NES RATNAM COLLEGE OF ARTS, SCIENCE AND COMMERCE

INTERNAL EXAM – SEMESTER IV

SUBJECT: GST

NAME: POOJA MAURYA

ROLL NO: 26

1.Explain GST & its benefits?

GST stands for “Goods and Services Tax”, and aimed at creating a single, unified market that
will benefit both corporates and the economy. It is an indirect tax that will lead to the
abolition of all other taxes such as octroi, central sales tax, state-level sales tax, excise duty,
service tax, and value-added tax (VAT). Both the state and the central governments will
impose GST on almost all goods and services produced in India or imported into the country.

GST is levied at every stage of the production distribution chain with applicable set off in
respect of the tax remitted at previous stages. It is basically a tax on final consumption. GST
is to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as
well as services at the national level. GST is an destination based taxed. Its main objective is
to consolidates all indirect tax levies into a single tax, except customs (excluding SAD)
replacing multiple tax levies, overcoming the limitations of existing indirect tax structure, and
creating efficiencies in tax administration.

Benefits of GST are as follows:

• Mitigation of Cascading effect:

Under the GST administration, the final tax would be paid by the consumer for the goods and
services purchased. However, there would be an input tax credit structure in place to ensure
that there is no slumping of taxes. GST is levied only on the value of the good or service.
• Abolition of Multiple Layers of Taxation:
One of the advantages of GST is that it integrated different tax lines such as Central Excise,
Service Tax, Sales Tax, Luxury Tax, Special Additional Duty of Customs, etc. into one
consolidated tax. It prevents multiple tax layers imposed on goods and services.
• Resourceful Administration by Government:
Previously, the management of indirect taxes was a complicated task for the Government.
However, under the GST establishment, the integrated tax rate, simple input of tax credit
mechanism and a merged GST Network, where information is available, and administration
of resources are well-organised and straightforward for the Government.
• Enhanced Productivity of Logistics: 
The restriction on inter statement movement of goods has reduced. Earlier logistic companies
had to maintain multiple warehouses across the country to avoid state entry taxed on
interstate movements.
• Creation of a Common National Market: 
GST gave a boost to India’s tax to Gross Domestic Product ratio that aids in promoting
economic efficiency and sustainable long – term growth. It led to a uniform tax law among
different sectors concerning indirect taxes. It facilitates in eliminating economic distortion
and forms a common national market.
• Ease of Doing Business: 
With the implementation of GST, the difficulties in indirect tax compliance have been
reduced. Earlier companies faced significant problems concerning registration of VAT,
excise customs, dealing with tax authorities, etc. The benefits of GST has aided companies to
carry out their business with ease.
• Regulation of the Unorganized Sector under GST: 
It has created provisions to bring unregulated and unorganised sectors such as the textile and
construction industries to name a few under regulation with continuous accountability.
• Reduction of Litigation: 
GST aids in reducing litigation as it establishes clarity towards the jurisdiction of taxation
between the Central and State Governments. GST provides a smooth assessment of tax.
• Tackling Corruption and Tax Leakages: 
With the GST online network portal, the taxpayer can directly register, file returns and make
payments of the taxes without having to interact with tax authorities. A mechanism has been
devised to match the invoices of the supplier and buyer. This will not only keep a check on
tax frauds and evasion but also bring in more businesses into the formal economy.
 2. Explain in detail Negative impact of GST Implications:

Ans. The GST bill, known as the Goods and Services Tax, was introduced in Lok Sabha in

December, 2014 and was implemented from July 1, 2017. Goods & Services Tax is a

multistage and destination-based tax that is levied on every value addition to the goods. GST

was introduced with the aim of one nation one tax system. Under the GST bill all other taxes

like Octroi, Central Excise VAT i.e. the value added taxes etc, got consolidated into one and

it restructured the indirect taxation. The basic idea of this bill was to create a single,

cooperative and undivided Indian market and to make the economy stronger and powerful.

GST has divided the goods and services into various categories and applied the tax from 5 %

to 28 % It has its own pros as well as cons. Elucidating on these prospects: -

Negative Impact of GST are as follows:

1. Dual Control

GST is being referred to as a single taxation system but in reality, it is a dual tax because both

the state and centre both will collect separate tax on a single transaction of sale and service.

2. Incumbent increase of the cost of some commodities – 

The tax rate has been increased for many products, thus increasing their costs

3.Some sector are at a loss- 

Sectors like Textile, Media, Pharma, Dairy Products, IT and Telecom are bearing the brunt of

a higher tax. Also, the price of commodities has increased like jewellery, mobile phones and

credit cards.

4.Real Estate Market affected – 

Economists are of the opinion that GST in India has already had a negative impact on the real

estate market. It has added up to 8 percent to the cost of new homes and reduced demand by

about 12 percent. There are approximately 140 countries where GST has already been

implemented by Australia, Germany, Japan, and Pakistan. India is one of the most stable
economies of the world and we have proved to be quite adept at adjusting to major economic

renovations.

As the coin has two sides, same way implementation of GST impacts a nation both ways,
positively and negatively. If we ignore the negative aspects and consider the positive effect,
then it is a way to reduce the black money. GST is having a few initial problems, but with
time, we will be able to see the bigger picture and it will surely result in an economic
integration.

3. Explain rules & procedures for GST registration?

Ans. The structure of GST stands on the foundation of the registration system, for it is a
registered person who is liable to pay tax and who is eligible to avail the benefits of the input
tax credit mechanism. A registered person can also collect GST from his recipients. An
unregistered person is not taxed and is also kept outside the input tax credit mechanism.

The GST law gives a limited option to certain categories of persons to avoid registration and
thus avoid the tax liability lawfully. However, if one falls within the reach of an extensive list
of statutorily prescribed criteria requiring compulsory registration, the supplier must get
registered.

Procedure for GST Registration:

a) Details to be furnished:
Before applying for registration process, person has to declare the following:
• PAN
• Mobile number
• E-mail address
• State or UT

In Part A of FORM GST REG-01 on the Common Portal, either directly or through a
Facilitation Centre notified by Commissioner.

b) Reference Number:
On successful verification of the PAN, mobile number and e-mail, a temporary
reference number shall be generated and communicated to the applicant.
c) Application:
Using the reference number, the applicant shall electronically submit an application in
Part B of FORM GST REG-01, duly signed or verified through electronic verification
code (EVC), along with documents specified in the form.
d) Specified Documents:
The following specified documents are required to be submitted along with the
application:
A. Documents required for Private Limited Company, Public Company (limited company) /
One Person Company (OPC):

i) Company documents
• PAN card of the company
• Registration Certificate of the company
• Memorandum of Association (MOA)/ Articles of Association (AOA)
• Copy of Bank Statement
• Declaration to comply with the provisions
• Copy of Board resolution

ii) Director related documents

• PAN and ID proof of directors

iii) Registered Office documents

• Copy of electricity bill/ landline bill, water bill
• No objection certificate of the owner
• Rent agreement (in case premises are rented)

B. Documents required for Limited Liability Partnerships (LLPs):

i) LLP Documents
• PAN card of the LLP
• Registration Certificate of the LLP
• LLP Partnership agreement
• Copy of Bank Statement of the LLP
• Declaration to comply with the provisions
• Copy of Board resolution

ii) Designated Partner related documents

• PAN and ID proof of designated partners

iii) Registered Office documents

• Copy of electricity bill, landline bill, water bill
• No objection certificate of the owner
• Rent agreement (in case premises are rented)

C. Documents required for Normal Partnerships

i) Partnership documents
• PAN card of the Partnership
• Partnership Deed
• Copy of Bank Statement
• Declaration to comply with the provisions
 ii) Partner related documents
• PAN and ID proof of designated partners

iii) Registered Office documents

• Copy of electricity bill / landline bill, water bill
• No objection certificate of the owner
• Rent agreement (in case premises are rented)
• Documents required for Sole proprietorship / Individual

iv) Individual documents

• PAN card and ID proof of the individual
• Copy of Cancelled cheque or bank statement
• Declaration to comply with the provisions

v) Registered Office documents

• Copy of electricity bill/ landline bill, water bill
• No objection certificate of the owner
• Rent agreement (in case premises are rented)

D. Acknowledgement:

On the receipt of an application, an acknowledgement shall be issued to the applicant

in FORM GST REG-02.

4. Explain Electronic credit ledger?

Ans. The electronic credit ledger reflects the amount of Input Tax Credit available to the
taxpayer. Thus, every claim of input tax credit of the registered taxpayer eligible for claiming
such a credit is credited to this ledger. The amount available in the electronic credit ledger is
utilized in making payments towards outward tax liability by the registered taxpayer.
The electronic credit ledger shall be maintained in form GST PMT – 02. This form shall be
maintained on the common portal for every registered person eligible to claim input tax credit
under GST act. Every claim of the input tax credit is credited to the electronic credit ledger.
Hence, following are the components of Form GST PMT-02:
 Serial Number
 Date of Deposit
 Time of Deposit
 Reporting Date by Bank (Reference Number)
 Reference Number
 Tax period, if applicable
 Description
  Transaction Type (Debit/Credit)
 Amount Debited/Credited:
Integrated Tax, Central Tax (CGST), State Tax (SGST), Cess, Total,
Integrated Tax, Central Tax, State Tax, Cess, Total.

GST Payment Rules for Electronic Credit Ledger

A. The electronic credit ledger shall be maintained in form GST PMT – 02 on the
common portal. This ledger reflects the amounts credited against every claim of input
tax credit taken under the act.
B. This ledger is debited to an extent the liability is set off or discharged using the credit
available.
C. There are cases where a registered taxpayer claims refund of any unutilized amount of
input tax credit from the electronic credit ledger. In such cases, the electronic credit
ledger is debited to the extent of the refund claimed.
D. However, there are situations when such refund filed by the taxpayer is rejected either
fully or partially. In such a case, the amount debited in rule above is credited to the
electronic credit ledger of the concerned taxpayer. The amount credited is restricted to
the portion of the claim rejected. Furthermore, the said amount is credited by a proper
officer through an order in form GST PMT – 03.
E. Entries are not allowed to be made directly in the electronic credit ledger under any
circumstance apart from the rules mentioned above.
F. In case there is any discrepancy in the electronic credit ledger, the registered person
communicates it to the concerned officer. This communication is made through the
common portal in form GST PMT – 04.

5. Explain various services exempted in GST?

Ans. The government has classified certain goods and services as exempt from GST.
Unlike with zero-rated goods and services, business owners cannot claim ITC for the sale of
exempted goods and services. Here’s a list of all the exemptions:  

Agricultural services
This includes all services related to agriculture except the rearing of horses. Exempt services
include cultivation, harvesting, supply of farm labor, fumigation, packaging, renting or
leasing of machinery for agricultural purposes, warehouse activities, and services
 by an Agricultural Produce Marketing Committee or Board that is provided by an agent
for the sale or purchase of agricultural produce.  

Transportation services

 Transportation service by road or bridge on payment of toll; transportation of goods

by road (except when carried out by transportation agency or courier agency).  

 Transportation of goods by inland waterways.  

 Transportation of passengers by air (in the states of Manipur, Meghalaya, Assam,

Arunachal Pradesh, Nagaland, Sikkim, Tripura, and Bagdogra).  

 Transportation by non-AC horse or contract carriages; transportation of agricultural

produce, milk, salt, newspapers, or woodgrains.  

 Transportation of goods where the gross amount charged is less than Rs. 1500.  

 Hiring services provided to any state transport undertaking, including motor vehicles
with a capacity to carry more than 12 passengers; services provided to goods transport
agencies.  

Services provided by the government and diplomatic missionaries

 Services by any foreign diplomatic mission located in India.  

 Services provided by the Reserve Bank of India.  

 Services by the Government or any local authority except the following services:  

o Services by the Department of Posts via speed post, express parcel post, life
insurance, and agency services provided to any individual other than the government.  
o Services related to an aircraft/vessel within or beyond the boundaries of a port
or airport.  
o Transportation of goods or passengers.  

o Any other service, except those that come under (a) and (b), that is provided to
business entities.  

 Services provided to diplomats, including the United Nations.  

 Life insurance services provided under the National Pension System; life insurance
provided by the Army, Naval and Air Force Groups.    

Judicial services
 Services provided by an arbitral tribunal (i.e., services provided by the court or
a judge) to any individual other than a business entity or to a business entity with a turnover
up to Rs. 20 lakhs (Rs. 10 lakhs for special category states) in the preceding financial year.  

 Services provided by a partnership firm of advocate(s) to: an advocate or partnership

firm of advocates, any individual that is not a business entity, or a business entity with
a turnover up to Rs. 20 lakhs (Rs. 10 lakhs for special category states) in the preceding
financial year.  

 Services provided by a senior advocate (legal services) to any individual other than a
business entity or to a business entity with a turnover up to Rs. 20 lakhs (Rs. 10 lakhs for
special category states) in the preceding financial year.  

Educational services

 Transportation of students and faculty, mid-day meal catering services, admission,

examination services, and security and housekeeping services.  

 Services provided by Indian Institutes of Management (except the Executive

Development Programme).  

Medical services

 Services provided by a veterinary clinic; health-care services provided by clinics or

paramedics.  

 Services provided by ambulances, charities, and organizations facilitating religious

pilgrimage.  

Services provided by organizers

 Services provided by organizers for business exhibitions held outside India.  

 Services provided by tour operators to foreign tourists (this includes tours that are
conducted completely outside India).  

Miscellaneous services

 Transmission or distribution of electricity by authorized personnel.

 Services provided by recognized sports bodies.  

 Services provided by journalists, Press Trust of India, or United News of India. This
includes the collection and provision of news.  

 Services provided by slaughterhouses.  

 Services provided by libraries.  

 Services provided for public conveniences, such as washrooms, lavatories,

urinals, and toilets.  

 Services provided for conducting religious ceremonies, including renting the premises

of any religious place.  

New exemptions that have been added: 

 Services provided by the GSTN to the Central government, State government, and
Union Territories.  

 Services related to renting property for residential purposes and renting rooms with
charges less than Rs. 1000 per day.  

 Admission to circuses, theatrical performances, award ceremonies, sport events (other

than recognized sport events), and admission to recognized sport events which charge less
than Rs. 250/- per person for registration. This also includes admission services for museums,
national parks, wildlife sanctuaries, zoos, etc.