GST Practical Record

G
P.ULAREDDYDEGREE&P
GC
. OLEGE
MEDHIPATNAM, HYDERABD.
Theory & Practice of GST

PRACTICAL RECORD
B.COM VI SEMESTER
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1. Draw a chart showing tax structure in India( Post GST)
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2. Draw a chart and write a note on pre- GST indirect tax structure in India
3. Write any five limitations of pre –GST Indirect Taxes
Indirect taxes have some disadvantages too, which are as follows:

(i) Regressive:
Indirect taxes are not equitable. For instance, salt tax in India fell more heavily on the poor
than on the rich, as it had to be paid at the same rate by all. Whether a rich man buys a
commodity or a poor man, the price in the market is the same for all. The tax is wrapped in
the price. Hence, rich and poor pay the same amount, which is obviously unfair. They are thus;
regressive.
(ii) Uncertain:
Unless indirect taxes are imposed on necessaries, we cannot be sure of the revenue yield. In
the case of goods, with an elastic demand, the tax might not bring in much revenue. The tax
will raise the price and contract the demand. When the thing is not purchased, the question of
the tax payment does not arise.
(iii) Raising Prices Unduly:

They cause the price of an article to rise b; more than the tax. A fraction of the money unit
cannot be calculated, so ever middleman tends to charge more than the tax. This process is
cumulative.
(iv) Uneconomical:
The cost of collection is quite heavy. Every source o production has to be guarded. Large
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administrative staff is required to administer such taxes. This turns out to be a costly affair.
(v) No Civic Consciousness:

These taxes do not develop civic consciousness, because many times the tax-payer does not
even know that he is paying tax. The tax is concealed in the price.
(vi) Harmful to Industries:

They discourage industries if raw materials are taxed. This will raise the cost of production
and impair their competitive capacity.
4. What was the significance of Introduction of VAT in Indirect Taxes priorto

implementation of GST? Write a short note
Value Added Tax (VAT) is a major source of revenue for all Indian states and union territories
(except Andaman and Nicobar Islands and Lakshadweep).
VAT was introduced as an indirect tax in the Indian taxation system to replace the existing
general sales tax. The Value Added Tax Act (2005) and associated VAT rules came into effect
beginning April 1, 2005 in many Indian states. A few states (Gujarat, Rajasthan, MP, UP,
Jharkhand and Chhattisgarh) excluded themselves from VAT during its initial introduction, but
later adopted the tax. Every state has its own VAT legislation, rates, taxable base, and list of
taxable goods.
What is VAT?
Every commodity passes through different stages of production and distribution before finally
reaching the consumer. Some value is added at each stage of the production and distribution
chain: for instance, a forged metal tool is more valuable than metal, which was itself more
valuable than the ore that was originally mined. Value Added Tax (VAT) is a tax on this value
addition at each stage.
Under a VAT system, a dealer collects tax on his sales, retains the tax paid on his purchase
and pays the balance to the government. It is a consumption tax, because it is borne
ultimately by the final consumer. The tax paid by the dealer is passed on to the buyer. It is not
a charge on the dealer. VAT is instead a multipoint tax system with provision for collection of
tax paid on purchases at each point of sale.
How is VAT computed?

In order to understand VAT, one must first understand its two components: input and output
tax.
What is output tax?

Output tax is VAT charged to the customer by a dealer making taxable sales. A dealer is an
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individual, partnership, or business that is registered under VAT. Any person or business
making sales above the prescribed limit are required to register. When a dealer is registered,
VAT becomes chargeable on all taxable sales made by that dealer.
What is Input Tax?

The tax a dealer pays for purchases is input tax. Many purchases will carry a VAT charge, but
when a dealer is registered under VAT, they can normally claim a credit for VAT charges on
most business purchases. Input tax includes not only the VAT on your purchases of raw
materials or on goods purchased for resale but also VAT on capital goods, such as machinery
or equipment.
VAT computation
A dealer pays VAT by deducting the tax paid on purchases (input tax) from his tax collected
on sales (output tax).
In other words, VAT = Output Tax – Input Tax.
For example: A dealer pays Rs.10.00 @ 10% on his purchase price of goods valued Rs.100.00.
He sells the goods at Rs.150.00 and collects tax amounting to Rs.15.00 (@ 10%). He will pay
Rs.5.00 (Rs.15.00- Rs.10.00) as he has already paid Rs.10.00 to his seller while purchasing
those goods.
Who will be covered by VAT?

All business transactions involving the sales of goods/commodities carried on within a state
by individuals, partnerships, or companies will be covered by VAT.
VAT will not cover small businesses with sales below a certain limit. In Maharashtra, the limit
is 10 lakhs or below.
What are the tax rates under VAT?

Since every state has its own VAT legislation, VAT rates, taxable base and list of taxable
goods, VAT rates will differ from state to state. As an example, here are Maharashtra’s tax
rates as of June 2016:
 Schedule ‘A’ – Essential Commodities (Tax-free) – Nil

 Schedule ‘B’ – Gold, Silver, Precious Stones, Pearls etc. – 1%
 Schedule ‘C’ – Declared Goods and other specified goods – 5% (Rates for items other
than declared goods changed to 5.5%)
 Schedule ‘D’ – Foreign Liquor, Country Liquor, Motor Spirits, etc. – 20% and above
 Schedule ‘E’ – All other goods (not covered by A to D) – 12.5% starting April 1, 2016.
Input tax credits and offsets of tax paid on purchases eliminate double taxation and
cascading. This also reduces the cost of production. VAT creates an environment where
industry can thrive and ultimately helps the economy g
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5.Need for GST in India
Need of GST in India
There are various taxes that have to pay at every stage and differently collected by State and
Central Government and rates differ from one state to another. If we talk about GST, it will
unified whole nation and taxes will be divided among Central and State Government, which
will make easier to provide services and goods across country, as no more additional state
taxes will be imposed.
Why in India, there is a need for GST?
Imposing several taxes on goods and services can lead to high cost and inefficient tax
structure which can subject to shirking and revenue disclosures. The need for GST in Indian
Taxation System will add value at each stage and will set off the rates both at state and at
central level. Introducing GST, will increase the efficiency of taxation, improves the economic
growth and it will bring whole nation to one national market.
What happen in present scenario? Our present taxation system is very complex and very
confusing, corruption chance is there, which leads to distrust of government, there are hidden
tax for exports, whereas no charge applicable on Importing of Goods/Services from one state
to another.
Just to overcome these issues, RajyaSabha introduced GST bill, which will bring transparency
to taxation and consumer will get to know how much tax amount they are paying to
government for sale/ purchase/ manufacturing.
Following are some of the points that can easily explain the need for GST:-
Tax Structure will be Simple: – At present, there are huge number of taxes that has to pay by
consumers, with GST it will single tax to pay, which is much easier to understand. For
businesses, accounting complexities will reduce and results less paperwork, which will save
both time and money. GST will increase economic GDP by 2%-2.5%.
Tax revenue will increase: Simple tax structure will bring more tax payers and in return it will
be revenue for government.
Competitive pricing: What GST will do? Well, it will eliminate all other taxes of indirect taxes
and this will effectively mean that tax amount paid by end users (consumers) will reduce. As
in Economics, lower will the prices, more will be demand for that product, results in more
consumption of goods, which will be benefited to companies.
Boost to exports: If Indian market will be competitive in pricing, then more and more foreign
players will try to enter the market, which results in more numbers of exporters and benefits
to Indian Market. As far there is no tax rate is finalized, but yes GST is much needed in the
countries where, it lacks transparency and complex taxation system.
There is a question in everyone’s mind……”Do we have to pay tax at different different rates
and at different different levels? Is there no solution to this? Yes, the solution to this
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is implementation of GST. GST will take away cascading effect of various taxes that are
charged on sale/ production/ purchase and so. Products reaches to customers at very high
rate as compared to manufacturing, so with GST there will be only one tax and it will reduce
burden to pay off.
6.what are the important stages in implementation of GST
7. What were the taxes subsumed in GST
Taxes to be subsumed in GST
CENTRAL TAXES TO BE SUBSUMED

IN GST
Following Central Taxes should be,
to begin with, subsumed under
the Goods and Services Tax:
 Central Excise Duty (CENVAT)
 Additional Excise Duties
 The Excise Duty levied under the
Medicinal and Toiletries Preparations (Excise Duties) Act 1955
 Service Tax
 Additional Customs Duty, commonly known as Countervailing Duty (CVD)
STATE TAXES TO BE SUBSUMED IN GST
Following State taxes and levies would be, to begin with, subsumed under GST:
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 VAT / Sales tax Entertainment tax (unless it is levied by the local bodies)
 Luxury tax Taxes on lottery, betting and gambling State Cesses and Surcharges in so far as
they relate to supply of goods and services
 Octroi and Entry Tax
 Purchase Tax
8.what are the with respect to inter – state transfer.explain with major difference in
incidence of tax during pre and post GST implementation example.
The major difference between Pre & Post GST regime are mentioned here under :
1. All Indirect taxes which were earlier levied on consumption of goods & services such
as Excise Duty, VAT, CST,Works contract tax, Services Tax etc has been subsumed in
to one tax i.e GST
2. Relief from filing multiple returns by a business men under different statue such VAT
return, CST return, Excise Return, Service tax return etc.
3. In GST regime a transaction could be either Supply of goods or supply of services.
There are no concept of part supply of goods & part supply of services.
4. No need to maintain books of accounts to comply with different Acts, only one set of
books of accounst to be maintained.
5. There are no tax on tax under GST regime.
6. Seamless flow of input tax credit, which was not available earlier.
GST or Goods and Services Tax replaced a slew of central and state levies from July 1. For
the month of July, firms are required to file simplified, self-assessed GST returns by August
20. They will have to file complete returns in early September that itemise and reconcile every
single sales invoice. Amid all this, the Central Board of Excise and Customs has once again
listed some common-use items - and their pre-GST tax rates - where the tax incidence is
lower or equal ever since GST came into effect. It has mentioned several "items of common
use" comparing GST rates with the earlier indirect taxes.
"The pre-GST tax incidence would be higher if the tax incidence on account of CST (Central
Sales Tax), octroi, entry tax etc. (which is more than 2 per cent) is also included," said the
CBEC, part of the revenue department under the finance ministry.
For example, items that now attract nil taxes under GST include wheat/rice, unbranded flour,
curd, butter milk, unbranded natural honey and children's drawing books. The earlier tax
incidence on such items was in the range of 2.5 -7 per cent, according to the CBEC. Also,
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items such as UTH (ultra high temperature) milk, tea, milk powder, sugar, vegetable edible oils,
spices and footwear (priced up to Rs. 500) will attract taxes of 5 per cent under GST,
compared with the earlier tax incidence of 6-10 per cent.
Description of goods Pre-GST tax incidence GST rate

Wheat 2.50% 0%
Rice 2.47% 0%
Unbranded flour 3.50% 0%
Curd/lassi/butter milk 4% 0%
Unbranded natural honey 6% 0%
Ultra high temperature (UTH) milk 6% 5%
Tea (other than unprocessed green
6% 5%
leaves of tea)
Milk powder 6% 5%
Sugar 6% 5%
Sweetmeats 7% 5%
Vegetable edible oils 6% 5%
Spices 6% 5%
Ketchup and sauces 12% 12%
Mustard sauces 12% 12%
Toppings, spreads and sauces (other
than mayonnaise, salad dressings,
12% 12%
mixed condiments and mixes
seasonings)
Mineral water 27% 18%
Sugar confectionery 21% 18%
Children's picture/drawing/colouring
7% 0%
book
Footwear of RSP (retail sale price) up
10% 5%
to Rs. 500 per pair
Kerosene pressure lantern 8% 5%
Coal 9% 5%
Tooth powder 12% 12%
LED 15% 12%
X-ray films for medical use 23% 12%
Diagnostic kits and reagents 16% 12%
Fixed speed diesel engines of power
16% 12%
not exceeding 15HP
Fly ash bricks and fly ash blocks 16% 12%
Sewing machine 16% 12%
Hair oil 27% 18%
Toothpaste 27% 18%
Soap 27% 18%
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Footwear of RSP more than Rs. 500
21% 18%
per pair
LPG stove 21% 18%
Aluminum foil 19% 18%
School bag 22% 18%
Printers (other than multifunction
19% 18%
printers)
Staplers 27% 18%
Tractor rear tyres and tractor rear tyre
20% 18%
tubes
Helmet 20% 18%
CCTV 19% 18%
Baby carriages 27% 18%
Plastic tarpaulin 19% 18%
Bamboo furniture 23% 18%
Headgear and parts thereof 27% 18%
Cement 29% 28%
9. What are the exclusive products not included in the purview of GST.why?
The goods and services Tax(GST) in India was implemented on July -1 -2017 even after many
months GST roll out there is much confusion on what products comes under GST and what
Not here is the list of products that kept outside the purview of GST 1.Animal Feed 2. Aquatic
Feed 3. Betel leaves.
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There are certain activities which are items not covered under GST. They are beyond the
scope of GST, i.e., GST will not apply on them. These are classified under Schedule III of the
GST Act as “Neither goods nor services”.
1.Services by an employee to the employer in relation to his employment
Related parties include employer-employee which raised many concerns whether
employment now attracted GST. This clarification has been brought in to clarify whether GST
is not applicable on employment. An employee will still pay income tax on salary earned.
2. Court/Tribunal Services including District Court, High Court and Supreme Court
Courts will not charge GST to pass judgment.
3. Duties performed by:
 The Members of Parliament, State Legislature, Panchayats, Municipalities and other

local authorities
 Any person who holds a post under the provisions of the Constitution
 Chairperson/Member/Director in a body established by the government or a local body
and who is not an employee of the same
4. Services of a funeral, burial, crematorium or mortuary including transportation of the

deceased
There are no taxes on funeral services for any religion.
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5. Sale of land and sale of building
Construction of a new building is subject to GST (being works contract).
6. Actionable claims (other than lottery, betting and gambling)
7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable
territory without such goods entering into India*.
10. When GST Council was notified and what is its composition
In the 2014 LokSabha election, the BharatiyaJanata Party-led NDA government was elected
into power. With the consequential dissolution of the 15th LokSabha, the GST Bill – approved
by the standing committee for reintroduction – lapsed. Seven months after the formation of
the Modi government, the new Finance Minister ArunJaitley introduced the GST Bill in
the LokSabha, where the BJP had a majority. In February 2015, Jaitley set another deadline of
1 April 2017 to implement GST. In May 2016, the LokSabha passed the Constitution
Amendment Bill, paving way for GST. However, the Opposition, led by the Congress,
demanded that the GST Bill be again sent back for review to the Select Committee of
the RajyaSabha due to disagreements on several statements in the Bill relating to taxation.
Finally in August 2016, the Amendment Bill was passed. Over the next 15 to 20 days, 18
states ratified the Constitution amendment Bill and the President Pranab Mukherjee gave his
assent to it.
A 21-member selected committee was formed to look into the proposed GST laws.After GST
Council approved the Central Goods and Services Tax Bill 2017 (The CGST Bill), the Integrated
Goods and Services Tax Bill 2017 (The IGST Bill), the Union Territory Goods and Services Tax
Bill 2017 (The UTGST Bill), the Goods and Services Tax (Compensation to the States) Bill
2017 (The Compensation Bill), these Bills were passed by the LokSabha on 29 March 2017.
The RajyaSabha passed these Bills on 6 April 2017 and were then enacted as Acts on 12 April
2017. Thereafter, State Legislatures of different States have passed respective State Goods
and Services Tax Bills. After the enactment of various GST laws, Goods and Services Tax was
launched all over India with effect from 1 July 2017.The Jammu and Kashmir state legislature
passed its GST act on 7 July 2017, thereby ensuring that the entire nation is brought under an
unified indirect taxation system. There was to be no GST on the sale and purchase of
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securities. That continues to be governed by Securities Transaction Tax (STT).
GST Council
GST Council constituted by the President on 16th September, 2016 - Article 279A
Comprising of -
Union Finance Minister - Chairperson
MoS (Revenue) - Member
the State Finance/Taxation Ministers – Members
Members of GST Council may choose one of the Members as the ViceChairperson
Quorum is half of total members
Decisions by majority of 75% of weighted votes of members present
voting. Weightage of votes: Centre – One-third and States – Two-third
11. What are different types of taxes levied under GST

Types of GST
Since GST subsumed indirect taxes of both central government (excise duty, service tax,
custom duty, etc.) and state governments (VAT, Luxury tax, etc.), both the governments now
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depend on GST for their indirect tax revenue. Therefore, the GST rate is composed of two
rates. Intra-state transactions will carry one of CGST and one of SGST (in case of state) or
CGST and UTGST (in case of union territory). Therefore, while making an intra-state sale (i.e.,
sale within the same state), the CGST collected will go to the central government and the
SGST collected will go the respective state government in which sale is made. Similarly, SGST
or UTGST are replaced with IGST when intra-state transactions are involved.
Hence, you can say that there are four types of GST:
 Central Goods and Services Tax
 State Goods and Services Tax
 Integrated Goods and Services Tax
 Union Territory Goods and Services Tax
12. What is RNR (Revenue neutral rate?)

Focus under GST is to arrive at such rates which would not decrease the current revenue
generation by Central & State government. Revenue neutral rate(RNR) is a structure of
different rates established in order to match the current revenue generation with revenue
under GST. RNR calculation has to include the cascading effect on certain goods having no
excise or sales tax implications.
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For example-: Wheat would get costlier due to RNR fixed for diesel being higher than current
tax rate even though wheat does not have any excise or sales tax implications.
RNR recommendation from Subramanian committee

The government of India had appointed a committee which is headed by Dr. Arvind
Subramanian. Committee had released a detailed report on the calculation of RNR and the tax
structure. RNR is calculated by the committee with three different approaches-:
 Macro approach-:
RNR is calculated on basis of total data for domestic output/net imports and
consumption of capital inputs. GST has a positive rate and zero rates on exports are two
assumptions under this approach. RNR found to be 11.6% after factoring compliance of GST
at 80%.
 Indirect tax turnover approach-:
This Approach was shared by NIPFP (National Institute of Public Finance Policy). There
are three steps under this approach-:
1. Estimate goods revenue base at the state level.

2. Estimate the services revenue base at the national level.
3. Adjustments for certain goods & services not to be taxed under GST.
This approach puts the RNR at 18.86%.
 Direct tax turnover approach
The approach was shared by the Thirteenth Finance Commission. RNR is calculated on the
basis of input tax data of all the registered entities. This approach puts the RNR at 11.98 %.
RNR is likely to be selected around 18% after making few changes to the indirect tax turnover
approach.
Ratio for Distribution of RNR

One of the biggest hurdle in deciding the RNR is the distribution ratio among the central and
state government. The ratio has to include the effects of the loss to be borne by different
state governments. Two different ratios were selected for assessment. Central to state ratio
of 60:40 or the reverse ratio of 40:60.
“Coming up with an RNR is as much soft judgment as hard science” as quoted by the
subramanian committee on the report shared by them with CBEC on RNR and GST rates. The
drawback of setting a RNR low would lead to decrease in growth rate of the economy in long
term.
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Conclusion
RNR is one of the biggest hurdles in the implementation of GST. It is probable that a higher
RNR is fixed by India when compared to the international RNR. We will share furthermore
articles around GST rates and tax calculation.
13. What are the categories of goods and services for levying GST
GST Rates on Goods
The government has proposed a 4-tier tax structure for all goods and services under the slabs
- 5%, 12%, 18% and 28%. After the recent revision of GST rates, these are the commodities
that fall under the four tax slabs along with those that do not attract any tax. Please note that
only those commodities are included in this list whose rates have been revised in various
council meetings.
UPDATE: As per 37th GST Council Meeting, cut and semi-polished stones will be taxed at
0.25% GST. This is a 5th GST tier that only includes a few products.
No Tax
Apart from other items that enjoy zero GST tax rate, these are the commodities added to
the list after 11th June rate revision –
Bones and horn-

Hulled cereal
cores unworked and Palmyra
grains like barley, All types of salt
waste of these jaggery
wheat, oat, rye, etc.
products.
Human hair –
Picture books, dressed,
Kajal [other than colouring books or thinned,
Sanitary Napkins
kajal pencil sticks] drawing books for bleached or
children otherwise
worked
Vegetables
preserved using Dicalcium
various techniques Phosphate
Unit container-packed
including brine and (DCP) of animal
Music frozen branded
other feed grade
Books/manuscripts vegetables
preservatives that conforming to
(uncooked/steamed)
are unsuitable for IS specification
immediate human No. 5470 :2002
consumption.
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5% Tax Slab
Given below are the items that have been added to the 5% GST tax rate slab along with the
other existing items-
Cashew
Marble
nuts/cashew Ice and snow Bio gas Insulin
rubble
nuts in shell
Accessories/parts
PawanChakki
for carriages Coir mats,
Aggarbatti and that is Wind- Natural
designed for matting and floor
Kites based Atta cork
differently-abled covering
Chakki
individuals
Braille paper,
Postage or braille typewriters,
revenue braille watches,
stamps, stamp- hearing aids and Walking
Numismatic coins Fly-ash blocks
postmarks, other appliances sticks
first-day to compensate
covers, etc. for a defect or
disability
12% Tax Slab
After the GST council meeting on 11th June, the following items were added to the 12% GST
rates category-
Ketchups,
sauces and
Preparations
mustard Menthol and
of vegetables,
sauce but menthol crystals,
fruits, nuts or
excluding peppermint,
other parts of Bari made
curry paste, fractionated/de-
plants, of pulses All diagnostic kits
mayonnaise terpenatedmentha
including including and reagents
and salad oil, dementholised
pickle, mungodi
dressings, oil, Menthapiperita
murabba,
mixed oil and spearmint
chutney, jam,
condiments oil
jelly
and mixed
dressings
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Glasses
for Spoons, forks,
Exercise
corrective ladles, skimmers, Fixed Speed
Plastic beads books and
spectacles cake servers, fish Diesel Engines
note books
and flint knives, tongs
buttons
Two-way
Playing cards,
radio (Walkie
chess board,
talkie) used by
Intraocular Corrective carom board and Debagged/roughly
defence,
lens spectacles other board squared cork
police and
games, like ludo,
paramilitary
etc.
forces etc.
Items
manufactured Agglomerated
from natural cork
cork
18% Tax Slab
The items mentioned below have been added to the 18% GST tax rate slab among the other
existing items-
School
satchels and
bags other
than of leather
or composition
leather; toilet
cases, Hand
bags and
Kajal pencil shopping bags Headgear and
Dental wax Plastic Tarpaulin
sticks of artificial parts thereof
plastic
material,
cotton or jute;
Handbags of
other materials
excluding
wicker work or
basket work
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All goods, Rear Tractor
Precast Salt Glazed
including tyres and rear
Concrete Stone Ware Aluminium foil
hooks and tractor tyre
Pipes Pipes
eyes tubes
Rear Tractor
wheel rim,
Weighing
tractor centre
Machinery Ball bearing,
housing,
other than Roller
tractor Printers other than
electric or Bearings, Parts Transformers
housing multifunction printers
electronic & related Industrial
transmission,
weighing accessories Electronics
tractor
machinery
support front
axle
Computer
Static CCTV including
Electrical Set top Box for monitors not
Converters CCTV with video
Transformer TV exceeding 17
(UPS) recorders
inches
Instruments
for measuring
Winding length, for use
Electrical Wires, Perforating or in the hand
Filaments or Coaxial stapling machines (for example,
Baby carriages
discharge cables and (staplers), pencil measuring
lamps Optical sharpening machines rods and
Fiber tapes,
micrometers,
callipers)
Sports goods,
Swimming Power banks games
Bamboo pools and Televisions/Monitors powered by consoles and
furniture paddling (upto 32 inches) Lithium-ion related items
pools batteries with HS code
9504
All items with Used or

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HS code 8483
including gear
retreaded
boxes,
pneumatic
transmission
rubber tires
cranks and
pulleys
28% Tax Slab
The council meeting was held to ‘reduce’ the tax rates on certain items based on customer
preferences. Hence, no additional items were added to the highest GST rates slab of 28%.
Luxury items such as small cars, consumer durables like AC and Refrigerators, premium cars,
cigarettes and aerated drinks, High-end motorcycles are included here.
GST Rates on Services

Government has also imposed GST on Services with the same 4-tier tax structure as of goods.
GST rates on services comprising of 5%, 12%, 18% and 28% comes with various pros and
cons for the consumers. However, government has exempted healthcare and educational
services from the purview of the GST.
The Goods and Services Tax council has passed the rate slabs at NIL, 5%, 12%, 18%, 28%.
Some of the services categorized under different slabs are mentioned below :
Nil GST
 Chargeable services offered on Basic Savings Bank Deposit (BSBD) account opened
under the PMJDY (Pradhan Mantri Jan DhanYojana)
 Hotel accommodation for transaction value per unit per day being Rs. 1000 or less
5% Tax Slab
Transport by air
Renting a
Goods Transport (scheduled)/air travel
Working for motor
transported in services in AC for purpose of
printing of cab
a vessel from contract/stage pilgrimage via
newspapers without
outside India or radio taxi chartered/non-
fuel cost
scheduled flights
Tour Print
Leasing of
operator media ad
aircrafts
services space
12% Tax Slab
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Rail Food /drinks Railway wagons,
Renting of
transportation of at coaches, rolling
accommodation
goods in Air travel restaurants stock (without
for more than
containers from excluding without refund of
Rs.1000 and less
a third party economy AC/heating accumulated
than Rs.2500 per
other than Indian or liquor Input Tax
day
Railways license Credit/ITC)
Hotel
accommodation
IP rights Movie
Construction of for transaction
on a Tickets less Chit fund services
building for the value per unit per
temporary than or equal by foremen
purpose of sale day ranging
basis to Rs. 100
between Rs. 1001
to 7500
18% Tax Slab
Renting for Hotel

Food/drinks at Food /drinks
accommodation for accommodation for
restaurants at restaurants Outdoor
more than Rs.2500 transaction value per
with liquor with catering
but less than Rs.5000 unit per day being Rs.
license AC/heating
per day 7501 or more
Movie
Circus, Indian Supply of Supply of food,
Tickets
classical, folk, works shamiyana, and party
over Rs.
theatre, drama contract arrangement
100
28% Tax Slab
Entertainment events-amusement facility, water parks,

Race club Gamblin
theme parks, joy rides, merry-go-round, race course, go-
services g
carting, casinos, ballet, sporting events like IPL
Food/drinks at AC 5-star hotels
14. Briefly explain the important components of Supply
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Time, Place and Value of Supply
Under GST, 3 types of taxes can be charged in the invoice. SGST and CGST in case of an intra-
state transaction and IGST in case of an interstate transaction. But deciding whether a
particular transaction is inter or intrastate is not an easy task.
Think about an online training where customers are sitting in different parts of the world.
Say in case, hotel services, where the receiver may have an office in another state and may be
visiting the hotel only temporarily, or where goods are sold on a train journey passing through
different states.
To help address some of these situations, the IGST act lays down certain rules which define
whether a transaction is inter or intrastate. These rules are called the place of supply rules.
Why are time place and value of supply important?

Time of supply means the point in time when goods/services are considered supplied’. When
the seller knows the ‘time’, it helps him identify due date for payment of taxes.
Place of supply is required for determining the right tax to be charged on the invoice, whether
IGST or CGST/SGST will apply.
Value of supply is important because GST is calculated on the value of the sale. If the value is
calculated incorrectly, then the amount of GST charged is also incorrect.
1. Time of Supply
Time of supply means the point in time when goods/services are considered supplied’. When
the seller knows the ‘time’, it helps him identify due date for payment of taxes.
CGST/SGST or IGST must be paid at the time of supply. Goods and services have a separate
basis to identify their time of supply. Let’s understand them in detail.
A. Time of Supply of Goods

Time of supply of goods is earliest of:
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1. Date of issue of invoice
2. Last date on which invoice should have been issued
3. Date of receipt of advance/ payment*.
For example:
Mr. X sold goods to Mr. Y worth Rs 1,00,000. The invoice was issued on 15th January. The
payment was received on 31st January. The goods were supplied on 20th January.
*Note: GST is not applicable to advances under GST. GST in Advance is payable at the time
of issue of the invoice. Notification No. 66/2017 – Central Tax issued on 15.11.2017
Let us analyze and arrive at the time of supply in this case.
Time of supply is earliest of –
1. Date of issue of invoice = 15th January
2. Last date on which invoice should have been issued = 20th January
Thus the time of supply is 15th January.
What will happen if, in the same example an advance of Rs 50,000 is received by Mr. X on 1st
January?
The time of supply for the advance of Rs 50,000 will be 1st January(since the date of receipt
of advance is before the invoice is issued). For the balance Rs 50,000, the time of supply will
be 15th January.
B. Time of Supply for Services

Time of supply of services is earliest of:
1. Date of issue of invoice
2. Date of receipt of advance/ payment.
3. Date of provision of services (if invoice is not issued within prescribed period)
Let us understand this using an example:
Mr. A provides services worth Rs 20000 to Mr. B on 1st January. The invoice was issued on
20th January and the payment for the same was received on 1st February.
In the present case, we need to 1st check if the invoice was issued within the prescribed time.
The prescribed time is 30 days from the date of supply i.e. 31st January. The invoice was
issued on 20th January. This means that the invoice was issued within a prescribed time limit.
The time of supply will be earliest of –
1. Date of issue of invoice = 20th January
2. Date of payment = 1st February
This means that the time of supply of services will be 20th January.
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C. Time of Supply under Reverse Charge
In case of reverse charge the time of supply for service receiver is earliest of:
1. Date of payment*
2. 30 days from date of issue of invoice for goods (60 days for services)
*w.e.f. 15.11.2017 ‘Date of Payment’ is not applicable for goods and applies only to
services. Notification No. 66/2017 – Central Tax
For example:
M/s ABC Pvt. Ltd undertook service of a director Mr. X worth Rs. 50,000 on 15th January. The
invoice was raised on 1st February. M/s ABC Pvt Ltd made the payment on 1st May.
The time of supply, in this case, will be earliest of –
1. Date of payment = 1st May
2. 60 days from date of date of invoice = 2nd April
Thus, the time of supply of services is 2nd April.
2. Place of supply
It is very important to understand the term ‘place of supply’ for determining the right tax to be
charged on the invoice.
Here is an example:
Location of Service Place of Nature of GST

Receiver supply Supply Applicable
Maharashtra Maharashtra Intra-state CGST + SGST
Maharashtra Kerala Inter-state IGST
A. Place of Supply of Goods

Usually, in case of goods, the place of supply is where the goods are delivered.
So, the place of supply of goods is the place where the ownership of goods changes.
What if there is no movement of goods. In this case, the place of supply is the location of
goods at the time of delivery to the recipient.
For example: In case of sales in a supermarket, the place of supply is the supermarket itself.
Place of supply in cases where goods that are assembled and installed will be the location
where the installation is done.
For example, A supplier located in Kolkata supplies machinery to the recipient in Delhi. The
machinery is installed in the factory of the recipient in Kanpur. In this case, the place of supply
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of machinery will be Kanpur.
B. Place of Supply for Services

Generally, the place of supply of services is the location of the service recipient.
In cases where the services are provided to an unregistered dealer and their location is not
available the location of service provider will be the place of provision of service.
Special provisions have been made to determine the place of supply for the following services:
 Services related to immovable property

 Restaurant services
 Admission to events
 Transportation of goods and passengers
 Telecom services
 Banking, Financial and Insurance services.
In case of services related to immovable property, the location of the property is the place of
provision of services.
Example 1:
Mr. Anil from Delhi provides interior designing services to Mr. Ajay(Mumbai). The property is
located in Ooty(Tamil Nadu).
In this case, place of supply will be the location of the immovable property i.e. Ooty, Tamil
Nadu.
Example 2:
A registered taxpayer offers passenger transport services from Bangalore to Hampi. The
passengers do not have GST registration. What will be the place of supply in this case?
The place of supply is the place from where the departure takes place i.e. Bangalore in this
case.
3. Value of Supply of Goods or Services

Value of supply means the money that a seller would want to collect the goods and services
supplied.
The amount collected by the seller from the buyer is the value of supply.
But where parties are related and a reasonable value may not be charged, or transaction may
take place as a barter or exchange; the GST law prescribes that the value on which GST is
charged must be its ‘transactional value’.
This is the value at which unrelated parties would transact in the normal course of business.
It makes sure GST is charged and collected properly, even though the full value may not have
been paid.
To generate GST compliant invoices and file GST Returns use our ClearTax GST software.
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15. Brief Registration Process of GST
If you are a regular dealer or a composite tax payer, you need to do the following for GST
registration:
1. Fill Part-A of Form GST REG-01. Provide your PAN, mobile number, and E-mail ID, and
submit the form.
2. The PAN is verified on the GST Portal. Mobile number, and E-mail ID are verified with a
one-time password (OTP).
3. You will receive an application reference number on your mobile and via E-mail.
4. Fill Part- B of Form GST REG-01 and specify the application reference number you
received. Attach other required documents and submit the form. Following is the list of
documents to be uploaded –
o Photographs: Photographs of proprietor, partners, managing trustee, committee
etc. and authorized signatory
o Constitution of taxpayer : Partnership deed, registration certificate or other proof
of constitution
o Proof of principal / additional place of business :
 For own premises – Any document in support of the ownership of the
premises like latest property tax receipt or Municipal Khata copy or copy of
electricity bill.
 For rented or leased premises – copy of rent / lease agreement along with
owner’s (landlord) documents like latest property tax receipt or
Municipal Khata copy or copy of electricity bill.
o Bank account related proof : Scanned copy of the first page of bank pass book
or bank statement
o Authorization forms: For each authorized signatory, upload authorization copy or
a copy of resolution of managing committee or board of directors in the
prescribed format.
5. If additional information is required, Form GST REG-03 will be issued to you. You need
to respond in Form GST REG-04 with required information within 7 working days from
the date of receipt of Form GST REG-03.
6. If you have provided all required information via Form GST REG-01 or Form GST REG-04,
a certificate of registration in Form GST REG-06 will be issued within 3 days from date
of receipt of Form GST REG-01 or Form GST REG-04.
7. If the details submitted are not satisfactory, the registration application is rejected
using Form GST REG-05.
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16. What is composition supply and Mixed supply. What is the rate of tax applied?
What is composite supply under GST?

Composite supply means a supply is comprising two or more goods/services, which are
naturally bundled and supplied in with each other in the ordinary course of business, one of
which is a principal supply.
It means that the items are generally sold as a combination.
The items cannot be supplied separately
How to determine if it is a composite supply?
A supply of goods and/or services will be treated as composite supply if it fulfills the
following criteria:
 Supply of 2 or more goods or services together AND
 It is a natural bundle, i.e., goods or services are usually provided together in the normal
course of business.
 They cannot be separated.
What tax rate will apply?

The tax rate of the principal supply will apply on the entire supply.
Example:
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Goods are packed and transported with insurance. The supply of goods, packing materials,
transport and insurance is a composite supply. Insurance, transport cannot be done
separately if there are no goods to supply. Thus, the supply of goods is the principal supply.
Tax liability will be the tax on the principal supply i.e., GST rate on the goods.
If the second condition is not fulfilled it becomes a mixed supply.
What is mixed supply under GST?
 Mixed supply under GST means a combination of two or more goods or services made
together for a single price.
 Each of these items can be supplied separately and is not dependent on any other.
Under GST, a mixed supply will have the tax rate of the item which has the highest rate of
tax.
For example-
A Diwali gift box consisting of canned foods, sweets, chocolates, cakes, dry fruits and aerated
drink and fruit juices supplied for a single price is a mixed supply. All are also sold separately.
Since aerated drinks have the highest GST rate of 28%, aerated drinks will be treated as
principal supply and 28% will apply on the entire gift box.
How to determine if it is a mixed supply or a composite supply?

You have to rule out that the supply is a composite supply. A supply can be a mixed supply
only if it is not a composite supply.
If the items can be sold separately, i.e., the supplies not naturally bundled in the ordinary
course of business, then it would be a mixed supply.
For example:
If a person buys canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit
juices separately and not as a Diwali gift box, then it is not considered a mixed supply. All
items will be taxed separately.
Differences between mixed and composite supplies

Particulars Composite Supply Mixed supply
Main item Principal item Item with highest tax rate
Tax rate Tax rate of principal Highest tax rate of all the
applicable item items
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17. What are the types a dealer can opt at registration
Who is eligible for GST Registration?

Every business or corporation that is involved in the buying and selling and good of services
comes under GST. It is mandatory for all whose aggregate turnover exceeds Rs. 40 lakhs
annually to register for a GST. For the North East states, J&K, Himachal Pradesh and
Uttarakhand the threshold limit is Rs.20 lakhs.
Some businesses are compulsorily required to register for GST and if such organizations
operate without registering for GST, it will be an offence and due penalties apply.
All persons who make interstate outward supplies of goods have to register for a GST too.
The same applies to people making taxable supplies on behalf of other taxable persons,
example agents and brokers.
The following taxable groups are eligible for GST registration:
 Persons who are required to pay tax under Reverse Charge.

 Persons who are required to deduct tax at source.
 Non-resident taxable person (No fixed place in India).
 Casual taxable person (No fixed place where GST is applicable).
 All e-commerce operators (e.g. Flipkart, Amazon).
 All agents of a supplier.
 Persons who supply goods or services through e-commerce operator.
 Input Service Distributor.
 An aggregator who supplies services under his brand name.
 Any Specialized Agency of the UN or any Multilateral Financial Institution.
 Persons making any Inter-State taxable supply (e.g. from Delhi to Maharashtra).
 All taxable individuals registered under Excise, VAT, Service tax, etc.
 The place of supply is important for determining the taxability. All individuals, from outside
India, supplying access and retrieval services for online information and database to persons
in India, other than a registered taxable person.
GST threshold
Companies with a supply turnover of over Rs. 40 lakh must register for GST. The keyword
here is “supply”, which takes into consideration any turnover, including stock-taking,
discounts and freebies. In fact, even those supplying non-taxable goods must register for GST.
A business making sales to other states must register for GST, regardless of turnover.
18. What is the threshold limit for composite dealers and Registered (Regular)
dealersThreshold Limit for GST Composition Scheme
The GST Council, on considering the demands raised by MSME, increased the threshold limits
for GST registration. This helps to ease compliance under GST. The states have an option to
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opt for a higher limit or continue with the existing limits. This article explains the earlier
threshold limits, new limits, their effective date of applicability and the persons to whom it
applies.
Overview of earlier limits, new limits and the date of applicability
Aggregate Registration Applicability

Turnover Required
Earlier Limits – For the sale of Goods/Providing Services
Exceeds Yes – For Normal Up to 31st March 2019

Rs.20 lakh Category States
Exceeds Yes – For Special Up to 31st March 2019

New Limits – For Sale of Goods
Exceeds Yes – For Normal From 1st April 2019

Exceeds Yes – For Special From 1st April 2019

New Limits – For Providing Services
There has been no change in Threshold limits for Service Providers
States who opted for the new limit

The above changes were proposed in the 32nd GST Council Meeting held on 10th January
2019. An option was provided to the states to opt for the new limits or continue the earlier
ones (status quo).
Normal Category States Normal Special Category States who opted for
who opted for a new limit Category States new limit of Rs.20 lakh
of Rs.40 lakh who choose
status quo
Chhattisgarh, Jharkhand, Kerala and Puducherry, Meghalaya, Mizoram,

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Delhi, Bihar, Maharashtra, Telangana Tripura, Manipur, Sikkim, Nagaland,
Andhra Pradesh, Gujarat, Arunachal Pradesh, Uttarakhand
Haryana, Goa, Punjab, Uttar
Pradesh, J&K, Assam,
Himachal Pradesh,
Karnataka, Madhya Pradesh,
Odisha, Rajasthan, Tamil
Nadu, West Bengal
Note 1: Two hilly states J&K and Assam have also opted to raise the limit to Rs.40 lakh.
These two states had the option to remain under lower threshold limits as they fall under the
Special Category States. Even previously when these two states had the option to charge GST
only on aggregate turnover exceeding Rs.10 lacs, they had opted for a higher threshold limit
of Rs.20 lakh.
Note 2: Kerala can now charge ‘calamity cess’ up to 1% on all intra-state supply of goods and
services to cope up with natural calamities faced by the state last year.
19. What is Supplementary Invoice?

What are supplementary invoices and their uses? Supplementary tax invoice is a type
of invoice that is issued by a taxable person in case where any deficiency is found in a
tax invoice already issued by a taxable person. It can be in form of a debit note or a credit
note.
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20. What are the eligibility for availing Input tax Credit
“Input Tax” in relation to a taxable person, means the Goods and Services Tax charged on any
supply of goods and/or services to him which are used or are intended to be used, during
furtherance of his business. Fulfilment of Input Tax Credit under GST – Conditions To
Claim is one of the most critical activity for every business to settle its tax liability.
ITC being the backbone of GST and a major matter of concern for the registered persons,
conditions for eligibility to ITC and eligible ITC have been prescribed which is more or less in
line with pre- GST regime. These rules are also quite particular and stringent in its approach.
Input Tax Credit under GST – Conditions To Claim

A registered person will be eligible to claim Input Tax Credit (ITC) on the fulfilment of the
following conditions:
1. Possession of a tax invoice or debit note or document evidencing payment
2. Receipt of goods and/or services
3. Goods delivered by supplier to other person on the direction of a registered person against
a document of transfer of title of goods
4. Furnishing of a return
5. Where goods are received in lots or installments ITC will be allowed to be availed when the
last lot or installment is received.
6. Failure of the supplier towards supply of goods and/or services within 180 days from the
date of invoice, ITC already claimed by recipient will be added to output tax liability and
interest to paid on such tax involved. On payment to supplier, ITC will be again allowed to be
claimed
7. No ITC will be allowed if depreciation has been claimed on tax component of a capital good
8. Time limit to claim ITC against an Invoice or Debit Note is earlier of below dates:
The due date of filing GST Return for September of next Financial year
OR
Date of filing the Annual Returns relevant for that Financial year
For instance, XY Corp, a buyer has a Purchase Invoice was dated 8th July 2017( FY 2017-18),
wants to claim GST paid on that purchase. As per the criteria laid down to reckon the time
limit:
The Due date of filing GST return for September 2018( FY 2018-19) is 20th October 2018 and
the Date of filing GST Annual Return for FY 2017-18 is 31st December 2018, whichever is
earlier will be the time period within which XY Corp has to claim ITC. Therefore, the date is
20th October 2018 and XY Corp can claim this ITC in any of the months between July 2017 to
September 2018.
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21. With Help of diagram show Input credit Mechanism
22. List out masters to be created to effect GST in tally

Go to Gateway of Tally > Create company > Press F11 Configuration > Press F3
Statutory and Taxation Screen Appears
Set “ Yes” to Enable Goods and Services Tax(GST)
Set “yes” to set/Alter GST details ( GST details screen Appears)
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34
23. Write the steps for filing GSTR-1, GSTR-2, GSTR-3
1. Login to www.gst.gov.in.
2. Go to Dashboard –>My profile –> Manage API Access.
3. Select ‘Yes’ corresponding to ‘Enable API Request’.
4. Select the ‘Duration’ as 30 days, and click Confirm.
1. Start Working On GSTR 1

Login to your ProfitBooks account and go to GST –> GST Returns.
Click on ‘GSTR-1’.
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2. Upload Invoices To GSTN
Review the invoices and click on ‘Upload Data’ button.
3. Verify The Uploaded Invoices

Click on ‘GSTR-1 Summary’ to verify the data. You can login to GSTN portal and verify if all the
invoices are uploaded correctly.
4. Submit GSTR-1
Once you review the uploaded invoices, you can proceed to finally submitting the GSTR-1.
Please note that its a final step and you won’t be able to make changes once the return is
filed.
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Please follow these steps to submit the return:
1) Login to www.gst.gov.in.
2) Go to ‘Services’ –>‘Returns’ and then click on ‘Returns Dashboard’.
3) Select the return filing period.
4) Choose ‘Prepare Online’ mode
5) Select the checkbox, submit and choose a signing method and file GSTR-1
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24. Who files GSTR -6A
1. What is GSTR 6?
GSTR 6 is a monthly return that has to be filed by an Input Service Distributor.
It contains details of ITC received by an Input Service Distributor and distribution of ITC.
There are a total of 11 sections in this return.
2. Why is GSTR 6 important?

GSTR 6 contains details of all the documents issued for distribution of Input Tax Credit and
the manner of distribution of credit and tax invoice on which credit is received.
GSTR 6 has to be filed by every ISD even if it is a nil return.
3. When is GSTR 6 due?

The due date for filing of GSTR 6 as per GST Act is 13th of next month.
Late fees have been reduced to Rs. 50 per day. However, no provision for reduction is made
where NIL return is filed.
4. Who should file GSTR 6?

GSTR 6 has to be filed by every Input Service Distributor.
5. How to revise GSTR 6?

There is no provision under GST for revising GSTR 6. Any mistakes made in the return can be
corrected while filing GSTR 6 of the following month.
6. What is GSTR 6A?

GSTR 6A is an automatically generated form based on the details provided by the suppliers of
an Input Service Distributor in their GSTR 1.
GSTR-6A is a read-only form. Any changes to be made in GSTR-6A have to be done while filing
GSTR-6.
Note: You do not have to file GSTR-6A. It is a read-only document.
You can view GSTR-6A by going to the Return Dashboard on the GST Portal and clicking on
‘PREPARE ONLINE’ on GSTR6A tile.
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25. What types of GST Returns, E – Commerce operators need to file
40
Return Forms under GST for E-commerce Sellers
Return/Form Details Frequency Due Date
GSTR – Monthl
Outward sales by seller 10th of next month
1 y
GSTR – Monthl
Purchases made by seller 15th of next month
2 y
GSTR – GST Monthly return along with the Monthl

20th of next month
3 payment of tax y
GSTR – GST Return for E-commerce Monthl

10th of next month
8 Operator y
GSTR – 31st Dec of next

GST Annual Return Yearly
9 financial year
26. What is Reverse Charge Mechanism

What Is Reverse Charge Mechanism?
Normally, suppliers of goods or services collect GST from the receivers and deposit it with the
tax authorities.
But under the reverse charge mechanism, receivers of goods or services pay the tax instead
of suppliers. Thus, if you are a recipient of goods or services under reverse charge, you must
remit only the purchase payments to suppliers. As for GST, you as a recipient must deposit
the tax directly with the tax authorities. This tax collection mechanism is aimed at reducing
tax evasion, particularly from the unorganized sectors.
When Is Reverse Charge Applicable?
 Supply From Unregistered Dealer To Registered Dealer- If you are a registered dealer who
purchases goods/services from an unregistered dealer, you as a registered dealer must pay
the GST. However, you are exempt from paying GST if your purchases from the unregistered
seller do not exceed Rs. 5,000.
 Supply of Goods and Services Specified By CBEC- If you are purchasing goods/services
which are specified by the CBEC under reverse charge, you as a recipient must pay GST.
These include: (i) goods transport services, (ii) insurance agencies, (iii) recovery agencies, (iv)
legal services, (v) transportation services for imported goods etc.
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 Services Provided By An E – Commerce Operator – In case you are an e-commerce operator
supplying services, reverse charge will apply to you. Hence, you as an e-commerce operator
are responsible to pay the GST.
For example, in case of transport service provided by taxi aggregator OLA, OLA is liable to
pay the GST. OLA will collect tax from passengers instead of the registered service providers.
There are cases where an e-commerce operator does not have a physical presence in the
taxable territory. In such a case, a person representing such e-commerce operator for any
purpose will be liable to pay tax. If there is no such representative, the operator would
appoint a representative. He will be held liable to pay GST.
Time Of Supply Under Reverse Charge Mechanism
Tax for goods under the reverse charge mechanism should be paid on the earliest of the
below dates:
 The Date on which the goods and services are received
 Date of payment as entered in the books of accounts of the recipient or the date on which the
payment is debited in his account, whichever is earlier
 Date after 30 days of issuing the invoice by the supplier

Where it is not possible to determine the time of supply, under the above mentioned cases,
– the time of supply shall be the date of entry in the books of accounts of the recipient of
supply.
Tax for services under the reverse charge mechanism should be paid on the earliest of the
below dates:
 Date of payment as entered in the books of accounts of the recipient or the date on which the
payment is debited in his account, whichever is earlier
 Date after 60 days of issuing the invoice by the supplier

Where it is not possible to determine the time of supply, under the above mentioned cases,
– the time of supply shall be the date of entry in the books of accounts of the recipient of
supply.
Can ITC Be Claimed Under Reverse Charge?

If you are a recipient and are liable to pay tax on reverse charge basis, you can claim
the ITC for such tax paid. However, it can be claimed only if such goods /services are or will
be used for your business.
A person who is required to pay tax under reverse charge has to compulsorily register under
GST. Also, the threshold limit of Rs. 20 lakhs (Rs. 10 lakhs for special category states except
J & K) is not applicable to them.
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27. What are the activities specified as Negative List according to Schedule -III.
a. Services by an employee to the employer in the course if or in relation to his
employment.
b. Services by any court or tribunal established under any law for the time being in force.
c. Functions performed by the Members of Parliament, Members of State Legislature,
Members of Panchayats, Members of Municipalities and Members of Other local
Authorities.
d. Duties performed by any person who holds any post in pursuance of the provisions of
the constitution in that capacity.
e. Duties performed by any person as a Chairperson or a Member or a Director in a body
established by the Central Government or State Government or Local authority and
who is not deemed as an employee before the commencement of this clause.
f. Services of funeral, burial, crematorium or mortuary including transportation of the
deceased.
g. Sale of land and, subject to paragraph 5(b) of Schedule II, sale of building.
h. Actionable claims, other than lottery, betting and gambling.
28. Mr. Ankur purchased goods for Rs. 8,00,000 and paid tax @ 5% from a dealer in same
locality. He sold Rs. 4,00,000 worth goods to Raj and collected tax from him. Record the
following transaction with the help of accounting Software.
1. Open Tally ERP9 and create an imaginary Company.
2. Enable GST Features by pressing F11statutory and Taxation  GSTGST Details.
3. Go to Gateway of Tally Accounting Info Ledger Single Create. The following

ledgers are to be created:
Name of Ledger Under
Sales Ledger Sales Account
Purchase ledger Purchases account
Dealer name account Sundry Debtor
INPUT CGST@2.5% AND Duties and Taxes
INPUT SGST@2.5% AND
OUTPUT CGST@2.5% AND
OUTPUT SGST@2.5%
Raj account Sundry creditor
4. Create stock items: gateway of Tally Inventory Info Stock Items Create. While
creating stock item, set GST rate as CGST AND SGST -5% (given) divided equally.
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5. Go to Gateway of Tally Accounting Vouchers F9 for purchases and F9 for sales
6. Enter the transaction setting the party name as DEALER NAME ACCOUT in purchase
voucher and RAJ account in sales voucher. Enterinput CGST and SGST in purchase
voucher and output CGST and IGST in case of sales voucher.
7. Go to Gateway of Tally  Display Statutory Reports GST GSTR 3B.
29. Mahesh Enterprises of Hyderabad purchased goods from Ashish Enterprises of Chennai,
he paid GST @ 28%. Record the transaction in Accounting software.
1. Open Tally ERP9 and create a Company “Mahesh enterprises”.
Purchases Purchases Account
Ashish enterprises Chennai Sundry Creditor(interstate dealer)
INPUT IGST@28% Duties and Taxes
creating stock item, set GST rate as IGST -28% (given).
5. Go to Gateway of Tally Accounting Vouchers F9.
6. Enter the transaction setting the party name as Ashish enterprises interstate dealer.
30. Create 3 stock items named milk, bread and Ice creams. Opening balances of these 3
stock items would be milk – 10 litres, Bread– 20 Pkts and Ice creams – 25 numbers.Create
1 sundry debtor and 1 sundry creditorwithin state. Record a purchase entry of 5 liters of milk
at 5% GST rate for ₹80 per liter, 10 Pkts of Bread for Rs.25 per pktat 5% GST rate and 30
numbers of Ice creams for ₹30 per Ice creamat 18% GST rate. A sale entry 10liters of milk
Rs.90 per liter, 15Pkts of Bread for Rs.40 per pktand 35 numbers of Ice creams for ₹50 per
Ice cream.
1. Open Tally ERP 9 and Create a Company.
2. Enable GST Features by going to F11 Features Statutory and Taxation GSTGST
Details.
3. Go to Gateway of Tally Accounting Info LedgerSingle Create. The following
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B Ltd Sundry Debtor
A Ltd Sundry Creditor
Sales Account Sales Account
CGST @18% Duties and Taxes
SGST @18% Duties and Taxes
4. Go to Gateway of TallyInventory Info Stock Items Create the following stock
items:
Name of the Ledger Units
Milk Litres
Bread Packets
Ice Creams Numbers
While creating stock items set the following tax rates:
Milk-5%; Bread-5%; Ice Creams-18%.
5. Go to Gateway of TallyAccounting Vouchers F9. Enter the Purchase transaction.
6. Go to Gateway of Tally Accounting VouchersF8. Enter the Sale Transaction.
31. What is the value in GST invoices when Rs. 10000 worth of goods are purchased, GST
tax rate @ 5%. In second invoice two purchases of Rs 5000 worth goods GST rate @ 5% and
another Rs 5000 GST @ 18%. Both the transactions are intra state and show the GST Tax
ledgers.
1. Open Tally ERP 9 and create a Company.
Details.

Y Ltd Sundry Debtor
X Ltd Sundry Debtor
SGST @ 18% Duties and Taxes
45
4. Create two Stock Items: Gateway of Tally Inventory InfoStock ItemsCreate. While
creating stock items, set GST rate as 18% and 5% for good 1 and good 2 respectively.
5. Go to Gateway of Tally Accounting Vouchers F9.
6. Enter the Transaction setting the party name as Y Ltd and X Ltd for first transaction and
second transaction respectively.
7. Print the transaction: Alt +P.
32. Mr. A sold goods to Mr. B for Rs. 20,000. Mr. A is charging packing charges of Rs.
800. And also paying freight of Rs. 2800 from Mr. A’s premises to Mr. B’s premises. Mr. A
also charged interest of Rs. 750 for delay in payment. Determine the taxable value for levy
of GST.Whether packing charges or freight, Interest are required to include in the invoice to
determine taxable value? Show Tax Invoice GST@ 12% (intra state supply).
Details.

Sales Sales Account
B Ltd Sundry Debtor
Packing Charges Indirect Income
Freight Charges Indirect Income
Interest on delayed Payment Indirect Income
CGST Duties and Taxes
SGST Duties and Taxes
4. While creating packing charges, freight charges, interest on delayed payment account,
set GST as not applicable and set the following:
a) include in assessable value for calculation -GST
b) apportioned to -Goods
c) method of calculation – Based on Value.
5. To create Stock Item: Goto Gateway of Tally Inventory Info Stock ItemsCreate.
6. Go to Gateway of Tally Accounting VouchersF8
7. Enter the transaction Details in the Voucher.
33. Mr. X sold 1000 units of goods to Mr. Y for Rs. 20,000 and total unit sold during the
46
year to Mr. Y after including these units is 2500 unit. As per terms of the agreement if Mr.
Y is purchasing more than 2000 unit of goods in a year then Mr. X is allowing 10%
discount in all the supplies. Assuming IGST rate is 18%. How discount will be recorded?
1. Open Tally ERP9 and create a Company.
Discount Indirect Expense
Y Ltd Sundry Debtor
IGST Duties and Taxes
6. Enter the transaction setting the party name as Y Ltd.
34. Create 5 stock items with GST @ zero tax rate, @ 5%, @12%, @18%, record interstate
purchase and sale transactions. Show the details of input tax credit.
Details.
Inter state purchases Purchases Account
Inter state sales Sales account
Party name Sundry Creditor
Party name Sundry debtor
INPUT IGST @5% Duties and Taxes
OUTPUT IGST @5% Duties and Taxes
INPUT IGST @12% Duties and Taxes
OUTPUT IGST @12% Duties and Taxes
OUTPUT IGST@18% Duties and taxes
INPUT IGST@18 Duties and taxes
4. Go to Gateway of TallyInventory Info Stock Items Create the following stock

47
items:
Name of the Ledger UNIT OF MEASURE
HEARING AIDS NUMBERS
SPICES KGS
DESKTOP P.C Numbers
TOOTH PASTE numbers
While creating stock items set the following tax rates:
Hearing aids-0%,spices-5%, desktop pc -12%, tooth paste-18%
5. Go to Gateway of TallyAccounting Vouchers F9. Enter the Purchase transaction.
7. Go to Gateway of Tally  Display Statutory Reports GST GSTR 3B to view input
tax credit
35. What are the conditions for E-Way bill. What are the options available in Tally.
1. What is aneWay Bill?

EWay Bill is an Electronic Way bill for movement of goods to be generated on the eWay Bill
Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs.
50,000 (Single Invoice/bill/delivery challan) without an e-way bill that is generated on
ewaybillgst.gov.in Alternatively, Eway bill can also be generated or cancelled through SMS,
Android App and by site-to-site integration through API. When aneway bill is generated, a
unique Eway Bill Number (EBN) is allocated and is available to the supplier, recipient, and the
transporter.
2. When Should eWay Bill be issued?

eWay bill will be generated when there is a movement of goods in a vehicle/ conveyance of
value more than Rs. 50,000( either each Invoice or in (aggregate of all Invoices in a vehicle/
Conveyance)# ) –
 In relation to a ‘supply’
 For reasons other than a ‘supply’ ( say a return)
 Due to inward ‘supply’ from an unregistered person
For this purpose, a supply may be either of the following:

A supply made for a consideration (payment) in the course of business
 A supply made for a consideration (payment) which may not be in the course of
business
 A supply without consideration (without payment)In simpler terms, the term ‘supply’
usually means a:
48
1. Sale – sale of goods and payment made
2. Transfer – branch transfers for instance
3. Barter/Exchange – where the payment is by goods instead of in money
Therefore, eWay Bills must be generated on the common portal for all these types of
movements. For certain specified Goods, the eway bill needs to be generated
mandatorily even if the Value of the consignment of Goods is less than Rs. 50,000:
1. Inter-State movement of Goods by the Principal to the Job-worker by Principal/

registered Job-worker***,
2. Inter-State Transport of Handicraft goods by a dealer exempted from GST registration
3. Who should Generate an eWay Bill?
 Registered Person – Eway bill must be generated when there is a movement of goods
of more than Rs 50,000 in value to or from a Registered Person. A Registered person or
the transporter may choose to generate and carry eway bill even if the value of goods is
less than Rs 50,000.
 Unregistered Persons – Unregistered persons are also required to generate e-Way Bill.
However, where a supply is made by an unregistered person to a registered person, the
receiver will have to ensure all the compliances are met as if they were the supplier.
 Transporter – Transporters carrying goods by road, air, rail, etc. also need to generate e
-Way Bill if the supplier has not generated an e-Way Bill.
Easy set-up in Tally.ERP 9 for e-Way bill generation
To start using Tally.ERP 9 to generate e-Way Bills, you have just one simple step : Go to
F11 > F3 > GST Details.
In 'GST Details,'' you can quickly make the following settings:-
1) Choose the amount limit for transactions above which you can generate e-Way
Bills
2) Applicable date from when on you can start to generate e-Way Bills
3) Inter or intra-state movements for which you would like to generate e-Way Bills
As per the settings, appropriate transactions will be made eligible for e-Way Bills by
Tally.ERP 9
36. Mr. Ajay (Hyderabad) provides consultancy services to Mr. Vijay (unregistered, address
on record shows Tamil Nadu)and charged Rs.10000, levied GST @18%. Even provided
consultancy services to Mr. Anand (unregistered and address is not available) Rs.15000,
GST @ 12%. Show the transactions in Tally.
49
Details.
3. GO TO F11 – ACCOUNTING FEATURES—ENABLE MAINTAIN ACCOUNTS ONLY TO YES.
ANAND SUNDRY DEBTOR(PLACEHYD)
CONSULTANCY SERVICES INDIRECT INCOMES
VIJAY SUNDRY DEBTOR
IGST@18 DUTIESANDTAXES
INPUT CGST@6 DUTIES AND TAXES
INPUT SGST@6 DUTIESAND TAXES
LOCAL CONSULTANCY SERVICES INDIRECT INCOMES
6. In case of Anand whose address is not available and unregistered the place of supply is
the place of service provider i.e. Hyderabad
7. Go to Gateway of Tally  Display Statutory Reports GST GSTR 3B to view input
tax credit.
37. M/s Pooja sold250 laptops to M/s.Raj for Rs. 50,000 each.Tax Invoice was raised.
They were given discount of Rs.5000. M/s Raj returned 250 laptops .Assuming GST rate
is 18%. Show discount and GST ledger.
Discount allowed Indirect Expense
M/S RAJ Sundry Debtor
OUTPUT CGST@9% Duties and Taxes
OUTPUT SGST@9% Duties and taxes
50
6. Enter the transaction setting the party name as m/s raj
7. Go to Gateway of Tally  DisplayAccount Books>Ledger>discount allowed and GST
TAX LEDGER.
38. Out ward supplies, B2B, Goods sold to R dealer Rs. 120000, Goods sold to
Customer (B2C) Rs.15000, Goods sold to Interstate dealer Y Rs. 150000. Assuming GST
@ 18% show the effect of outward supplies in GST Return.
R DEALER SUNDRY DEBTOR
Y DEALER Sundry Debtor
CUSTOMER NAME SUNDRY DEBTOR
OUTPUT CGST@9% DUTIES AND TAXES
OUTPUT SGST@9% DUTIES AND TAXES
OUTPUT IGST@18% DUTIES AND TAXES
creating stock item, set GST rate as CGST-9 AND SGST-9, AND IGST -18% (given).
6. Enter the transaction setting the party name as R DEALER/Y DEALER/CUSTOMERS
NAME.
7. Go to Gateway of Tally  Display Statutory Reports GST GSTR 1.
39 Purchased goods from registered dealer M/s Modern, Rs. 50000andRs. 5000 was
paid as advance , Purchased goods from unregistered dealer M/s. Ram Rs. 40000.
Purchased goods from inter state dealer M/s Jyothi, Rs. 75000. Goods returned to M/s
Jyothi Rs.5000, after raising tax invoice. Record Inward supplies in Tally.
2. Enable GST Features by pressing F11statutory and Taxation 
GSTGSTDetails.ENABLE TAX LIABILITY ON REVERSE CHARGE TO YES
SBI BANK BANK ACCOUNT
51
INPUT CGST@9% Duties and taxes
Input sgst@9% Duties and taxes
Input igst@12% Duties and Taxes
Interstate purchases Purchases
m/s jyothi Sundry creditor
M/S MODERN SUNDRY CREDITOR
M/S RAM SUNDRY CREDITOR
REG PURCHASES PURCHASES
UNREG PURCHASES PURCHASES
creating stock item, set GST rate as CGST-6%, AND SGST-6%, IGST -12% (ASSUMED).
5. Go to Gateway of Tally Accounting Vouchers F9
6. Go to Gate way of TallyAccounting VouchersF5 (Set under Nature of Transaction
as Advance payment under reverse Charge).
7. Enter the transaction setting the party name as M/S JYOTHI/M/SMODERN/M/S RAM
8. Go to Gateway of Tally  Display Statutory Reports GST GSTR 2.
52

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Theory & Practice of GST

3. Write any five limitations of pre –GST Indirect Taxes

Indirect taxes have some disadvantages too, which are as follows:

(iii) Raising Prices Unduly:

(v) No Civic Consciousness:

(vi) Harmful to Industries:

4. What was the significance of Introduction of VAT in Indirect Taxes priorto

How is VAT computed?

What is output tax?

What is Input Tax?

In other words, VAT = Output Tax – Input Tax.

Who will be covered by VAT?

What are the tax rates under VAT?

 Schedule ‘A’ – Essential Commodities (Tax-free) – Nil

Why in India, there is a need for GST?

6.what are the important stages in implementation of GST

7. What were the taxes subsumed in GST

Taxes to be subsumed in GST

CENTRAL TAXES TO BE SUBSUMED

Description of goods Pre-GST tax incidence GST rate

3. Duties performed by:

 The Members of Parliament, State Legislature, Panchayats, Municipalities and other

4. Services of a funeral, burial, crematorium or mortuary including transportation of the

11. What are different types of taxes levied under GST

12. What is RNR (Revenue neutral rate?)

RNR recommendation from Subramanian committee

 Indirect tax turnover approach-:

1. Estimate goods revenue base at the state level.

This approach puts the RNR at 18.86%.

 Direct tax turnover approach

Ratio for Distribution of RNR

Bones and horn-

All items with Used or

GST Rates on Services

Renting for Hotel

28% Tax Slab

Entertainment events-amusement facility, water parks,

Food/drinks at AC 5-star hotels

14. Briefly explain the important components of Supply

Why are time place and value of supply important?

A. Time of Supply of Goods

B. Time of Supply for Services

Location of Service Place of Nature of GST

Maharashtra Maharashtra Intra-state CGST + SGST

Maharashtra Kerala Inter-state IGST

A. Place of Supply of Goods

B. Place of Supply for Services

 Services related to immovable property

3. Value of Supply of Goods or Services

What is composite supply under GST?

 Supply of 2 or more goods or services together AND

 They cannot be separated.

What tax rate will apply?

What is mixed supply under GST?

How to determine if it is a mixed supply or a composite supply?

Differences between mixed and composite supplies

Main item Principal item Item with highest tax rate

Who is eligible for GST Registration?

 Persons who are required to pay tax under Reverse Charge.