Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and

services. This law has replaced many indirect tax laws that previously existed
in India.According to the Goods and Services Tax (GST) Act, 2017, GST means a tax on
the supply of goods or services or both, except taxes on the supply of alcoholic liquor for
human consumption and petroleum products.

Features

1. One Nation, One Tax: GST (Goods and Services Tax) replaces a complex web of indirect
taxes with a single, unified tax, making it easier for everyone to understand and comply
with tax regulations.
2. Input Tax Credit: Businesses can set off the tax they paid on purchases against the tax
they collect on sales, reducing the cascading effect of taxes and promoting fairer taxation.
3. Threshold Exemption: Small businesses with a turnover below a certain limit are exempt
from GST, providing relief to small enterprises.
4. Online Filing and Payment: GST procedures are predominantly online, simplifying the
filing and payment processes for taxpayers and reducing paperwork.
5. Transparency and Compliance: GST promotes transparency as it's a technology-driven
system, making it harder to evade taxes and improving overall compliance in the tax
system.

Objectives

1. Simplify Taxation:
● Objective: Make tax procedures easier for businesses and individuals.
● Explanation: GST replaces multiple indirect taxes with a single, unified tax,
simplifying the overall taxation process.
2. Boost Economic Growth:
● Objective: Promote business expansion and economic development.
● Explanation: By eliminating tax barriers and encouraging a seamless flow of
goods and services, GST aims to enhance trade and contribute to economic
growth.
3. Reduce Tax Evasion:
● Objective: Minimize instances of individuals or businesses avoiding taxes.
● Explanation: GST's transparent and traceable nature helps curb tax evasion by
ensuring better compliance and accountability.
4. Ensure Fair Taxation:
● Objective: Distribute the tax burden more equitably across various sectors.
 ● Explanation: GST ensures that taxes are applied at each stage of the production
and distribution chain, preventing undue concentration of the tax burden on a
particular segment.
5. Facilitate Interstate Trade:
● Objective: Simplify and encourage commerce between states.
● Explanation: With a uniform tax structure across states, GST facilitates smoother
interstate transactions, reducing complications associated with varying state tax
systems.

Advantages of GST Disadvantages of GST

1. Simplified Tax Structure: GST replaces multiple

1. Initial Implementation Challenges: Transitioning to GST
taxes with a single, unified tax system, reducing
can be initially challenging for businesses and governments.
complexity.

2. Reduced Tax Cascading: GST is levied only on the

2. Impact on Small Businesses: Smaller businesses may face
value addition at each stage, eliminating the tax on tax
compliance issues and increased administrative burden.
(cascading effect).

3. Promotes Seamless Interstate Trade: With a 3. Potential Price Increases: In some cases, GST
uniform tax structure, GST facilitates smoother implementation may lead to higher prices for certain goods
interstate commerce. and services.

4. Improved Transparency: GST's transparent nature 4. Technology Dependency: Effective GST implementation
helps in tracking transactions, reducing the scope for relies on robust technological infrastructure, which can be a
tax evasion. challenge for some regions.

5. Boosts Economic Growth: GST aims to promote 5. Complexity in Compliances: Compliance with GST
economic growth by simplifying tax procedures and regulations may be complex, especially for businesses
reducing trade barriers. operating in multiple states

Structure of GST
The Dual GST model in India is a unique feature of the Goods and Services Tax (GST) system,
where both the central and state governments have the authority to levy and collect taxes on the
supply of goods and services. The dual structure of GST comprises Central GST (CGST) and
State GST (SGST), and it is applicable to intra-state transactions.

Here's a breakdown of the Dual GST model:

Central GST (CGST):

● Levy Authority: The central government has the authority to levy and collect
CGST.
● Applicability: CGST is applicable on the supply of goods and services within a
state.
● Revenue Collection: The revenue collected from CGST goes to the central
government.
State GST (SGST):
● Levy Authority: The state government has the authority to levy and collect SGST.
● Applicability: SGST is applicable on the supply of goods and services within the
same state.
● Revenue Collection: The revenue collected from SGST goes to the respective
state government.
Integrated GST (IGST):
● Levy Authority: The central government has the authority to levy and collect
IGST.
● Applicability: IGST is applicable on interstate transactions or the supply of goods
and services between states.
● Revenue Collection: The revenue collected from IGST is initially collected by the
central government and later distributed between the central and state
governments.

The key advantage of the Dual GST model is that it ensures a share of revenue for both the
central and state governments.This dual structure simplifies the taxation process for intra-state
transactions, as both CGST and SGST are levied on the same taxable value. It helps in avoiding
tax cascading (tax on tax) and promotes a more transparent and efficient tax system. The GST
Council plays a crucial role in deciding tax rates, exemptions, and other policy matters to
maintain consistency across the country.

GST Council
As per Article 279A of the amended Constitution, the GST Council will be a joint forum of the Centre
andthe States, and it consists of the following members:
a)The Union Finance Minister will be the Chairperson
b) The Union Minister of State, for Revenue or Finance and
c) The Minister of Finance or taxation or any other Minister nominated by each State Government will be
the Members.
The Vice-chairperson of the GST council will be elected by GST council members. The Council will
makerecommendations to the Union and the States on important issues related to GST, like the goods and
services that may be subjected or exempted from GST, principles that govern Place of Supply, threshold
limits, GST rates, special rates for raising additional resources during natural calamities/disasters, special
provisions for certain States, etc.

Powers of GST Council:

● Setting Tax Rates:The GST Council decides how much tax you have to pay when you
buy something. They set the rates to make sure it's fair for everyone.
● Amending Rules:If they see something in the tax rules that needs fixing or improving, the
GST Council has the power to change or adjust those rules.
● Deciding Exemptions: Ever heard of tax exemptions? The GST Council is the group that
can decide if certain things shouldn't be taxed at all. They can give exemptions to make
things easier for people.
● Sharing Revenues:They decide how to share the money collected through taxes between
the central government and the state governments. It's like making sure everyone gets
their fair share of the pie.
● Special Powers in Emergency:In special cases, like during emergencies, the GST Council
has the power to make quick decisions to handle the situation. It's like giving them extra
authority when needed.

Functions of GST Council:

● Meeting Regularly:The GST Council has the regular job of meeting and discussing tax-
related matters. They come together to talk about what's working and what needs
improvement.
● Creating Uniform Rules:They work to create the same tax rules for all states. It's like
making a fair and equal game for everyone, no matter which state you're in.
● Making Recommendations:If there's something important related to taxes, the GST
Council can make recommendations to the central and state governments. It's like giving
advice on how to make things better.
● Listening to Concerns:They listen to the concerns and ideas of the central and state
governments. If there are problems or suggestions, the GST Council considers them and
tries to find solutions.
● Being Flexible: While they want the rules to be the same, the GST Council also
understands that different states might need different solutions. So, they try to be flexible
and understand the unique situations of each state.

The CGST Act, or Central Goods and Services Tax Act of 2017 is like the rulebook created
by the central government for the Goods and Services Tax (GST) in India. Let's break down its
features in simple terms:

● Central Tax Law:The CGST Act is a set of rules made by the central government to
govern how taxes are applied on goods and services all over the country.
● Tax Collection by Center:Under this act, the central government collects taxes known as
Central GST (CGST) on transactions that happen within a single state.
 ● Applying Tax Equally:It makes sure that the tax rules are the same for everyone, no
matter which state you are in. This way, it's fair and consistent across the country.
● Input Tax Credit:One cool feature is that if a business pays tax on the things they buy to
make or sell stuff (like raw materials), they can get credit for that when they pay their
own taxes. It's like a discount for being a good taxpayer.
● Legal Framework:The CGST Act provides a legal framework, which means it's like the
law that everyone, including businesses and individuals, has to follow when it comes to
taxes under the GST system.

So, in simple terms, the CGST Act is like the central government's rulebook for the GST game,
ensuring fair play and equal rules for everyone across the country.