST AND MANUFACTURING
• Reduced Cost of Production -The new GST regime will be greatly beneficial as a
reduction in tax cascading may lead to a lower cost of production.
One of the major defects of the current indirect tax regime – the non-availability
of tax credit of central/union taxes over state taxes and vice versa – could be
eliminated by allowing unrestrictive tax credit under GST.
• Hassle-free Supply Of Goods -State-border checkpoints, which are tasked with
material scrutiny and location-based tax compliance, negatively impact the
overall production and logistics time. The new GST regime will unify the Indian
market and assist the smooth flow of goods within the country.
• Area-based Exemptions- As GST would lead to the entire country being
considered a common and unified market, the current area-based exemptions
would become irrelevant.

13. GST AND RETAILER & WHOLESALER
• Procurement of goods, movement of goods would become less
cumbersome.
• Less state boundary paperwork.
• Reduction in transit inventory.
• Reduction in working capital requirement.
• Increase in cost of rentals.

14. GST AND START-UP
• Ease of starting business: Any new business needs to have
a VAT registration from sales tax department. GST will bring
about a uniformity in process and centralized registration
that will make starting business and expanding in different
States much simpler.
• Higher exemptions to new businesses: As per the current
structure, any business with a turnover of more than Rs five
lakh has to get VAT registration and pay VAT.
GST will make this limit higher, to up to Rs 10 lakh and,
further to it, businesses with turnover between Rs 10 and
50 lakh will be taxed at a lower rates. This will bring respite
from tax burdens to newly established businesses.

15. GST AND START-UPS
• Simple taxation: GST will simplify the process by integrating all
taxes, making the process of paying tax simpler.
• Respite for businesses in both sales and services: Businesses like
restaurants, which fall under both sales and service taxation, have
to calculate the VAT and service tax on both items separately. GST
will not distinguish between sales and services, and thus the tax
calculation will be done on total.
• Reduction in logistics cost and time across States: Many transport
vehicles get delayed during movement across States due to small
border tax and check post issues. Interstate movement will become
cheaper and less time consuming, as these taxes will be eliminated.
The whole Indian market opens up for manufacturers as interstate
supply becomes tax-neutral. This will also bring down costs
associated with maintaining high stocks, as there will be
undisrupted movement of goods

16. DIFFERENCE BETWEEN UPA & NDA GST
KEY DIFFERENCES NDA UPA
ADDITIONAL 1% TAX There will be 1% extra tax (in
addition to GST) in case of inter-state
sale. This tax will go to the
originating i.e. manufacturing state.
GST was shifting the tax collection
from manufacturing states to
consuming states. Therefore,
manufacturing states were not
comfortable with GST.
COMPENSATION TO STATES NDA bill agrees to indemnify the
states for any loss of revenue due to
introduction of GST.
No such compensation was agreed
to provide to the state.
Petroleum deferred GST shall not be applicable on
petroleum products at the initial
stage.
Standing Committee had
recommended that all petroleum
products should be incorporated in
GST without any exceptions.

17. THANK YOU!