GST and Indirect Taxes

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GST and Indirect taxes

INTRODUCTION TO GOODS AND
SERVICE TAX (GST)
revision sheet for internals
GST (Goods and Services Tax) is one indirect tax for the whole nation (one nation
one tax) . It is the resultant tax after subsuming major Central and State indirect
taxes. GST is a destination based tax levied on the consumption of goods and
services across the nation, thus rendering the country one unified common market.
A destination based tax is one which is levied in the state where the goods or
services are consumed and not where they are produced. On the other hand, an
origin based tax is levied in the state where goods or services are produced (not
consumed).
In India, GST is effective from July 1, 2017.
In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply
of goods and services. This law has replaced many indirect tax laws that previously
existed in India.
GST and Indirect taxes 1

The Constitutional Framework of GST laws
in India
In India, the taxation reforms can be traced back to the early 1990s right from
liberalization and globalization to the recent enactment of Goods and Services Tax
(GST), which was incorporated by way of the 101st Amendment to the Constitution.
GST can be considered the most comprehensive single tax reform in India since
independence. It united numerous indirect taxes into a solitary tax in this manner
subsuming a variety of taxes.
What is Indirect Tax?

Indirect taxes are levied on goods and services and is levied based on the
production, sale or purchase of goods or provision of services in various forms such
as import and export duty, excise, sales tax, value-added tax, service tax,
entertainment tax, electricity duty, tax on passenger fares and freights etc. As the
name suggests, indirect taxes are basically taxes that can be passed on to another
entity or individual, unlike direct taxes which are paid directly by the persons on
whom these taxes are levied.
They can be imposed by the laws made by the Central or State government. For the
Central government, the three main components of indirect taxes are Central Excise,
Customs and Service tax. Similarly, for the State Governments, the major taxes are
Value Added Tax and Central Sales Tax along with Octroi, Entertainment Tax etc.
Deficiencies in the old Indirect tax Regime

In the old indirect tax regime, there were many deficiencies which were slowing
down the economic growth of the country. To begin with, the multiplicity of taxes was
creating a lot of confusion among the taxpayers. States were imposing their own tax
and the Centre was imposing its own tax. Also, there were different varied taxes for
goods and services. For instance, there were different taxes for entertainment tax
and luxury and all these taxations over tax were creating a cascading effect and the
whole process of paying tax had become immensely complex for the taxpayers as
they were finding it difficult to comply with the tax laws since they had to file the
return under different laws. Hence, the need for a revamping of the whole tax
structure became necessary.

The constitution (one hundred and first amendment)
act, 2016
In pursuance of such reform, the One Hundred and Twenty-Second Amendment Bill,
2014 was first passed by the Lok Sabha on 6 May, 2015 and then by the Rajya
Sabha on 3 August, 2016. On 1 July, 2017, it came into force and officially came to
be known as the Constitution (One Hundred and First Amendment) Act, 2016. It has
been ratified by more than half of the State Legislatures in accordance with Article
368(2) of the Constitution. The amendment introduced the Goods and Services Tax
Act, 2017.
Under the GST Act, 2017 the burden of paying the tax is on the final consumer. It is
a destination-based consumption tax. The revenue is received by that State where
the goods and services are destined to be consumed. The State which produced the
goods and services will not receive the taxes. Maximum retail price (MRP) includes
GST, it cannot be charged over MRP. Following have been kept out of the ambit of
GST- alcoholic liquor for human consumption, oil and fuel, tobacco and real estate
sector.
In India, the Double GST Model is followed, Centre and State both can
simultaneously levy a tax on the same transaction. It suits the federal structure of the
Government of India as in case of supply within the State, Central Goods and
Services Tax (CGST) and State Goods and Services Tax (SGST)/Union Territory
Goods and Service Tax (UTGST) is levied in half rate. In the case of supply outside
the State, Integrated Goods and Services Tax (IGST) is levied at full rate. The half
share is given to the Centre and the other half is given to the State/UT where the
goods and services are destined to be consumed. The CGST Act, 2017 provides
separate provisions for the supply of goods [1] and supply of services [2].
Collection of GST
The liability to pay CGST/SGST/IGST arises at the time of supply of goods and/or
services, as the case may be. Thus, liability to pay tax on inter-State supply, or intra-
State supply, or both would crystalize at the time of supply. Liability to tax and liability
to pay tax is separate and distinct. Liability to pay tax is not the same thing as a
liability to tax. Accordingly, though the tax is attracted to supply, the power to collect
the same arises only when the time of supply arises. But the collection of such tax is
postponed to a future date. Collection of such tax is made by the due date of filing
return for the respective tax period.

Constitution provisions related to Tax
The predominant provision which gives the constitutional authority to the
Government to levy tax is Article 265 of the Constitution of India which provides that
no tax shall be levied or collected except by the authority of law. A charging section
is a must in any taxing statute for levy and collection of tax. An executive order is not
sufficient to levy a tax. In the case of Chhotabhai Jethabhai Patel & Co. v. Union of
India, [3] it was held that the law providing for the imposition of tax must be valid and
that it should not be prohibited by any provisions of the Constitution.
The Constitution (One Hundred and First Amendment) Act, 2016 comprises 20
sections which made several amendments in the Constitution. Just like the Union,
the States of India also has the power to levy a tax on the supply of goods or
services or both. Earlier, the State did not have the power to levy a tax on
newspapers but the law changed after the advent of the GST Act, 2017. Article 286,
however, imposes the following restrictions on the State’s power to impose sales tax
on goods:-
1. Sale or purchase of goods which take place inter-State,
2. Sale or purchase of goods during import and export out of the territory of India.
Definition of Tax
The Constitution (One Hundred and First Amendment) Act, 2016 defines ‘goods and
services tax’ as any tax on supply of goods, or services or both except taxes on the
supply of alcoholic liquor for human consumption.[4] Thus, alcoholic liquor for human
consumption has been kept out of the GST ambit. Further, ‘Services’ has been
defined as anything other than goods.[5]
Levy of the Duty of Tax

Article 268 discusses the duties that are levied by the Union but are collected and
appropriated by the States. For example, stamp duties mentioned in Union List shall
be levied by Central Government but shall be collected by the State. Article 269
discusses the taxes that are levied and collected by the Union and are assigned to
the States. It implies that the revenue collected will not go to the Consolidated Fund
but will be used and distributed among the State in accordance with the principle
formulated by the Parliament. Article 270 discusses the taxes that are levied and
collected by the Union and distributed between the Union and the States. For
example, taxes and duties referred in the Union list.

Special provisions for GST
Article 246A has been inserted to give power to the Parliament and the respective
State/Union Legislatures to make laws on GST respectively imposed by each of
them. However, the Parliament has the exclusive power to make laws regarding
inter-State supplies. The IGST Act deals with inter-State supplies. Import of goods or
services also come under the ambit of inter-State supplies. This gives the Central
Government the power to levy IGST on import transactions.
While Article 246A has bestowed on the Parliament the exclusive power to make
laws regarding inter-State supplies, the method of dissemination of revenue from
such supplies between the Centre and the State is covered in Article 269A. It allows
the GST Council to frame rules in this regard.
The GST Act, 2017 also made amendments in residuary powers of legislation under
Article 248. As per the amendment, the exclusive power of Parliament to make any
law on any matter not enumerated in the Concurrent List or State has been made
subject to Article 246A. The amendment also provides that Parliament has the power
to make laws for the whole or any part of the territory of India on a matter in the
State List or regarding GST provided under article 246A if it is necessary or
expedient in the national interest or if a Proclamation of Emergency is in operation
under Article 249 and Article 250 respectively.
GST Council
The most astonishing feature of the amendment is the formation of the GST Council
under Article 279A. It is a joint forum of the Central Government as well as the State
Governments. The Union Finance Minister of India is appointed as the Chairperson
of the GST Council. The Council is responsible for making important decisions
regarding GST laws. Its functions include making the decision on tax-related laws,
the tax rate, tax exemption rules, notifying separate notification date for applicability
of GST on oil and fuel, the due date of submitting GST forms, special exemptions for
some States etc.
Challenges in Implementation of GST

1. Tax administration staff at both the Central and State level should be trained
adequately regarding the concept, legislation and procedure of GST so that it
could be successfully implemented.
2. Exporters who prior had profited by tax exemptions on their inputs are currently
needed to pay taxes on inputs in advance. Only then they are allowed to claim a

refund after filing of tax returns.
3. GST makes the entire process from filing the return, payment of tax, refund
claim etc., entirely online. Generally, little and medium ventures might not have
the specialized technical knowledge to adjust to this gigantic change.
Conclusion
After analyzing the constitutional provisions of GST, it can be concluded that GST
will bring One Nation and One Tax market. GST is going to subsume all major
indirect tax laws prevailing in India. Proficient formulation of GST is unquestionably
going to prompt revenue gain for both Centre and States significantly through
enlarging of tax base and advancement in tax compliance. It can be further
concluded that GST positively affects different areas and industries. It is evident from
the above discussion that the new system of imposing and collecting taxes is much
more convenient and less complicated than before.
With the beginning of industrial revolution in the early 1800 European market where
introduced with machine made material with clothing fabric being most prominent.
This introduction was so intense the selling manufacturing items become impossible
due to market saturation. Indian market was flooded with British products. Few rare
exceptions were there, few products like clothes were also produced in India in
cottage industry as per obvious reasons compared to the imported British products
and price with lower. At that point British thought the impose taxes on India made
products. The modern history of indirect taxes start in the early of 20th century while
the excise duty was imposed on salt, sugar, motor spirit, etc. Gradually the base of
excise duty was increasing. The Central excise act was formulated in 1944 and their
after has gone to a gradual change year by year
Introduction of VAT (Value added tax)

In 1976, Jha suggested value added tax VAT in the form of MAN VAT (VAT at the
manufacturing level)
Following jha’s recommendation a dare move was made by V . P . Singh when he

introduced MODVAT (modified value added taxation ) in 1986 when he was the
finance minister. MODVAT was a predecessor of present days VAT. and it is almost s
as the same MANVAT suggested by L .K. Jha
initially it was introduced for selected commodities under the union excise duties
(UED).

few years later, Dr Manmohan Singh, the architect of economic reform in India,
carried forward from where V.P singh left. He extended MODVAT to almost all
commodities and reduced excise duties rate. Later, Yeshwant Sinha, the then
finance minister, introduced a full-fledged VAT for union excise duties (UED) in the
name CENVAT in 1999
in order to persuade the states to rationalize their tax system, the government of
India appointed a state finance minister’s committee to make recommendations to
phase in the VAT within the given time frame. This was later transformed into the
Empowered committee of state finance minister's.
The committees recommendation that the VAT be implement in 2003 was postponed
repeatedly until April 2005 the major landmark in tax reform at the state level was
simplifying and finalizing the sales tax system the introduction of value of the tax in
the state from 1st April 2005.
The introduction of VAT was a major reform exercise, even if it may call some
confusion and uncertainty the VAT tax base has strength in the information base for
tax administration resulting in improving the compilers of other tax and their by
enhancing the overall productivity of tax system VAT was introduced in Assam in the
year 2005
introduction of GST
The attempt of a nationwide VAT was an unthinkable one even at the beginning of
the new millennium as it means state sales tax and central excise duty and service
tax are to be merged into one for the states for the sales tax is the largest source of
tax revenue but still, the advantage of a single tax and its beneficial impact on
unifying the economy promoting economic activities the first move to was the
introduction of goods and service tax (GST) in India was made the Atal Bihari
Vajpayee government in the year 2000 by initiating discussion with the state finance
minister.
In 2004 Vijay Kelkar suggested a comprehensive GST and in the next year Mr. P
Chidambaram the then finance minister set to launch GST as a budget goal
After a year of deliberation between sales and Central GST was introduced in India
on and from first July 2017 all the states except the state of Jammu Kashmir join this

mission of “one nation one tax” however the state of Jammu and Kashmir also
introduced GST in the state from 8 July 2017.
Why Is GST Necessary?

Here’s a pointwise study on why is GST necessary to India –
1. To bring the entire Indirect Taxation under One Market. This would mean that all
across India, the taxation rates are uniform for a specific Good/Service; There
would be One Common Governing Law that needs to be understood and
complied with. This would make a positive proposition for India in the following
ways:(a) Uniformity of taxation across states – This would promote businesses
to transact across state borders and enhance their consumer base.( b)The
convenience of Compliance – It would pave the way for easier setup of
businesses across state borders since taxation laws would be common across
states. ( c) Foreign Business entities would have an easier entry to the
Indian market – A large business entity would any day prefer to make its target
market a country rather than a state. Complying with every single state’s taxation
laws and tax rates would be monetarily draining and time-consuming and
uniformity across borders ensures easier compliance.
2. To eliminate the Cascading Effect (or) to make a majority of the Goods/Services

cost lesser than the current cost.
3. The GST is implemented via the Goods and Service Tax Network (GSTN). The
GSTN, comprising of robust technical architecture in synergy with the Thought-
Process of the Digital Age. A Vital element of the compliance would be that the
unique GST Identification Number (GSTIN) has to be seeded for all sales
registries/invoices uploaded. This would help in –(a) Tracking and recording all
monetary transactions of the taxpayer. Thus, evading of would become all the
more difficult. (b) determining the health of businesses across various sectors of
the country, i.e., the sales of all companies across a particular sector can be
determined and the actual growth of each sector for the country can be
established.
4. The GSTN has enlisted 34 GST Suvidha Providers for providing a platform
through which taxpayers can file their taxes. Also, Application Service Providers
in turn can integrate with these GSPs to provide taxpayers one more route for
tax filing. These multiple routes have enabled many businesses to provide much
sought-after value additions to taxpayers, the most important of which would be
accountancy. The Digital Open-Mindedness of the Entire GST System has

ensured transparency in the framework of the system and instilled healthy
competition in a new, self-created market by the GST
TAX STRUCTURES IN INDIA

The tax revenue is the main source of public revenue . Tax is levied of individuals or
companies to meet expenditure which is required for public welfare. In other words a
tax is a compulsory collection of money by the government for public welfare.
Taxation policies plays an important role in the financial and economical
development of the country. The defaulter or the partial payment of the tax attracts
penalties.
GST rates changes hit industries and trade bodies. Everyone from business to
consumers evaluates their position as a result of this change.
So in this article, we bring you the meaning of the GST rate and the key
changes in GST rates from the inception of the GST law so far.
Meaning of GST rates and present GST

rate structure
GST rate refers to the percentage rate of tax imposed on the sale of goods or
services under the CGST, SGST and IGST Acts. A business registered under
the GST law must issue invoices with GST amounts charged on the value of
supply. The GST rates in CGST and SGST (For intra-state transactions) are
approximately the same. Whereas, the GST rate in the case of IGST(For inter-
state transactions) is approximately the sum total of CGST and SGST rate.
The GST slabs are pegged at 5%, 12%, 18% & 28%. According to the GST
latest news from the GST council, the tax structure for common-use goods are
as under:
GST Rates Structure for Goods and

services under 5%, 12%, 18% & 28%

Tax GRates Products
0% Milk
0% Eggs
0% Curd
0% Lassi
0% Unpacked Foodgrains
0% Unpacked Paneer
0% Gur
0% Unbranded Natural Honey

0% Fresh Vegetables
0% Salt
5% Sugar
5% Tea
5% Edible Oils
5% Domestic LPG
5% PDS Kerosene
5% Cashew Nuts
5% Milk Food for Babies
5% Fabric
5% Spices
5% Coal
5% Life-saving drugs
12% Butter
12% Ghee
12% Almonds
12% Fruit Juice
12% Packed Coconut Water
18% Hair Oil
18% Toothpaste
18% Soap
18% Pasta
18% Corn Flakes
18% Soups

Tax GRates Products
28% Small cars (+1% or 3% cess)

28% Consumer durables such as AC and fridge
28% Untitled
Note: Labelled and pre-packaged paneer, buttermilk, and curd attract 5% GST
from 18th July 2022.
GST Rate Changes from 18th July 2022

The government issued nine Central Tax (Rate) notifications number 03/2022
to 11/2022 on 13th July 2022. These GST rate changes will apply from 18th July
2022. Further, exemptions were withdrawn on a few daily essentials. The
government notified revised rates for items that faced an inverted tax
structure. Also, the taxman notified changes in the applicability of the reverse
charge mechanism for certain services.
GST Rate revision in 47th GST Council

Meeting
The 47th GST council meeting was held on 28th and 29th June 2022. The following
decisions were taken regarding GST rates, including pruning of the exemption list
and correction of the inverted tax structure.
GST Rates and hike cuts

Title Column 1 Column 2
description of goods and services old ratio new ratio
what’s costlier
cut and polished diamonds 0.25% 1.50%
Tetra Pack (Aseptic Packaging Paper) 12% 18%
Tar (From coal, or coal gasification plants, or producer

5/18 % 18%
gas plants and coke oven plants)
What's cheaper

Title Column 1 Column 2
Import of tablets called Diethylcarbamazine (DEC) free

of cost for National Filariasis Elimination Programmed 5% nil
(IGST)
Import of particular defense items by private
businesses or suppliers for end-consumption of applicable rate nil
Defense (IGST)
Ostomy Appliances 12% 5%
Orthopedic appliances such as intraocular lens,

artificial parts of the body, splints and other fracture
appliances, other appliances which are worn or carried, 12% 5%
or body implants, to compensate for a defect or
disability
Transport of goods and passengers by ropeways (with

18% 5%
ITC of services)
Renting of truck or goods carriage including the fuel

18% 12%
cost
The rates will come into effect from 18th July 2022
subject to CBIC notification
Pruning of GST exemptions

Description of goods or services Old Rate New Rate
Earlier fully exempted, now withdrawn
Maps and hydrographic or similar charts of all kinds,

including atlases, wall maps, topographical plans and NIL 12%
globes, printed
Cheques, lose or in book form NIL 18%
Parts of goods of heading 8801 NIL 18%
Air transportation of passengers to and from north-

eastern states and Bagdogra now restricted to Nil Condition added
economy class
Transportation by rail or a vessel of railway equipment Nil Applicable rate

and material, storage or warehousing of commodities
attracting tax such as copra, nuts, spices, jaggery,
cotton, etc., fumigation in a warehouse of Agri produce,
services by RBI, IRDA, SEBI, FSSAI, and GSTN,
renting of residential dwelling to GST-registered

businesses, and services by the cord blood banks for
preserving stem cells
Room rent (excluding ICU) exceeding Rs.5,000 per

Nil 5%
patient day taxed without ITC
Common bio-medical waste treatment facilities for

treating or disposing biomedical waste shall be taxed Nil 12%
with availability of ITC, like CETPs
Hotel accommodation priced up to Rs.1,000 per day NIL 12%
Training or coaching in recreational activities on arts or

Nil Applicable rate
culture, or sports other than by individuals
Earlier partially exempted, now withdrawn
Petroleum/ Coal bed methane 5% 12%
e-Waste 5% 18%
Scientific and technical instruments to public funded

5% Applicable rate
research institutes
*The rates will come into effect from 18th July 2022
Correction of Inverted tax structure

scription of goods or services Old Rate New Rate
Solar water heaters and systems 5% 12%
Prepared or finished leather or chamois leather or

5% 12%
composition leathers
Job work for processing of hides, skins, leather, making

of leather products including footwear, and clay brick 5% 12%
manufacturing
Earthwork works contracts and sub-contracts to the

Central and state governments, Union Territories and 5% 12%
local authorities
Pawan Chakki being air-based atta chakki, wet grinder,

cleaning, sorting or grading machines for seeds and
5% 18%
grain pulses, and milling machines or cereal making
machines, etc;
Ink for drawing, printing, and writing 12% 18%
Knives with paper knives, cutting blades, pencil 12% 18%

sharpeners and its blades, skimmers, cake-servers,
spoons, forks, ladles, etc

Centrifugal pumps, submersible pumps deep tube-well
turbine pumps, bicycle pumps that are power-driven 12% 18%
mainly for handling water
Milking machines and dairy machinery, cleaning,

sorting or grading machines and its parts for eggs, fruit 12% 18%
or other agri produce
Lights and fixture, LED lamps, their metal printed

12% 18%
circuits board
Marking out and drawing instruments 12% 18%
Services by foreman to chit fund 12% 18%
Works contract for railways, metro, roads, bridges,

12% 18%
effluent treatment plant, crematorium, etc.
Works contract and sub-contract to the Central and

state governments, local authorities for canals, dams,
12% 18%
pipelines, plants for water supply, historical
monuments, educational institutions, hospitals, etc
Refund of accumulated ITC for edible oils and coal is

disallowed.
*The rates will come into effect from 18th July 2022
GST Rate changes from 1st January 2022

(1) New HSN Codes from 2022
Three notifications were issued on 28th December 2021 by the CBIC to align
HSN codes with HS-2022 with effect from 1st January 2022. Central Tax (Rate)
notification no. 18/2021, Central Tax (Rate) notification no. 19/2021 and Central
Tax (Rate) notification no. 20/2021
(2) GST rate changes to correct the inverted tax

structure:
GST increased to 12% from 5% for textiles with HSN codes 51, 52, 53, 54, 55,
56, 58, 60, 63 and 64 such as woven as well as knitted fabrics, knitting, saree
falls, embroidery works, curtains bed linen and home furnishings. It also
includes dyeing services.

The same increase applies to footwear with HSN code 64 valued at or below
Rs.1,000 per pair.
Changes were notified vide the Central Tax (Rate) notification no. 14/2021 and
15/2021 dated 18th November 2021, recommended at the 45th GST Council
meeting.
(3) e-Commerce operators to pay GST under Section

9(5) for passenger transport and restaurant services
e-Commerce operators will become liable to pay GST under Section 9(5) for
the cab services, carrier services, etc provided for transportation of
passengers since they are removed from the list of exemptions. This is
notified by the Central Tax (Rate) notification no. 16/2021 dated 18th November
2021.
Further, the transport of passenger service included under Section 9(5) of the
CGST Act will also include omnibus and other motor vehicles. Further, cloud
kitchens e-commerce operators providing the supply of food will also be
included under Section 9(5) and subject to GST. However, it exempts food
supply services from premises having hotel accommodation where the
declared tariff per unit is at or below Rs.7,500. These two are notified vide the
Central Tax (Rate) notification no. 17/2021 dated 18th November 2021.
(4) Other GST rate changes

a) Exempts ‘carriages for disabled persons’ under HSN code 8713 earlier taxed
at 12% by the Central Tax (Rate) notification no. 13/2021 dated 27th October
2021. Further, the same notification removed ‘in respect of Information
Technology software’ from entry 452P earlier charged 18% GST.
b) Central Tax (Rate) notification no. 15/2021 dated 18th November 2021
removed ‘Governmental Authority or a Government Entity’ from serial 3 being
construction services.
c) Key changes are carried out to the description of goods chargeable to GST
vide the Central Tax (Rate) notification no. 18/2021 dated 28th December 2021.
d) Key changes are carried out to the description of goods exempt from GST
vide the Central Tax (Rate) notification no. 19/2021 dated 28th December 2021.
e) A concessional GST rate of 12% applies to HSN code chapter 4414 instead
of earlier 44140000 covering wooden frames having paintings, photos ,mirrors,

etc. Also, a concessional GST rate of 12% applies to HSN code 7419 80 instead
of earlier 741999 covering art ware related to brass, copper or its alloys,
electroplated with nickel/silver.
Item Before After
Import of expensive life-saving medicines such as

Zolgensma, Viltepso or as recommended by a relevant 12% Nil
government department for personal use
Nil from 1st July

Waste unintentionally generated during the fish meal
Applicable rate 2017 to 30th
production, except for Fish Oil
September 2019
IGST on the goods sold at Indo-Bangladesh border

Applicable rate Nil
haats
Transport of goods by vessel and air from India to

Nil Nil
outside India extended up to 30th September 2022
Granting of National Permit to goods carriages on a fee

18% Nil
payment
Skill training programmed where the state/central

government funds expenditure equal to or more than 18% Nil
75%
Services on AFC Women's Asia Cup to be held in 2022 18% Nil
‘Keytruda’ drug for the treatment of cancer 12% 5%
Biodiesel, sold to the oil marketing companies for

12% 5%
blending it with diesel
Fortified Rice Kernels for the Integrated Child

18% 5%
Development Services Scheme, etc.
Retro fitment kits in vehicles for the disabled Applicable rate 5%
With effect from 1st October 2021 subject to the CBIC notification
GST rate corrections for inverted tax structure:
Item Before After
Specified Renewable Energy Devices and parts 5% 12%
Ores and metal concentrates 5% 18%
All kinds of pens 12/18% 18%
Railway parts, locomotives and goods in Chapter 86 12% 18%

GST Rate revision in 44th GST Council
Meeting
The 44th GST council meeting was held on 12th June 2021 and the following
decisions had been taken regarding GST rates effective up to 30th September
2021.
These were notified vide the Central Tax(Rate) notification no. 04/2021 and
05/2021 dated 14th June 2021.
Medicines required for COVID-19 & Black Fungus treatment:
Items Old rate Proposed rate
Tocilizumab 5% Nil
Amphotericin-B 5% Nil
Remedesivir 12% 5%
Anti-coagulants like Heparin 12% 5%
Any other drug (recommended by the Ministry of Health

and Family Welfare (MoHFW) and the Dept. of Pharma Existing rate 5%
(DoP) for Covid-19 treatment)
Medical equipment required for COVID treatment:
Medical Grade Oxygen 12% 5%
Oxygen concentrators/ generators (which include

12% 5%
personal imports)
Ventilators and ventilator masks/ cannula/ helmets 12% 5%
BiPaP machine 12% 5%
High flow nasal cannula device 12% 5%
Pulse oximeters 12% 5%
COVID-19 testing kits and items utilized for the prevention of COVID-19:
Covid-19 testing kits 12% 5%
Specified Inflammatory Diagnostic Kits, namely D-

12% 5%
Dimer, IL-6, Ferritin and LDH
Hand sanitizer 18% 5%

Temperature checking equipment 18% 5%
others:
Gas/electric/other furnaces for crematorium, including

18% 5%
their installation, etc.
Ambulances 28% 12%
GST Rate revision in 42nd GST council

meeting
The 42nd GST council meeting was held on 5th October 2020 and the following
decisions have been taken regarding GST rates.
GST exemption provided to satellite launch services by ISRO, Antrix Corporation

and New Space India Limited (NSIL) to encourage the space launching services
in India.
The non-alcohol based sanitizers will continue to be taxed at an 18% GST rate.
GST Rate revision in 39th GST council

meeting
39th GST Council meeting was held on 14th March 2020, Saturday at New
Delhi. Read all the highlights on 39th GST Council Meeting.
The following are the rate cuts announced at the 39th GST Council meeting:
Item Old Rate New Rate
Mobile phones and specified parts 12% 18%
Handmade matches 5% 12%
Other than handmade matches 18% 12%
Aircraft MRO (Maintenance, Repair, Overhaul) services 18% 5% (with full ITC)
The rate changes are effective from 1 April 2020

meeting
38th GST Council meeting was held on 18th December 2019, Wednesday at
New Delhi. Read all the highlights on 38th GST Council Meeting.
Lotteries (State-owned) 12% 28%
Lotteries (State-authorised) 28% 28%
Woven and non-woven fabrics 12% 18%
Sacks of Polythene and Polypropylene in nature 12% 18%
GST rate changes will apply from 1 March 2020 for lottery and from 1 January
2020 for bags and sacks.

meeting
GST Council had its 37th meet held at Goa on Friday (20th September 2019).
Read all the highlights on 37th GST Council Meeting.
GST Rate Revision effective from 1st October 2019
Plates and cups made of flowers, leaves and bark 5% Nil
Caffeinated Beverages 18% 28%+12% cess
Supplies of Railways wagons & coaches (without

5% 12%
refund of accumulated ITC)
Outdoor Catering (without ITC) 18% 5%
Diamond Job work 5% 1.50%
Other Job work 18% 12%
Hotels (Room Tariff of Rs.7501 or above) 28% 18%
Hotels (Room Tariff from Rs 1,001 to Rs 7,500) 18% 12%
Woven/ Non-woven Polyethylene Packaging bags 18% 12%

Marine fuel 18% 5%
Almond Milk 18%
Slide fasteners 18% 12%
Wet grinders (consisting of stone as a grinder) 12% 5%
Dried Tamarind 5% Nil
Semi-precious stones- cut & polished 3% 0.25%
Specified goods for petroleum operation under HELP* Applicable Rate 5%
*Hydrocarbon Exploration Licensing Policy
Cess on Petrol Motor Vehicles (Capacity of 10-13

15% 1%
passengers)
Cess on Diesel Motor Vehicles (Capacity of 10-13

15% 3%
passengers)
Supplies to FIFA- specified persons for the Under-17 Women’s Football World
Cup in India
Supply to the Food and Agriculture Organization (FAO) for specified projects in
India
Imports of certain defense goods not made indigenously (up to 2024)
Supply of silver/platinum by specified agencies (Diamond India Ltd) for export
Import of Silver or Platinum by specified agencies (Diamond India Ltd)

meeting
GST Council had its 36th meet via video conference on Saturday (27th July
2019). Read all the highlights on 36th GST Council Meeting..
Items Old rate New rate
Electric chargers 18% 5%
Electric vehicles 12% 5%

A full exemption is given to hiring of e-buses(seating capacity exceeds 12
passengers) by local authorities
Note: Will come into effect from 1 August 2019 after the CBIC notification
GST Rate revision in 33rd GST council

meeting
The latest meeting-33rd GST Council meeting is rescheduled on 24th February
2019 from earlier date 20th February 2019.
It was chaired by Finance Minister Arun Jaitley. Real estate was in limelight.
This is the first one after the Interim Budget 2019.

The GST rates were slashed on the under-construction houses without ITC
benefit; No changes to GST Rate on lottery or Cement.
GST Rate revision in 31st GST council

meeting
31st GST Council meeting was held on 22nd December 2018. GST Rates for 23
Goods and 3 Services has been revised*.
Here is a summarized version of the list of rate cuts on both Goods and
Services
Changes in Tax
SL.no List of Goods/Services
Rate
Vegetables provisionally preserved but unsuitable for

1 5% to Nil
immediate consumption
Vegetables cooked/uncooked via steamed, frozen or

2 5% to Nil
boiled (branded)
3 Music Books 12% to Nil
Parts for manufacturing renewable energy devices

4 5%
falling under chapter 84, 85 or 94 of Tariff
5 Natural cork 12% to 5%
6 Fly ash blocks 12% to 5%
7 Walking sticks 12% to 5%
8 Marble rubble 18% to 5%

9 Agglomerated cork 18% to 12%
10 Cork roughly squared or debugged 18% to 12%
11 Articles of Natural cork 18% to 12%
12 Movie Tickets < or = Rs 100 18% to 12%
13 Premium on Third party insurance on Vehicles 18% to 12%
14 Accessories for Handicapped Mobility Vehicles 28% to 5%
15 Power banks 28% to 18%
16 28% to 18%
Video game consoles, equipment's used for Billiards

17 and Snooker and other sport related items of HSN code 28% to 18%
9504
18 Retreated & used pneumatic Rubber Tyrese 28% to 18%
19 Color Television Sets & monitors up to “32 Inches” 28% to 18%
20 Digital & Video Camera recorders 28% to 18%
Pulleys, transmission shafts, cranks and gear boxes

21 28% to 18%
under HSN 8483
22 Tax rate on Air travel of pilgrims reduced* 28% to 18%
For travel by non-scheduled/chartered operations for religious pilgrimage

which are facilitated by GoI under bi-lateral agreements. Others: -GST on
the composite supply of goods attracting 5% GST rate where it is supplied
along with the supply of construction services and other goods for solar
power plant, is now levied as follows:
70% of value is considered as supply of goods and taxed at 5% GST.
Remaining 30% of the EPC contract value is supply of service and attracts
standard tax rate for service.
Rate of 5%/18% to be applied based on transaction value of footwear. -

Uniform GST rate of 12% on Flexible Intermediate Bulk Container (FIBC)
from existing 5%/12% (depending on the value).
Goods recommended for exemption

Supply of gold by Nominated Agencies to exporters of article of gold Jeweler.
Proceeds received by Government from auction of gifts received by President,

Prime Minister, Governor or Chief Minister of a State and public servants, the

proceeds of which is used for public or charitable cause.
Vehicles imported for temporary purposes under the Customs Convention on the
Temporary importation of Private Road Vehicles (carnet de passages-en-
douane) will be exempt from IGST and Compensation cess.
Services recommended for exemption

Services supplied by banks to Basic Saving Bank Deposit (BSBD) account
holders under Pradhan Mantri Jan Dhan Yojana (PMJDY)
Services supplied by rehabilitation professionals recognized under Rehabilitation

Council of India Act, 1992 at hospitals, schools or rehabilitation centers
established by Government or charitable institute registered under Section 12AA
of The Income tax Act,1961.
Loan guarantee services provided by Government to its undertakings and PSUs

for bank loans.

meeting
28th GST Council Meeting was held on 21st July 2018. GST Rates for 45 Goods
and 2 Services has been revised*.
Recent GST Rate Changes on Goods

Rakhi (other than that of precious or
1 Nil 18%
semi-precious material )
2 Sanitary Napkins Nil 12%
Circulation and commemorative

3 Nil 5%
coins
4 Raw material for broom Nil 12%
5 Stone/Marble/Wood Deities Nil 5%
6 Sal leaves and its products Nil 18%
7 Khali dona Nil 18%
8 Coir pith Compost Nil 5%
9 Chenille fabrics and other fabrcis 5% 12%

under 5801
10 Handloom dari 5% 12%
Phosphoric Acid (fertilizer grade

11 5% 12%
only)
Handmade Carpets, Textile Floor,

12 5% 12%
Coverings
Knitted cap/topi having retails sale

13 5% 12%
value exceeding Rs. 1000
Kota Stones and Simliar Stones

14 5% 18%
(other than polished)
Ethanol for sale to oil marketing

15 5% 18%
companies for blending with fuel
16 Solid Bio fuel pellets 5% 18%
17 Marine Engine 5% 28%
18 Bamboo Flooring 12% 18%
19 Hand Operated Rubber Roller 12% 18%
20 Brass Kerosene Pressure Stove 12% 18%
21 Zip and Slide Fastener 12% 18%
22 Handicrafts (Excluding handmade) 12% 18%
Handbags including pouches and

23 12% 18%
purses; jewellery box
24 Fuel Cell vehicle 12% 28%
25 Televisions upto 68 cm 18% 28%
Glaziers’ putty, grafting putty, resin

26 18% 28%
cements
Refrigerators, freezers, water

27 cooler, milk coolers, ice cream 18% 28%
freezer
28 Washing Machines 18% 28%
29 Food Grinders & mixer 18% 28%
30 Vacuum Cleaners 18% 28%
Paints and Varnishes (including

31 18% 28%
enamels and lacquers)
32 Shavers, Hair Clippers 18% 28%
33 Hair Cleaners 18% 28%

34 Storage water heaters 18% 28%
35 Immersion heaters 18% 28%
36 Hair Dryers, Hand Dryers 18% 28%
37 Electric Smoothing irons 18% 28%
38 Scent Sprays 18% 28%
39 Toilet Sprays 18% 28%
Pads for application of cosmetics or

40 18% 28%
toilet preparations
41 Lithium-ion batteries 18% 28%
42 Powder Puffs 18% 28%
43 Special purpose motor vehicles 18% 28%
Work Trucks (Self-propelled, not

44 fitted with lifting or handling 18% 28%
equipment)
45 Trailers & Semi trailers 18% 28%
List of Goods Exempt
Fortified Milk exempt 5%
Recent GST Rate Changes on Services
SERVICES
Rate Change
Services new GST old GST
Supply of e-books 5% 18%
Supply of Multimodal Transportation 12% nil
List of Services Exempt
Senior Citizens
1. Services provided by Coal Mines provident fund organization to the PF

subscribers

2. Services provided by Old age home run by state government / central government
to the citizens aged more than 60 years up to Rs. 25000
GST exempted on the administrative fee collected by National Pension System Trust
4. Services provided by an unincorporated body or non profit entity registered under

any law to own members up to Rs. 1000 per year of membership fees.
Agriculture/ Farmers
1. Services by way of artificial insemination of livestock (other than horses)
2. Services provided by FSSAI to food businesses.
3. Services provided by way of warehousing minor forest produce
4. Services provided by the installation and commissioning by DISCOMS for

extending electricity distribution network for agricultural use.
Banking/Finance/ Insurance
1. Reinsurance services provided to insurance scheme such as Pradhan Mantri

Rashtriya Swasthya Suraksha Mission
Government
1. Guarantees given by central/state government to their undertakings/PSUs.
2. Services provided by government to ERCC by assigning the right to collect royalty

to mining lease holders.
Miscellaneous
1. Import of services by Foreign diplomatic missions/UN other international

organizations
2. GST rate slabs will apply on the actual rate for hotel services instead of declared
tariff.

meeting
25th GST Council meeting on 18th January

2018
GST council has made the much-awaited announcements around tax rates on
various categories of goods on 18th January 2018 at Vigyan Bhavan, Delhi.
There has been hype around these rates for a while and now these GST rates
are finally in the public domain!
GST Rates for 29 Goods and 53 Services were revised*. Click here to read all
updates of the meet.
Goods taxed at 0%- Vibhuti, De-oiled rice bran and parts used to manufacture

hearing aids
Reduced from 28% to 18%- Old and used motor vehicles [medium and large
cars and SUVs] without ITC, Public transport Buses that run on Biofuel, Services
of joy rides, Go-karting
Reduced from 28% to 12% –Old and used motor vehicles [other than medium
and large cars and SUVs] without ITC
Reduced from 18% to 12% –Drinking water packed in 20 liters bottles, Drip

irrigation system, sprinklers, Biodiesel, Sugar boiled Confectionery, Services of
construction of metro / mono-rail, mining of petrol crude
Reduced from 18% to 5% –LPG for household use, Tamarind Kernel

Powder, Mehendi paste in cones, Raw materials and Consumables needed for
Launch vehicles/satellites, Services of Tailoring
Reduced from 12% to 5%-Velvet fabric( Without Refund of ITC), Articles of

straw, of esparto or of other plaiting materials
Reduced from 3% to 0.25%-Diamonds and precious stones
Rate increased from 0% to 5%-Rice bran (other than de-oiled rice bran)
Rate increased from 12% to 18%-Cigarette filter rods
Services included in the Exemption List:
Providing information under RTI Act, 2005

Legal services provided to Government
Admission to, or conduct of examination provided to all educational

institutions including any service of conducting entrance examinations on
collection of entrance fees Admission to, or conduct of examination provided
to all educational institutions including any service of conducting entrance
examinations on collection of entrance fees
GST Rate revision in 23rd GST council

meeting
23rd GST Council meeting on 10th

November 2017
GST Rates for 178 items have been reduced from 28% to 18%. Click here to
read all updates of the meet.
GST Rate for manufacturers and traders under composition scheme is 1 %
Reduced from 28% to 18% W.e.f. 15th Nov 2017 – Shampoo, Perfume, tiles,
watches
Reduced from 28% to 12% – Wet grinders, tanks
Reduced from 18% to 12% – Condensed milk, refined sugar, diabetic food
Reduced from 12% to 5% – Desiccated coconut, idli dosa batter, coir products
Reduced from 5% to Nil – Duar meal, khandsari sugar, dried vegetables
For Restaurants within hotels, and room tariff less than Rs. 7,500 the GST rate

is 5%. Also, the credit of ITC paid on inward supplies cannot be taken.
For Restaurants within hotels, and room tariff greater than Rs. 7,500 the GST
rate is 18% and credit of ITC paid on inward supplies can be availed.
Outdoor catering continues to be charged at 18% with the availability of ITC on

inward supplies.
In addition to the above, a few other items were mentioned in the Council’s
announcement of GST rates. These items and the applicable GST rates on
them are as follows

Goods under GST Slabs
5% Tax Slab
Sugar, Tea, Coffee and Edible oil will fall under the 5 % slab, while cereals, milk
will be part of the exempt list under GST. This is to ensure that basic goods are
available at affordable prices. However, instant food has been kept outside this
bracket so, no relief for Maggie lovers!
Coal to be taxed at 5 % against the current 11.69 %. This will prove beneficial for
the power sector and heavy industries which rely on coal supply. This will also
help curb inflation. Expect a good run for Coal India tomorrow.
The ‘mithai’ from the neighboring sweet shop might lose some of its flavors as
Indian sweets will now be taxable at 5 %. If you have a sweet tooth, this could
hurt your pocket a wee bit in the coming days.
18% Tax slab
Toothpaste, hair oil, and soaps will all be taxed at 18 %, where currently they are
taxed at 28 % Most of the cosmetics and fast-moving consumer goods (FMCG)
brands should get the benefit of this tax reduction. After all, Fair and Lovely
might seem fairer in its pricing from now on!
The Council has set the rate for capital goods and industrial intermediate items
at 18 per cent. This will positively impact domestic manufacturers as seamless
input credit will be available for all capital goods. Indeed, it is time for “Make In
India”.
Services under GST Slabs

for restaurants serving alcohol, the tax bracket will be 18 per cent
education, healthcare are going to be exempted from GST
services on Non-AC restaurants will be 12 %
Characteristics of Tax:
1. Basic Characteristics of a Tax:

From the above definitions we can meaningfully derive some basic characteristics of
a tax.
They are:

1. It is a compulsory contribution. Even though a tax is paid willingly, in a sense it is a
compulsory contribution. It only means that no one can refuse to pay a tax, on the
general ground that he doesn’t derive any benefit from certain state services. A tax is
levied on the basis of same predetermined criteria such as equity. Seligman
emphasizes that compulsory contribution is enforced without reference to special
benefits conferred.
2. The fact that tax is a contribution implies the notion of a sacrifice involved on the
part of the contributor.
3. Tax payment is a personal obligation. Prof. Lutz rightly point out that the
obligation to pay tax is a personal responsibility of the taxpayer. This personal
obligation to contribute to the states support is universal and applies to all. This
does not mean that all taxes must be levied on persons or objects of taxation.
As a matter of fact, taxes are actually based on a great variety of material things as
well as non-material and intangible form of wealth. The meaning is that the primary
obligation to pay the tax is a personal obligation.
4. A tax is levied according to certain legal requirements.
5. The amount of tax is not fixed with reference to the exact benefit which a
taxpayer receives from public service. In other words there is no element of quid-
pro-quo in the payment of tax.
6. A tax is paid out of the income of the taxpayer.
7. The power of taxation is mainly to be used for collecting revenue to the state.
Writers like Prof. Lutz are of the opinion that the modern concept of taxation
emphasizes positively that it should be used for the purpose of providing public
revenue and that it apparently does not give a positive sanction to the use of the
taxing power for the accomplishment of ulterior objects.
Commercial Revenue and Income from Public Domain:

In the words of Prof. P. E. Taylor “the revenue which we call commercial are received
in the form of prices paid for government produced commodities and services”.
It includes payment for postage, tolls, interest on funds borrowed form government
credit corporations, prices for liquor in government stores, surplus war materials,
electricity distributed by publicly owned utilities etc.

The basic characteristic of commercial revenue is that in return for payment, the
person concerned receives a consumable commodity or service.
Profit from public undertakings run on a monopoly basis also can be included in the
category of commercial revenue. According to-Dalton monopoly profit of a public
enterprise resemble very much of a tax.
Dalton argues that there is no substantial distinction between the British government
revenue from export duties imposed on private traders and the French government
monopoly profit from the sale of Tobacco; so long as the government uses its
monopoly power in a public enterprises to charge high prices with a view to get large
profits as a form of revenue.
Income from public domain is also included in the commercial revenue. This income
is received from public property in land, building, mine etc. income from this source
consist of the receipts from lease or sale of these properties or the sale of products
in public properties. It includes only that part of public property which is reserved or
used by the state or is leased to private persons basically for fiscal purposes.
However revenue from public domain is not a major source of income in many
countries in modern times. The income from this source is steadily tending to
decrease.
Administrative Revenue:
Those receipts placed in the category of administrative revenue include fees,
licenses, fines, forfeitures, escheats and special assessments. They generally arise
as a by-product of the administrative function of the government. Hence they are
called administrative revenues.
(a) Fees:
Fees are payments for services rendered by the governments such as registration of
births and deaths etc. Prof. Seligman defined fee as “a payment to defray the cost
of each recurring service undertaken by the government primarily in the public
interest but conferring a measurable special advantage on the fee payers”.
Thus a fee is a payment charged by the government to bear the cost of admin‐
istrative service rendered by the government.
It is paid by the people to avail such services. In charging the fee certain principles
should be followed. The fee levied must be equal to the cost of production. It may
also resemble a monopoly price, since it is charged by the public authority to prohibit
rendering the same service by any other than itself.

The fee can be distinguished from price. The fees are charged for government
services. Whereas price are charged for materials or services of business character
e.g. sale of fertilizer manufactured by a government factory.
An element of tax is present in fee. But it is absent in price. In a sense fee is a

compulsory contribution, but price is a voluntary payment.
(b) License Fee:
It is a special type of fee, it is charged for granting a permission or privilege. License

fee are charged for keeping a gun, or a motor vehicle. Hence a license fee is paid in
those instances in which the government authority involved; simply confer
permission or a privilege to a particular person.
The best examples are the registration fee for motor vehicles, the payment for permit
to operate automobile.
A distinction can be drawn between tax and fees. Prof. Seligman point out how fee
differs from a tax in several important points.
1. A tax is levied as a part of a common burden. Whereas a fee is assessed as a

payment for a special privilege. The basis of taxation is the ability or Faculty of the
taxpayer. The basis of a fee is the special benefit accruing to the individual. In the
case of a tax, the benefit is not susceptible of direct measurement. In the case of a
fee the benefit is measurable
2. The payment of fee legalizes some action. If the fee is not paid, the base of the
fee or the source or purpose of the fee becomes illegal. This is not the case with a
tax. If the income tax is not paid, the defaulter is made to pay a penalty, but the
income itself is not made illegal. But if the automobile driver does not pay the
registration fee, driving of the car is made illegal.
3. A third distinction between taxes and fees may be found in the conditions attached
to the service which the government performs in the case of a fee the government
does some particular thing in return. In the case of tax, it gives no equal service.
There is quid-pro-quo in fees, but quid-pro-quo is absent in tax.
(c) Special Assessment:
Certain public improvements, such as the construction of streets and sewers, confer
specific benefit upon particular property owners in addition to their general
community benefits.
Special assessments are charges imposed upon property benefited by such

improvements. It is imposed by the government, whenever certain specific
improvements have been made as a result of public expenditure. For instance,

provision of irrigation facilities in a particular area may call for a special assessment
on all beneficiaries.
This is compulsory contribution levied in proportion to the special benefits derived,
towards the cost of the improvement of property. This assessment is known in
England as ‘betterment tax’ and in America as ‘special assessment’.
In India betterment levy is imposed on certain properties, especially land, whose

capital value has been enhanced by the introduction of casual irrigation.
Prof. Seligman defined special assessment as “a compulsory contribution, levied in

proportion to the special benefit derived to defray the cost of a specific improvement
to property, undertaken in the public interest”.
Prof. Seligman point out the following characteristics of special assessment:

(a) The special benefit is measurable,
(b) There is an element of special purpose,
(c) These assessments are not progressive but proportional to the benefit received,
(d) It is a payment for specific local improvement, and
(e) Through this charge the government claims a part of the unearned increment in
the value of property, which arises from specific improvement programmed of the
government.
Three practical bases are used in making special assessments:
(1) If the public authority improves a street, the suitable method of fixing the rate of
the beneficiaries is to make it vary according to the length of the frontage facing the
street.
(2) In the case of irrigation and drainage projects, the area is used to assess the
special benefit received.
(3) If the improvements results in appreciation of the value of the properties, the
assessment will take into account, the new value of the property as a ratio of the
original value.
(d) Fine and Penalty:
A fine is a punishment or penalty imposed on an individual for any violation of law.

For example, violation of traffic rules, payment of income tax after the stipulated time
etc. A public authority imposes penalty mainly to defer from certain acts.
(e) Forfeitures:

If refers to the penalty imposed by competent authority like courts, for the failure of
individuals to appear in the courts to complete contracts as stipulated or to
safeguard valuable assets.
Forfeitures of bail or of bond are similar to fines. As source of revenue, fines and
forfeitures have little significance. They are almost entirely unpredictable. In revenue
sense they are pure by-products of the administration of government machinery.
(f) Escheat:
It refers to the claim of the state to the property of persons who die without legal
heirs or documented will. It is the duty of the state to guarantee distribution of the
estates of deceased persons to heirs specified in wills, or to persons declared to be
lawful heirs by courts, if no such heirs exist, the property reverts to the state.
Under the rights of escheat, the government may also acquire unclaimed property of
dissolved educational institutions or other trusts. This is not an important source of
revenue to modern government.
4. Grants and Gifts:

Gifts are voluntary contribution from private individual or non-governmental
organizations to the government funds for specific purpose, such as relief fund or
defense fund during a war or an emergency.
Such contributions are made by patriotic, charitability minded persons during war,
flood or natural calamities to overcome deficiency in government revenue position.
Gifts have no significant place in modern revenue system, except during national
emergencies like war.
Grants or grants-in-aid are a method by which one government provides financial
assistance to another. In a federation the central government provides grants to
state governments, usually in the performance of a specified function.
Sometimes the government of one country receives a grant from another country
which is commonly called foreign aid. It may be military aid, economic aid etc. Many
advanced countries and international funding agencies like World Bank, IMF, etc.
gives grants-in-aid to developing and poor countries for economic development
programmed.
5. Public Borrowing:
In the modern world every government use the method of raising revenue by public
loans. Just as individuals or business firms may borrow in anticipation of other
revenues, the government also borrows.

The government can borrow loans within the country and from outside the country.
The government can borrow from individual institutions, banks etc. From outside
sources it can borrow from international lending institutions.
6. Printing of Paper Money:

The government may resort to printing of paper money as a means of paying their
bills. Governments, unlike individuals, have the power to create money. However, the
printing of paper money is normally avoided as a source of revenue because its use
is too easily abused. Once this method of financing is started, it is difficult to stop and
runaway inflation can easily result.
Thus there are different sources of income of a government. Some of them like taxes
are compulsory payments, others like fees and prices are voluntary. Special
assessments etc. are partly compulsory and partly voluntary.
Each source has its own importance in the revenue base of a government. However,
among these various sources, tax revenue constitutes the major source in modern
times.
Objectives of Taxation:
In a modern democratic society ‘tax tool’ is an important ingredient of the fiscal
system, to achieve certain important objectives.
Today tax tool is not only the traditional type of revenue raiser, but also it is a multi-
edged tool, which can be used for influencing the national economy. The war and
post war period have proved that a good deal of economic effect can be generated
by taxation.
Now it has been widely accepted that taxation is a powerful fiscal tool, which can be
effectively used to achieve certain objectives such as increased production, better
distribution of wealth, to control cyclical fluctuation in income and employment etc. in
a country.
Hence taxation should be governed by certain well defined objectives.
The major objectives of taxation held in the past and pursued today are
detailed below:
1. Revenue Aspect:
The time honored objective of taxation is to raise revenue. The introduction of new
tax measures or the strengthening of existing measures means an increase in
government income to finance normal expansion of governmental activity. This

objective means that the structure of taxes and tax rates ought to be devised to
generate more revenue.
This doesn’t mean that non-revenue consideration have no place in the formulation
of tax policy. This only means that when government has to meet increased
expenditure, it is on taxes that it primarily relies.
However, revenue objective of taxation is subject to certain criticism. It is commonly
argued that, taxation may be used as an instrument for obtaining certain social
objectives like redistribution of wealth and reduction of inequality.
2. Regulatory Objective:
A second objective of taxation is that of regulation or control. This is ‘sumptuary
taxation’. Technically the term sumptuary refers to the regulation or control of private
expenditures. In public finance it came to represent all extra revenue objective of
taxation.
There are some taxes where primary objective is to control and regulate consump‐
tion. For example, restrictions on the consumption of alcoholic liquors are effected by
means of restrictive excise duties.
In the case of such taxes, primary aim is one of regulation and not of revenue. For
instance, the policy of high cigarette excise enforced by some state governments in
India seeks to attain certain social and economic objectives at the cost of revenue
yield.
Likewise customs duties can be levied on imported articles with a view to encourage
internal production of the same. However, this method of combining regulation with
revenue collection is criticized on the ground that it achieves neither purposefully.
3. Taxation as a Means of Regulating the Level of

National Income:
Nowadays taxation is advocated as a measure to regulate the flow of income. This is
an extension of the regulative aspect of taxation. Taxes transfer income from
individuals to government. This in turn will alter the pattern of private consumption
and investment and thus influence the level of national income.
Similarly those taxes, which are taken from surplus income, reduce funds available
for private consumption and investment. When the level of income is low, the
revenue objective of taxation will have to be subordinated to sumptuary objectives,
4. Functional Finance Objective:

This was advocated by A.P. Lerner, an American Economist. He holds the view that,
the chief objectives of public finance is to maintain an adequate level of national
income. Lerner observes “taxation should never be imposed merely as a means of
raising money for the government, but to leave less in the hands of the tax payer”.
According to this view, public finance must be functional finance in which revenue
motives and other motives must be subordinated to that of maintaining an adequate
level of income. Taxation should be used as a means of cutting down total spending,
when it becomes necessary so as to prevent excessive total demand and inflation.
5. Incentive Objective:
In recent years a good deal of emphasis has been given on ‘incentive taxation’. It
includes a variety of proposals, designed to provide preferential treatment for income
from business enterprises and establishing rewards and penalties to stimulate
output.
Its purpose is to stimulate the larger flow of investment activities in the desired chan‐
nel and to prevent its flow into undesired channels. Several types of incentives are
provided under incentive taxation to stimulate investment activity.
For example, ‘tax holiday’ given to investors who establish investment units in a
backward area, for a certain number of years. Another example is export subsidy
given to export industries to boost our export to foreign countries.
6. Reduction of Inequalities:
It is now generally accepted that taxation ought to be used as a means of regulating
the socio-economic life of the community, it is an effective tool to reduce the glaring
inequalities of income and wealth existing in the modern society. Democratic
governments aim at securing social justice. Progressive tax system is designed to
achieve this objective.
7. Growth, Equity and Stabilization:

In the case of developing countries, the objective of taxation is to promote economic
growth with stability. Tax policy should judiciously be framed to promote saving,
investment and capital formation activities.
Growth may sometimes generate inflationary pressure in the economy. Hence, tax
policy should aim at bringing about stability in the economy.
The discussed objectives may change from time to time depending on the prevailing
economic condition in an economy. The changing political scenario of a democratic

country also exerts influence in the tax policy pursued by the government.
However, revenue objective is the prime motto behind any tax policy. All other objec‐
tives are supplementary to these basic objectives. In a sense socioeconomic
objectives cling around the revenue objective of tax policy.
Hence, it is very difficult to frame a comprehensive tax policy, which will help to
realize the manifold objectives discussed above.
Principles or Canons of Taxation:

Taxation by definition involves compulsion. Taxpayers are required to make certain
payments regardless of their individual disposition in the matter.
In a democracy, taxes will not be imposed unless they meet with the approval of the
majority of the representatives of the people. But once taxes are levied, no individual
has the choice of paying or not paying.
Owing to this compulsory nature, tax collections have significant effects upon the
behavior of individuals and the functioning of the economy. This aspect must be
taken into consideration, in the framing of appropriate tax structure.
Tax revenue has occupied the most important place in the revenue system of all the
governments in modern days. Principles of taxation mean the framing and
employment of appropriate criteria in the development of tax structure. This aspect
has received attention from earlier days.
Mercantilists and physiocrats advanced doctrines of tax principles. Adam Smith

developed his famous canons of taxation, widely quoted down even in the present
day. Mc Culloch, J.B. Say and John Stuart Mill dealt with the question at length.
Principles of taxation focused the attention in the studies of Edgeworth, Dalton and
Pigou. Recent decades witnessed little progress in the development of principles of
taxation.
Recently, most studies in public finance, merely repeat the older doctrines. The
development of the principles of taxation is essentially an application of the theory of
economic welfare.
The principles of taxation can be selected only in terms of the goals which are
accepted as the appropriate objectives of the economic system. Adam Smith was
probably the first writer to attempt a general statement of the principles or canons
which should govern any sound system of taxation.
The celebrated Canon of taxation as prescribed by Adam Smith is explained
below;

1. Canon of equality or Ability:
According to this canon, taxes imposed should be in accordance with an individual’s
ability to pay. In this context, Adam Smith observes “the subjects of every state ought
to contribute towards the support of the government as nearly as possible, in
proportion to their respective abilities that is in proportion to the revenue which they
enjoy under the protection of the state”.
It implies that in absolute terms the richer should pay more taxes, because without
the protection of the state, they could not have earned and enjoyed that extra
income. In this case Smith observes “it is not very unreasonable that the rich should
contribute to the public expense not only in proportion to their revenue, but
something more than that proportion”.
2. Canon of Certainty:
This canon is meant to protect tax payers from unnecessary harassment by the tax
officials. The amount to be paid, the time and method of payment should be clear
and certain for the tax payers to adjust his income and expenditure accordingly.
“The tax which each individual is bound to pay ought to be certain and not
arbitrary. The time of payment, the manner of payment, the quantity to be paid
ought all to be clear and plain to the contributors and to every other person”.
Adam Smith further point out that if a scope for arbitrariness exists, then under such
circumstances, even honest tax machinery will become unpopular. Certainty also
implies that the state should know how much revenue it could expect and when it
could get it.
According to Adam Smith uncertainty in taxation encourages corruption. All attempts
at equality will be a myth, without the tax being certain.
3. Canon of Convenience:
This canon states that “every tax ought to be levied at the time or on the manner in
which it is most likely to be convenient for the contributor to pay it. A tax imposes
burden on the taxpayer.
Hence a tax should be imposed at a time and in such a manner that the taxpayer
feels minimum of inconvenience. For example, agricultural tax should be collected
soon after harvest, since the farmers are in a better position to pay it. Income tax
should be deducted monthly on installment basis from salaried taxpayers.
The canon of certainty implies that the time and manner of payment should be
certain. But the canon of convenience says that the time of payment and manner of

payment should be convenient.
4. Canon of Economy:
Every tax involves a collection cost. It is important that the cost of collection should
be the minimum possible. Smith says that “every tax ought to be contrived as
both to take out and to keep out of pockets of the people as little as possible
over and above what it brings to the public treasury of the state”.
The tax is economical, in the sense that the cost of collection is very small.
Moreover, a tax will violate the canon of economy, if hinders the development of
trade and industry in any manner.
Taxes on harmful drugs and intoxicants are regarded as economical because they
not only bring income but also discourage unproductive expenditure. This rule
requires that taxes be established, in such a manner as to minimize the real costs of
collection, in terms of resources required to collect the taxes and to comply with the
tax laws on the part of the taxpayers.
Other Canons:
The above canons of taxation are still considered as fundamental principles of

taxation. However, owing to the needs of the modern complex state and the problem
involved in them, the canons of Adam Smith needs to be supplemented, by certain
rules, most of which should be treated as corollaries to the canons of taxation.
It is true that the canons of Adam Smith are excellent. Yet it is generally recognized
that they must be completed, to suit the needs of modern complex society, by the
addition of a few other general principles.
Hence later writers on public finance like Bastable, Shiras, and Mrs. Hicks etc. have
added a few more canons of taxation, which are given below.
5. Canon of Productivity:
Productivity or physical adequacy means that, the tax system should sufficiently yield
the revenue needed to meet the requirements of the state.
Productivity again means that the government should not depend upon deficits. One
tax bringing a large income is not better than many taxes, each bringing very small
revenue. However, multiplicity of taxes should be avoided. Another meaning of
productivity is that the tax should not discourage production.
6. Canon of Elasticity:

Elasticity is closely connected with fiscal adequacy. This canon implies that yield
from taxation should grow along with increase in population and development of
economy.
When the state is in need of larger revenues in an emergent situation, it should be

possible to raise them by pushing up the rate of the tax.
Elasticity demands that there should be in the system, a capacity to respond quickly
to the changes in the demand for revenue. For example, in India income tax is
elastic. By raising the rate a bid or imposing surcharge the government is able to
collect more revenue.
7. Simplicity:
The tax system should be simple, plain and intelligible to the common man. As far as
the underdeveloped countries are concerned, this is a very important characteristic
of good tax system; since the common taxpayers are illiterate.
In any country the system of taxes and the laws governing them should be simple. A
complex tax system may even prompt an honest taxpayer, to indulge in involuntary
tax evasion.
8. Flexibility:
Flexibility means that there should be no rigidity in the tax system, so that it can be
quickly adjusted to new conditions. Under a flexible system, a new tax can be
imposed or an old tax can be withdrawn to adjust to the changed situation.
9. Diversity:
There should be a variety of taxes properly coordinated, so as to form a united and
consistent system. The tax system should be broad based. This canon requires that
the tax system should not rely on a few taxes. There should be a large number and
variety of taxes, so that it can touch all sections of the people in the society.
10. Neutrality:
The tax system should not distort the working of the market mechanism. Taxes
should not produce any adverse effect in the economy. This canon means that taxes
should be able to avoid undesirable effect upon the economic system of the country.
11. Canon of Co-Ordination:

In a federal system of government, taxes are imposed by the central, state and local
governments.
Hence there must be a well stitched co-ordination between the taxes imposed by
different taxing authorities.
12. Canon of Expediency:
This canon insists that taxes should not be covered in controversy. Taxpayers should
have no doubt about its desirability.
The canons of taxation have a sound philosophy behind them and exhibit an insight
into the practical experience of tax administration and its effects. Since the days of
Adam Smith many other principles have been added.
Supplementing Smith’s four canons, Bastable adds the maxims of productivity and
elasticity and holds productivity to be the most important principle. In this context,
Prof. Cannon observes “the ultimate object of every system of public finance,
so far as the distribution of taxation is concerned must be of course to secure
the best result on the whole and in the long run”.
In this context, equity and economy is considered as the two guiding principle of
taxation. However, in general, the tax structure is considered as a part of the
economic organization of a society and should therefore fit in its overall economic
policy.
Difference between Tax and Duty.

Basis Tax Duty
Duty is a tax levied on goods that are

Tax is a compulsory extraction
Meaning imported from another nation and also
of money by Government
manufactured within the country
tax is levied on both goods and

Scope duty is levied only on the goods
individuals
higher duties are levied on some

Taxes are mostly progressive in
Nature categories of products to discourage
the nature
people from using it .
Tax is a term used in reference

Duty is used in term of goods only such
Related to of income such as income tax,
as customs duty, excise tax
wealth tax, property tax
Tagged on Taxes are generally are tagged Duties generally are tagged with a cost
on an ‘ income or value’ perspective

perspective
Difference between fee and tax

Basis Tax Fees
Fee is a charge for a special services

tax is a compulsory extraction of
Meaning rendered to individuals by some
money by Government
government agency
This tax is often assessed as an

Basis of percentage of an amount of The fee rate is directly related to the
payment money involved in the transaction cost of maintaining services
.
money from the fee is not applied on

Taxes are levied for the common
utilization of anything but to providing those
welfare of the society not for the
revenue services for which the fee has been
benefit of any individual
paid.
Tax is levied as a burden hence

fees is paid to get special services and
benefits there is no benefits applied with
privileges
them
Difference between tax and penalty

Basis Tax Penalty
tax is a compulsory extraction of money penalties are paid for the

Meaning
by Government contravention of law
To generate Revenue for Government and

objectives To provide punishment
welfare of our society
Section 1 of GST – Short title, extent and

commencement
@June 29, 2021 9:00 PM
GST Act 2017:

Section 1 of GST Act 2017 – Short title, extent and commencement. Check out
details for GST Section 1 as per CGST Act 2017. Complete Analysis of GST
Section 1, Section 1 of GST provide details for Short title, extent and
commencement. Explanation of Goods and Service Tax all Sections.

(1) This Act may be called the Central Goods and Services Tax Act, 2017.
(2) It extends to the whole of India except the State of Jammu and Kashmir
(3) It shall come into force on such date as the Central Government may, by
notification in the Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and
any reference in any such provision to the commencement of this Act shall be
construed as a reference to the coming into force of that provision.
1. The Central Goods and Services Tax Act, 2017 has been implemented in the
State of Jammu and Kashmir from 8th July, 2017 through Constitution (Application to
Jammu and Kashmir) Amendment Order, 2017, the Central Goods and Services Tax
(Extension to Jammu and Kashmir) Ordinance, 2017 and the Integrated Goods and
Services Tax (Extension to Jammu and Kashmir) Ordinance, 2017.
2. Certain provisions were came into force on 22.6.17 and remaining provisions on
1.7.17 as notified by the Central Government and hence appointed day for the
CGST Act, IGST, UTGST Acts, SGST Acts was 1st July, 2017. However, the
appointed day for the State of Jammu and Kashmir was 8th July, 2017.
Analysis and Updates

Title:
All Acts enacted by the Parliament since the introduction of the Indian Short Titles
Act, 1897 carry a long and a short title. The long title, set out at the head of a statute,
gives a fairly full description of the general purpose of the Act and broadly covers the
scope of the Act.
The short title, serves simply as an ease of reference and is considered a statutory
nickname to obviate the necessity of referring to the Act under its full and descriptive
title. Its object is identification, and not description, of the purpose of the Act.
Extent:
Part I of the Constitution of India states: “India, that is Bharat, shall be a Union of
States”. It provides that territory of India shall comprise the States and the Union

Territories specified in the First Schedule of the Constitution of India. The First
Schedule provides for twenty-nine (29) States and seven (7) Union Territories.
Part VI of the Constitution of India provides that for every State, there shall be a
Legislature, while Part VIII provides that every Union Territory shall be administered
by the President through an ‘Administrator’ appointed by him. However, the Union
Territories of Delhi and Puducherry have been provided with Legislatures with
powers and functions as required for their administration.
India is a summation of three categories of territories namely – (I) States (29); (ii)
Union Territories with Legislature (2); and (iii) Union Territories without Legislature
(5).
The State of Jammu and Kashmir enjoys a special status in the Indian Constitution
in terms of Article 370 of the Indian Constitution. The Parliament has power to make
laws only on Defense, External Affairs and Communication related matters of
Jammu and Kashmir. As regards the laws related on any other matter, subsequent
ratification by the Government of Jammu and Kashmir is necessary to make it
applicable to that State.
Therefore, the State of Jammu & Kashmir were required to pass special laws to be
able to implement the Goods and Services Tax Acts. Accordingly, the assembly of
J&K passed the GST bill in the first week of July. Subsequently, Honorable President
of India had promulgated two ordinances, namely, the CGST (Extension to Jammu
and Kashmir) Ordinance, 2017 and the IGST (Extension to Jammu and Kashmir)
Ordinance, 2017 making the CGST/ IGST applicable to the State of Jammu and
Kashmir, w.e.f. 8th July, 2017.
Once the laws are passed by the State of Jammu & Kashmir, the Union Government
will have to amend the Central Goods and Services Act, 2017 to delete the phrase
that such provisions do not apply to the State of Jammu & Kashmir. After the
promulgation of ordinance, the India has adopted GST in its form across the country.
Objectives of Taxation
Objectives
of raising

revenue
The basis reason for
collection of tax is for
generating Government
Revenue. Government
use this for National
Defense, for improving
the infrastructure and
for the welfare and
uplifting of the society
Regulatory
Developmental objective objective
Taxation can help you to achieve higher level of Taxation works as an
development within the country such as important role in
regulation especially in
Economic development
the social and
social development economical aspects
capital development such as
reducing inequalities. Regulation of

consumption of
increasing the employment opportunities goods
regulation of
production of goods
Tax structure in India before GST regulations of
import and export of
goods
regulations of
inflammation and
depression etc.

following are
those taxes
which are
replaced by
GST
Central Excise Duty
Duties of Excise
(Medicinal and
Toilet Preparations)
Additional Duties of
Customs (CVD)
Special Additional
Duty of
Customs(SAD)
Service Tax
State Value Added

Tax (VAT)
Central Sales Tax

(CST)
Entry Tax
Purchase Tax
Luxury Tax
Taxes on lotteries,
betting and
gambling
The Structure of GST in India

In the context of India, it is important to note that both the state and the centerl need
to benefit from GST. With this aim in mind, the GSTC introduced a dual GST mode
that distributed powers to both Centre and States to levy the tax concurrently.

Accordingly, the current GST structure comprises of
the following components:
1. Central GST (CGST)

CGST is levied by the Central Government of India on the intra-state supply of
goods and services. The transaction value is defined as the price actually paid or
payable for the said supply of goods or services.
2. State GST (SGST)

GST imposed by specific State governments on the intra-State trade and services or
trade within the state is called SGST(State-GST). Here the revenues are earned by
the State govt. due to SGST as the transaction occurred within the state.
3. Union Territory GST (UGST)

In case of Union territories such as Chandigarh, instead of State govt. the GST is
collected by the Central administration and is referred to as UGST
4. Integrated GST (IGST)

IGST would be collected by the central government on the inter-state transactions of
goods and services. Centre would levy IGST (CGST plus SGST) on all inter-state
transactions of taxable goods and services.
With dual GST, it is naturally a matter of concern which component of GST is

applicable to whom and when.
To determine this, it is first important to ascertain the location of the supplier of the
goods/ services and the consumer. Location defines whether a combination of SGST
and CGST will be applicable or only IGST.
Let us say there is an auto component manufacturer in Pune, and he wants to send
the goods to Mumbai. Since both Pune and Mumbai are located in Maharashtra,
both SGST and CGST will be applicable. It will be equally distributed between the
central government and the state government. Now take another example. Let’s say
this same auto component manufacturer from Pune wants to dispatch goods to

Ahmedabad. Since Pune is in Maharashtra and Ahmedabad is in Gujarat, this is an
interstate transaction, and only the IGST component of the GST will be applicable. It
is pertinent to note here that it does not create any difference for the consumer as
the combined rate of SGST and CGST is always equal to the IGST rate. In other
words, GST ensures smooth flow of taxes between the state and the center without
complicating the tax rates for the parties involved.
Who Should Pay GST?

By its very definition, it is clear that any person who is supplying goods or services is
liable to pay GST. However, to spare the small suppliers and consumers, the
government f India has also set up the basic exemption limit for small suppliers of
goods and services. These limits vary from state to state, and may change from time
to time. It is suggested that you talk to your GST consultant to know whether GST is
applicable to you or not.
Now let us see who all are liable to pay GST. The following categories of
persons will be liable to pay GST:
Supplier making supplies above basic threshold Limit
Persons already registered under an earlier law which are subsuming under
GST
E-Commerce operators registered under GST and through whom certain

categories of notified supplies are made.
Persons registered under GST and required to deduct Tax (TDS)
E-Commerce Operators registered under GST and required to collect tax (TCS)
Any business or entity that has registered for GST will be assigned a unique Goods
and Services Tax Identification Number (GSTIN). This GSTIN will be used for the
purpose of filing returns.
Benefits of GST Implementation

GST is comprehensive: GST will subsume all of the current indirect taxes.
Plus, by bringing in a unified taxation system, across the country, it will ensure
that there is no more arbitrariness in tax rates.
GST is Multi-stage: GST is levied each stage in the supply chain, where a

transaction takes place.

Value-addition: This is the process of addition to the value of a product/ service
at each stage of its production, exclusive of initial costs. Under GST, the tax is
levied only on the value added. This is done through Destination-based
consumption: Unlike the current indirect taxes, GST will be collected at the point
of consumption. The taxing authority with appropriate jurisdiction in the place
where the goods/ services are finally consumed will collect the tax
Scope of GST
1. Easy compliance: GST makes it easy for taxpayers to compliance with required
rules and regulations timely. They can avail all services relating to GST via
online portal such as registration, tax payment, return filling, response to notices,
etc. It has accelerated the whole process.
2. Removes cascading effect: GST has eliminated the cascading effect of

taxation on goods that existed in the previous tax system. Cascading effect
means implying tax on tax which raises the cost of the product. Here the tax is
not levied on the full value of the product but only on the net value added to it.
Removal of cascading effect will make goods cheaper for consumers.
3. Simplification of taxation: This tax has simplified the whole taxation procedure

by eliminating around 17 indirect taxes. GST has minimized the compliance cost
for business and saved them from facing various problems that arise in indirect
tax previously.
4. Provides transparency: The introduction of GST has provided better

transparency in the collection of taxes to the government. Due to its robust IT
structure, it is difficult to evade tax and make false claims by taxpayers. It has
also reduced the collection cost of taxes by the government which ultimately
raises its revenue.
5. Bring uniformity in tax structure: GST has unified the whole tax structure of
the nation. It has introduced the same tax rates for products and services across
the country.
6. Improve profitability: GST has reduced the transaction costs for business

which facilitates them in doing operations efficiently. It has also brought down
production cost by eliminating the cascading effect of tax which improves overall
competitiveness for industry and trade.

Goods and Services Tax (GST): Salient
Features
The introduction of GST is going to be a very important step in the field of indirect tax
reforms in India. It is perceived that GST would increase the competition of our
products in both Domestic and International markets. Many studies have proven that
such a situation would create an instant growth in the economy.
Some of the Salient Features of GST are as follows:
According to present concept, the tax is applied on manufacture and sale of goods
or provision of services. But GST would be applicable on the supply of goods or
services.
The GST will have a dual effect between Centre and States simultaneously levying it
on a common tax base. The GST which will be levied by the Centre on intra-State
supply of goods and/or services would be called Central GST (CGST) and that to be
levied by the States would be called State GST (SGST).
The GST will be applicable to all goods other than alcoholic liquor for human
consumption and five petroleum products, which are petroleum crude, motor spirit
(petrol), high speed diesel, natural gas and aviation turbine fuel. It would apply to all
services barring a few to be specified.
Tobacco and Tobacco products will be subjected to GST and the Centre can levy
Central Excise duty on these products.
The GST will replace the following taxes currently levied and collected by the Centre:
Central Excise Duty

Duties of Excise (Medicinal and Toilet Preparations)
Additional Duties of Excise (Goods of Special Importance)
Additional Duties of Excise (Textiles and Textile Products)
Additional Duties of Customs (commonly known as CVD)
Special Additional Duty of Customs (SAD)
Service Tax
State taxes that would be subsumed under the GST are:

State VAT
Central Sales Tax
Luxury Tax
Entry Tax in lien of octroi (ETILOO)
Entertainment Tax (not levied by local bodies)
Taxes on advertisements
Purchase Tax
Taxes on Lotteries, Betting and Gambling
State cusses and surcharges insofar as they relate to supply of goods and services
*ETILOO: is a tiny tax, but difficult to comply with and inflicts enormous pain on the
economy. It divides the Indian common market and acts like a tariff on import of
goods into a local/municipal area from the rest of the country.
An Integrated GST (IGST) would be levied and collected by the Centre on inter-State
supply of goods and services. The accounts would be settled periodically between
the Centre and the States to ensure that the SGST portion of IGST is transferred to
the destination State where the goods or services are eventually consumed.
The tax payers shall be allowed to take credit of the taxes paid on inputs (input tax
credit) and utilize the same for payment of output tax. But no input tax credit on
account of CGST shall be utilized towards payment of SGST and vise versa. The
credit of IGST would be permitted to be utilized for payment of IGST, CGST and
SGST in that order.
Harmonized System of Nomenclature (HSN) code will be used for classifying goods
under GST regime. Taxpayers whose turnover is higher than Rs. 1.5 Crores but
below Rs.5 Crores shall use 2 digit code and the taxpayers whose turnover is Rs.5
Crores and above shall use 4 digit code.
Exports shall be treated as zero-rated supply. No tax is payable on export goods but
credit of the input tax related to the supply shall be admissible to exporters.
The import of goods and services would be treated as inter-State supplies and would
be subject to IGST in addition to the applicable customs duties.
The laws, regulations and procedures for levying and collecting CGST and SGST
will be in harmony to possible extent.
Centre State Relation- Financial Relations

Introduction
States in India were not sovereign entities prior to the foundation of the federation.
As a result, no specific guidelines to protect the states were required. The central-
state financial relationship has undergone a substantial transformation as a result of
the 101st amendment to the constitution and the implementation of the Goods and
Services Tax (GST) in India. Bilateral financial relations between the Centre and
states are set out in articles 268 to 280 of the Constitution of India.
Articles 268-293, mentioned in Part XII of the Constitution, specifies the financial
relations between the Centre and the States.
Division of taxation authorities between the federal government and the states:
The Parliament has the authority to charge the union list taxes
The state legislature has sole authority to impose the taxes listed in the State
List. The Concurrent List enumerates the taxes that can be levied by both the
Parliament and the state legislatures
The Parliament has the residuary power of taxation (i.e., the authority to impose
taxes not listed in any of the three lists). The parliament may levy a gift tax, a
wealth tax or an expenditure tax under this article
There are no tax entries available on the concurrent list. In terms of tax
legislation, the concurrent jurisdiction is inaccessible. However, the 101st
Amendment Act of 2016 provided an exemption by establishing a unique
provision for goods and services tax. The concurrent competence to make
legislators/legislation controlling goods and services tax has been given to
parliament and state legislatures by this amendment.
As time has passed, the Finance Commission has been effective in introducing
dynamic and progressive reforms in the financial relations between the centre and
the states. Inequitable borrowing power distribution remains a problem and a major
concern that must be addressed in light of the changing dynamics of the states-
centre financial relationship.
The Constitution has placed the following restrictions over the taxation powers of the
states:
A state legislature may levy taxes on certain professions, crafts, callings and
occupations. However, under 2500 p.a. cap, a state legislature is barred from
levying a tax on the supply of goods or services or both, under the following two
situations:

When such supply occurs outside the state; and
Where such supply occurs during the export or import process.
The Parliament has the authority to establish standards for identifying whether a
supply of commodities or services, or both, occurs outside of the state, or in the
path of import or export
The usage or sale of electricity is subject to a tax imposed by the state

legislature. However, no tax could be levied on the sale or use of electricity,
which is:
Consumed by the union or sold to the union; or
Consumed in the construction, maintenance, or operation of any railway by

the union or by the concerned railway company or sold to the union or the
railway company for a similar purpose.
Any authority established by Parliament for controlling or developing any

interstate river or river valley shall charge a tax on any water or power stored,
generated, consumed, distributed, or sold by a state legislature. However, in
order for legislation to be effective, it must be reserved for the President’s
consideration and approval
Distribution of Tax Revenues

The 80th Amendment Act of 2000 and the 88th Amendment Act of 2003 changed
the way tax revenues were distributed between the federal government and the
states
1. The Centre imposes taxes, while the states are in charge of collecting them.
(Article 268): It contains a variety of duties and tax revenues, including:
Stamp duty is charged on bills of exchange, promissory notes, insurance

policies, checks, stock transfers, and other documents
The collected duties levied by any state (inside the state) are given to the state
rather than to the Consolidated Fund of India
The centre imposes a service tax, but the states collect and appropriate it
(Article 268-A) (now outlawed amid GST)
2. Taxes levied and collected by the federal government but distributed to state
(article 269): This category includes the following taxes:

Various tariffs were levied on the sale or purchase of commodities (other than
newspapers) in the course of interstate commerce or trade
Various tariffs on products sent in the course of interstate trade or commerce
All of these taxes’ net proceeds do not go into the Consolidated Fund of India
(CFI). According to the principles established by the Parliament, they are
assigned to the involved states
3. Imposition and collection of Goods and Services Tax in line with interstate trade or
commerce (Article 269- A):
The Centre imposes and collects the Goods and Services Tax (GST) on supplies
made in the course of interstate trade or commerce
However, this tax is split between the Centre and the States in the manner
proposed by Parliament based on the GST Council’s recommendations
Furthermore, the Parliament has the authority to develop standards for

establishing the site of supply and when commodities or services, or both, are
supplied in the course of interstate trade or commerce
4. Taxes imposed and collected by the Centre but distributed amongst the Centre
and the States proportionately (Article 270): This category comprises all taxes and
duties referred to in the Union List except the following:
Articles 268, 269, and 269-A deal with duties and taxes (mentioned above).
Article 271 imposes a surcharge on taxes and duties (mentioned below).
Any tax imposed for a specified purpose. The President, on the recommendation
of the Finance Commission, prescribes the method for distributing the net
earnings of all these taxes and duties (FCs).
4. Article 271-Surcharges on certain taxes and duties for purposes of the centre:
Articles 269 and 270 of the Constitution provide that the Parliament may impose
surcharges on taxes and duties at any time (mentioned above).
The Centre receives all of the profits from such surcharges. In other words, the
states aren’t paying any of the levies. This fee is not applicable to the Goods and
Services Tax (GST). To put it another way, the GST will not be subject to this
surcharge.
State Government Taxes: Taxes of this nature are entirely the responsibility of
the governments. They are 18 in number and are included on the State List.

Grants-in-Aid to the States
In addition to taxation shared between the Union and the states, the Constitution
provides grants-in-aid to the states from federal funds. Statutory grants and
discretionary grants are the two types of grants-in-aid to states:
Statutory Grants
Article 275 empowers the Parliament to offer grants to states which are in need
of financial assistance, rather than to all states. Each year, these grants are
charged to the Consolidated Fund of India (CFI)
Aside from this standard provision, the Constitution additionally provides for
special funds to promote the welfare of scheduled tribes (STs) in a state or to
improve the quality of administration of scheduled territories in a state, such as
Assam
Under Article 275 statutory grants (both general and particular) are awarded to
states on the Finance Commission’s recommendation.
Discretionary Grants
Article 282 empowers the Union and the states to give grants for any public
purpose, even if it falls outside of their own legislative jurisdiction. The Centre is
responsible for enforcing this regulation
Conclusion
The financial relationship between the Centre and the States changes dramatically if
a financial emergency is declared under Article 280 of the Indian Constitution. In
such instances, the Centre gains enormous authority and exerts enormous influence
over the States, forcing them to adhere to specific financial propriety standards and
other important protections.
The Constitution (122nd Amendment)

(GST) Bill, 2014
Highlights of the Bill
The Bill amends the Constitution to introduce the goods and services tax
(GST).

Parliament and state legislatures will have concurrent powers to make laws on
GST. Only the centre may levy an integrated GST (IGST) on the interstate
supply of goods and services, and imports.
Alcohol for human consumption has been exempted from the purview of GST.
GST will apply to five petroleum products at a later date.
The GST Council will recommend rates of tax, period of levy of additional tax,
principles of supply, special provisions to certain states etc. The GST Council
will consist of the Union Finance Minister, Union Minister of State for Revenue,
and state Finance Ministers.
The Bill empowers the centre to impose an additional tax of up to 1%, on the
inter-state supply of goods for two years or more. This tax will accrue to states
from where the supply originates.
Parliament may, by law, provide compensation to states for any loss of

revenue from the introduction of GST, up to a five year period.
Key Issues and Analysis

An ideal GST regime intends to create a harmonised system of taxation by
subsuming all indirect taxes under one tax. It seeks to address challenges
with the current indirect tax regime by broadening the tax base, eliminating
cascading of taxes, increasing compliance, and reducing economic distortions
caused by inter-state variations in taxes.
The provisions of this Bill do not fully conform to an ideal GST regime.
Deferring the levy of GST on five petroleum products could lead to cascading
of taxes.
The additional 1% tax levied on goods that are transported across states
dilutes the objective of creating a harmonised national market for goods and
services. Inter-state trade of a good would be more expensive than intra-state
trade, with the burden being borne by retail consumers. Further, cascading of
taxes will continue.
The Bill permits the centre to levy and collect GST in the course of inter-state
trade and commerce. Instead, some experts have recommended a modified
bank model for inter-state transactions to ease tax compliance and
administrative burden.

Why was there a need for constitutional
amendment for introduction of GST in
India!
The authority to levy and collect tax arises from the Constitution of India.
constitutional amendment for gst Article 245 of the Constitution confers the powers
of Parliament and the legislature of the State for enacting the laws. In the case of
any taxation law, any rule, provision, or notification that is Ultra vires the Constitution
is illegal and void. The significant provisions relating to the Constitution are as under:
Taxes that are not to be imposed save by

authority of Law (GST amendment article
265)
This GST article in constitution states that nobody shall have the authority to levy or
collect tax without the authority of law. GST in which list of constitution the term
authority of law presumes that tax proposed to be levied must be within the legal
constitutional framework of gst framework of the Legislature imposing tax.
Extent of laws made by Parliament and by

legislatures of State (Article 245)
This article of the constitution deals with the relationship between the Union and the
States. The power to enact the laws is conferred on Parliament and the Legislature
of the State by Article 245 of the Constitution. The said article provides as under:
“(i) Subject to the provisions of the Constitution, Parliament has authority to frame
laws for the entire or any part of India, and the States may make laws for the whole
or any part of their territory.
(ii) No law that had been framed by the Parliament would be considered invalid on
the grounds that it would have an extraterritorial operation.”
Subject matter of laws made by Center

and by the governments of the State

(Article 246):
It gives the sole authority to Central and State governments for levying taxes in
India. Whereas the Parliament may make laws for the whole of India or any part
thereof, the State Legislature may make laws for the State or part thereof.
The Seventh Schedule to Article 246:
It contains III Lists which enumerate the matters under which the Union and the
State Governments have authority to make laws. The three lists are as follows: List I:
Union List
The Central Government has exclusive powers in respect of matters listed in this
list. List II:
State List
The State Government has powers in respect of matters listed in this list. List III:
Concurrent List
The authority to make laws in respect of matters listed in the List lies both with
Centre and State Governments.
Why was there a need to amend the

Constitution of India?
The Constitution of India has given separate powers to the Centre and the States to
impose various taxes. The Central government levied Excise Duty on all the goods
produced or manufactured in India, The State The government levies Value Added
Tax (VAT) once the goods entered the stream of trade upon completion of
manufacture.In the case of Inter-State Sale of Goods, the Centre carried the power
to levy the Central Sales Tax, but the tax was collected and retained entirely by
States. In the case of Services, the Centre alone had the power to levy Service Tax.
In the case of goods imported from outside India, the Centre levied Basic Custom
Duty (BCD) and Additional duties of Customs together with applicable cesses if any.
To lay the foundation of
GST in India
an amendment was made in the Constitution to empower the Centre and the States
to together charge and collect GST. In this respect, the existing Constitution has
been amended by the 101 constitutional amendment Act, 2016 for this purpose.

article 246a of the Constitution empowers the Centre and the State to levy and
collect tax.
Constitution 101st Amendment Act 2016

Both the Centre and the States have the power to make laws governing goods
and services.
The IGST (Integrated Goods and Service Tax) has to be levied on Inter-state
transactions of Goods and Services and the same has to be collected by Central
Government.
GST is to be levied on all supplies of goods and services except alcoholic liquor
for human consumption. GST shall not be charged on the Petroleum Crude,
High-Speed Diesel, Motor spirit, Natural gas, and Aviation Turbine Fuel till a date
to be notified in the official gazette.
The Chairman of The GST Council shall be The Union Finance Minister.
Article 246A: Special Provisions for GST

Article 246A gives special power to Centre and States to make laws to GST imposed
by Centre and States. Also, it gives exclusive power to the Centre to make laws for
Inter-State Supplies.
Article 248: Residuary Powers of

Legislation:
Article 248 provides the residuary powers to Parliament of our country to frame laws
for any matter not listed in the Concurrent or State List.
Article 269A: Levy and Collection of GST

in course of Interstate Trade or Commerce:
This article states that GST to be levied on Inter-State Trade or Commerce shall be
levied and collected by GOI and apportioned between Union and States in the
guidance and recommendations of the GST Council of India. Also in the case of
Import of Goods and Services IGST would be levied which was earlier subject to
CVD under the Customs Tariff Act,1975. It also states that cross Utilization of IGST
and SGST would not form part of the Consolidated Fund of India.

Article 279A: GST Council
This article has given the power to the President of India to constitute a joint
committee of the States and Centre called the GST Council. The Union Finance
Minister would be the Chairperson and the ministers in charge of Revenue and
Finance would be the Members of the council. The GST Council has the authority to
make recommendations on levies of tax, cesses, or surcharges, exempt, and to
modify them from time to time. They are also authorized to put forward their
recommendations from time to time.
Article 366: Definitions

New definitions for Goods and services (12A), Services (26A), and State (26B) have
been inserted.
What is the dual GST Model under GST

Registration?
CGST (Central Goods and Services Tax) and SGST ( State Goods and Services
Tax) make up India’s dual GST system, which is really just two distinct taxes with
varying tax rates.
It means that both the federal government and the state government can tax and
collect taxes through the laws of this country.
Additionally, both administrations have been allocated unique functions, as stipulated

by the Constitution’s division of powers legislation. As a whole, a dual GST system is
meant to comply with the Constitution’s fiscal federalism provisions.
There are two ways to implement a dual GST system: concurrently or non-
concurrently( not at the same time). In the concurrent dual GST model, the taxes are
imposed concurrently by both the federal government and the state governments,
but each tax is collected separately.
On the other hand, States are responsible for charging and collecting taxes on
products, while the federal government is responsible for taxes on services in the
non-concurrent dual GST model. In India, we have a Concurrent Dual GST Model to
eliminate the cascading effects of taxes.
In simple words, Using a dual GST approach, both the federal and state
governments charge taxes on the supply of goods and services, but the

administration is handled independently by each jurisdiction.
What are the advantages of the Dual GST

Model in India?
There are several advantages of the Dual GST Model in India that you must know.
These advantages of the Dual GST Model are as follows:
Reduced tax burdens imposed by the federal and state governments.
Lower tax rates across a range of products and services
The elimination of the current cascading impact of taxes
Completion of taxes in a less cumbersome manner for taxpayers.
Increased tax revenue due to a bigger tax base and better compliance.
Legislation governing Central GST and State GST would provide a uniform
method of collection for both tax regimes. When it comes to GST, the
composition/compounding scheme should have a maximum yearly gross
revenue limit as well as an applicable minimum tax rate.
If you’re a taxpayer, you have to make sure that you send in regular and online
returns to both the CGST and SGST authorities in a standard way. Thus, you
have to do only online GST Return Filing.
Each taxpayer is given a PAN-linked taxpayer identity number of 14-15 digits.
You can generate e-invoices online in the dual GST model. InstaBill allows you
to generate e-invoices easily and quickly along with several other important
features.
Why do we have Dual GST in India?

A separate tax structure was in place for each state prior to the implementation of
GST.
Therefore, company owners had to cope with several intricate state and federal
taxes on each transaction. Cascading taxes resulted from taxes being placed on top
of taxes, which was a common occurrence in the past.
CGST Full Form and CGST Meaning

The full form of CGST under GST law is Central Goods and Service Tax. It is called
as CGST Act 2017. The CGST act has been enacted to make a provision for levy
and collection of tax on intra-state supply of goods or services or both by the Central
Government and the matters connected therewith or incidental thereto.
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Origin and Commencement of CGST Act

CGST Act extends to whole of India excluding the states of Jammu and Kashmir.
Jammu and Kashmir will need to approve levy of GST in its State assembly, on
account of its special powers on taxation under the Constitution. Once this is
done, GST shall be introduced in the State.
The CGST Act shall come into force from a date which will be notified by the
Central Government in Official Gazette, i.e. from the appointed date.
Different provisions may be made applicable from different dates as may be

notified.
Objective of CGST Act 2017

Under erstwhile taxation laws, Central Government levied taxes on, manufacture of
certain goods in the form of Central Excise duty, provision of certain services in the
form of service tax, inter-State sale of goods in the form of Central Sales tax.
Similarly, the State Governments levied taxes on retail sales in the form of value
added tax, entry of goods in the State in the form of entry tax, luxury tax and
purchase tax, etc. Accordingly, there is multiplicity of taxes which are being levied on
the same supply chain.
Difficulties faced under erstwhile taxation laws shall be listed as below :
cascading of taxes as taxes levied by the Central Government are not available
as set off against the taxes being levied by the State Governments;
certain taxes levied by State Governments are not allowed as set off for payment
of other taxes being levied by them ;
the variety of Value Added Tax Laws in the country with disparate tax rates and
dissimilar tax practices divides the country into separate economic spheres; and

the creation of tariff and non-tariff barriers such as octroi, entry tax, check posts,
etc., hinder the free flow of trade throughout the country. Besides that, the large
number of taxes results in high cost of compliance for the taxpayers in the form
of number of returns, payments, etc.
In view of the aforesaid difficulties, all the above mentioned taxes are subsumed in a
single tax called the goods and services tax which will be levied on supplies which
includes goods and services at each stage of supply chain starting from manufacture
or import and till the last retail level.
So any tax which were levied by the Central Government or the State Governments
on the supply of goods or services has now been converged in goods and services
tax, which is a dual levy where the Central Government will levy and collect tax in
the form of central goods and services tax (CGST Act 2017) and the State
Government will levy and collect tax in the form of state goods and services tax
(SGST Act 2017) on intra-State supply of goods or services or both.
Salient Features of CGST Act 2017

The features of Central Goods and Services Tax Act, 2017, are as follows :
to levy tax on all intra-State supplies of goods or services or both
to broaden the base of the input tax credit by making it available in respect of

taxes paid on supply of goods or services or both used or intended to be used in
the course or furtherance of business;
to impose obligation on electronic commerce operators to collect tax at source,

at such rate not exceeding one per cent of the value of taxable supplies(net), out
of payments to suppliers supplying goods or services through their portals;
to provide for self assessment of the taxes payable by the registered person;
to provide for conduct of audit of registered persons in order to verify compliance

with the provisions of the Act;
to provide for recovery of arrears of tax using various modes including detaining
and sale of goods, movable and immovable property of defaulting taxable
person;
to provide for powers of inspection, search, seizure and arrest to the officers;
to establish the Goods and Services Tax Appellate Tribunal by the Central
Government for hearing appeals against the orders passed by the Appellate
Authority or the Revisional Authority;

to make provision for penalties for contravention of the provisions of the
proposed Legislation;
to provide for an anti-profiteering clause in order to ensure that business passes

on the benefit of reduced tax incidence on goods or services or both to the
consumers; and
to provide for elaborate transitional provisions for smooth transition of existing

taxpayers to goods and services tax regime.
Taxonomy of CGST Law

The CGST Act, 2017 comprises of 174 Sections in 21 Chapters and three
Schedules on supplies without consideration, treatment of activities as to goods
or services and activities which shall be considered as neither goods or services.
These Schedules are as under :
Schedule I. Activities to be treated as supply even if made without

consideration
Schedule II. Activities to be treated as supply of goods or supply of services
Schedule III. Activities or transactions which shall be treated neither as a

supply of goods nor a supply of services.
What is SGST?
SGST is one of the tax components of GST in India. SGST Act expands to State
Goods and Service Tax.
It is 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 2017.
A simple understanding could be that, 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 into one tax in GST
called State GST.
All the tax proceeds collected under the head SGST is for State Government.

What determines whether CGST, SGST or IGST is
applicable for a supply
To identify whether Central Goods & Services Tax (CGST), State Goods &
Services Tax (SGST) or Integrated Goods & Services Tax (IGST) will be
applicable in a taxable transaction, one needs to first know if the transaction is
an Intra State or an Inter-State supply.
Intra-State supply of goods or services is when the location of the supplier

and the place of supply i.e., location of the buyer are in the same state. In a
transaction involving supply within the state, a seller has to collect both
CGST and SGST from the buyer. The Central GST gets deposited with
Central Government and State GST gets deposited with State Government.
Inter-State supply of goods or services is when the location of the supplier

and the place of supply are in different states. Also, in cases of export or
import of goods or services or when the supply of goods or services is made
to or by a SEZ unit, the transaction is assumed to be Inter-State. In an
transaction involving supply between two states or outside the state, a seller
has to collect IGST from the buyer.
Difference between CGST and SGST
Case study to understand CGST, SGST and IGST

A trader in Indore is selling a Printer worth Rs. 10,000 to a trader in Bhopal. The
CGST for this transaction will be 14% whereas the SGST will be 14%. The
trader will have to charge Rs. 1,400 as CGST and Rs. 1400 as SGST from the
trader in Bhopal and the respective amounts will be deposited in the Central and
State Government accounts.
Now, the trader from Bhopal (in the given example) is supplying this printer to his
shop in Bengaluru. As this is an inter-state trade, the Bhopal shop keeper will
charge IGST of 28% i.e. Rs. 2800 on the basic value of the product (Rs. 10,000)
from his Bengaluru shop and deposit the IGST amount into the government
account.
What is UTGST?
The reason behind UTGST applicability in GST is that the common State GST
(SGST) cannot be applied in a Union Territory without legislature.
To address this issue, GST Council has decided to have Union Territory GST
Law (UTGST) which would be on par with SGST. However, SGST can be
applied in Union Territories such as New Delhi and Puducherry, since both have
their individual legislatures, and can be considered as “States” as per GST
process.
UTGST State List Includes

UTGST applies to only those union territories where we do not have a separate
legislature and that list includes the following union territories :
Chandigarh
Lakshadweep
Daman and Diu
Dadra and Nagar Haveli
Andaman and Nicobar islands
What are the 3 types of GST possible after

UTGST’s inception in GST
There could be the following combination of taxes applicable for any transaction:
For Supply of goods and/or services within a state (Intra-State): CGST +

SGST

For Supply of goods and/or services within Union Territories (Intra -
UT): CGST + UTGST
For Supply of goods and/or services across States and/or Union Territories
(Inter-State/ Inter-UT): IGST
Order of utilization of credits taking into account of

UTGST in GST
In the case of utilization of Input Tax Credit of UTGST in an orderly manner, the
treatment to be followed is the same as that of SGST. To sum this up, Input Tax
Credit of SGST or UTGST would first set off against SGST or UTGST
respectively. Output Tax liabilities and balance, if any, can be set off
against IGST Credits available.
With the new rule, the IGST credit needs to be completely utilized before off-
setting it with CGST or SGST. The order of setting off ITC of IGST can be done
in any proportion and any order towards setting off the CGST or SGST output
after utilizing the same for IGST output.
UTGST Rates
Union Territory GST contains same tax rates of 0%, 5%, 12%, 18% and 28%.
Tax exemption criteria for goods and services decided by the government for
SGST will be the same for UTGST.
Introduction
The IGST full form under GST law is Integrated Goods and Service Tax. It is called
as IGST Act 2017.
The scope of IGST Model gives meaning to the GST Act of which IGST is one of the
components. The IGST Act clarifies that Centre would levy IGST which would
be CGST plus SGST on all inter-State transactions of taxable goods and services
with appropriate provision for consignment or stock transfer of goods and services.
The seller making supply outside the state will pay IGST on value addition after
adjusting available credit of IGST, CGST, and SGST on his purchases. And the
exporting State will transfer to the Centre the credit of SGST used in payment of
IGST.
On the other hand, the Importing dealer will claim credit of IGST while discharging
his output tax liability in his own State. The Centre will then transfer to the importing

State the credit of IGST used in payment of SGST.
The relevant information will also be submitted to the Central Agency which will act
as a clearinghouse mechanism, verify the claims and inform the respective
governments to transfer the funds.
What is IGST?
"Integrated Goods and Services Tax” (IGST) means the tax levied under this Act on
the supply of any goods and/or services in the course of inter-State trade or
commerce and for this purpose,
A supply of goods and/or services in the course of import into the territory of India
Finer
shall be deemed to be a supply of goods and/or services in the course of inter-State
point
trade or commerce.
1
Finer
Export of goods and/or services shall be deemed to be a supply of goods and/or
point
services in the course of inter-State trade or commerce.
2
Integrated goods and services tax (IGST) would mean the tax levied under IGST Act
on the supply of any goods and / or services in the course of inter-state trade or
commerce.
Integrated GST shall also apply to import of goods and services into India. The basic
ideology stipulates that any supply of goods or services in the course of import of
goods or services into Indian territory shall be deemed to supply involving inter-state
trade or commerce and hence liable to IGST.
For transactions that are look-alike of import transactions and export of goods and
services, shall be deemed to be supplied in course of inter-state trade or commerce.
Interstate trade or commence will, therefore include :
Supplies made in the course of – Inter-state trade or commence
Import into Indian territory (deemed to be inter-state)
Export (deemed to be inter-state)
Thus, Integrated GST shall apply to inter-state transactions and import as well as
export transactions (deemed to be inter-state transactions) relating to supply of
goods and / or services.

Origin and commencement of IGST Act
The Act is called the Integrated Goods and Services Tax Act, 2017 (in short IGST),
an Act enacted to levy, collect and administer IGST in India.
This Act shall be applicable to the whole of India, i.e., including the State of Jammu
& Kashmir. And shall come into force from a date which will be notified by the
Central Government by way of a notification.
Salient features of IGST Act 2017

Continuance of uninterrupted ITC chain on inter-State transactions.
No requirement to pay tax upfront or substantial blockage of funds for the inter-
State seller or buyer.
No claim of refund of taxes paid in exporting State, as ITC is used up while

paying the tax.
Self-monitoring model.
The activity of streamlining is limited to inter-State dealers and Central and State
Governments
should be able to streamline their processes expeditiously.
As Dealers making inter-state supplies will be e registered and correspondence

with them will be by email, the compliance level will improve substantially.
The IGST Model can take ‘Business to Business’ as well as ‘Business to

Consumer’ transactions into an account.
Taxonomy of IGST law

The IGST Act comprises of the following 11 Chapters, 33 Sections and 8 Definitions.
IGST Example
Mr. X, a trader registered in Bangalore, sold goods to Mr. Y, a registered trader in
Chennai, for Rs. 10 Lakhs and further Mr. Y sold these goods to Mr. Z, a registered
retailer from Jaipur, for Rs. 11 Lakhs.

For First · Mr. X will collect IGST at the CGST + SGST rate on Rs. 10
transaction Lakhs.· As we all know that CGST SGST and IGST full form expands
between Mr. X to Central GST/ State GST and Integrated GST respectively.· Mr. Y
and Mr. Y will get the credit which he can use for further payment of his GST.
For Second
· Mr. Y will collect IGST at the CGST + SGST rate on Rs. 11 Lakhs.
transaction
· Mr. Z will get the credit which he can use for further payment of his
between Mr. Y
GST.
and Mr. Z
Who pockets the

· Tamil Nadu will get the SGST on Rs. 10 Lakhs from Karnataka on
taxes here? [Note:
the first transaction between Mr. X and Mr. Y. · Tamil Nadu will also
Key point to
be collecting tax on the second transaction between Mr. Y and Mr. Z on
remember : GST
the amount of Rs. 11 Lakhs which it will further transfer to the Central
is a consumption-
Government (CGST) and to the Rajasthan government (SGST).
based tax.]
What conclusion could be derived from this IGST example? Inter-State trade will
definitely benefit as the interstate transactions do not have to be taxed twice.
This is in contrast to erstwhile tax laws where if you purchased goods from Chennai,
you pay tax there and then again in your state in which you ultimately sell it. This
helps the traders to increase their Inter-State trade by lowering the tax burden.
Basic understanding about CGST, SGST and IGST

In simple words, these are different names for same tax. Only difference is that tax
levying authority and place of sale is different on the basis of which are the names.
Which could be easily understood from the table below :
Authority of the State/Centre over these taxes which

defines these taxes

A federal country such as India, where both the Centre and the States have been
assigned the powers to levy and collect taxes. Both center and state government
have distinct responsibilities to perform, as per the Constitution, for which they need
to raise resources.
The GST to be levied by the Centre on intra state supply of goods and / or services
is Central GST (CGST) and that by the States is State GST (SGST). On supply of
goods and services outside the state, Integrated GST (IGST) will be collected by
Centre. IGST also applies on imports as well.
Erstwhile
taxation laws - GST - Analysis
Transaction
levies levies
Value Added
CGST Under GST, a transaction of sale within the state
Sale within Tax (VAT) &
& shall have two taxes, SGST which share is taken by
the state Excise /
SGST the state and Central GST which goes to the centre.
Service Tax
Central Sales
Sale
Tax (CST) & A transaction of sale outside the state shall have only
outside the IGST
Excise / one type of tax, IGST which goes to the centre.
state
Service Tax
Consumption determines the type of levy – CGST/

SGST and IGST
GST is a consumption based tax i.e. proceeds of taxes should be received by the
state in which the goods or services are consumed and not by the state in which
such goods are manufactured. Integrated GST is designed to ensure seamless flow
of input tax credit from one state to another.
One state has to deal only with the Centre government to settle the tax amounts and
not with every other state, thus making the process easier.
Difference between CGST and SGST in tabular form

Central GST & State GST are components of GST, Goods and Service Tax.
CGST SGST
Parameter

CGST SGST
Parameter
CGST expands as Central Goods and The expansion of SGST is State

Expansion
Service Tax. Goods and Service Tax.
Different indirect taxes of Central In SGST, the taxes like State Sales
Excise Duty, Central Sales Tax CST, Tax, VAT, Luxury Tax, Entertainment
What are Service Tax, Additional excise duties, tax (unless it is levied by the local
the taxes excise duty, CVD (Additional Customs bodies), Taxes on lottery, betting and
that are duty – Countervailing Duty), SAD gambling, Entry tax, State Cesses and
subsumed (Special Additional Duty of customs) Surcharges in so far as they relate to
surcharges and cesses are merged supply of goods and services etc. are
with CGST. subsumed.
Share of
The share of tax revenue under CGST The share of tax revenue under SGST
tax
is meant for central government. is meant for state government.
revenues
A dealer can use input tax credit of A dealer can use input tax credit of
Mechanism
CGST against CGST or IGST. The SGST against SGST or IGST. The
for usage
credit of CGST cannot be used credit of SGST cannot be used against
of credits
against SGST CGST
Can SGST Credit Be Used to Pay IGST?

The SGST act provides that the cross sectional usage of tax credits of SGST with
CGST or CGST with SGST is not permissible under the Act. But the usage of SGST
credit against IGST liability is possible under the Act.
The rule is simple the tax credit of SGST be first used to settle SGST liability and
balance if any be used to settle IGST liability but SGST credit shall not be used to
settle IGST liability
Differences between GST and Previous

Tax Structure
In 2017, the Goods and Services Tax (GST) replaced several State and Central
indirect taxes. Some of those taxes before GST were:
VAT
Service tax
Sales tax

Entry tax
Excise duty tax, etc.
Levying GST eliminated the cascading effect of taxes on the Indian economy.
Explain Cascading Effect of Taxes

Cascading tax effect simply means "tax on tax". This happens when a product is
taxed at every stage of its production before it is sold to the final customer. At every
stage, a new tax is imposed on the already taxed product so its value keeps
increasing. So, the final customer has to pay a higher price because of all the taxes
involved.
Comparison between Previous Tax and GST
What was the Previous Tax Structure?

In 2005, Value Added Tax (VAT) was introduced into the Indian taxation system. It is
an indirect tax.
Introduced to make India a single integrated market.
VAT replaced sales tax.
It's a consumption tax levied on a product anytime it adds value to the supply
chain.
Calculated using the product's price minus any prior taxable expenses of items
utilized in the product.
In 2014, VAT was introduced in all states and union territories except Andaman
and Nicobar Islands and Lakshadweep Islands.
Drawbacks of VAT
Under the VAT system, it was not viable to claim Input Tax Credit (ITC) on
services.
Cascading Effect of taxes.
Various states have different VAT rates.
CST input cannot be subtracted from VAT and vice versa.
Every state has its VAT legislation.

Multiplicity of taxes.
Why was GST Introduced?

Former Prime Minister Late Shri Atal Bihari Vajpayee formed a committee to
write the GST law in 2000. This committee proposed the concept of "one nation,
one tax".
A task force known as the “Kelkar Task Force” was formed in 2004 to strengthen
the taxation system by implementing GST.
However, the implementation of GST was first postponed in 2008 and later failed
in 2010 as the government took no concrete steps.
What are its Benefits Over VAT?

The primary goal of implementing the GST system was to simplify India's tax
structure. Doing this would eliminate the tax system's complexity before GST,
which suffered from various multi-dimensional issues.
The complexity of taxation and its cascading impact was an important reason for
changing the old taxing system on goods and services.
The former tax structure featured many taxes, including excise duty on

manufactured goods, Wealth Tax, Sales Tax, VAT, Central Sales Tax, Import and
Export Taxes, Service Tax, Luxury Tax, and plenty of others, all of which
produced a lot of complications and inadvertent tax distribution.
The disadvantages are better explained through the following example:

Let us suppose a consultant provides services to his clients.
Under VAT regime/Before GST: The consultant would have charged 15% service tax
on services of Rs. 75,000. So, his output tax was Rs. 75,000 x 15% = Rs.11,250.
Then, if he purchased office supplies for Rs. 25,000 by paying 5% as VAT, it would
cost Rs. 22,000 x 5% = Rs. 1,250. He had to pay Rs. 11,250 output service tax
without getting any deduction of Rs. 1,250 VAT already paid on stationery. His total
tax outflow is Rs. 12,500
After GST Implementation: GST on service of Rs. 75,000 @18% = Rs. 13,500. Now,
subtract GST on office supplies (Rs. 25,000 x 5%) = Rs. 1,250. Therefore, the net
GST liability to pay is Rs. 12,250
Implementation of the GST removed various geographical hardships for trading and
business, and the entire nation came under a single taxing system. This can be

understood from the table below :
Taxes included from earlier tax regime into the Taxes excluded from the earlier
current GST framework: tax regime:
Service Tax Electricity Duty
VAT/Sales Tax Toll Tax
Central Sales Tax Alcohol consumption
Entertainment Tax Property Tax
Luxury Tax Countervailing Duty
Lottery Tax
Entry Tax
Tax on Lottery
The Different Components of GST

The structure of GST has three important components:
CGST – The Central Government levies it on intra-state sales of the product
SGST – The state Government collects it after an intra-state sale
IGST – The Central Government of India collects it from an inter-state transaction
Also Read: GST Rates in India - List of Goods and Service Tax Rates, Slab
What are the Differences between GST and VAT
Parameter GST VAT
What does it On the sale of Products

Both goods and services
tax? (separate tax for services)
When is the
At the time when goods are
tax On the supply of goods and services
sold
applicable?
Tax rate and Each state has different rates

Uniform tax rates across India
laws and laws
Who has After collection, the tax is

After collection, tax is equally shared by
authority confined to the state in which
the state and central government
over taxes the sale takes place

Parameter GST VAT
Returns should be filed on every 20th returns are filed either on the

Tax return
day of the next month for the previous 10th, 15th, and 20th of the next
filed
month month for the previous month
Online and offline payment choices

Payment
available (Online payment is compulsory if Only offline payment
Methods
the GST payable is more than Rs. 10,000)
Input tax credit benefit is available which

Input tax No input tax credit benefit exists
means a taxpayer can claim the credit on
credit on customs duty paid
the supplies received
Compliances A similar set of compliances for the Compliances for the movement
for goods movement of goods between different of goods between states differ
moved states from one state to another.
Who collects The state where the seller

State where the consumer resides
the tax? resides
Concerning different taxes, these are the following differences

between VAT and GST
Parameter VAT GST
Depending on the regulations

Under the Finance Act, the centre
governing Place of Supply, the
Service Tax imposes service tax on a list of services
State GST absorbs service
on a provision/payment basis.
tax.
Except for certain products, all others State GST absorbs this tax
State VAT
are taxed under VAT. under itself
Under GST, the excise duty is

Excise duty will be charged until the replaced by Central GST, and
Excise Duty
product is manufactured under VAT. tax will be levied upto the
retail level.
Basic Customs Under VAT, the government levies a Same tax levied as before
Duty separate tax on imports. GST.
Special The central government levies a Under GST, this duty is

Additional Duty separate tax on imports under VAT. absorbed by State GST.

Parameter VAT GST
Entry tax will not be collected

Certain governments apply an entry tax
under the GST, but an extra 1
on inter-state transfers that are
Entry Tax percent will be collected as a
considered as imports in the local
tax on the inter-state supply of
region under the VAT.
specific commodities.
When it comes to inter-state transfers

including C-Forms, CST is charged at a This tax will be imposed under
Central Sales Tax reduced rate of 2 percent under VAT. GST, however, dealers will be
Otherwise, the full rate applies, which eligible for full credit.
varies from 5 to 14.5 percent.
Tax on Export of
Commodities and Under VAT, this tax is not required. No change.
Services
Tax on Inter-State
This tax will be imposed under
Transfer of Under VAT, this tax is not required
GST; however, dealers will be
Commodities to against Form F.
eligible for full credit.
Agent or Branch
Set-offs between State GST

Cross Set-Off of Set-off of service tax and excise charge (SGST) and Central
Levy is allowed under VAT. GST(CGST) are not permitted
under GST.
Tax on Transfer Under GST, this tax may be

This tax is normally excluded under
of Commodities imposed unless TIN of the
VAT; however, its applicability depends
to Agent or transferor and transferee is
on state processes.
Branch the same.
There would be no such

Disallowance of There are a few non-creditable items
disallowance under GST
credit on certain and services that are subject to VAT
unless the GST Council
items and CENVAT requirements.
permits it.
Disallowance of
Unless the GST Council
inputs or input
selects a list of things that
services utilized
Not permitted under VAT come under the Negative List,
in exempted
there would be no such
commodities or
disallowance under GST.
services
There is a credit available between

Credit is granted under GST
service tax and excise duty under VAT,
Cascading Effect on the entire amount of taxes
but no set-off against VAT on excise
paid up to the merchant.
duty.

Parameter VAT GST
The national excise barrier is Rs.1.5

According to the GST
crore, while the VAT barrier varies from
Threshold limits Council's proposals, the State
Rs.5 lakh to Rs. 20 lakh depending on
for levy of tax GST will vary from Rs.10 lakh
the state. The service tax threshold is
to Rs.20 lakh.
Rs.10 lakh.
Levy of tax on
Certain government entities, non-profit
NGOs and
organizations, and public sector No changes under GST.
government
undertakings will be subject to VAT.
bodies
There would be no such

exemptions under GST, and
Certain regions, such as the North-
the GST Council may
Exemptions East, will be eligible for VAT
establish an Investment
exemptions.
Refund Scheme for specific
zones.
Pre and Post GST India

In the pre-GST era
CENVAT
CENVAT (excise duty) is imposed on products made in India, but only at the

manufacturing level.
It was a critical obstacle to an efficient and neutral flow of tax credits.
This resulted in the replacement of VAT for the GST in many countries.
Division of central and state tax:
The Constitution divides the tax system between central and state governments.
The state government had the right to impose any tax on affairs or objects of the
state.
In the case of services tax, the central government can collect taxes. Yet, the
state government dominates in employment contracts.
This structure created obstacles for the central government's income generation
and distribution.
Not accounting for variables:

The tax system does not consider various things like copyrights, patents,
software.
As a result, there were complications in classifying these goods under tax policy.
Central Monopoly
With the boom in the service sector, the central government has monopoly in
collecting taxes.
The state governments lost their income by not imposing taxes on the service
sector.
Offsetting
Offsetting was not allowed under the CST for interstate sales of products.
This increased the cascading impact.
Need for Technology
Better tax control and administration requires considerable technology upgrades.
The implementation is both costly and time-consuming.
Irregularities in the files
The tax returns filed under federal and state tax systems had flaws due to no
cross-checking.
Multiple Categories
The indirect tax system includes 15 different taxes payable based on different
standards.
This required immediate and systematic regulation of the filling and calculation of
taxes
Complex Systems
The taxation system in India before GST was complex and needed fixing.
Different taxes on the same products in different countries resulted in high

inflation.
Also Read: Impact of GST on Different Sectors
In the Post-GST era

In a bid to solve the issues under the previous tax structure, GST benefited India in
the following ways:
Increase in Revenue
1. According to experts, GST strengthens the economy and will raise India’s GDP
in future.
2. GST has succeeded in expanding the taxable base by standardizing the

obligation level.
3. In the long run, tax compliance will be easier.
4. An online tax system means more efficiency and accountability.
5. This leads to fewer opportunities to get away with tax fraud.
Simplifying Tax Filing for businesses
1. Business owners realized that the shift to the new GST system takes time,
money, and management.
2. The procedure of submitting GST returns will become simpler in the long run.
3. All major indirect taxes are now unified.
4. Thus, separate departments dedicated to maintaining vast tax documents are no

longer required.
5. As a start-up, one will no longer need to register for certain taxes such as VAT
and Service Tax.
Making Certain Items More Affordable
1. As a private taxpayer, one will notice that the price of certain items has
decreased.
2. This includes the reduction in the tax on private cars by around 5-6 percent.
3. With a 5 percent levy, air transport and economy class travel became somewhat
cheaper.
4. The cost of eating out has remained stable. It depends on the type of
establishment though. Whether the place has air conditioning, sells alcohol, and
if it has a revenue of less than Rs.50 lakh per year are important factors.
5. Unprocessed grains such as rice and wheat, unprocessed milk, vegetables, fish,
meat, and unbranded flours are exempted from GST.
Conclusion

After looking at Old Tax Vs GST, we discover that the implementation of GST on
products and services has made a significant improvement to the current tax
structure. Regular taxpayers and businesses across the country have benefitted
from the changes. However, there are still certain areas that need to be considered
and improved under GST in future.
Unit II- GST ACTS: (Structure &

Terminology)
CGST Full Form and CGST Meaning
The full form of CGST under GST law is Central Goods and Service Tax. It is called
as CGST Act 2017. The CGST act has been enacted to make a provision for levy
and collection of tax on intra-state supply of goods or services or both by the Central
Government and the matters connected therewith or incidental thereto.
Origin and Commencement of CGST Act

CGST Act extends to whole of India excluding the states of Jammu and Kashmir.
Jammu and Kashmir will need to approve levy of GST in its State assembly, on
account of its special powers on taxation under the Constitution. Once this is
done, GST shall be introduced in the State.
The CGST Act shall come into force from a date which will be notified by the
Central Government in Official Gazette, i.e. from the appointed date.
Different provisions may be made applicable from different dates as may be

notified.
Objective of CGST Act 2017

Under erstwhile taxation laws, Central Government levied taxes on, manufacture of
certain goods in the form of Central Excise duty, provision of certain services in the
form of service tax, inter-State sale of goods in the form of Central Sales tax.
Similarly, the State Governments levied taxes on retail sales in the form of value
added tax, entry of goods in the State in the form of entry tax, luxury tax and
purchase tax, etc. Accordingly, there is multiplicity of taxes which are being levied on
the same supply chain.
Difficulties faced under erstwhile taxation laws shall be listed as below :

cascading of taxes as taxes levied by the Central Government are not available
as set off against the taxes being levied by the State Governments;
certain taxes levied by State Governments are not allowed as set off for payment
of other taxes being levied by them ;
the variety of Value Added Tax Laws in the country with disparate tax rates and
dissimilar tax practices divides the country into separate economic spheres; and
the creation of tariff and non-tariff barriers such as octroi, entry tax, check posts,
etc., hinder the free flow of trade throughout the country. Besides that, the large
number of taxes results in high cost of compliance for the taxpayers in the form
of number of returns, payments, etc.
In view of the aforesaid difficulties, all the above mentioned taxes are subsumed in a
single tax called the goods and services tax which will be levied on supplies which
includes goods and services at each stage of supply chain starting from manufacture
or import and till the last retail level.
So any tax which were levied by the Central Government or the State Governments
on the supply of goods or services has now been converged in goods and services
tax, which is a dual levy where the Central Government will levy and collect tax in
the form of central goods and services tax (CGST Act 2017) and the State
Government will levy and collect tax in the form of state goods and services tax
(SGST Act 2017) on intra-State supply of goods or services or both.
Salient Features of CGST Act 2017

The features of Central Goods and Services Tax Act, 2017, are as follows :
to levy tax on all intra-State supplies of goods or services or both
to broaden the base of the input tax credit by making it available in respect of

taxes paid on supply of goods or services or both used or intended to be used in
the course or furtherance of business;
to impose obligation on electronic commerce operators to collect tax at source,

at such rate not exceeding one per cent of the value of taxable supplies(net), out
of payments to suppliers supplying goods or services through their portals;
to provide for self assessment of the taxes payable by the registered person;
to provide for conduct of audit of registered persons in order to verify compliance

with the provisions of the Act;

to provide for recovery of arrears of tax using various modes including detaining
and sale of goods, movable and immovable property of defaulting taxable
person;
to provide for powers of inspection, search, seizure and arrest to the officers;
to establish the Goods and Services Tax Appellate Tribunal by the Central
Government for hearing appeals against the orders passed by the Appellate
Authority or the Revisional Authority;
to make provision for penalties for contravention of the provisions of the

proposed Legislation;
to provide for an anti-profiteering clause in order to ensure that business passes

on the benefit of reduced tax incidence on goods or services or both to the
consumers; and
to provide for elaborate transitional provisions for smooth transition of existing

taxpayers to goods and services tax regime.
Taxonomy of CGST Law

The CGST Act, 2017 comprises of 174 Sections in 21 Chapters and three
Schedules on supplies without consideration, treatment of activities as to goods
or services and activities which shall be considered as neither goods or services.
These Schedules are as under :
Schedule I. Activities to be treated as supply even if made without

consideration
Schedule II. Activities to be treated as supply of goods or supply of services
Schedule III. Activities or transactions which shall be treated neither as a

supply of goods nor a supply of services.
the Odisha goods and service tax act 2017 has been enacted to make
provisions foe levy and collection of tax on intra-state .supply of goods or
services or both by the state of Odisha

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GST and Indirect taxes

GST and Indirect taxes 1

What is Indirect Tax?

Deficiencies in the old Indirect tax Regime

GST and Indirect taxes 2

GST and Indirect taxes 3

1. Sale or purchase of goods which take place inter-State,

Levy of the Duty of Tax

GST and Indirect taxes 4

Challenges in Implementation of GST

GST and Indirect taxes 5

Introduction of VAT (Value added tax)

Following jha’s recommendation a dare move was made by V . P . Singh when he

GST and Indirect taxes 6

GST and Indirect taxes 7

Why Is GST Necessary?

2. To eliminate the Cascading Effect (or) to make a majority of the Goods/Services

GST and Indirect taxes 8

TAX STRUCTURES IN INDIA

Meaning of GST rates and present GST

GST Rates Structure for Goods and

GST and Indirect taxes 9

0% Unbranded Natural Honey

12% Packed Coconut Water

18% Hair Oil

18% Corn Flakes

GST and Indirect taxes 10

28% Small cars (+1% or 3% cess)

GST Rate Changes from 18th July 2022

GST Rate revision in 47th GST Council

GST Rates and hike cuts

description of goods and services old ratio new ratio

cut and polished diamonds 0.25% 1.50%

Tetra Pack (Aseptic Packaging Paper) 12% 18%

Tar (From coal, or coal gasification plants, or producer

GST and Indirect taxes 11

Import of tablets called Diethylcarbamazine (DEC) free

Ostomy Appliances 12% 5%

Orthopedic appliances such as intraocular lens,

Transport of goods and passengers by ropeways (with

Renting of truck or goods carriage including the fuel

Pruning of GST exemptions

Earlier fully exempted, now withdrawn

Maps and hydrographic or similar charts of all kinds,

Cheques, lose or in book form NIL 18%

Parts of goods of heading 8801 NIL 18%

Air transportation of passengers to and from north-

Transportation by rail or a vessel of railway equipment Nil Applicable rate

GST and Indirect taxes 12

Room rent (excluding ICU) exceeding Rs.5,000 per

Common bio-medical waste treatment facilities for

Hotel accommodation priced up to Rs.1,000 per day NIL 12%

Training or coaching in recreational activities on arts or

Earlier partially exempted, now withdrawn

Petroleum/ Coal bed methane 5% 12%

Scientific and technical instruments to public funded