ASSIGNMENT – 1

(BRIDGE - COURSE)

NAME: SHIVANGI JOSHI

ID NO. 15BBA013
TOPIC: WHAT IS GST?
SUBMITTED TO: DR. GAURAV THAKARAR
ASSISTANT PROF.(HS),
CHARUSAT, CHANGA
 What is gst?
 It is also known as VAT. VAT is not a tax. So now the question is what is
VAT? It is a system. It is the system in which you get the credit of the taxes
which you have paid earlier.
 How did the system came in india?
 It was established in 1986. It came in the form of MODVAT, that is
MODIFIED VALUE ADDED TAX. Very firstly it came in EXCISE. After
that india launched new tax, that is SERVICE TAX(SRT). VAT also was
included in SRT.
 Before 1986, if you have to pay EXCISE, then you only have one choice
and that is CASH.
 After 1986, you can pay your taxes by 2 ways, that is
1.) By taking credit on excise and
2.) By Cash

Before VAT came, you have to pay by cash and after VAT, you have to
pay it by credit on service tax and also by cash.
After 2004, an incident took place, namely CENVAT, that is central value
added tax.

It is having a big role. Befor the introduction of CENVAT, Credit of Excise

for Excise and Credit of service tax is for Service. But after the introduction
of CENVAT, credit of excise can be paid for credit as well as Service tax.
And the credit of service tax can be used for Excise as well as Service tax.

Intersector credit: Excises on manufacture, service tax is on provision on

service. So these are two different sectors: Manufacture and service
industry. Now one sector credit can be utilized for another sector credit.

When the same Vat sector introduced in 2005, LST, in 2005, the first step
taken was introducing VAT in LST. It means before 2005, the way in which
we can pay LST was one and only and that was CASH. And after 2005, the
way of payment of LST was two, thatr is 1.0 credit of LST and 2.) Cash.

In simple words we can say that india is having two types of VAT, that is
1.) CENVAT and 2.) State VAT. The problem in these two VATS, State
VAT can only be used for liability of State VAT, and may be used for CST.
It cant be used for payment of Excise’s liability and also cant use for
payment of service tax’s liability.
And in the case of central VAT, it can be used for Excise duty and Service
duty but cant be used for local sales tax and for payment of CST’s liability.
Because some are state things adnd some are4 central things. So state VAT
can only use state things and CENVAT can use on central things. Its’s the
biggest limitation.
And just because of that GST was introduced, that is GOODS AND
SERVICE TAX. And the core use of that is thatb whomsoever’s credit can
be used for whomsoever. This line is very much important for
understanding GST. Uninterrupted flow of credit. Excise is a part of cost for
dealers. So the cost increases , inflation was increases and the taxation
becomes double. And because of that we were facing lots of problems, and
for removing this problems, saving india from double taxation, saving you
from cashcading, saving you from mulyiple taxes, the invention took place,
whose name is GST, that is GOODS AND SERVICES TAX.

In short, GST (GOODS AND SERVICES TAX) is a comprehensive tax

system. Which will ultematey ensure, uniterupted flow of credit among
different sectors wether it is sales, wether it is manufacture wether it is
service sector.

So what is GST? It is VAT. But we changed name. and the core of GST is
that, “ONE INDIA ONE TAX”

In india, the introduction of GST (GOODS AND SERVICES TAX) was

the idea of Congress, but because of some reasons, they failed to introduce
GST(GOODS AND SERVICES TAX) and so after that our Indian PM(
PRIME MINISTER) MR. NARENDRA MODI, announced GST (GOODS
AND SERVICES TAX) at the mid ni8ght (that is 12:00 am) of 1st (first)
July 2017.