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Tax structure in India (before GST)
Taxes
Direct Taxes Central Govt.
Income Tax
Corporate Tax
Wealth Tax
Indirect Taxes
Central Govt.
Custom Duty
Excise Duty
Service Tax
State Govt.
VAT/CST
Entertainment Tax
Octroi/ Entry tax

Share of different taxes collected by GOI in 2015
http://pib.nic.in/newsite/PrintRelease.aspx?relid=136519
These details to understand the different source of income

Major products on which GST is not applicable
 Petroleum Products
 Alcohol
 Stamp duty
 Custom duty
 Electricity duty
 Natural Gas

Calculation of duties on imports
 Basic Custom duty - 7.5% and 10%
 Countervailing duty (CVD) - 12.5%
 Education Cess on Custom duty - 2%
 Secondary and Higher Education
Cess – 1%
 Special additional duty (SAD) - 4%
This gives an understanding how import duties are calculated.
Assessable value mean value of goods + freight + insurance + landing cost

An illustration on cascading effect
Total tax loaded on the final product of Rs. 275/- is Rs. 70/- (ie. 10 by A +15 by B +20
by C +25 by D. This due to no input credit at every stage).

Tax credit system to remove cascading effect

Goods and Services Tax (GST)
What is GST? | Wonderfully Explained by Pallavi Joshi
https://www.youtube.com/watch?v=yzk5Hsw_SWs
Is the GST is one more tax on existing taxes ?

One nation , One Tax:
One nation, one tax means GST in place of CE, Vat, CST, Octroi.
We cannot have one rate, because, if you make one rate many goods write now is at
zero rated or 5% rated will be charged at higher rate say 10%. Which GOI don’t want
to do to protect the interest of low income people.

Goods and Services Tax (GST) means
 It is a tax on supply of Goods or Services or both.
 ‘Supply’ includes stock transfer, free samples etc.
 Services means anything other than goods.
 Dual GST- i.e. State GST (SGST) and Central GST
(CGST), both will be on supply of goods and services
within the state.

Goods and Services Tax (GST) includes
GST – includes – SGST, CGST, IGST and UGST

Taxes subsumed in CGST and SGST
CGST &
IGST
Central Excise duty
Additional duty of Customs
(CVD)
Special Additional duty of
customs (SAD)
Additional duty of Customs
(CVD
Service Tax
All cesses and
surcharges
SGST
VAT and CST
Luxury Tax
Entry Tax
Entertainment Tax
Taxes on lotteries,
betting, and gambling.
State Cesses and
Surcharges

GST payable on supply
CGST – Intra – State supply of “goods” / “services”
SGST (State ‘A’) – Intra – State supply of “goods” / “services”
IGST – Import of “goods” and “services” and
Inter-State supply of “goods”/”services”.

Where the GST is now
3. 01st July 2017
GST came in effect.
2. All States
approved
1. 12th April 2017

GST registration number -15 digits code
Assess has to take registration in every state wherever they have place of business.

Input tax credit under GST
Eligible input tax credit under GST
 CGST/IGST/SGST/UGST charged on any supply of goods and
services and includes:
 IGST paid on imported goods.
 CGST/IGST/SGST/UGST paid under reverse charge on Goods and
Services.
 CGST/IGST/SGST/UGST paid under reverse charge on supply of
Goods and Services from un-registered person.

Input tax credit under GST
Input tax credit not eligible under GST
 Motor vehicles and conveyances (only in specified cases eligible).
 Food and beverages, outdoor catering
 Rent a cab, life insurance, health insurance
 Eligible if obligatory for an employer under any law for the time
being in force.
 Travel benefits extended to employees on vacation such as leave
 Works contract services for construction of immovable property
Other than plant and machinery.
 Goods / services used for construction of immovable property
 Tax paid on composite Scheme.
 Goods and services used for personal consumption.
 Goods lost, stolen, destroyed, written off or disposed by way of free
gifts and samples.
 Credit after the expiry of one year from the date of issue of tax
invoice.

D. SRIRANGANADHAM
Cost Accountant
E-mail: dsriranganadham@gmail.com

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