INTRODUCTION OF THE ORGANISATION

 Organization is working as a Chartered Accountants firm under the rules and regulations and
code of ethics designed for CA firms by ICAI (The Institute of Chartered Accountants of
India).
The Institute of Chartered Accountants of India (ICAI or the Institute) was established as
statutory body on July 1, 1961 under Chartered Accountants Ordinance, 1961 to regulate the
profession of accountancy in the country.
ICAI is governed by the Council which consists of nineteen members. Fifteen members are
elected from amongst the members for a period of four years. The remaining four of the
Council members are nominated by the Government of India.
Vision of the ICAI is:
The profession of Chartered Accountants in India should be the benchmark of professional
excellence upholding the principles of integrity, transparency and accountability.
Mission of ICAI:
Is to achieve excellence in professional competence, add value to businesses and economy,
safeguard public interest; ensure ethical practices and good corporate governance while
recognizing the needs of globalization.
These kinds of firms provide different kinds of professional services like audit, taxation and
management consultancy to its clients.
The Chartered Accountancy course is conducted by the Institute of Chartered Accountants of
India, which has its headquarters in New Delhi, 5 regional offices (Calcutta, Kanpur,
Chennai, Mumbai and New Delhi) and 81 branches under these regional centres.

Service by CA
Accountancy
Auditing
Taxation
Cost Accountancy
Executors and Trustees
Directorship
Companies Secretarial Work
Management Accounting

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INTRODUCTION TO THE TOPIC

Taxation is the inherent power of the state to impose and demand contribution upon persons ,
properties , or right for the purpose of generating revenues for public purposes.
Taxes are enforced proportional contributions from persons to property levied by the law
making body of the state by virtue of its sovereignty for the support of the government and all
public needs.
Brief History of Taxation :
Tax is today an important source of revenue for the government in all the countries . More
than 3000 years ago , the inhabitants of ancient Egypt and Greece used to pay tax ,
consumption taxes and custom duties. Income tax was first introduced in India in 1860 by
James Wilson who become Indians First Finance Member.
In order to meet the losses sustained by the government on account of military mutiny of
1857. In 1918 A New Income Tax bill was passed and which was further again replace in
1922. Finally, The Ministry of Law and Finance The Income Tax was Passed in 1961 and
brought came in force on 1st April 1962. and this is also known as the Financial Year in
Current Era. I e. ( 01.04.18 – 31.03.2019)
Taxation System : Tax system of raising money to finance Government. All governments
require payment of money taxes from people.
Government use revenues to pay soldiers and police to build dams and roads, to operate
schools and hospitals, to provide food to the poor and medical care facilities etc and also
hundreds of other purposes without taxes to fund its activities, govt could not exist.
So, taxation is the most important source of revenues for modern government typically
according for 90% or more of their income 
Essentials Characteristics of Tax :
1. It is an enforced Contribution.
2. It is generally payable by Money.
3. It proportionate in character , usually based on ability to pay .
4. It is levied on person and property with the jurisdiction of the state.
5. It is levied for public purpose.
6. It is commonly required to be paid a regular intervals.

Why are Taxes Levied ?

The reason for levy of taxes is that they constitute the basic source of revenue to the
government. Revenue so raised is utilized for meeting the expenses of government like
defense, provision of education , health care, Infrastructure facilities like roads , dams etc.

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What are the Reasons of Taxation ?
1. Provide the basic facilities for every citizen of country.
2. Finance government multiple projects and schemes.
3. Protection of Life.
4. Responsibility of citizen to the Nation.

Meaning of Tax :
The word Tax came from Latin word “Taxo , Tax are '' which means To asses or estimate .
Tax can be defined in the following ways:
“The compulsory payments made to governments associated with certain activities are called
Taxes ''
“A general purpose, compulsory contribution by the people to public treasury to meet the
expenditure of government is called Tax ''
“A specific amount of money demanded by government from its public levied on their
income, sales, wealth etc. ''
“Taxes are the price we pay for a civilized society ''
Tax in general, is the imposition of financial charge upon an individual or a company by the
govt of India or their respective state or similar other functional equivalents in a state. The
computation and imposition of the varied taxes prevalent in the country are carried on by the
Ministry of Finance Department of Revenue.

Different Types of Taxes In India :

Prevalence of various kinds of taxes is found in India. Taxes in India can be either direct or
indirect. However, the types of taxes even depend on whether a particular tax is being levied
by the central or the state government or any other municipalities . Following are some of the
major Indian government are :
1. Direct Taxes :
It is names so because it is directly paid to the union government of India. As per a survey,
the Republic of India has witnessed a consistent rise in the collection of such taxes over a
period of past years . The visible growth in these tax collections as well as the rates of taxes
reflects a healthy tax along with better administration of taxation. To name a few of the direct
taxes, which are imposed by the Indian government are :
 Banking cash Transaction Tax.
 Corporate Tax.
 Capital Gains Tax.
 Double Tax Avoidance treaty.

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  Fringe Benefit Tax.
 Securities Transaction Tax.
 Personal Income-tax.
 Tax Incentives.

2. Indirect Taxes :
As opposed to the direct taxes, such a tax in the nation is generally levied on some specified
services or some particular goods . An indirect tax is not levied on any particular organization
or an individual. Almost all the activities , which fall with in the periphery of the indirect
taxation , are included in the range starting from manufacturing goods and delivery of
services to those that are meant for consumption.
Usually, the indirect taxation in the Indian Republic is a complex procedure that involves
laws and regulations, which are interconnected to each other. These taxation regulations even
include some laws that are specific to some of the states of the country. The organizations
offer services in all or most of the related fields , some of which are as follows :
 Anti Dumping Duty
 Custom Duty.
 Excise Duty.
 Sales Tax.
 Service Tax .
 Value Added Tax . Or VAT

3. Local Taxes In India :

The most known tax , which is levied by the local municipal jurisdictions on the entry of
goods, is known as the Entry Tax or the Doctor Tax.
4. Income Tax
Income tax in India includes all income except the agricultural income that is levied and
collected by the central government. This particular income is also shared with the states. The
income tax was incorporated in India from the year 1860.
However, after many alteration, finally with the Indian Income-tax Act , 1922, there was a
revolutionary change brought by the All India Income Tax Committee. The significant as
after this the administration of the Income Tax came under the direct control of the central
Government. This act got amended again in the year 1961 , and the present Income Tax
regime in India is still following the provisions of the act of 1961.
5. Consumption Tax :
Consumption Tax is applicable on the consumption of any type of goods or service. This
particular tax is based on consumption and not on income. The consumption Tax can be
regarded as a sales tax, as this tax is also regressive in nature like the other pure sales taxes.
However , there are some remedies by which the consumption tax can be made progressive in
nature.

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BACKGROUND OF GST OUTSIDE INDIA

Goods and Service also known as the value added tax (VAT) or Harmonized sales tax.
Following are some successfully implemented GST models in other countries :
1. France :
a. Rate of GST 19.6%
b. France was the first country to introduced GST in 1954.
World wide , almost 150 countries have introduced GST in one or the other form since now.
Most of the countries have a unified GST System. Brazil and Canada follow a dual system
vis a vis India is going to introduce . In china , GST applies only to goods and the provisions
of repairs , replacements and processing services.

2. Australia :
a. Rates of GST 10%
b. GST is administrated by the tax office on behalf of the Australian Government, and is
appropriated to the states and territories.
c. Every company whose turnover exceeds $ 75000 is liable for registration under GST and
in default 1/11th of the income and some amount is form of penalty.

3. Canada :
a. GST is imposed at 5% in Part ix of the excise tax act . GST is levied on goods and service
made in Canada except items that are either exempt or zero rated.
b. When a supplier makes a zero rated supply, he is eligible to recover any GST paid on
purchases but the supplier who makes a supply of exempt goods he is not eligible take input
tax credit on purchases for the purpose of making the exempt goods and services.

4. New Zealand :
a. Rate of GST 12.5%
b. Exceptions are rent collected on residential rental properties, donations and financial
services.

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Historical Background of Goods and Service Tax in India :

 Amaresh Baghchi Report , 1994 suggests that the introduction of Value Added Tax
will act as root for implementation of Goods and Service Tax in india.
 Ashim Dasgupta, 2000 empowered committee, which introduces VAT system in 2005
, which has replaced old age taxation system in India.
 Vijay Kelkar Task Force 2004, it strongly recommended that the integration of
indirect taxes in to the form of GST in India.
 Announcement of GST to be implemented by 1st April , 2010 After successfully
implementation of VAT system in India and suggestion various committees and task
forces on GST, the union government first time in union budget 2006-07 announced
that the GST would be applicable from 1st April 2010.
 The Government has formed various joint working groups of state finance ministers
to study the impact of GST various states.
 The empowered committees of state finance ministers after various meetings reached
on amicable formula for implementation of GST in India.
 Task force of finance ministers has submitted their report in December 2009 on
structure of GST in India.
 In August , 2013 Standing committee on Finance tabled its report on GST Bill.
 In December, 2014 revised constitution Amendment bill was tabled in Parliament.
 On June 14, 2016 , the ministry of finance released draft model law on GST in public
domain for views and suggestions .
 GST bill passed in Rajya Sabha on 3rd August , 2016 the constitution amendment
(122nd ) bill 2014 was passed by Rajya Sabha with concern amendments.
a. The changes made by Rajya Sabha were unanimously passed by Lok Sabha.
b. After the passage of amendment bill in Rajya Sabha and the charges subsequently ratified
and passed by the lok sabha unanimously, the bill was adopted by a majority of state
Legislatures where in approval by at least 50% of the state Assemblies was required.
c. The final step to the constitution (122nd ) amendment bill, 2014 becoming an act was taken
when the Honorable President of India gave his final assent on September 8, 2016.
In 2017 – Four GST related bills become act to following Presidents assent and passage in
parliament:
a. Central GST Bill.
b. Integrated GST Bill .
c. Union Territory GST Bill.
d. GST (compensation to states ) Bill.
In 2017 GST Council finalizing the GST Rules and GST Rates.

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When GST is Applicable – Modi Govt. Want to applicable GST Bill from 1st July 2017, Due
to a some legal Problems GST Bill is not applicable before 1st July 2017.

CONCEPT OF GOODS AND SERVICE TAX(GST)

Introduction Of GST
The reference of GST was first made in the Indian Budget in 2006-07 by the Finance
Minister Mr. P. Chidambaram as a single centralized Indirect tax. The GST constitution
( 122nd ) Amendment Bill 2014 was introduced on December 19, 2014 and passed on May
06, 2015 in the lok sabha and yet to be passed in the Rajya Sabha.
The bill seeks to amend the constitution to introduce Goods and Services tax vide proposed
new article 246 A. This article gives power to Legislature of every state and parliament to
make laws with respect to goods and services tax where the supplies of goods or of service
take place . Recently, Union Minister Mr. Arun Jaitley said that GST could be implemented
as early as January 1, 2016.
Note: The word bill may be interpreted as the constitution (122nd ) Amendment Bill 2014.

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Meaning Of Goods and Service Tax (GST)

Clauses 366 (12A) of the constitution Bill defines GST as “ goods and service tax” means
any tax on supply of goods, or services or both except taxes on the supply of the liquor for
human consumption. Further the clause 366 (26A) of the Bill defines Services means
anything other than Goods.
Thus it can be said that GST is a comprehensive tax levy on manufacture , sale and
consumption of goods and services at a national level . The proposed tax will be levied on all
transactions involving supply of goods and services, except those which are kept out of its
preview.
Purpose of GST :
The Two Important Purposes of GST are followings:
 Single Umbrella Tax Rate:
GST shall replace a number of indirect taxes being levied by union and state government.
 Removing Cascading Effect :
GST is intended to remove Tax on Tax Effect and provides to common national market for
Goods and Services.

Types Of Categories under GST rate

The GST tax is levied based on Revenue Neutral Rate . For the purpose of imposing GST tax
in India, the goods and services are categorized in to four.
These are four categories of goods and services are follows :
1. Exempted Categories under GST in India :
The GST and council and other GST authorities notifies list of exempted goods. Such goods
are not fallen under payment of GST tax. The authorities may modify or amend the list time
to time by adding deleting any item if required by notification to public.
2. Essential Goods and Services for GST in India :
Essential Category of goods and services are charged very lower GST rate. Essential goods
and services are the goods and services for necessary items under basic importance.
3. Standard Goods and services for GST in India :
A major share of GST tax payers falls under this category of Standard Goods and Service. A
Standard rate is charged against the goods and services under this category.

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 4. Special Goods and Services for GST tax Levy :
Under special category of goods and services, GST rates would be high. Precious metals
including luxury items of goods and services fall under special goods and services for GST
rate implementations.

Tax
Products
Rates
Household necessities such as edible oil, sugar, spices, tea, and coffee (except instant)
5% are included. Coal , Mishti/Mithai (Indian Sweets) and Life-saving drugs are also
covered under this GST slab
12% This includes computers and processed food
Hair oil, toothpaste and soaps, capital goods and industrial
18%
intermediaries are covered in this slab
Luxury items such as small cars , consumer durables like AC and Refrigerators,
28%
premium cars, cigarettes and aerated drinks , High-end motorcycles  are included here.
GST rates in India at a glance :

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Types Of Goods and Service Tax in India.

1. CGST ( Central Goods and Service Tax) :GST to be levied by the center.
2. SGST ( State Goods and Service Tax ) : The GST is to be levied by the states is State GST
(SGST) .
3. IGST ( Integrated Goods and Service Tax ) : Integrated GST will be levied by the center
and the states concurrently .

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Challenges of GST implementations :
 With respect to Tax Threshold
The threshold limit for turnover above which GST would be levied will be one area which
would have to be strictly looked at. First of all, the threshold limit should not be so low to
bother small scale traders and service providers. It also increases the allocation of
government resources for such a petty amount of revenue which may be much more costly
than the amount of revenue collected. The first impact of setting higher tax threshold would
naturally lead to less revenue to the government as the margin of tax base shrinks; second it
may have on such small and not so developed states which have set low threshold limit under
current VAT regime.
 With respect to nature of taxes
The taxes that are generally included in GST would be excise duty, countervailing duty, cess,
service tax, and state level VAT among others. Interestingly, there are numerous other states
and union taxes that would be still out of GST.
 With respect to number of enactments of statutes
There will two types of GST laws, one at a center level called ‘Central GST (CGST)’ and the
other one at the state level - ‘State GST (SGST)’. As there seems to have different tax rates
for goods and services at the Central Level and at the State Level, and further division based
on necessary and other property based on the need, location, geography and resources of each
state.
 With respect to Rates of taxation
It is true that a tax rate should be devised in accordance with the state’s necessity of funds.
Whenever states feel that they need to raise greater revenues to fund the increased
expenditure, then, ideally, they should have power to decide how to increase the revenue.
 With respect to tax management and Infrastructure
It depends on the states and the union how they are going to make GST a simple one.
Success of any tax reform policy or managerial measures depends on the inherent
simplifications of the system, which leads to the high conformity with the administrative
measures and policies.

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OPPORTUNITIES OF GST

 An end to cascading effects

This will be the major contribution of GST for the business and commerce. At present, there
are different state level and center level indirect tax levies that are compulsory one after
another on the supply chain till the time of its utilization.
 Growth of Revenue in States and Union
It is expected that the introduction of GST will increase the tax base but lowers down the tax
rates and also removes the multiple point This, will lead to higher amount of revenue to both
the states and the union.
3 Reduces transaction costs and unnecessary wastage's
If government works in an efficient mode, it may be also possible that a single registration
and single compliance will suffice for both SGST and CGST provided government produces
effective IT infrastructure and integration of such infrastructure of states level with the union.
 Eliminates the multiplicity of taxation
One of the great advantages that a taxpayer can expect from GST is elimination of
multiplicity of taxation. The reduction in the number of taxation applicable in a chain of
transaction will help to clean up the current mess that is brought by existing indirect tax laws.
 One Point Single Tax
Another feature that GST must hold is it should be ‘one point single taxation’. This also
gives a lot of comforts and confidence to business community that they would focus on
business rather than worrying about other taxation that may crop at later stage. This will help
the business community to decide their supply chain, pricing moralities and in the long run
helps the consumers being goods competitive as price will no longer be the function of tax
components but function of sheer business intelligence and innovation.
 Reduces average tax burdens
Under GST mechanism, the cost of tax that consumers have to bear will be certain, and GST
would reduce the average tax burdens on the consumers.
 Reduces the corruption
It is one of the major problems that India is overwhelmed with. We cannot expect anything
substantial unless there exists a political will to root it out. This will be a step towards
corruption free Indian Revenue Service.

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IMPACT OF GOODS AND SERVICE TAX

Food Industry
The application of GST to food items will have a significant impact on those who are living
under subsistence level. But at the same time, a complete exemption for food items would
drastically shrink the tax base. Food includes grains and cereals, meat, fish and poultry, milk
and dairy products, fruits and vegetables, candy and confectionery, snacks, prepared meals
for home consumption, restaurant meals and beverages. Even if the food is within the scope
of GST, such sales would largely remain exempt due to small business registration threshold.
Given the exemption of food from CENVAT and 4% VAT on food item, the GST under a
single rate would lead to a doubling of tax burden on food.
Housing and Construction Industry
In India, construction and Housing sector need to be included in the GST tax base because
construction sector is a significant contributor to the national economy.
FMCG Sector
Despite of the economic slowdown, India's Fast Moving Consumer Goods (FMCG) has
grown consistently during the past three – four years reaching to $25 billion at retail sales in
2008. Implementation of proposed GST and opening of Foreign Direct Investment (F.D.I.)
are expected to fuel the growth and raise industry's size to $95 Billion by 201835.
Rail Sector
There have been suggestions for including the rail sector under the GST umbrella to bring
about significant tax gains and widen the tax net so as to keep overall GST rate low. This will
have the added benefit of ensuring that all inter – state transportation of goods can be tracked
through the proposed Information technology (IT) network.
Financial Services
In most of the countries GST is not charged on the financial services. Example, In New
Zealand most of the services covered except financial services as GST. Under the service tax,
India has followed the approach of bringing virtually all financial services within the ambit of
tax where consideration for them is in the form of an explicit fee. GST also include financial
services on the above grounds only.
Information Technology enabled services
To be in sync with the best International practices, domestic supply of software should also
attract G.S.T. on the basis of mode of transaction. Hence if the software is transferred through

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electronic form, it should be considered as Intellectual Property and regarded as a service.
And if the software is transmitted on media or any other tangible property, then it should be
treated as goods and subject to G.S.T. 35 According to a FICCI – Technopak Report.
Implementation of GST will also help in uniform, simplified and single point Taxation and
thereby reduced prices.

Impact on Small Enterprises

There will be three categories of Small Enterprises in the GST regime.
Those below threshold need not register for the GST
Those between the threshold and composition turnovers will have the option to pay a
turnover based tax or opt to join the GST regime.
Those above threshold limit will need to be within framework of GST Possible downward changes in
the threshold in some States consequent to the introduction of GST may result in obligation being
created for some dealers. In this case considerable assistance is desired. In respect of Central GST, the
position is slightly more complex. Small scale units manufacturing specified goods are allowed
exemptions of excise up to Rs. 1.5 Cr ores. These units may be required to register for payment of
GST, may see this as an additional cost.

Effect of GST on Indian economy

Some effects of GST on the Indian Economy are discussed as follows :

 Increased FDI - The flow of Foreign Direct Investments may increase once GST is
implemented as the present complicated/ multiple tax laws are one of the reasons
foreign Companies are wary of coming to India in addition to widespread corruption.
 Growth in overall revenues - It is estimated that India could get revenue of $15
billion per annum by implementing the Goods and Services Tax as it would promote
exports, raise employment and boost growth. Over a period, the dilution of the
principles may see that only part of this is accruing.
 Simplified tax laws - This reduces litigation and waste of time of the judiciary.
Present law appears to be much worse and an amalgam of the bad parts of VAT/ ST.
 Increase in exports and employment - GST could also result in increased
employment, promotion of exports and consequently a significant boost to overall
economic growth and factors of production -land labour and capital.
Experts are also making positive speculations regarding GST.
So, in long run GST will act as a boon for the society and we can take example from
CANADA.
GST the biggest tax reform in India founded on the notion of “one nation, one market, one
tax” is finally here. The moment that the Indian government was waiting for a decade has
finally arrived. The single biggest indirect tax regime has kicked into force, dismantling all

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the inter-state barriers with respect to trade. The GST rollout, with a single stroke, has
converted India into a unified market of 1.3 billion citizens. Fundamentally, the $2.4-trillion
economy is attempting to transform itself by doing away with the internal tariff barriers and
subsuming central, state and local taxes into a unified GST.
The rollout has renewed the hope of India’s fiscal reform program regaining momentum and
widening the economy. Then again, there are fears of disruption, embedded in what’s
perceived as a rushed transition which may not assist the interests of the country.
Will the hopes triumph over uncertainty would be determined by how our government works
towards making GST a “good and simple tax”. The idea behind implementing GST across the
country in 29 states and 7 Union Territories is that it would offer a win-win situation for
everyone. Manufacturers and traders would benefit from fewer tax filings, transparent rules,
and easy bookkeeping; consumers would be paying less for the goods and services, and the
government would generate more revenues as revenue leaks would be plugged.

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BENEFITS OF GST

(A) Make in India

(i) Will help to create a unified common national market for India, giving a boost to Foreign
investment and “Make in India” campaign
(ii) Will prevent cascading of taxes as Input Tax Credit will be available across goods and
services at every stage of supply;
(iii) Harmonization of laws, procedures and rates of tax;
(iv) It will boost export and manufacturing activity, generate more employment and thus
increase GDP with gainful employment leading to substantive economic growth;
(v) Ultimately it will help in poverty eradication by generating more employment and more
financial resources;
(vi) More efficient neutralization of taxes especially for exports thereby making our products
more competitive in the international market and give boost to Indian Exports; (vi) Improve
the overall investment climate in the country which will naturally benefit the development in
the states;
(vii) Uniform SGST and IGST rates will reduce the incentive for evasion by eliminating rate
arbitrage between neighbouring States and that between intro and inter-state sales; (viii)
Average tax burden on companies is likely to come down which is expected to reduce prices
and lower prices mean more consumption, which in turn means more production thereby
helping in the growth of the industries. This will create India as a” Manufacturing hub”.

(B) Ease of Doing Business

(i) Simpler tax regime with fewer exemptions;
(ii) Reductions in the multiplicity of taxes that are at present governing our indirect tax
system leading to simplification and uniformity;
(iii) Reduction in compliance costs - No multiple record keeping for a variety of taxes - so
lesser investment of resources and manpower in maintaining records;
(iv) Simplified and automated procedures for various processes such as registration, returns,
refunds, tax payments, etc;
(v) All interaction to be through the common GSTN portal- so less public interface between
the taxpayer and the tax administration

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 (vi) Will improve environment of compliance as all returns to be filed online, input credits to
be verified online, encouraging more paper trail of transactions;
(vii) Common procedures for registration of taxpayers, refund of taxes, uniform formats of
tax return, common tax base, common system of classification of goods and services will
lend greater certainty to taxation system;
(viii) Timeliness to be provided for important activities like obtaining registration, refunds,
etc;
(ix) Electronic matching of input tax credits all-across India thus making the process more
transparent and accountable.
(C) Benefit to Consumers:
(i) Final price of goods is expected to be lower due to seamless flow of input tax credit
between the manufacturer, retailer and service supplier;
(ii) It is expected that a relatively large segment of small retailers will be either exempted
from tax or will suffer very low tax rates under a compounding scheme- purchases from such
entities will cost less for the consumers;
(iii) Average tax burden on companies is likely to come down which is expected to reduce
prices and lower prices mean more consumption.

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LITERATURE REVIEW

The proposed GST is likely to change the whole scenario of current indirect tax system. It is
considered as biggest tax reform since 1947. Currently, in India complicated indirect tax
system is followed with imbrication of taxes imposed by unions and states separately. GST
will unify all the indirect taxes under as umbrella and will create a smooth national market.
Expert says that GST will help the economy to grow in more efficient manner by improving
the tax collection is it will disrupt all the tax barriers between states and integrate country by
single tax rate.

GST was first introduced by France in 1954 and now it is followed by 140 countries . Most
of the countries followed unified GST while some countries like Brazil , Canada follow a
dual GST system where tax imposed by central and state both. In India also dual system of
GST is proposed including CGST and SGST .
● Ehtisham Ahmed and Satya Poddar (2009) studied , “ Goods and service tax reforms and
intergovernmental consideration in India ” and found that GST introduction will provide
implies and transparent tax system with increase in output and productivity of economy in
India. But the benefits of GST are critically dependent on rational design of GST.
● According to Palil et al. (2010) , Public awareness towards GST is low can happen due to
introduction of GST especially in the early years such as lack of familiarity with the new
system. There are several factors that discouraged customers from accepting GST
implementation in Malaysia and the most important factor among all is a fear of price
increase and will cause the inflation.
● (Saira et al, 2010) , Based on the history of the implementation by the other countries
around the world, most of the countries received a positive impact in terms of their revenue,
despite the success of GST implementation the Malaysian citizens still feel uncertain with the
GST, (Saira et al, 2010). The findings from the study showed that the majority of Malaysians
not convinced with the GST system ,
● Dr. R. Vasanthagopal (2011) , Conducted a study on , “ GST in India : A big leap in the
Indirect Taxation System” and concluded that switching to seamless GST from current
complicated indirect tax system in India will be positive step in becoming Indian economy .
Success of GST will lead to its acceptance by more than 130 countries in world and a new
preferred form of Indirect Tax System in Asia also [2]
● According to Torgler (2011) , tax morale is important to taxpayer awareness. On the other
hand, research by Tekeli (2011) using multiple regression analysis show that tax morale has

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insignificant relationship on tax awareness. A Tekeli (2011) conclusion is supported study by
regarding cause and consequences of tax morale.
● Research by Mustapha and Palil (2011) , stated that the influence of compliance behavior
towards individuals’ awareness has been proven in various researches. From the findings of
Razak and Adafula (2013); Santi (2012) they found that taxpayers’ awareness is significantly
associated with tax compliance and this is also supported by study Jatmiko (2006).
● Agogo Mawuli (May 2014) studied , “ Goods and Service Tax An Appraisal “ and found
that GST is not good that low income countries and does not provide broad based growth to
poor countries. If still countries want to implement GST then the rate of GST should be less
than 10 % for growth.
● International Journal of Scientist research and management (2014) , Girish Gargh Assistant
Professor from PGDAV College University of Delhi has published paper titled Basic”
Concepts and Features of good and service tax in India.
● International Journal of innovative studies in sociology and humanities (2016) , A study on
impact of GST after implementation Milan-deep Kour and his co-authors Assistant Professor
from Eternal University himachal Pradesh talks about the impact of GST and implementation
of it, its benefit and challenges. He also emphasizes that GST is going to change things in
current situation .
● Bar hate (2017) , found that people have no doubt whatsoever regarding the proposed
benefits of GST irrespective of their business type, legal status of business for the reason
being they feel irritated by the present system which appears to be cumbersome. Most
respondents believe that GST will bring monetary gains to their business and do not
anticipate any significant boost in tax compliance costs.
● Times of India (26 July, 2017) , page no 1&17 it is stated that Sweet makers are confused
with fixing the tax for their products as the ingredients used in the sweets are taxed separately
as raw material and as finished goods the products its taxing is different ex. Plain burfi is 5%
taxed but chocolate burfi is fixed with 28%. Plain burfi mixed with other dry fruits is of 12%.
This taxing system makes the Sweet makers to get confused on how much GST to be fixed
for which product.
● Times of India dated ( 27 July , 2017) , stated that the GST implication across different
places for the same product has wider differences which the consumers are unaware, resulting
them in surprise. Ex A Rasamalai sold in counter at a shop is taxed with 5% but if it is served
in the hotel it is taxed with 18% this has resulted in difference of consumers shopping to
purchase the similar products

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RESEARCH METHODOLOGY

 Introduction of Research Methodology:

Research is a logical and systematic search for new and useful information on a particular
topic. Research methodology is a systematic way to solve a problem. It is a science of
studying how research is to be carried out. Essentially, the procedures by which researchers
go about their work of describing, explaining and predicting phenomenon are called research
methodology.

About my Research Problem:

The present research is descriptive in nature. Since GST is a new phenomenon in India, there
are hardly any studies in this area. Specially there is a huge gap of empirical and behaviour
studies on GST in India. The study tries to find the significance of popular perception
regarding GST.

Need of Study:
The Need of study have to fill the gap that has identified in the previous researchers. Under
this study We know that how much level of understanding the GST and Perception towards
GST as well as traders, taxpayers concerned by GST.

Research Design :

A good research design has characteristics viz, problem definition , time required for research
project and estimate of expenses to be incurred the function of research design is to ensure
that the required data are collected and they are collected accurately and economically. A
research design is purely and simply the framework for a study that guide the collection and
analysis data. In this project the two basic types of research design are used :

➢ Descriptive Research :
It is the design that one simply describe something such as demographic characteristics of
people . The descriptive study is typically concerned with determining frequency with which
something occurs or how two variables vary together. A descriptive study requires a clear

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specification of who, what, when and why apex of the research . It requires formulation of
more specific hypothesis and the testing these through statically inference technique.
This is the research design of the study and then it comes to develop the research plan , which
means that what to do before going for the actual interpretation and it is discussed below .

Classification of Data :
The correct information is the key to success. Data information is of two types ; Primary Data
and Secondary Data. Primary data is information collected by researcher or person himself
where is secondary data is collected by other but utilized or used by researcher . Data can be
classified under two categories depending upon source utilized . These categories are :

➢ PRIMARY DATA

➢ SECONDARY DATA
Primary Data : The study is largely based on the primary data which has been collected
through the structured Questionnaire Method.
Using Primary Primary Data Collection Tool : Questionnaire:- The data has been collected by
administering a structured schedule of questions. The questions are generally framed by 5
point Likert Scale and answers by respondents in form of Agree , Dis agree , Neutral,
Strongly Agree and Strongly dis Agree.
Secondary Data : This type of data has already been collected by someone else and has
already passed through statistical process. This type of data has been collected from the
following resources
Sources of Collection of Secondary Data

➢ Internet

➢ Books

➢ Journal

➢ Thesis.

➢ News Papers

➢ Govt Gazettes.

➢ Magazines etc.
For this study Primary Data and Secondary data both has been used for research topic.

Limitations
Limitations Concerns over GST are as follows –

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  Lack of clarity on subsuming of cess
The automotive industry has witnessed several cesses, including automobile cess, NCCD,
tractor cess and infrastructure cess. In the discussions on GST, the Government has indicated
its intention to subsume all Central and State cesses into GST. However, on a reading of the
Model GST law and the constitutional amendment bill, it is not clear as to whether the cesses
levied under different legislations (for specified purposes) will be subsumed into GST or
would continue under the GST scenario.
 Impact on Registration, Return and Accounting
Registration: Dealers need to obtain separate registration for each state even if it pertains to
the same dealership and covered under the same PAN. But dealer can opt for multiple
registrations within the state for various cars.
Returns: Compliance burden will be very high in the GST System as one has to file 37
Returns in one financial year for each registration apart from ISD returns. In case taxes are
not paid by the vendors or if the returns are not filed by the vendors, then the credit of such
taxes is denied to the customers. Therefore, timely payment of taxes, filing of returns needs to
be ensured in the GST.
Accounting: Communication, flow of documents from all branches to H.O. should be before
10th of the subsequent month. Therefore, accounting department needs to be faster.
 Valuation Disputes
The Automobile industry has seen significant disputes under central excise valuation like:
sale below the cost for market penetration, inclusion of State Industrial Promotion Subsidies
retained by the manufacturer, deductibility of post-sale discounts from value under excise,
valuation of demo cars, advertisement charges recovered from dealers etc., and sales through
marketing companies and mutuality of interest. The Model GST law continues with the
concept of 'transaction value' which is a welcome measure however the powers for rejection
of the transaction value are very wide, and could lead to significant valuation disputes.
 Transfer of Right to use of Car with accessories, handling charges
Dealers charge various ancillary services such as insurance, extended warranty, accessories,
logistics and handling, registration etc in addition to amount for sale of vehicle. It important
whether the entire transaction shall be classified as separate supplies or as a ‘composite
supply’ or as a ‘mixed supply’ (new concept), which will create litigation at large.

 Post Supply Discounts

Generally, dealers receive various discounts from its manufacturers based on targets,
vehicles lifted, Special Customers [like CA, Doctor], Year- End Discounts etc. It is to note
that post supply discounts will not be allowed as deduction from the value if the same is not
linked to any invoice in the GST

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OBJECTIVE OF STUDY

 To study of GST in conceptual frame work in india

 To know effect of gst on Indian Economy
 To understanding various terminology of GST
 To know gst will act as boon or bane for industry

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OBSERVATIONS AND SUGGESTIONS

The GST or the Goods and Services Tax bill was the biggest talk of this year’s budget. Some
say that it could upset the balance of the economy, some are saying it is flawed in its current
state whereas others are saying that if it isn’t passed it could lead to crisis in the Indian
economy.
Now manufacturers like Maruti-Suzuki and Hyundai are all in favour of the GST in its
current format as it gives small car manufacturers massive tax reductions.
For the carmakers, the GST is undoubtedly a good news but till it gets implemented, they run
the risk of losing sales as people may hold on to their car purchase till July, 2017. With the
festive season around the corner, the gravity of this trend only seems to compound further but
in the long-run the GST is set to benefit each one of us, beyond the automotive industry and
more. In the end though, the customer wins and remains the king. Now let's hope the GST
implementation doesn't hit a roadblock.
GST was implemented from July 1, 2017. The day marked changes in most tax structures and
would help India unite under a single framework.

Introduction of GST will result in –

 GST will lead to merger of firms
 Reduction in number of taxes.
 Decrease in effective tax rate of goods over a period.
 Increase in transparency and tax collection.
 Uniformity in tax rates across India.

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  It will result in lower prices and consecutively, boost demand for automobiles. The
on-road prices of vehicles could go down by 4% to 8%.
 The automotive sector will be one of the most positively impacted sectors.
 Other than the center imposed taxes, the other major chunk of taxation comes from
state imposed Value added tax (VAT) that ranges between 12-14.5 per cent across
states. Add the various cess in the country and even for a small car, a customer pays
upwards of 30 per cent on tax and cess alone.
 Proper GST administration and dispute resolution (more importantly on inter-state
transactions) is very critical.
Companies need to upgrade their enterprise resource planning (ERP) — a category of
business-management software — so as to accommodate the complexities of calculating
GST. ERP helps companies manage and monitor everything in the organisation, including
supply chain, finance and even human resource functions. SAP and Oracle are the big players
in the Indian ERP space.
Many companies will have to move from their current system, where every transaction is
recorded separately, to an upgraded system where there is a correlation between every entry,
according to industry executives.
GST rollout is one of the biggest tax reforms for India. Timely GST preparedness is a key to
smooth transition for industry, and we have a huge and experienced talent pool that is fully
geared for this.

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CONCLUSION

India has many taxes in place like excise, sales tax, service tax, entertainment tax, VAT etc.
These taxes are divided at Central as well as state level. These bundle amount of taxes are
difficult to manage and sometimes causes inconvenience to businesses and customers. GST
aims to solve it with single indirect taxation system.
GST has been the buzzword in the country for the last few days and finally the bill has
passed, leading to the realization of “One country, one tax”, at least on papers for now.
Goods and Services Tax Network (GSTN) is a nonprofit organization formed to create a
platform for all the concerned parties i.e. stakeholders, government, taxpayers to collaborate
on a single portal. The portal will be accessible to the central government which will track
down every transaction on its end while the taxpayers will be having a vast service to return
file their taxes and maintain the details. The IT network will be developed by private firms
which are being in tie up with the central government and will be having stakes accordingly.
While overall the industry is looking forward to the introduction of GST, more will be clear
only when the actual tax rate under the new Bill has been decided. The exclusion of petrol
and diesel from the GST umbrella may be another concern as otherwise prices would have
come down. However, as states have correctly pointed out, petroleum related products (and
alcohol) as the biggest source of revenue for state governments, maybe this is for the better.
Nevertheless, automobile industry is looking forward to introduction of GST. However, there
are quite a few concerns in the draft Model GST law, including some of the key aspects
highlighted above, which need to be addressed. Restrictions and conditions on eligibility to
tax credits on assets used for business is also a major area of concern, and the credit
mechanism should be more liberal.

Proper GST administration and dispute resolution (more importantly on inter-state

transactions) is very critical apart from the competitive GST rate.
So, GST will act as boon for automobile industry.

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REFERENCES

 https://gst.caknowledge.in/impact-gst-automobile-sector/
 http://www.ey.com/in/en/newsroom/news-releases/ey-gstimpact-on-the-auto-industry
 https://www.legalraasta.com/gst/impact-of-gst-on-automobilesector/
 http://auto.economictimes.indiatimes.com/news/policy/benefitschallenges-for-auto-
sector-in-gst-bill/53541153
 http://www.abplive.in/auto/gst-bill-how-it-affects-the-autosector-391864
http://www.caclubindia.com/articles/impact-of-gst-onautomobile-dealers-industry-
28910.asp
 http://www.gstinindia.in/GST-on-Automobiles-sector.aspx
 https://www.linkedin.com/pulse/impact-challanges-gstautomobile-industry-india-
manish-goyal
 http://www.usstaad.com/Blog/news-reviews/impact-gst-carprices/
 http://economictimes.indiatimes.com/articleshow/53678594.cms ?
utm_source=contentofinterest&utm_medium=text&utm_campa ign=cppst

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