A PROJECT REPORT ON

“A STUDY ON GOODS AND SERVICES TAX (GST)”

SUBMITTED BY
BAZIF ABDUL BASIT MOOSA
REGISTRATION NO: - 2101719088

ACADEMIC YEAR: 2017-18

SPECIALIZATION-FINANCE

PROJECT GUIDE
PROF. FATIMA SAYED

ANJUMAN-I-ISLAM’S
ALLANA INSTITUTE OF MANAGEMENT STUDIES
BADRUDDIN TAYABJI MARG OFF 92,
DR D.N. ROAD, OPP.CST STATION, MUMBAI-400001

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2
 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to my Director Dr. Bernadette D'silva for giving me
an opportunity of doing an Internship and ourProf. Fatima Sayedfor providing me her valuable
guidance and suggestions throughout the tenure of the internship. I express my profound thanks to
expert Dr.V.Aditya Srinivas working as Chief Operating Officer and Chief Economist. And all
those who have indirectly guided and helped me in completion of this training.

Thanking You

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 CERTIFICATE

I, Prof FATIMA SAYYED herby certify that BAZIF ABDUL BASIT MOOSA studying in the
second year of Master of Management Studies (MMS) course in the academic year 2017-18 and at
Anjuman-I-Islam Allana Institute of Management studies, Mumbai, hereby declares that this project
report entitled “A STUDY ON GOODS AND SERVICES TAX (GST)” has been prepared by him
during this academic year 2017-2018.
I further declare that the information submitted in the project is true and original to the best of my
knowledge

Date:
Place: Mumbai

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 DECLARATION

I, BazifMoosa student of Anjuman-I-Islam Allana Institute of Management Studies, hereby declare

that the summer project entitled “STUDY ON GOODS AND SERVICE TAX (GST)” Carried
out at BSE BROKERS FORUM, is submitting for the year 2017-18 under the valuable guidance
and the supervision of my guide, in partial fulfillment of requirement of the Master of Management
Studies (MMS) at Anjuman-I-Islam Allana Institute of Management Studies. All information
provided in this report are true to the best of my knowledge and is a record of original work done
by me.

Name: -Bazif Moosa

Registration No: - 2101719088
Specialization: - Finance
Counter signed by the student:-
Counter signed by the faculty guide:-

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 Executive summary

The Goods and Services Tax (GST) is another such undertaking that is expected to provide the
much-needed stimulant for economic growth in India by transforming the existing base of indirect
taxation towards the free flow of goods and services. GST is also expected to eliminate the
cascading effect of taxes.
'One India, One Tax' will be the new identity of India. Goods and Service tax (GST) in India is
hyped as the single largest tax reform since independence. It is estimated to boost GDP by 1.5 to
2%. The benefits of simplified compliance, technological backing and uniform process all over,
will contribute significantly to 'Ease of doing Business' while also bringing-in tax compliance and
transparency. The current taxation system in effect is very complex with more than ten repetitive
indirect taxes. In this taxation system neither manufacturers, nor ultimate consumers are benefitted.
All the gains are pocketed by middle man. India is geared up to introduce a dual GST on a common
taxing event of supply by central as well as state government. Keeping in mind that GST will be in
effect from the middle of 2017, the Indian companies have begun pushing their IT vendors and tax
advisors to upgrade their systems to be GST compatible. To meet this, both finance software
companies as well as ERP vendors have made desired changes to accommodate the prescribed
methodology of calculating GST. They are aligning their processes to accommodate GST in order
to have a smooth transition from pre GST to post GST phase without causing inconvenience to their
customers. This white paper focuses on the proposed GST model for India, GST add-on designed
by IT vendors and GST ready ERP software.

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 Table of Contents
Chapter No. Particulars Page No.

List of Figures 8

List of Abbreviations 9

Chapter 1 Industry Profile 10

Chapter 2 Company Profile 21

Chapter 3 Introduction to GST 23

Chapter 4 GST Model 34

Chapter 5 Impact of GST on various sectors 35

Chapter 6 GST Registration &Return 39

Chapter 7 Conclusion 51

Bibliography 52

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 List of Figures

Figure Title Page No.

1.1 Overview 10

1.2 History 11
1.3 Awards & Recognition 19
2.1 Overview 21
2.2 Brief History 21
2.3 Objectives 22
3.1 About GST 23
3.2 Meaning 24
3.3 Define 24
3.4 Features 24
3.5 Types of GST 25
3.6 GST Slab Rate 26
3.7 GST Rates 28
5.1 Result Analysis 36
5.2 Impact of GST on Indian Economy 37

6.1 Registration 39

6.2 GST Return 40

6.3 Offences & Penalties 47

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List of Abbreviations

GST: Goods and Services Tax

SGST: State Goods and Services Tax

CGST: Central Goods and Services Tax

IGST: Integrated Goods and Services Tax

GSTIN: Goods and Services Tax Identification Number

POS: Place of Supply

UIN: Unique Identity Code

B to B: from one registered person to another registered person

B to C: from one registered person to unregistered person

VAT: Value Added Tax

CST: Central Sales Tax

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 Chapter 1

Industry Profile

1.1 Overview

Established in 1875, BSE (formerly known as Bombay Stock Exchange Ltd.), is Asia's first & the
Fastest Stock Exchange in world with the speed of 6 micro seconds and one of India's leading
exchange groups. Over the past 143 years, BSE has facilitated the growth of the Indian corporate
sector by providing it an efficient capital-raising platform. Popularly known as BSE, the bourse was
established as ‘The Native Share & Stock Brokers' Association’ in 1875. In 2017 BSE become the
1st listed stock exchange of India.

Today BSE provides an efficient and transparent market for trading in equity, currencies, debt
instruments, derivatives, mutual funds. BSE SME is India’s largest SME platform which has listed
over 250 companies and continues to grow at a steady pace. BSE StAR MF is India’s largest online
mutual fund platform which process over 27 lakh transactions per month and adds almost 2 lakh
new SIPs ever month. BSE Bond, the transparent and efficient electronic book mechanism process
for private placement of debt securities, is the market leader with more than Rs 2.09 lakh crore of
fund raising from 530 issuances. (F.Y. 2017-2018).

Keeping in line with the vision of Shri Narendra Modi, Hon’be Prime Minister of Inida, BSE has
launched India INX, India's 1st international exchange, located at GIFT CITY IFSC in Ahmedabad.

Indian Clearing Corporation Limited, a wholly owned subsidiary of BSE, acts as the central
counterparty to all trades executed on the BSE trading platform and provides full novation,
guaranteeing the settlement of all bonafide trades executed.

BSE Institute Ltd, another fully owned subsidiary of BSE runs one of the most respected capital
market educational institutes in the country.

BSE has also launched BSE Sammaan, the CSR exchange, is a 1st of its kind initiative which aims

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to connect corporate with verified NGOs

BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked stock market
benchmark index. It is traded internationally on the EUREX as well as leading exchanges of the
BRCS nations (Brazil, Russia, China and South Africa)

1.2 History

BSE Ltd, the first ever stock exchange in Asia established in 1875 and the first in the country to be
granted permanent recognition under the Securities Contract Regulation Act, 1956, has had an
interesting rise to prominence over the past 143 years.

The journey of BSE Ltd. is as eventful and interesting as the history of India's securities market.

Following are some of the key milestones and achievements

Milestones:
2018
Date BSE Milestones
BSE launches its commodity derivatives segment making it India's 1st
1st October 2018
Universal Exchange
BSE Investments Limited acquires 24% stake in CDSL Commodity
01st August 2018
Repository Limited (CCRL)
BSE launches ‘chatbot’, “Ask Motabhai”, for faster, more convenient
01st August 2018
access to stock market information

17th July 2018 BSE building received trademark

30th June 2018 BSE signs MoU with Bombay Metal Exchange

27th June 2018 BSE StAR MF crossed 10000 Mutual Funds Distributors registrations

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24th May 2018 BSE signs Memorandum of Understanding with Brink's India Pvt Ltd

BSE becomes India’s first exchange to be recognized as a Designated

16th May 2018
Offshore Securities Market by the US SEC
BSE signs an MOU with Soybean Processors Association of India
21st February 2018
(SOPA)

BSE to launch cross currency derivatives and cross INR options with
21st February 2018
effect from 27th February 2018
19th January 2018 BSE StAR Mutual Fund introduce e-mandate facility
2017
Date BSE Milestones
India's Premier Stock Exchange BSE and World's largest Insurance
26th October 2017 Exchange Ebix, Inc. Sign MOU to Launch Joint Venture Company, for
Setting up Pioneering Insurance Distribution Network in India
22nd August 2017 Asia Index Private Limited launches the S&P BSE Bharat 22 Index
BSE receives SEBI "No Objection" to act as a "Facilitator" in non-
1st August 2017
competitive bidding in the auction of Government Securities and T-Bills
21st July 2017 BSE wins Business World Digital Leadership and CIO Award
BSE crosses another milestone of raising Rs.200,111 Crore via the Debt
23rd March 2017
online platforms
16th March 2017 BSE partners with Sentifi for analyzing and reporting social media updates
06th March 2017 Asia Index Private Limited launches S&P BSE SENSEX Next 50 Index
3rd February 2017 BSE becomes India's 1st listed Stock Exchange
Hon’ble Prime Minister of India, Shri Narendra Modi inaugurated India
9th January 2017
International Exchange (IFSC) Ltd, India’s 1st International Exchange
2015 To 2016
Date BSE Milestones
Shri Arun Jaitley, Hon'ble Minister of Finance Unveiled the
9th July, 2016
Commemorative Postage Stamp Celebrating 140 glorious years of BSE
BSE gets SEBI approval to launch “BSE–BOND”- Electronic Book
21st Jun, 2016
Mechanism for issuance of debt securities on private placement

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9th Jun, 2016 BSE announces commencement of trading of Sovereign Gold Bonds
BSE Migrates Algorithm Trading Test Environment to Cloud
2nd May, 2016
Infrastructure
BSE signs Memorandum of Understanding with Korea Exchange (KRX)
28th Apr 2016
to launch S&P BSE Sensex based derivatives contracts at KRX
BSE & CMIE launch world’s first high-frequency data on unemployment
05th Apr 2016
and consumer sentiments

BSE StAR Mutual Fund Processes 81,000 orders worth Rs. 270 crore -
28th Mar 2016
Record Order in single day

BSE partners with CII (Confederation of Indian Industry) and IICA

09th Dec 2015 (Indian Institute of Corporate Affairs) to launch a one of its kind CSR
platform 'Sammaan – The CSR Exchange

BSE becomes the fastest exchange in the world with a median response
13th Oct 2015
speed of 6 microseconds

BSE SME platform successfully completes listing of 100 SMEs under its
16th July 2015
SME umbrella
09th July 2015 BSE celebrated its 140th Foundation Day
BSE exceeds 1 billion derivatives contracts on its new Deutsche Börse T7
28th May 2015
powered trading platform
18th May 2015 BSE introduces overnight investment product
Asia Index Private Limited launches S&P BSE All Cap, S&P BSE
16th Apr 2015
SENSEX Leverage and Inverse Indices
BSE commenced live trading from its Disaster Recovery site in
08th Jan 2015
Hyderabad

2011 To 2014
Date BSE Milestones
12th Dec 2014 Market Cap of BSE SME listed companies crosses landmark 10,000 crore
28th Nov 2014 BSE listed cos market cap crosses landmark 100 lakh crore
22th Oct 2014 BSE inks strategic partnership with YES BANK
26th Sept 2014 BSE inks MoU with BNY Mellon

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 BSE felicitated at The Asian Banker Summit 2014 - BSE Best Managed
27th May 2014
Financial Derivatives Exchange in the Asia Pacific
Launch of Equity Segment on BOLT Plus with Median Response Time of
7th Apr 2014
200 (µs)
04th Apr 2014 BSE SME exceeds USD 1 billion market capitalization
20th Mar 2014 BSE Launches New Debt Segment
11th Feb 2014 Launch of Institutional Trading Platform on BSE SME
28th Jan 2014 Launch of Interest Rate Futures (BSE –IRF)
28th Nov 2013 Launch of Currency Derivatives (BSE CDX)
19th Feb 2013 BSE enters into Strategic Partnership with S&P Dow Jones Indices
30th Mar 2012 BSE launched trading in BRICSMART indices derivatives
13th Mar 2012 Launch of BSE - SME Exchange Platform
22nd Feb 2012 Launch of S&P BSE-GREENEX to promote investments in Green India
15th Jan 2011 Co-location facility at BSE - tie up with Netmagic
BSE Training Institute Ltd. with IGNOU launched India's first 2 year full
7th Jan 2011
time MBA program specializing in Financial Market
Maharashtra and United Kingdom Environment Ministers launched
17th Nov 2011
Concept Note for S&P BSE Carbon Index

2006 To 2010
Date BSE Milestones
27th Dec 2010 Commencement of S&P BSE Shariah Index
10th Dec 2010 Launch of SIP
22nd Nov 2010 Launch of SLB
12th Nov 2010 Commencement of S&P BSE Volatility Index
11th Oct 2010 Launch of Fastrade on Web (FoW) - Exchange hosted platform
4th Oct 2010 EUREX - S&P BSE SENSEX Futures launch
29th Sep 2010 Introduction of Smart Order Routing (SOR)
21st Sep 2010 First to introduce Mobile-based Trading
23rd July 2010 Options on BOLT
12th May 2010 Dissemination of Corporate Action information via SWIFT platform

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 New DBM framework @ Rs.10 lakhs - 90% reduction in Membership
22nd Apr 2010
Deposit
20 th Jan 2010 S&P BSE PSU website launched
4th Jan 2010 Market time changed to 9.00 a.m. - 3.30 p.m.
18th Dec 2009 BSE's new derivatives rates to lower transaction costs for all
14th Dec 2009 Marathi website launched
Launch of clearing and settlement of Corporate Bonds through Indian
7th Dec 2009
Clearing Corporation Ltd.
4th Dec 2009 BSE Launches BSE StAR MF – Mutual Fund trading platform
25th Nov 2009 BSE launches FASTRADE™ - a new market access platform
5th Oct 2009 BSE Introduces New Transaction Fee Structure for Cash Equity Segment
1st Oct 2009 Bombay Stock Exchange introduces trade details facility for the Investors
24th Aug 2009 S&P BSE IPO Index launched
BSE - USE Form Alliance to Develop Currency & Interest Rate
7th Aug 2009
Derivatives Markets
The S&P BSE SENSEX raised 2110.70 points (17.34%) and Index-wide
18th May 2009
upper circuit breaker applied
1st Oct 2008 Currency Derivatives Introduced
10th Jan 2008 S&P BSE SENSEX All-time high 21206.77
Appointed Date” under the Scheme i.e. Date on which
16th May 2007 Corporatisaton and Demutualisation was achieved. Notified by SEBI
in the Official Gazette on 29.06.2007
Singapore Exchange Limited entered into an agreement to invest in
7th Mar 2007
a 5% stake in BSE
Launch of Unified Corporate Bond Reporting platform : Indian Corporate
2nd Jan 2007
Debt Market (ICDM)
iShares S&P BSE SENSEX India Tracker listed at Hong Kong Stock
2nd Nov 2006
Exchange
21 st Oct 2006 BSE Hindi website launched
7th Jul 2006 BSE Gujarati website launched
7th Feb 2006 S&P BSE SENSEX closed above 10000

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 2001 To 2005
Date BSE Milestones
19th Aug 2005 BSE becomes a Corporate Entity
12th Aug 2005 Certificate of Commencement of Business
8th Aug 2005 Incorporation of Bombay Stock Exchange Limited
The BSE (Corporatisation and Demutualisation) Scheme, 2005
20th May 2005
(the Scheme) announced by SEBI
Second biggest fall of all time, Circuit filters used twice in a day
17th May 2004
(564.71 points, 11.14%)
2nd Jun 2004 S&P BSE SENSEX closes over 6000 for the first time
1st Dec 2003 T group launched
1st Sep 2003 S&P BSE SENSEX shifted to free-float methodology
1st June 2003 Bankex launched
1st Apr 2003 T+2 settlement Introduced
16th Jan 2003 Retail trading in G Sec
1st Jan 2003 India 's first ETF on S&P BSE SENSEX - ‘SPICE' introduced
1st Apr 2002 T+3 settlement Introduced
15th Feb 2002 Negotiated Dealing System (NDS) established
1st Feb 2002 Two way fungibility for ADR/GDR
31st Dec 2001 All securities turn to T+5
29th Nov 2001 100% book building allowed
1st Nov 2001 Stock futures launched
25th Jul 2001 S&P BSE Dollex 30 launched
11th Jul 2001 BSE Teck launched, India 's First free float index
9th Jul 2001 Stock options launched
2nd Jul 2001 VaR model introduced for margin requirement calculation
15th Jun 2001 WDM operations at commenced
4th Jun 2001 S&P BSE PSU index introduced
1st Jun 2001 Index Options launched
1st Feb 2001 BSE Webx Launched

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1st Mar 2001 Corporatisation of Exchanges proposed by the Union Govt.

1996 To 2000
Date BSE Milestones
9th Jun 2000 Equity Derivatives introduced
11th Feb 2000 S&P BSE SENSEX crosses 6000 intra-day
11th Oct 1999 S&P BSE SENSEX closed above 5000
15th Jul 1999 CDSL commences work
1st Jun 1999 Interest Rate Swaps (IRS) / Forward Rate Agreements (FRA) allowed
Central Depository Services Ltd.(CDSL) set up with other financial
22nd Mar 1999
institutions
1997 BSE On-Line Trading (BOLT) system expanded nation-wide
21st Jul 1997 Brokers Contingency Fund (BCF) introduced
12th May 1997 Trade Guarantee Fund (TGF) introduced
19th Aug 1996 First major S&P BSE SENSEX revamp

1875 To 1995
Date BSE Milestones
14th Mar 1995 BSE On-Line Trading (BOLT) system introduced
1992 Securities Appellate Tribunal (SAT) established
29th May 1992 Capital Issues (Control) Act repealed
SEBI Act established
1st May 1992
( An Act to protect, develop and regulate the securities market)
30th Mar 1992 S&P BSE SENSEX closes above 4000
15th Jan 1992 S&P BSE SENSEX closes above 2000
25th Jul 1990 S&P BSE SENSEX closes above 1000
3rd Jan 1989 BSE Training Institute (BTI) inaugurated
10th Jul 1987 Investor's Protection Fund (IPF) introduced
S&P BSE SENSEX , country's first equity index launched (Base
2nd Jan 1986
Year:1978-79 =100)

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 BSE granted permenant recognition under Securities Contracts
31st Aug 1957
(Regulation) Act (SCRA)
2nd Feb 1921 Clearing House started by Bank of India
9th Jul 1875 The Native Share & Stock Broker's Association formed

Achievements:

At par with international standards, BSE Ltd. has been a pioneer in several areas over the
decades and has many firsts and key achievements to its credit.
BSE is the first exchange in India to

• Launch a special platform for trading in SME securities

• Introduce Equity Derivatives
• Launch a Free Float Index - S&P BSE SENSEX
• Launch Exchange Enabled Internet Trading Platform
• Obtain ISO certification for a stock exchange
• Exclusive facility for financial training – BSE Institute Ltd.
• Launch its website in Hindi and regional languages
• Host the popular opening-bell ceremony in Indian capital markets
• Launch mobile-based trading in India in Sept 2010
• Become securities market infrastructure member of SWIFT in India and provide corporate actions
to custodians in ISO 15022 format
• Launched S&P BSE SENSEX Realized S&P BSE Volatility (REALVOL) Index in Nov 2010

Besides the above, BSE has taken large strides in product and service innovation for the
benefit of its members and investors, notable ones being

• Launch of a reporting platform for corporate bonds

• Launch of the S&P BSE IPO index and S&P BSE PSU website
• Revamp of its website with wide range of new investor-friendly features

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• Launch of trading in S&P BSE SENSEX futures on EUREX and leading exchanges of the BRICS
nation bloc
• Launched Smart Order Routing for members and investors
• Introduced SACT (SMS alert & Complaint Tracking system)
• Launched co-location facility at BSE premises in November 2010
• Reduction in membership fees to Rs. 10 lakh for new memberships to promote financial access and
inclusion
• Launch of web-based mutual fund trading platform for investors

1.3 Awards & Recognitions

As a pioneering financial institution in the Indian capital market, BSE has won several awards and
recognitions that acknowledge the work done and progress made.

• ‘IT Genius Awards 2017’ in the category ‘Data Centre Excellence’ for setup of the India INX Data
Centre by CORE (Centre of Recognition & Excellence)
• Digital Innovation Award 2017 for the Social Media Analytics Project by Netmagic
• Business World Digital Leadership and CIO Award
• The IDC Digital Transformation Awards 2017
• The Best Exchange of the year award for equity and currency derivatives in Tefla's Commodity
Economic Outlook Award 2017
• Best Brand award 2017 by Economic Times
• CIO POWER LIST 2017
• Best Corporate film encompassing Vision, History, Value and Spirit of Excellence award, Best
Corporate film on Employer Branding award and Most Influential HR Leaders in India award at
World HRD Congress 2017
• 'Best Exchange of the year' award at 4th India Bullion &Jewellery awards 2017
• Red Hat Innovation Awards 2016 by Red Hat Solutions
• Skoch Achiever Award 2016 for SME Enablement
• Best IT Implementation Award 2016 in the “Most Complex Project Category” by PCQuest
• InfoSec Maestros Awards 2016.
• Lions CSR Precious Awards 2016

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• Golden Peacock Award 2015
• CIO Power List 2015
• SKOCH Rennaissance Award 2014 for Contribution to Economy
• SKOCH Rennaissance Award 2014 for Corporate Social Responsibility
• Netmagic Innovative Champion Award – IT Consolidation growth & Scalability 2014
• India Innovative Awards- Big Data Innovation 2014
• ET Now – CISCO Technology Awards 2014
• Unicom –India Top 50 companies with best software 2014
• HR was awarded with Asia's Best Employer Brand Awards at Singapore in two categories in August
2014
• Asia's Best Employer Brand Award
• CHRO of the Year Award
• Lokmat HR Leadership Award at Mumbai in June-2014
• 50 most talented global HR leaders in Asia at the World HRD congress at Mumbai in February-
2014
• FIICI-Frames Best Animation Film-International Category for the Investor Education television
commercial
• India Innovation Award for Big Data Implementation
• ICICI Lombard & ET Now Risk Manager Award in BFSI Category
• SKOCH Order of Merit for E-Boss for qualifying among India’s Best 2013
• Indian Merchant Chamber Award in the Large Enterprise Category for use of Information
Technology
• Best Managed Financial Derivatives Exchange in the Asia Pacific by the The Asian Banker
• The Golden Peacock Global CSR Award for its initiatives in Corporate Social Responsibility
• BSE has won NASSCOM - CNBC-TV18’s IT User Awards, 2010 in Financial Services category
• BSE has won Skoch Virtual Corporation 2010 Award in the BSE StAR MF category
• Responsibility Award (CSR), by the World Council of Corporate Governance
• Annual Reports and Accounts of BSE have been awarded the ICAI awards for excellence in
financial reporting for four consecutive years from 2006 onwards
• Human Resource Management at BSE has won the Asia - Pacific HRM awards for its efforts in
employer branding through talent management at work, health management at work and excellence
in HR through technology

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 Chapter 2

Company Profile

2.1 OVERVIEW
Brokers Forum is the association of the members of the Bombay Stock Exchange and is recognized
by the BSE Ltd. and SEBI as such. BBF, set up in 1993, is incorporated as a society under the
Societies Act 1860. The object of the association is “To foster, encourage and spread the knowledge
of trading dealings and transactions in stock exchanges is connection with stock, bonds, shares,
debentures, obligations, securities, fixed deposits, commercial papers and investments of all kinds.
etc. and the mechanics of the functioning of the Stock Exchange”

2.2 Brief History

Bombay Stock Exchange Brokers Forum was incorporated in the year 1993 with a view to support
and co-ordinate on behalf of the Brokers Forum thereby facilitating for the smooth functioning of
the trade and business. It has been acting as a link between the regulators of the market and other
Government bodies relating to the markets. The forum has time and again come up and made
representation for the larger interest of the community. With the country seeing and experiencing
an economy so dynamic and ever changing Brokers Forum is acting as a facilitator in filling the
gaps so that the business may shore up their competitiveness and enhance their global reach.

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The day to day activities of BBF is managed by the apex Management Committee. The Committee
comprises of member of the BSE who are elected bi-annually at the AGM of the Forum. The
members of the Committee work on an honorary basis to further the objects of the association in
particular and the benefit of the Indian Capitals Markets in general

2.3 Objectives
• To foster, encourage and spread the knowledge of trading, dealing and transactions in stock
exchanges
• To organize, sponsor, promote, establish, conduct or undertake research and spread knowledge
regarding various types of transactions, dealings and investments to be made
• To impart training that has directly or indirectly the objective or effect of spreading knowledge
and information regarding the Stock Exchange transactions.

Over the years, the Brokers Forum has been actively involved in the following activities:
1. To communicate and have a dialogue with the government and the regulators on the matters
effecting the capital markets
2. To be a partner of the BSE in the fostering and development of the Exchange and its competitive
position in the Capital Markets
3. To advice, guide and represent members of the BSE in all matters relating to the Stock Broking
and other allied activities

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 Chapter 3

Introduction to GST

3.1About GST:

The President of India approved the Constitution Amendment Bill for Goods and Services Tax
(GST) on 8 September 2016, following the bill's passage in the Indian parliament and its ratification
by more than 50% of state legislatures. This law will replace all indirect taxes levied on goods and
services by the central government and state government and implement GST by April 2017. The
implementation of GST will have a far-reaching impact on almost all the aspects of the business
operations in India. With more than 140 countries now adopting some form of GST, India has long
been a stand-out exception.

GST is a value-added tax levied at all points in the supply chain, with credit allowed for any tax
paid on input acquired for use in making the supply. It would apply to both goods and services in a
comprehensive manner, with exemptions restricted to a minimum.

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In keeping with the federal structure of India, it is proposed that the GST will be levied concurrently
by the central government (CGST) and the state government (SGST). It is expected that the base
and other essential design features would be common between CGST and SGSTs for individual
states. The inter-state supplies within India would attract an integrated GST (IGST), which is the
aggregate of CGST and the SGST of the destination state.

3.2 MEANING

The Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for
domestic consumption. The GST is paid by consumers, but it is remitted to the government by the
businesses selling the goods and services. In effect, GST provides revenue for the government.

3.3 DEFINE
Clauses 366 (12A) of the constitution Bill defines GST as “goods and service tax” means any tax
on supply of goods, or service or both except taxes on the supply of the liquor for human
consumption. Further the clause 366 (26A) of a bill define Service meaning other than Goods.

3.4 FEATURES OF GST:

1. Dual Goods and Service Tax :CGST and SGST

2. Destination-Based Consumption Tax: GST will be a destination-based tax. This implies

that all SGST collected will ordinarily accrue to the State where the consumer of the goods
or services sold resides.

3. Computation of GST on the basis of invoice credit method: The liability under the GST
will be invoice credit method i.e. cenvat credit will be allowed on the basis of invoice issued
by the suppliers.

4. Payment of GST: The CGST and SGST are to be paid to the accounts of the central and
states respectively.

5. Goods and Services Tax Network (GSTN): A not-for-profit, Non-Government Company

called Goods and Services Tax Network (GSTN), jointly set up by the Central and State

24
 Governments will provide shared IT infrastructure and services to the Central and State
Governments, tax payers and other stakeholders.

6. GST on Imports:Centre will levy IGST on inter-State supply of goods and services.

Import of goods will be subject to basic customs duty and IGST.

7. Maintenance of Records: A taxpayer or exporter would have to maintain separate details in

books of account for availment, utilization or refund of Input Tax Credit of CGST, SGST
and IGST.

8. Administration of GST: Administration of GST will be the responsibility of the GST

Council, which will be the apex policy making body of the GST. Members of GST Council
comprised of the Central and State ministers in charge of the finance portfolio.

9. Goods and Service Tax Council:The GST Council will be a joint forum of the Centre and
the States. The Council will make recommendations to the Union and the States on
important issues like tax rates, exemption list, threshold limits, etc. One-half of the total
number of Members of the Council will constitute the quorum of GST council.

3.5 TYPES OF GST

In India, there are three types of GST: CGST, SGST, and IGST

• CGST: Means Central Goods and Service Tax, one of the three categories under Goods
and Service Tax (CGST, IGST and SGST) with a concept of one tax one nation. CGST
falls under Central Goods and Service TaxAct 2016.
For easy understanding, when CGST is being introduced, the present central taxes of
Central Excise Duty, Central Sales Tax CST, Service Tax, Additional excise
duties, excise duty levied under the medical and toiletries preparation Act, CVD
(Additional Customs duty – Countervailing Duty), SAD (Special Additional Duty of
customs) surcharges and cesses are subsumed. CGST is charged on the movement of
goods and services of standard commodities and services which can be amended time to
time by a separate body. The revenue collected under CGST is for Centre. However, input
tax credit on CGST is given to states and such input tax could be utilized only against the
payment of Central GST.

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• SGST: Means State Goods and Service Tax, one of the three categories under Goods and
Service Tax (CGST, IGST and SGST) with a concept of one tax one nation. SGST falls
under State Goods and Service Tax Act 2016. For easy understanding, when SGST is
being introduced, the present state taxes of State Sales Tax, VAT, Luxury Tax,
Entertainment tax (unless it is levied by the local bodies), Taxes on lottery, betting and
gambling, Entry tax not in lieu of Octroi, State Cesses and Surcharges in so far as they
relate to supply of goods and services etc. are subsumed.
The revenue collected under SGST is for State Government.

• IGST means Integrated Goods and Service Tax, one of the three categories under Goods
and Service Tax (CGST, IGST and SGST) with a concept of one tax one nation. IGST
falls under Integrated Goods and Service Tax Act 2016. IGST is charged when movement
of goods and services from one state to another. For example, if goods are moved from
Tamil Nadu to Kerala, IGST is levied on such goods. The revenue out of IGST is shared
by state government and central government as per the rates fixed by the authorities.

3.6 GST SLAB RATE

26
 • Exempted GST Rate Slab (No Tax)

7% goods and services fall under this category. Some of these that are of regular consumption
include fresh fruits and vegetables, milk, butter milk, curd, natural honey, flour, besan, bread, all
kinds of salt, jaggery, hulled cereal grains, fresh meat, fish, chicken, eggs, along with bindi, sindoor,
kajal, bangles, drawing and coloring books, stamps, judicial papers, printed books, newspapers, jute
and handloom, hotels and lodges with tariff below INR 1000 and so on.

• 5% GST Rate Slab

14% goods and services fall under this category. Some of these include apparel below INR 1000
and footwear below INR 500, packaged food items, cream, skimmed milk powder, branded paneer,
frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, cashew nut, cashew nut in shell,
raisin, ice, fish fillet, kerosene, coal, medicine, agarbatti (incense sticks), postage or revenue stamps,
fertilizers, rail and economy class air tickets, small restaurants, and so on.

• 12% GST Rate Slab

Edibles like frozen meat products, butter, cheese, ghee, dry fruits in packaged form, animal fat,
sausages, fruit juices, namkeen, ketchup & sauces, ayurvedic medicines, all diagnostic kits and
reagents, cellphones, spoons, forks, tooth powder, umbrella, sewing machine, spectacles, indoor
games like playing cards, chess board, carom board, ludo, apparels above INR 1000, non-AC
restaurants, business class air ticket, state-run lottery, work contracts and so on attract a 12% GST.
17% of goods and services fall under this category.

• 18% GST Rate Slab

43% of goods and services fall under this category. Pasta, biscuits, cornflakes, pastries and cakes,
preserved vegetables, jams, soups, ice cream, mayonnaise, mixed condiments and seasonings,
mineral water, footwear costing more than INR 500, camera, speakers, monitors, printers, electrical
transformer, optical fiber, tissues, sanitary napkins, notebooks, steel products, headgear and its
parts, aluminium foil, bamboo furniture, AC restaurants that serve liquor, restaurants in five-star
and luxury hotels, telecom services, IT services, branded garments and financial services and so on
attract an 18% GST.

27
 • 28% GST Rate Slab

19% of goods and services fall under this category. The rest of edibles like chewing gum, bidi,
molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate, pan masala,
aerated water, personal care items like deodorants, shaving creams, after shave, hair shampoo, dye,
sunscreen, paint, water heater, dishwasher, weighing machine, washing machine, vacuum cleaner,
automobiles, motorcycles, 5-star hotel stays, race club betting, private lottery and movie tickets
above INR 100 etc. have been clubbed together under the 28% GST slab.

3.7 GST RATES

GOODS

S.NO Items New Old

Rate rate

1 Rakhi (other than that of precious or semi-precious material ) Nil 18%

2 Sanitary Napkins 12%

3 Circulation and commemorative coins 5%

4 Raw material for broom 12%

5 Stone/Marble/Wood Deities 5%

6 Sal leaves and its products 18%

7 Khali dona 18%

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8 Coir pith Compost 5%

9 Chenille fabrics and other fabrcis under 5801 5% 12%

10 Handloom dari

11 Phosphoric Acid (fertilizer grade only)

12 Handmade Carpets, Textile Floor, Coverings

13 Knitted cap/topi having retails sale value exceeding Rs. 1000

14 Kota Stones and Similar Stones (other than polished) 18%

15 Ethanol for sale to oil marketing companies for blending with fuel

16 Solid Bio fuel pellets

17 Marine Engine 28%

18 Bamboo Flooring 12% 18%

19 Hand Operated Rubber Roller

20 Brass Kerosene Pressure Stove

21 Zip and Slide Fastener

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22 Handicrafts (Excluding handmade)

23 Handbags including pouches and purses; jewellery box

24 Fuel Cell vehicle 28%

25 Televisions upto 68 cm 18% 28%

26 Glaziers’ putty, grafting putty, resin cements

27 Refrigerators, freezers, water cooler, milk coolers, ice cream freezer

28 Washing Machines

29 Food Grinders & mixer

30 Vacuum Cleaners

31 Paints and Varnishes (including enamels and lacquers)

32 Shavers, Hair Clippers

33 Hair Cleaners

34 Storage water heaters

35 Immersion heaters

30
36 Hair Dryers, Hand Dryers

37 Electric Smoothing irons

38 Scent Sprays

39 Toilet Sprays

40 Pads for application of cosmetics or toilet preparations

41 Lithium-ion batteries

42 Powder Puffs

43 Special purpose motor vehicles

44 Work Trucks (Self-propelled, not fitted with lifting or handling

equipment)

45 Trailers & Semi trailers

List of Goods Exempt

Fortified Milk Exempt 5%

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Recent Rate Changes on Services

SERVICES

Rate Change

Services New Rates Old Rates

Supply of e-books 5% 18%

Supply of Multimodal Transportation 12% Nil

(https://cleartax.in/s/gst-rates)

Comparative Study of GST in Other Countries

Countries GST (%) Goods and Services on which GST levied
France 19.6% All services except medical supplies, postal services,
education, certain financial transactions and insurance
services
Russia 18% All services except lease of premises to foreign companies
accredited in Russia, medical services and certain medical
products, educational services, public transportation, sale
of securities, banking and insurance services, rent of
apartments, sale of apartments and residential prop
United 15%- 17.5% Supplies of goods and services except financial and
Kingdom insurance services, education services supplied by eligible
bodies, certain cultural services, betting, gaming, lotteries,
subscriptions, health and welfare
New 15% All goods and services except rents collected on residential
Zealand rental properties, donations, precious metals and financial
services

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 Bangladesh 15% All goods and services except: · Certain food items (such
as meat, fish, potatoes, vegetable and fruits); · Jute and jute
goods; · Social welfare & cultural training; · Rehabilitation
services; and · Agricultural development.
Mauritius 15% Supplies of goods and services with the exception of: · Rice
and wheat, · bread and butter, · milk and cream, · medical,
hospital and dental services, · educational and training
services provided by registered institutions · postal
services, · cargo handling, · certain residential buildings
Australia 10% Most transactions except services such as financial
services, residential rent, residential services etc.
Singapore 7% All goods and services except sales and lease of residential
properties and most financial services
Japan 5% All supplies of goods and services except social welfare
services, letting off commercial buildings, postal services,
noncommercial activities of no-profit making
organizations etc.
Canada 5% Supplies of goods and services purchased within the
country except certain politically sensitive essentials such
as groceries, residential rent, medical services and financial
services

GST is touted to be one of the triggers that could help boost the country's economic fortune.
Economists are of the view that it will unite the country economically as it will remove various
forms of taxes that are currently levied at different points. GST will help in widening the coverage
of tax base, improve tax compliance, remove existing unhealthy competition among states and re-
distribute the burden of taxation equitably among manufacturing and services. Overall it will result
in increasing revenue at the Centre.

33
 CHAPTER 4

GST MODEL

GST structure is expected to have two components: One levied by the Centre- Central GST (CGST),
and the other levied by the State- State GST (SGST). Both components would be applicable on all
taxable transactions of goods and services. The Centre and the States would have simultaneous
jurisdiction for all tax-payers in the value chain. The CGST and the SGST would be levied
simultaneously on every transaction of goods and services, except for the services and goods which
are beyond the purview of GST.
• EXEMPTIONS : Custom Duty, Excise duty on Tobacco products, Specific Cess, Taxes on
liquor, Electricity Cess, Property Tax, Toll Tax, and Stamp Duty are exempted as of now
from the purview of GST but subjected to changes introduced by the government.
• GST TAX RATES : A four-tier GST tax structure of 5%, 12%, 18% and 28%, with lower
rates for essential items and the highest for luxury and de-merits goods that would also
attract an additional cess is introduced. Essential items like food and basic necessities will
be taxed at zero percent. (Tax rates subject to latest Annexure by the government).

34
 CHAPTER 5

Impact of GST on various sectors

IT
Currently IT sector is paying 14 percent of tax to the authority and subjected to 18-20 percent
after the imposition of GST. Also an important point to notice here, that the long disputed issue
of canned software taxation will also come to end as their will no difference arise between
goods and services after the GST. Overall impact could be suggested here is neutral or slightly
negative.

Telecom
In the current stage, the Telecom sector is paying 14 percent of tax to the government body, but
the scenario takes the shift after the imposition of GST. The rate arise to 18 percent and the
companies expect to pass the burden on the post-paid customers. There is also a lower input
tax credit in this sector's capex cost. Overall, it seems that this regime will be negative to the
industry and the sector will also be in state where they can't pass the entire tax burden to the
customers especially their prepaid segment.

Automobiles
Currently, automobile sector pays around 30 to 47 percent tax to the Government which is now
expected to range between 20-22 per cent, after the implementation of GST. And the overall
cost cutting can be expected for the end user by around 10 per cent. Transportation time should
also be reduced as the check points and octroi is cleared hands before. Overall GST will bring
a smile into the automobile sector.

Cement
In the current scenario, cement sector is presenting 27 to 32 per cent of their share to the tax
authority. After the rolling out of GST, this will improve the sector growth in various terms,
like transportation by 20-25 per cent and in the warehouse scheme as the rationalization would
be easy in terms of state wise fragmentation and also in the transportation cost as reduced transit
time.

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Pharmacy
Here, the impact could be neutral as the sector only shares 6 per cent of his share to the tax
authority. The sector also avails the incentives in tax benefits of location wise. There are various
concessional benefits and exemptions held for this sector and will extend till the expiry of the
period. The implications of GST would also try to reduce the logistics cost and would also try
to see in to the matter of inverted duty structure.

Banking and Financial Institutions

The sector is paying 14 percent right now, but not on the interest part of transaction. After the
GST implied, the tax horizon can expand up to 18 to 20 percent on the fee based transactions.
Overall input expense of operations will likely to increase and also hike in the transactions of
financial in nature such as loan processing fees, debit/credit charges, insurance premiums etc.

5.1 Result Analysis

Basic concept of GST Importer to wholesaler

GOLD
Price 100000 100000
Sales Tax (14%) 14000 -
Duty (12.5%) 12500 -
Excise Duty (1%) 1000 -
CGST (18%) - 18000
Grand Total 127500 118000

Wholesaler to retailers

Price 127500 118000

Add margin (10%) 12750 11800
other charges (rent, transport) 15000 15000
Sub Total 155250 144800
Sales Tax (14%) 21735 -
SGST (18%) - 26064
Total Price 176985 170864

36
 Effect on LED T.V. Price

SONY BRAVIA 32" KLV 32R306

Price (exclusive tax) 20700 20700

Sales Tax (14.5%) 3001.5 -
GST (18%) - 3726
Grand Total 23701.5 24426

5.2 Impact of GST on Indian Economy

Reduce tax burden on producers and foster growth through more production. This double
taxation prevents manufacturers from producing to their optimum capacity and retards
growth. GST would take care of this problem by providing tax credit to the manufacturer.

• Various tax barriers such as check posts and toll plazas lead to a lot of wastage for
perishable items being transported, a loss that translated into major costs through higher
need of buffer stocks and warehousing costs as well. A single taxation system could
eliminate this roadblock for them.
• A single taxation on producers would also translate into a lower final selling price for
the consumer.
• Also, there will be more transparency in the system as the customers would know
exactly how much taxes they are being charged and on what base.
• GST would add to government revenues by widening the tax base.

• GST provides credits for the taxes paid by producers earlier in the goods/services chain.
This would encourage these producers to buy raw material from different registered
dealers and would bring in more and more vendors and suppliers under the purview of
taxation.
• GST also removes the custom duties applicable on exports. Our competitiveness in
foreign markets would increase on account of lower cost of transaction.

37
• The proposed GST regime, which will subsume most central and state-level taxes, is
expected to have a single unified list of concessions/exemptions as against the current
mammoth exemptions and concessions available across goods and services

The introduction of Goods and Services Tax would be a very noteworthy step in the field
of indirect tax reforms in India. By amalgamating a large number of Central and State taxes
into a single tax, it would alleviate cascading or double taxation in a major way and pave
the way for a common national market.

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 CHAPTER 6

GST REGISTRATION & RETURN

6.1 Registration

1) Every person who is liable to be registered under Schedule III of this Act, shall apply
for registration in every such State in which he is liable within 30 days from the date of
which he becomes liable to registration, in such manner and subject to such conditions
as may be prescribed.
2) Notwithstanding anything contained in sub-section (1), a person having multiple
business verticals in a State may obtain a separate registration for each business vertical,
subject to such conditions as may be prescribed.
3) A person, though not liable to be registered under Schedule III, may get himself
registered voluntary, and all provisions of this Act, as are applicable to a registered
taxable person, shall apply to such person.
4) Every person shall have a Permanent Account Number issued under the Income Tax
Act, 1961 (43 of 1961) in order to be eligible for grant of registration under subsection
(1), (2) or (3).
5) Where a person who is liable to be registered under this Act fails to obtain registration,
the proper officer may, without prejudice to any action that is, or may be taken under
this Act, proceed to register such person in the manner as may be prescribed.
6) The registration or the Unique Identity Number, shall be granted or, as the case may be,
rejected after due verification in the manner and within such periods as may be
prescribed.
7) A registration or an Unique Identity Number shall be deemed to have been granted after
the period prescribed under sub-section (7), if no deficiency has been communicated to
the applicant by the proper officer within that period.
8) Notwithstanding anything contained in sub-section (7), any rejection of application for
registration under the CGST/SGST Act shall be deemed to be a rejection of application
for registration under the CGST/SGST Act.
9) The Central or State Government may, on the recommendation of the Council, by
notification, specify the category of persons who may be an exempted from obtaining
registration under this Act.

39
6.2 GST RETURNS

Every registered taxable person shall, for every calendar month or part thereof, furnish, in such
form and in such manner as may be prescribed, a return, electronically, of inward and outward
supplies of goods or services, input tax credit availed, tax payable, tax paid and other particulars
as may be prescribed within 20 days after the end of such month:
Provided that a registered taxable person paying tax under the provisions of Section 8 of this
Act shall furnish a return for each quarter or part thereof, electronically, in such form and in
such manner as may be prescribed, within 18 days after the end of such quarter:
Every registered taxable person, who is required to furnish a return under sub-section (1) shall
pay to the credit of the appropriate Government the tax due as per such return not later than the
last date on which he is required to furnish such return.

40
A return furnish under the sub-section (1) by a registered taxable person without payment of
full tax due as per such return shall not be treated as a valid return for allowing input tax credit
in respect of supplies made by such person. Every registered taxable person shall furnish a
return for every tax period under sub-section (1), whether or not any supplies of goods or
services have been effected during such tax period.

Note: Subject to the provisions of Section 25 and 26, if any taxable person after furnishing a
return discovers any omission or incorrect particulars therein, other than as a result of scrutiny,
audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission
in the return to be filed for the month or quarter, as the case may be, during which such omission
are noticed, subject to the payment of interest, where applicable and as specified in the Act:

Figure Types of GST Returns

S.No. Return Particulars

1 GSTR-1 Details of outward supplies of taxable goods or services.

2 GSTR-2 Details of inward supplies of taxable goods or services.

3 GSTR-3 Monthly return on the basis of details of inward and outward

supplies along with the payment of amount of tax.
4 GSTR-4 Quarterly Return for compounding taxable persons.

5 GSTR-5 Return for Non-Resident foreign taxable persons.

6 GSTR-6 Input Service Distributor return.

7 GSTR-7 Return for authorities deducting tax at source.

8 GSTR-8 Details of supply affected through e-commerce operator.

9 GSTR-9 Annual Return

41
1) What is GSTR-1?

GSTR-1 is a monthly return that should be filed by every registered dealer by the 10 th of the
following month. It is the first or the starting point for passing input tax credit to the dealers. It
contains details of all outward supplies i.e. sales.
GSTR-1 has to be filed by "all" taxable registered persons under GST. However, there are
certain dealers who are not required to file GSTR-1, instead are required to file other different
GST returns as the case may be. These dealers are E-Commerce operators, Non-Resident
dealers and Tax deductors. It has to be filed even in cases where there is no business conducted
during the reporting month.

42
FigureGSTR-1 Registration

How to file GSTR-1?

The Suppliers need to log in to the GSTN portal with the given User ID and Password,
following these steps:

• Search for "Services" and then click on Returns, followed by Returns Dashboard.

• In the Dashboard, the dealer has to enter the financial year and the month for which the
return needs to be filed. Click on Search after that.
• All returns relating to this period will be displayed on the screen.

• Dealer has to select the tile containing GSTR-1

• After this, he will have the option either to prepare online or to upload the return.

• The dealer will now Add invoices or upload all invoices directly.

43
• Once the entire form is filled up, the dealer shall then Click on Submit and validate the
data filled up
• With the data validated, dealer will now click on FILE GSTR-1 and proceed to either
E-Sign or digitally sign the form.
• Another confirmation pop-up will be displayed on the screen with a yes or no option to
file the return.
• Once Yes is selected, an Acknowledgement Reference Number (ARN) is generated.

44
2) What is GSTR 2?

It is mandatory to furnish details of inward supplies of goods/services received during a tax

period for every registered taxable person. These details are furnished based on FORM GSTR-
2A which is auto populated on the basis of GSTR 1 filed by your supplier, electronically
through the Common Portal, either directly or from a Facilitation Centre. However, GSTR 2A
does not in itself auto populates a complete GSTR 2, as there are certain other transactions
which are to be mentioned manually in addition to the data which is generated through GSTR
2A, viz. Details of Inward Supplies from an Unregistered Persons on which tax is paid on the
Reverse Charge basis and Imports effected during the tax period, etc.

Who can file GSTR-2?

It ismandatory to file a GST Return for each and every entity registered under the GST Act.
Even in case where there are no inward supplies during the tax period, NIL return for that
period is required to be filed.
In case of failure to file the return within due period, the tax payer is penalized with the late
fees of INR 100 per day up to a maximum limit of INR 5,000/-

When to file GSTR-2?

• Every registered taxable person is required to furnish details of Inward Supply for a tax
period i.e. the end of the relevant month.
• This return has to be filed by the recipient of (goods/services) supplies within 15 days
from the end of the relevant tax period.
• However, to facility the ease of payment and return filing for small and medium scale
businesses with annual aggregate turnover up to Rs.1.5 crores, it has been decided in
the 22nd GST Council meeting dated 06th October 2017, that such tax payers shall be
required to file quarterly returns in Form GSTR 1,2 and 3 and pay taxes only on
quarterly basis, starting from the third quarter of this financial year, i.e. October to
December 2017.

3) What is GSTR 3?
45
GSTR-3 is a return to be filed on monthly basis (compounding and ISD taxpayers are
exceptions). GSTR-3 is more like a pooled version of GSTR-1 and GSTR-2. The form captures
the information of outward and inward supply information at aggregate level which will be
auto populated through GSTR-1, GSTR-1A and GSTR-2.It will comprise of the entire turnover
related details, including, local sales turnover, export sales turnover, exempted local sales
turnover, turnover except GST and taxable turnover. A taxpayer just has to validate this
prefilled information and make modifications if required.

4) What is GSTR 4?
46
Compounding taxpayers would have to file a quarterly return called GSTR-4. Taxpayers
otherwise eligible for the compounding scheme can opt against the compounding and file
monthly returns and thereby make their supplies eligible for ITC in hands of the purchasers.
Compounding taxpayer will also file a simple Annual return (GSTR-9)

5) What is GSTR-5?
Non –Resident Taxpayers would have to file GSTR-1, GSTR-2 and GSTR-3 returns for the
period for which they have obtained registration. The registration of Non–Resident taxpayers
will be done in the same manner as that of Regular taxpayers. Non-Resident Taxpayers would
be required to file GSTR-5return for the period for which they have obtained registration within
a period of seven days after the date of expiry of registration. In case registration period is for
more than one-month, monthly return(s) would be filed and thereafter return for remaining
period would be filed within a period of seven days as stated earlier.

6.3OFFENCES AND PENALTIES

Offences and penalties:

Where a taxable person who –

• supplies any goods or services without issue of any invoice or issue any false
invoice with regard to any such supply;
• issue any invoice or bill without supply of goods or services in violation of the
provisions of this Act;
• collects any amount as tax but fails to pay the same to the credit of the appropriate
Government beyond a period of three months from the date on which such payment
becomes due;
• fails to deduct the tax in terms of sub-section (1) of section 37, or deduct the amount
which is less than the amount required to be collected;
• fraudulently obtains refund of any CGST/SGST under this Act;

• is liable to be registered under this Act but fails to obtain registration;

• transport any taxable goods without the cover of documents;

47
 • fails to keep, maintain or retain books of account;

• issues any invoice by using the identification number of another taxable person;

• destroys any material evidence;

• fails to furnish information and/or documents called for by a CGST/SGST officer

in accordance with the provisions of this Act or rules made there under or furnishes
false information and/or documents during any proceedings under this Act;
• supplies, transports or stores any goods which he has reason to believe are liable to
confiscation under this Act;

Any person who contravenes any of the provisions of this Act or rules made there under
for which no penalty is separately provided for in this Act, shall be liable to a penalty
which may extend to Rs. 25,000/-

OPPORTUNITIES
Creation of a one-market economy: The present legal framework permits the fragmentation
of markets due to the differential treatment of intra-state and inter-state transactions. This,
coupled with the several tariff and non-tariff incentive schemes offered by states to attract
investments, resulted in the structuring of supply chain models based on the optimization of
indirect tax costs rather than other economic factors and best practices.
• Improved transparency with seamless input tax credit: GST is a value-added tax that will
apply at each stage of value addition in a business value chain. However, to avoid any cascading
impact, the regime would allow an input tax credit of the amount paid toward GST at the
previous stage. This seamless credit availability is likely to improve the transparency between
stakeholders (i.e., an assessee and authorities) and lead to the substantial simplification of
compliances. In addition, the uniformity in classification and reduction in tax exemptions are
likely to reduce classification disputes that are a regular cause of litigation between an assessee
and the revenue department under the present regime.
• Rationalization of cost of goods and services: With a unified levy and seamless input tax
credit under the proposed GST regime, the government seeks to resolve the distortionary effect
48
 of multiple non-creditable taxes levied across the business value chain and helps in the
reduction of associated costs.
• Simplified compliance: The unification of several indirect taxes would substantially cut down
compliances required in comparison with the present regime and reduce costs associated with
them.
Though, conceptually, GST seeks to address uncertainties and distortionary effects of the
extant indirect tax regime, it is critical that businesses and industries carefully map its impact
to tread through this transitionary phase. While the much-awaited GST is conceivably expected
to bring in a uniform experience as well as simplicity to the existing herculean system, a little
introspection into the following key issues would give businesses a better insight into the
ramifications of the proposed system:

• Anti-profiteering clause: The revised Model GST Law (Model Law) as promulgated by the
government has introduced an anti-profiteering mechanism. This has been introduced to ensure
that the benefit of the reduced input cost on account of tax efficiencies is shared with consumers
and not retained as excess profits. Though the anti-profiteering measure has been introduced
with the pious intent of benefiting a consumer and controlling the inflationary impact of GST,
it is likely that this may result in an “inspector raj” and excessive scrutiny of business policies.

It would be relevant to highlight that the current Model Law merely prescribes the manner of
enforcement without providing the manner in which a profiteering situation is to be determined.
It is expected that detailed rules and regulations would be promulgated to ensure that the
government does not end up disrupting the dynamics of the free-market economy under the
garb of safeguarding consumer interests. Thus, while planning their transition to the GST
regime, it is critical for businesses to assess the impact of such provisions to avoid any future
dispute with revenue authorities.
• Uncertainty regarding MRP-regime goods: Goods falling within the scope of the Legal
Metrology regime are currently taxed on their declared retail or sale price under the existing
Excise regime. For this purpose, the government provided abatement in respect of many goods
to control the negative cost impact of Excise duty. With the Model Law departing from the
MRP-based valuation in favor of a “transaction value” regime, it is critical that businesses
involved in the manufacturing of MRP-regime goods undertake a thorough assessment of their
cost impact. This issue is specifically critical for businesses involved in sectors such as retail,
consumer goods, electronics, and automotive components.
49
• Uncertainty regarding place of supply and place of provision of service: Though the Model
Law attempts to provide a detailed list of situations and applicable regimes, some concerns still
remain. For example, in the asset management industry, the local offices of mutual funds
transact with investors and sign them up for investment, but the allocation of units in the
respective mutual fund is undertaken by the headquarters, which may or may not be within the
same state. The extant Model Law does not provide sufficient guidance on such unique
transactions, which require specific provisions in consonance with the relevant trade practice
so as to avoid any disruption to the sector.
• Restructuring related party transactions: Departing from the existing principle of taxing the
sale of goods or the provision of services by one person to another, GST would be charged on
their supply. Accordingly, all intra-group or related party transactions, including those between
the branches of the same legal entity, would now be chargeable to GST. Thus, it is critical that
all intra-group or related party transactions are revisited in light of the proposed regime to
undertake the necessary alignment in business practices to minimize the increased demands on
working capital.
• Valuation of stock transfers: Stock transfer of goods among different entities or branches of
an enterprise is a common trade practice. In terms of the Model Law, stock transfers are to be
taxed at the transaction value. Since in many cases, incomplete or unfinished goods undergo
stock transfers for the captive consumption of related entities, the valuation of goods would
have to be made in accordance with the computed value based on cost-accounting standards.
This change in law mandates requisite diligence at the time of clearance cause to avoid any
disputes with revenue authorities. To avoid this operational hardship for trade and industry, it
is expected that a separate yardstick is provided specifically for the determination of value in
the case of stock transfers. In this regard, it is also important that the relevant staff is educated
thoroughly on the proposed valuation mechanism to avoid disputes and take informed
positions.
• Increased obligations for vendor management: In terms of the Model Law, it is necessary
that the amount of input tax credit that is provisionally availed by a purchasing dealer matches
the output tax liability discharged by a supplier. On account of this mandate for increased
synergies between a vendor and purchasing dealer, it is apparent that contractual arrangements
among parties would need to be revisited and that indemnity clauses would need to be
appropriately reworded to cover all such risks. This is critical for ensuring diligent and timely
compliance by vendors.

50
 CHAPTER 7

Conclusion

It can be concluded from the above discussion that GST will provide relief to producers and
consumers by providing wide and comprehensive coverage of input tax credit set-off, service
tax set off and subsuming the several taxes. Efficient formulation of GST will lead to resource
and revenue gain for both Centre and States majorly through widening of tax base and
improvement in tax compliance. It can be further concluded that GST have a positive impact
on various sectors and industry. Centre has decided to review the existing exemptions from
Central Excise Duty so that list of goods exempt from CGST and SGST list and 99 items
exempted from VAT are taken off from both the components of GST. VAT has to some extent
reduced tax-evasion and frauds. It is encouraging to note that most of the traders and general
public are aware of VAT. GST, the major reforms on indirect taxes, will reduce tax burden
due to cascading effect. The efficiency in tax administration will be improved, indirect tax
revenue will be increased considerably due to inclusion of more goods and services, and at
last the cost of compliance will be reduced for the dealers. The implementation of GST will
be in favor of free flow of trade and commerce throughout the country. This single most
important tax reform initiative by the Government of India since independence provides a
significant fillip to the investment and growth of our country’s economy. To get the desired
result, it should be assured that the benefit of input credit is ultimately enjoyed by final
consumers

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BIBLIOGRAPHY:

1. Goods and Service Tax (GST) Impact on Indian economy by Anjali Agarwal
2. Indirect tax introduction on GST (M.com) by CA Vaibhav Singavi, Dr. Ashok Wagh
3. Basic Concepts and Features of Good and Services Tax in India by Garg Girish

Websites:

✓ www.gst.gov.in

✓ www.gstn.org

✓ www.gstcouncil.gov.in

✓ www.cbec.gov.in

✓ www.financialexpress.com

✓ www.wikipedia.com

✓ www.cleartax.com

✓ www.timesofindia.com

✓ www.indiatoday.com

✓ www.moneycontrol.com

✓ www.bseindia.com

✓ www.brokersforumofindia.com

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