A PROJECT REPORT

ON
GOODS AND SERVICES TAX

For
ARS STEELS & ALLOY INTERNATIONAL PVT
LTD.,
By

" KESAVAN R "

Submitted To

" ANNA UNIVERSITY"

IN THE PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
THE
AWARD OF THE DEGREE OF
MASTERS IN BUSINESS ADMINISTRATION (MBA) A.Y.
2022-2024

PROJECT GUIDE SUBMITTED BY

PROF. SONALI CHAUDHARI PRAJAKTA J.SHINDE
DEPARTMENT OF MBA MBA 3rd SEMESTER

DEPARTMENT OF MBA
RAJGAD INSTITUTE OF MANAGEMENT , RESEARCH &
DEVELOPMENT DHANAKAWADI PUNE - 411043
BATCH 2022-2024

1
 COLLEGE CERTIFICATE

DEPARTMENT OF MBA

RAJGAD INSTITUTE OF MANAGEMENT , RESEARCH

& DEVELOPMENT DHANAKAWADI PUNE - 411043
BATCH 2022-24.

MBA (FINANCIAL MANAGEMENT)

This is to certify that the project entitled "Goods & Services Tax".
Which is being submitted herewith for the award of Degree
"Master of Business Administration in FINANCE".

RAJGAD INSTITUTE OF MANAGEMENT , RESEARCH & DEVELOPMENT

DHANAKAWADI PUNE affiliated to SAVITRIBAI PHULE PUNE
UNIVERSITY, is the result of workcompleted by Mrs.PRAJAKTA
J.SHINDE under my supervision & guidance & best of knowledge
and belief.

Prof. Sonali Dr. D.D.Bharati

Chaudhari HOD Principal
ProjectGuide

3
 DECLARATION OF GUIDE

This to certify that the report of the project submitted is the outcome of the
project work entitled "GOODS & SERVICE TAX" Submitted by
KESAVAN R carried under my guidance and supervision for the award of
Degree in Master of Business Administration from ANNA UNIVERSITY. To
the best of my knowledge, the report embodies the work of the candidate
himself.

Date- Signature of Guide

Place- Chennai

4
 DECLARATION OF STUDENT

I the undersigned, hereby declare that the project report entitled “STUDY OF GOODS

& SERVICE TAX” In – ARS STEELS & ALLOY INTERNATIONAL PVT., LTD.,

submitted by me to the ANNA UNIVERSITY, CHENNAI in partial fulfilment of the

requirement for the award of degree of Master of Business

Administration (MBA) under guidance of is my original work except the topics on

Organization PROF. Dr. R. GUNASEKARAN profile and the

conclusion drawn therein are based on the material Collected by myself.

Date: Signature of Student

Place: - Chennai KESAVAN R
 ACKNOWLEDGEMENT

I would like to express my deepest appreciation to all those who provided me the possibility
to complete this report. I have taken efforts in this project. However, it would not have been
possible without the kind support and help of many individuals and the organization. I
express my gratitude towards my Company Guide FRANCIS VIJAY, for allowing me to
work under his guidance. Without help, guidance and Support this project would not have
been possible. I would like to take this opportunity as privilege to express my deep sense of
gratitude to Professors, Honorable Founders, RAJGAD INSTITUTE OF
MANAGEMENT, R E S E A R C H & DEVELOPMENT
DHANAKAWADI PUNE-411043
For their continuous encouragement, invaluable guidance and help for completing the present research
work. They have been a source of inspiration to means I am in debited to them for initiating me in
the field of research.

My deepest thanks to Dr. R. GUNASEKARAN the guide of the project for guiding and correcting
various documents of mine with attention and care. She has taken pain to go through the project and
make necessary correction as and when needed.

I would also thank my institution and my faculty members without whom this project would have
been a distant reality. I also extend my heartfelt thanks to my family and well-wishers.

Date:

Place: Chennai
PARVATIBAI GENBA MOZE COLLEGE OF ENGINEERING (MBA)
WAGHOLI, PUNE-412207.

Department of MBA

AY- 2022-2024

Project Outline Report for Summer Internship Project

● Name Of The Student – KESAVAN RAVI

● Trainee Organization-
1. Name – FRANCIS VIJAY (ARS STEELS & ALLOY INTERNATIONAL PVT., LTD.,)

2. Address – Anna Nagar, Chennai .

3. Email - ----------------------------------

4. Contact No - ------------------------------

● Internal Company Guide-

1. Name

2. Contact No.----------------------------

● Beginning Date of The Project: 1 SEP 2024

● Completion Date of Project: 15 DEC 2023

● Specialization- MBA (FSM)

●Title Of The Project - Study Of Goods & Service Tax

7
 INDEX

Sr Title Page No

1 CHAPTER 1: - INTRODUCTION

1.1 Concept and introduction of Tax

1.2 Brief History of Taxation
1.3 Essentials characteristics of Tax
1.4 Different types of Taxes
1.5 Executive Summary
2 CHAPTER 2: - OBJECTIVES OF STUDY
3 CHAPTER 3: - COMPANY PROFILE
3.1 Company Profile
3.2 Our Mission

4 CHAPTER 4:- REVIEW OF LITERATURE

5 CHAPTER 5:- RESEARCH METHODOLOGY
5.1 Introduction of Research Methodology
5.2 About Research Problems
5.3 Need of Study
5.4 Classification Of Data
6 CHAPTER 6:- DATA ANALYSIS
6.1 Concept & Introduction of GST
G6.2 Meaning Of GST
6.3 Purpose Of GST
6.4 Types Of GST in India
6.5 Silent Features Of GST
6.6 Opportunities Of GST

6.7 Benefits Of GST

6.8 Return of Filling Process

7 CHAPTER 7:- FINDINGS

8 CHAPTER 8:- SUGGESTIONS

9 CHAPTER 9:- CONCLUSION 8

10 CHAPTER 10:- BIBLIOGRAPHY
 CHAPTER 1: - INTRODUCTION

Concept and Introduction of Tax:

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.е. (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.

9
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 interval.

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.

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.
10
Different Types of Taxes:
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:

• Direct Taxes:
• Indirect Taxes:
• Local Taxes in India:
• Income Tax:

Direct Taxes:

A direct tax is a tax that a person or organization pays directly to the entity that imposed
it. Examples include income tax, real property tax, personal property tax, and taxes on
assets, all of which are paid by an individual taxpayer directly to the Government.

• A direct tax is paid by an individual or organization to the entity that levied the tax.
•Direct taxes include income taxes, property taxes, and taxes on assets.
• There are also indirect taxes, such as sales taxes, wherein a tax is levied on the seller
but paid by the buyer.

Indirect Taxes:
Indirect Tax An indirect tax is a tax collected by an intermediary from the person who bears the
ultimate economic burden of the tax. The intermediary later files a tax return and forwards the tax
proceeds to Government with the return. GST is the most prominent example of Indirect tax levied in
India on the supply of Goods & Services. GST is levied at every step in the production process, but is
refunded to all parties in the chain of production other than the final consumers. Goods & Services are
divided into five tax slabs for collection of tax - 0%, 5%, 12%, 18% and 28%. Petroleum products,
alcoholic drinks, electricity, and real estate are taxed separately by the individual state governments.
India adopted a dual GST model, meaning that taxation is administered by both the Union & State
Governments. Transactions made within a single state are levied with Central GST (CGST) by the
Central government and State GST (SGST) by the State governments. For Inter-state transactions and
i m p o r t e d goods & services, an integrated GST (IGST) is levied by the Central government. The
GSTN software is developed by Infosys Technologies and IT network is maintained by the NIC.

11
Local Taxes in India:

This is levied annually by the local/municipal authorities on property for the maintenance of
basic civic services in a city, town, village or other municipality. In India, property tax is paid by
the property owner, and it is set at a specific rate by the local/municipal authority, according to the
property's value. The annual value is determined by the following:

•Municipal valuation - market value of the property set by the municipal/local authority
• Fair rent - rental value of let properties, according to the guidelines set by central
government
•Rent received (for let properties)

The annual value is zero for properties in which the owner resides continuously and is not let out.
Property tax is levied on:

•Apartments/flats
•Residential houses
•Shops
•Factories
•Office buildings
•Warehouses

Immovable property is also considered as a source of income, and any revenue generated from
it is subject to income tax. Therefore, vacant plots of land without any buildings are taxed as an
alternative income source, and are not subject to property tax. Additionally, owners are entitled to
deductions of up to 30 percent of the net value of a property for repairs, building and maintenance.
Further information about local property tax regulations and required forms can be found on the
official website of the relevant local municipality.

Income Tax:
Income tax is a tax charged on the annual income earned by an individual. The amount of tax paid
will depend on how much money you earn as income over a financial year. One can proceed with
Income tax payment, TDS/TCS payment, and Non-TDS/TCS payments online. All taxpayers must fill
in the relevant details to make these payments. The entire process becomes simple and quick. Income
tax for FY 2021-22 applies to all residents whose annual income exceeds Rs.2.5 lakh p.a. The
highest amount of tax an individual could pay is 30% of their income plus cess at 4% if their income is
more than Rs. 10 lakh p.a.

12
Who should pay Income Tax?

It is mandatory to file IT for individuals if the gross total income is over Rs.2, 50,000 in a
financial year. This limit exceeds Rs.3, 00,000 for senior citizens and Rs.5, 00,000 for super
senior citizens. The entities listed below are required to pay tax and file their income tax returns.

1. Artificial Judicial Persons

2. Corporate firms
3. Association of Persons (AOPs)
4. Hindu Undivided Families (HUFs)
5. Companies
6. Local Authorities
7. Body of Individuals (BOIs)

Executive Summary

The differential multiple tax regime across sectors of production leads to distortions in
allocation of resources thus introducing inefficiencies in the sectors of domestic production.
While indirect taxes paid the producing firms get offsets under state VAT and CENVAT, the
producers do not receive full offsets particularly at the state level. The Multiplicity of taxes
further adds the difficulty in getting full offsets. Add to this, the lack of full offsets taxes
loaded on the fob export prices. The export competitiveness gets negatively impacted even
further. Efficient allocation of productive resources and providing full tax offsets is expected
to result in gains for GDP, returns to the factors of production and export of the economy. The
joint working Group of the Empowered Committee of the State Finance Ministers submitted
to its report on the proposed Goods and Service Tax (GST) to the finance minister in
November 2007. A dual GST, one for the entre and other for the state was to be implemented
1 April 2010. The new system would replace the state VAT CENVAT and some other taxes.
The proposed GST would eliminate the cascading effect and would integrate hitherto disjointed
goods and services taxes. It will lead to uniformity in tax rates and procedures throughout the
country. It will ensure better compliance and thus will increases the revenue of both Centre
and state. The export sector will also gain from his integration of state and Centre taxes.
Consumer will be benefited in form of lower tax rates. There will be dual tax rate viz. Central
GST (CGST) and state GST (SGST). Also, for interstate sales there will be an integrated GST.
However cross credits among CGST and SGST are yet to be decided. It is also proposed to keep
certain taxes such as taxes on petroleum products to be kept out of preview of GST.
13
14
 CHAPTER 2: - OBJECTIVES OF STUDY

I choose to work with ARS STEELS & ALLOY INTERNATIONAL PVT., LTD., . During
this Internship I have learnt many new skills. Before internship I have only theoretical knowledge
about work in organization but now, I have some practical experience of working in
organization. Now I have knowledge about the organization's working environment and how
organizations work and achieve their goals and objectives. This internship has to gives me the
understanding of business and also about the elements of strategic thinking, planning and
implementation, and how these things are applied in a real-world organization environment.
Following are the objectives that I have in my mind before working as an internee.

•To analyze the business situation.

•To learn more than the theoretical knowledge.
•To apply the theoretical knowledge in actual organization.
•To make quick decision in real situations.
•To know how to present your recommendations in front of your boss.
•Expand networks of professional’s relationship & contacts.
•Develop organizational skills to complete the project in a timely manner.

15
 CHAPTER 03:- COMPANY PROFILE

ABOUT THE COMPANY

Established in the year of 1990, “ARS Steels & Alloy International Pvt. Ltd.” are
Manufacturer and Exporter of an extensive array of TMT Bar, ARC Mild Steel TMT Bar, etc.
We direct all our activities to cater the expectations of customers by providing them excellent
quality products as per their gratification. Moreover, we follow moral business policies and
crystal pure transparency in all our transactions to keep healthy relations with the customers.

ARS constantly ensures to enhance the progress and well-being of its esteemed stakeholders
by introducing products like ARS TMT Bars.

Since its inception, the promoter-directors of the company, Mr. Ashwani Kumar Bhatia, and
Mr. Rajesh Bhatia have galvanized the energy and steel industry, and plan on using their vast
experience in expanding overseas.

OUR MISSION:

 To ignite ARS' vision, keeping its values in the forefront

 To pursue latest technology for excellence
 To set new benchmarks in all spheres
 To source, develop and retain best talents
 To ensure ethical and high standard actions leading to trust with all customers and
 Stakeholders.

ARS aspires to lead the Steel & Power Industry through limitless innovation in technology
creating new generation products and services, aims to set the new benchmarks of value-creation
for all its Customers and Stakeholders, ARS intends to bring about boundless growth with trust.

16
 OUR VALUES:

 Commitment:

We will value commitment as vital and integral to our operations. We will encourage and
support our employees to achieve the highest professional delivery standards, ensuring
customer satisfaction whilst maintaining the quality of our products and services. Through
commitment, we will build trust within the organization and the communities we serve.

 Result Oriented:

We will create a culture of setting and achieving business results and consistently comply
with quality standards and timelines, whereby everyone is accountable together as a team. We
shall always remain focused and display an optimistic "can-do" approach in new and diverse
situations and take effective actions to overcome any obstacles.

 Excellence:

We will be committed to set up new industry benchmarks by consistently improving

performance and delivering high-quality standards. We shall continuously challenge the limits,
learn from others, encourage "out of box thinking" and be a world-class organization by creating
value for our employees, customers and stakeholders.

 Stakeholders' Trust:

We will care for all our stake holders. Our customers, employees, suppliers, vendors and
investors are the sole reason for our existence. We will actively seek to understand, engage,
provide confidence and strive continuously to delight each of these stakeholders. We will exhibit
behavior which reflects courtesy, honesty, and responsibility while dealing with internal and
external stakeholders.

 Team work:

We will work together to achieve organizational objectives and create an environment which
boosts a strong sense of team spirit across the organization. We will work effectively within
teams, treat our people as valued partners, will communicate openly & build trust within the
team.

17
INFRASTRUCTURE FACILITIES:

INFRASTRUCTURE & MANUFACTURING FACILITIES:

18
 CHAPTER 4: - REVIEW OF LITERATURE

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 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.

According to Tan and Chin-Fat (2000), Malaysian understanding regarding GST was still
low.
Based on study conducted by Djawadi and Fahr (2013) pointed out that
Knowledge about tax is important to increase the thrust of authorities and also the citizens.

Tulu (2007), indicate that other factors such as taxpayers' attitude or morale found to be the
result of lack of awareness has found to have little impact on taxpayers' attitude towards
taxation. A lot of individuals or taxpayers might want to comply in full with the tax
systems, but are unable to do so because they are not aware of and lack of understanding
their full obligations. Even they understand their obligations they may not know how to
comply with it cause of there is no two-way communications between the authorities and
taxpayers. Dup claimed that the ability of taxpayers to comply with the tax laws have a
strong relationship with tax awareness.

19
• Ehtisham Ahmed and Satya Poddar (2009) studied, "Goods and service tax reforms and
governmental consideration in India" "and found that GST introduction will provide plies and
transparent tax system with increase in output and productivity of economy in India. But the
benefits of GST are critically dependent on regional design of GST.

• 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.

20
 CHAPTER 5: - RESEARCH METHODOLOGY

Introduction of Research Methodology

Research is a logical and systematic search for new and useful information on a
particular topic. is a 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 describing, explaining and predicting phenomenon are called
research methodology.

About My Research Problem

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

Problem Statement:
The title of Project Report: A Study on Goods and Service Tax. Annapurna
Manufacturer to wholesaler taxing on total bill for the product sold Ÿ Wholesaler to
distributor taxing on total bill for the product sold Ÿ Distributor to Retailer taxing on total bill
for the product sold Ÿ Retailer to Consumer itemized / total bill taxing for the product bought.

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
• Discussion with experts
• Questionnaires with investors

✓SECONDARY DATA
• Web sites were used as the vital information source.
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 CHAPTER 6: - DATA ANALYSIS

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
(22nd) 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.

GST

CENTRAL GST STATE GST

It will Subsume the following taxes: will Subsume the following taxes:
Central Excise Duty VAT / Sales Tax
Additional Excise Duty Purchase Tax
Service Tax Entertainment Tax
Countervailing Duty (CVD) Luxury Tax
Additional Duty of Customs Lottery Tax
Surcharge, Education and secondary, State Surcharge & Cases Leviable
Higher Secondary Cess

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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 y 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:

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.

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.

23
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.

Special Goods and Services for GST tax Levy:

Under special category goods and services, GST mates would be high Precious metal including
luxury items of goods and services fall under special goods and services for GST rate implementations.

GST rates in India at a glance:

Exempted categories: 0
Commonly used Goods and Services: 5% Standard
Goods and Services fall under 1st Slab: 12%
Standard Goods and Services fall under 2nd Slab: 18% special category of Goods and Services including
Luxury Goods: 28%

Types of Goods and Service Tax in India:

1. CGST (Central Goods and Service Tax): GST to be levied by the Centre.
2. SGST (State Goods and Service Tax): The GST is to be levied by the states is State GST

3. IGST (Integrated Goods and Service Tax): Integrated GST will be levied by the Centre
and the States concurrently.
24
25
Different Taxes are Cover under GST:

1. State taxes which will be subsumed in SGST:

• VAT/ Sales Tax.
•Luxury Tax.
•Entertainment Tax (unless it is levied by local bodies)
•Taxes on Lottery, betting, and gambling.

2. Central Taxes which will be subsumed in CGST:

•Central Excise Duty.
•Additional Excise Duty.
•Service Tax.

The Excise duty levied under the medical and toilet preparation Act.
•Additional Customs Duty.
•Education Less. Surcharges.

3. Taxes that will not be subsumed:

•Stamp Duty.
•Electricity Duty.
•Other Entry taxes and Octroi Entertainment Tax (levied by local bodies.)
• Basic Customs duty and safeguard duties on import of goods in to
India. Professional Tax.

Salient Features of GST

The salient features of GST are as under:
1. The GST would be applicable on the supply of goods or services as against the
present concept of tax on the manufacture and sale of goods or provision of services. It would
be a destination-based consumption tax.
2. It would be a dual GST with the Center and States simultaneously Levine it on
common tax bast. The GST to be levied by the Center on intrastate supply of goods and / or
services would be called the Central GST (CGST) and that to be levied by the States would be
called the State GST (SGST).

26
3. The GST would apply to all goods other than alcoholic liquor for human consumption and
five petroleum products, viz. petroleum crude, motor spirit (petrol), high speed diesel, natural
gas and aviation turbine fuel. It would apply to all services barring a few to be specified.

4. Tobacco and tobacco products would be subject to GST.

5. The GST would replace the following taxes currently levied and collected by the Centre:
a. Central Excise duty
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)

27
f. Special Additional Duty of Customs (SAD)
6. State taxes that would be subsumed under the GST are:
a. State VAT

b. Central Sales Tax

c. Luxury Tax
d. Entry Tax (all forms)
e. Entertainment and Amusement Tax (except when levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
7. The CGST and SGST would be levied at rates recommended by the GST Council.
8. There would be a floor rate with small band of rates within the states may fix the rates for SGST.

9. The list of exempted goods and services would be common for the Center and the States which
would be finalized by OST Council.

10. An Integrated GST (IGST) would be levied and collected by the Center on Interstate supply
of goods and services. Accounts would be settled periodically between the Center and the States to ensure
that the SGST portion of IGST is transferred to the destination State where the goods or services are
eventually consumed.

11. Tax payers shall be allowed to take credit of taxes paid on inputs (input tax credit) and utilize the
same for payment of output tax. However, no input tax credit on account of CGST shall be utilized
towards payment of SGST and vice versa. The credit of IGST would be permitted to be utilized for
payment of IGST, CGST and SGST in that order.

12. HSN (Harmonized System of Nomenclature) code shall be used for classifying the goods under the
GST regime. It is being proposed that taxpayers whose turnover is above Rs. 1.5 cores but below Rs. 5
cores shall use 2-digit code and the taxpayers whose turnover is Rs. 5 cores and above shall use 4-digit
code. Taxpayers whose turnover is below Rs. 1.5 cores will not be required to mention HSN Code in their
invoices.

28
13. Exports shall be treated as zero-rated supply. No tax is payable on export of goods or services but
credit of the input tax related to the supply shall be admissible to exporters and the same can be claimed
as refund by them.

Opportunities of GST:

1. 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.

2. 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.

4. 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.

5.One Point Single Tax

Another feature that CST must hold is its should be 'one-point single taxation. This also gives a lot of
comforts and confidence to business community thar 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 fiction of tax components but

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function of sheer business intelligence and innovation.

6. 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.

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.
(іii) 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) 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 neighboring States and that between intro and inter-state sales.

B) Ease of Doing Business

1. Simpler tax regime with fewer exemptions.

2. Reductions in the multiplicity of taxes that are at present governing our indirect tax system leading
to simplification and uniformity.

3. Reduction in compliance costs - No multiple record keeping for a variety of taxes - so lesser
investment of resources and manpower in maintaining records.

4. Simplified and automated procedures for various processes such as registration, returns,

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refunds, tax payments, etc.

5. All interaction to be through the common GSTN portal- so less public interface between
the
taxpayer and the tax administration.

6. Will improve environment of compliance as all returns to be filed online, input credits to be
verified online, encouraging more paper trail of transactions.

7. 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.

8. 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.

RETURN

1.Return fling process for Normal Assesses:

Step 1: Supplier (GSTR-1):

cover all outward supplies effected during/in earlier tax period and submit GSTR-1.

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Step 2: Recipient (GSTR-2):
➢ GSTR-2A (of recipient) shall be auto-generated based on GSTR-1 filed by Supplier.
➢ Following shall also be made available with recipient for preparation of GSTR-2
•Part-A of GSTR-2A showing inward supplies & DN/N of suppliers;
•Part-B of GSTR-2A showing ITC transferred to recipient by ISD as per GSTR-6
•Part-C of GSTR-2A showing TDS deducted by diductors as per GSTR-7.
•Part-D of GSTR-2A showing TCS collected by E-commerce operator as per GSTR-8.
➢ Recipient shall correct any mistake in GSTR-2 on basis of auto-populated GSTR-2 & 2A
and BOA.
➢ Recipient shall mention ITC ineligible on inward supplies relating to non-taxable supply/
personal use of goods/ etc. in GSTR-2;
➢ Any correction made by recipient in GSTR-2 shall be auto populated and made available using
GSTR-1A to the supplier for making corrections in GSTR-1.
Note: GSTR 1 relevant details are auto-populated in GSTR-2A which is visible to recipient and GSTR-
2 relevant details are auto-populated in GSTR-1A which is visible to supplier.

Step 3: Monthly return (GSTR-3)

• Part-A of GSTR-3 shall be auto-populated from GSTR-1 & GSTR-2, details of

• Pay Tax as per GSTR-3 & fill the details in Part-B:
• Apply for refund in Part-B in case of balance in Electronic Cash Ledger (option of
Assesses)

Step 4: Mismatch Report (GST ITC-1) (Assuming compliance for August)

• Communication of mismatch to both supplier and recipient latest by last date of the month in
which mismatch being carried out (by Sept. end)

• If rectification not done by date, then Output liability of recipient would be increased by such
amount succeeding the output liability of recipient Orphancy communicated (i.e. of Oct.)

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2) GST Return - Miscellaneous Points

a) Reduction of Sales Value of Invoice - Process

• Issuance of Credit Note (CN) by Supplier;

• Insertion of details in GSTR-1 by Supplier;
• Acceptance of CN in GSTR-2A by recipient.

b) TDS Certificate shall be issued automatically in GSTR-7A on the basis of return filed by
deductor in GSTR-7.

c) GSTR-3 (Monthly Return Form)

• Part- A is fully automated.

• Only adjustment entries and challan information will be entered in Part-B.
• Cash ledger (tax deposit in cash and TDS/ TCS) will made separately CGST, SGST for
and IGST.

d) Mismatching:

• Any mismatch being rectified at a later stage would be shown in GSTITC-1.

• In case of reversal of interest paid on mismatch on account of rectification of returns, amount
shall be credited to electronic cash ledger in GST PMI-3

• The following case shall be assumed as no mismatch:

If ITC claimed by Buyer is less than Output tax paid by Seller
If Reduction of Output Liability by Supplier using Credit note is less than the ITC claim reduced
in return by recipient.

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3)GST Return Forms and Due date of returns Normal Assesses:

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 CHAPTER 7: - FINDINGS

After Analysis these are followings, findings were emerged:

❖ GST is very good tax reform for India and it is the turning point of the taxation

system

❖ Most of the customers perception that GST is very beneficial in Long Term for

economy of the country and also effect of GDP.

❖ GST has increased the various Legal formalities.

❖ Need more clarity on GST and opened that discuss about GST with others.

❖ Most of the customers opinion that GST is fair tax. And also, GST is

predominantly compliance tax.

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 CHAPTER 8: - SUGGESTIONS

❖ The customers suggested that there should be a smooth, transparent and simple transition
provisions which is easily understandable.

❖ Special focus on awareness and training of all offers, professionals and assesses should
be given on GST.

❖ Since the public are very clear about OST, any disputes on OST introduction should be
protectively addressed by way of speedy redress.

❖ The relevant authorities especially the customers department must work closely with other

departments like information, Inland Revenue and other enforcement

authority ensure good implementation.

❖ Lastly, the government must ensure a good management of the income

collected from the GST.

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 CHAPTER 9: - CONCLUSION

➢ This study highlighted the overall overview of GST.

➢ The Government to put in more effort to ensure that Consumers have a clear
understanding and develop a positive perception towards GST, leading to its
acceptance.

➢ Good understanding among customers is important as it can generate a positive

perception towards the taxation policy.

➢ The Custom Department could initiate and promote an extensive publicity program
means which could help to create awareness and generate positive perception among
customers in understanding the rationale and importance of
GST in India.

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 CHAPTER 10: - BIBLIOGRAPHY

• www.caportal.saginfotech.com
• www.gstindia.com
• https://en.wikipedia.org
• www.gstn.org
• www.cbec.gov.in
• www.financialexpresss.com
• www.gstcounsil.gov.in
• www.researchget.com
• www.gsthelpline.com
• www.services.gst.gov.in
• www.taxguru.in
• www.cleartax.com

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