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GST Introduction - Workshop Notes

1-day workshop conducted by MSME, Bangalore

 GST = One Nation, One Tax

 Actual GST implementation - only after 6-7 months (December 2019 or so)
 GST must be audited by CA or auditors only when turnover > Rupees 2 crore
 Input Tax Credit
 Tax System of India - two types of taxes: direct tax and indirect tax

Direct Tax Indirect Tax
Incidence and impact is on the same person Impact on one person and incidence on another
Example: Income Tax person/party
Example: Manufacturer and consumer
Governed by Finance Act, through Budget
Central Board for Direct Tax Central Tax, State Tax - now subsumed under GST
Effective from April 1 to March 31 period and Effective in the financial year (April 1 - March 31)
cannot change in between and can change anytime
1982 Tariff Act
Goods listed were previously taxed. Then taxed
under VAT.
In Karnataka, state tax + GST
Service Tax

 Service tax - introduced in 1994

o 2012 - except for 67 services, all other services are taxable
o Negative list items = include Government services -> exempted from Service Tax
o Major source of revenue for Government
 Tobacco, petroleum products, alcohol for human consumption -> GST is exempted
o Alcohol -> GST is exempted because state excise is still applicable
o Some entertainment products are exempted
o Agricultural products = 0% GST
o GST = destination-based tax system
 Destination = where the goods finally reach and are consumed
o Earlier tax system = origin-based tax system
 Example: If Karnataka exports goods to Bihar, Karnataka benefits. Bihar pays the
o "I" in GST = bringing all states (31 states) and Union Territories together
 For GST purpose, 31 states (because Delhi and Pondicherry has Chief Ministers)
and 5 Union Territories (UT)
 GST Act includes Jammu and Kashmir as state of India
 Before 2017, 6 states of India were "developed states". All developmental focus
on them.
 6 states -> Gujarat, Maharashtra, Karnataka, Andhra Pradesh, Punjab,
and Tamil Nadu -> received all FDI
 Integrates all 31 states and 5 UTs
 Global Investors Meet in Assam, West Bengal, Odisha, etc.
 Now, developing states earning revenue
 GST revolution = one nation, one tax (not one rate)
 GST Council - under Article 27(A) of The Constitution of India
o Represented by states and Union Territories
o Council decides on taxes