Maths Kush

S no.
CONTENTS
1. INDEX
2. INTRODUCTION
3. WHAT IS GST
4. HISTORY OF GST
5. GST STRUCTURE AND TYPES OF
GST
6. CALCULATION OF GST
7. SYSTEM OF GST IN INDIA
8. MERITS OF GST
9. DEMERITS OF GST
10. CONCLUSION
INTRODUCTION
The tax structure prior to Goods and Service Tax

(GST) was tedious and complex with so many types
of indirect taxes that were levied by the Central and
State Governments of India on for availing the
services such as Entertainment Tax (for watching
movies), Value Added Tax (on purchasing goods and
services), excise duties, luxury tax etc.
The levying of tax is done on both direct taxes and
indirect taxes by both State and Central
Government.
Thus, to forgo the tediousness and to have a unified
law by subsuming duties levied on services such as
‘custom duty, excise duty, service tax, sales tax, VAT’
the central government came up with Goods and
Service Tax.
WHAT IS GST ?
The goods and services tax (GST) is an indirect

federal sales tax that is applied to the cost of certain
goods and services. The business adds the GST to
the price of the product, and a customer who buys
the product pays the sales price inclusive of the GST.
The GST portion is collected by the business or
seller and forwarded to the government. It is also
referred to as value added tax (VAT) in some
countries.
Most countries with a GST have a single unified GST
system, which means that a single tax rate is applied
throughout the country.
HISTORY OF GST
The implementation of the Goods and Services Tax

(GST) in India was a historical move, as it marked a
significant indirect tax reform in the country.
The amalgamation of a large number of taxes
(levied at a central and state level) into a single tax
is expected to have big advantages.
One of the most important benefit of the move is
the mitigation of double taxation or the elimination
of the cascading effect of taxation.
The initiative is now paving the way for a common
national market. Indian goods are also expected to
be more competitive in international and domestic
markets post GST implementation.
From the viewpoint of the consumer, there would
be a marked reduction in the overall tax burden
that is currently in the range of 25% to 30%.
The GST, due to its self-policing and transparent
nature, is also easier to administer on an overall
scale.
TYPES OF GST
CALCULATION OF GST
As a Buyer, to calculate the GST on your goods, you
must be familiar with the Net Price of the good and
the corresponding GST rate that applies to that good
(5%, 12%..and so on).
It is simple to calculate the GST using the formula

given here:
 When the GST is excluded:
GST = Supply Value X GST %
100
 When the GST is included in the supply value
GST = Supply Value - [Supply Value x {100/(100+GST%)}]
EXAMPLE OF GST CALCULATION

MERITS OF GST
• A robust and comprehensive IT system would be
the foundation of GST Regime in India. All tax-payer
services such as registrations, returns, payment etc.
would be available online. It would make
compliance easy and transparent.
•GST will ensure that indirect tax rates and

structures are common across the country. It would
increase the certainty and ease of doing business. In
other words, GST would make doing business in the
country tax neutral, irrespective of choice of place
of doing business.
• A seamless flow of tax-credit through-out the

value chain and across boundaries of states, would
ensure that there is minimal cascading of taxes.
DEMERITS OF GST
Increase Burden of Compliance:
The new GST regime states that companies have

to mandatorily get GST registered in all the states
they operate their businesses in. This leads to an
unnecessary burden on businesses for tedious
paperwork processes and compliance.
No GST charged on petroleum products:
The GST Council excludes petrol and petroleum

products under its administration. These
products attract other taxes such as central
excise duty and value added tax (VAT) levied by
states.
GST is an online taxation system:
From GST Registration to filing GST returns, the

Government has made online provision for GST.
CONCLUSION
The taxation system of a country forms the
strongest pillar of its economy. Thus, it is
necessary to ensure a robust, simple, and citizen-
friendly tax framework exists in a country.
With GST, the Indian government experimented
with setting up a strong tax cluster that works for
the betterment of the nation and its people.

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S no.

7. SYSTEM OF GST IN INDIA

The tax structure prior to Goods and Service Tax

The goods and services tax (GST) is an indirect

The implementation of the Goods and Services Tax

It is simple to calculate the GST using the formula

 When the GST is included in the supply value

GST = Supply Value - [Supply Value x {100/(100+GST%)}]

EXAMPLE OF GST CALCULATION

•GST will ensure that indirect tax rates and

• A seamless flow of tax-credit through-out the

The new GST regime states that companies have

The GST Council excludes petrol and petroleum

From GST Registration to filing GST returns, the

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