GST – PROS AND CONS

NAMAN AGRAWAL –IB1715134

ADITYA KUNAL- IB1715268
SELVA BHARATHY –IB1715148
CHANCHAL MAURYA – IB1715103
SEJAL KEDIA – IB1715114
RITIKA BHATI – IB1715113
 PRE – GST ERA
The following is the list of indirect taxes in the pre-GST regime:
• Central Excise Duty
• Additional Duties of Excise
• Additional Duties of Customs
• Cess
• State VAT
• Central Sales Tax
• Purchase Tax
• Luxury Tax
• Entertainment Tax
• Entry Tax
• Taxes on advertisements

CGST, SGST, and IGST has replaced all the above taxes.
GST
• Goods and Service Tax (GST) is an indirect tax levied in India on the sale of goods and
services.

• Goods and services are divided into five tax slabs for collection of tax - 0%, 5%, 12%,18%
and 28%

• CGST: Collected by the Central Government on an intra-state sale (Eg: Within

Maharashtra)
• SGST: Collected by the State Government on an intra-state sale (Eg: Within Maharashtra)
• IGST: Collected by the Central Government for inter-state sale (Eg: Maharashtra to Tamil
Nadu)
Value addition in Tax
• Goods & Services Tax Law in India is a comprehensive, multi-
stage, destination-based tax that is levied on every value addition.
 TAX STRUCTURE IN NEW REGIME
Transaction New Regime Old Regime
Sale within the State CGST + SGST VAT + Central Revenue will be shared
Excise/Service tax equally between the
Centre and the State
Sale to another State IGST Central Sales Tax + There will only be one
Excise/Service Tax type of tax (central) in
case of inter-state sales.
The Centre will then share
the IGST revenue based
on the destination of
goods.
Tax calculations in earlier
regime:
Action Cost 10% Tax Total

Manufacturer 1,000 100 1,100

Warehouse adds label and repacks @ 300 1,400 140 1,540

Retailer advertises @ 500 2,040 204 2,244

Total 2040 444 2,244

*All values in Rupees

Tax calculations in current
regime:
Action Cost 10% Tax Actual Total
Liability

Manufacturer 1,000 100 100 1,100

Warehouse adds label and repacks @ 300 1,300 130 30 1,430

Retailer advertises @ 500 1,800 180 50 1,980

Total 1,800 180 1,980

*All values in Rupees

Advantages of GST:

• GST eliminates the cascading effect of tax

• Higher threshold for registration

• The number of compliances is lesser

• Simple and easy online procedure

Advantages of GST:

• Composition scheme for small businesses

• Defined treatment for E-commerce operators

• Uniform taxes throughout the nation

• Unorganized sector is regulated under GST

 DISADVANTAGES OF GST
• Real estate hit

• Cost lier services

• GST will mean an increase in operational costs

• GST is an online taxation system

• SMEs will have a higher tax burden