Indirect Taxes by CA Kedar Junnarkar

Contents

No Chapter Name Page No.

Goods and Service Tax (75 marks)
1 Goods and Service Tax – An Introduction 1.1. to 1.12
2 Concept of Supply 2.1 to 2.17
3 Place of Supply – IGST Act, 2017 3.1 to 3.28
4 Registration under GST 4.1 to 4.18
5 Tax Invoice, Credit and Debit Notes 5.1 to 5.13
6 Time of Supply 6.1 to 6.4
7 Value of Supply 7.1 to 7.7
8 Payment of GST 8.1 to 8.14
9 Returns under GST 9.1 to 9.12
10 Accounts, Records and E-way Bill 10.1 to 10.10
11 Input Tax Credit 11.1 to 11.23
12 Exemptions and Reverse Charge under GST 12.1 to 12.29
13 Procedures under GST 13.1 to 13.45
Customs and Foreign Trade Policy (25 Marks)
14 Customs Law: Basics 14.1 to 14.15
15 The Customs Tariff Act, 1975 15.1 to 15.11
16 Valuation under the Customs Act, 1962 16.1 to 16.11
17 Baggage 17.1 to 17.4
18 Customs Procedures 18.1 to 18.9
19 Duty Drawback and Refund 19.1 to 19.10
20 Foreign Trade Policy 20.1 to 20.25

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 Indirect Taxes by CA Kedar Junnarkar

Chapter 1 – Goods and Service Tax – An Introduction

Features of Indirect Taxes

i. An Important Source of Revenue ii. Wider tax base
iii. Tax on commodities and services iv. Promotes social welfare by taxing
v. Shifting of burden harmful products such as alcoholic
vi. No perception of direct pinch products, tobacco products etc.
vii. Inflationary viii. Regressive in nature

Goods and Service Tax

• A comprehensive tax structure covering both goods and services viz. Goods and Service Tax (GST)
• There is simultaneous introduction of GST at both Centre and State levels
• It would integrate taxes on goods and services for the purpose of set-off relief and will ensure that both
the cascading effects of CENVAT and service tax are removed and a continuous chain of set-off from the
original producer’s point/ service provider’s point upto the retailer’s level/consumer’s level is
established.
• In the GST Regime, the major indirect taxes have been subsumed in the ambit of GST.

Features of Goods and Service Tax

• Tax on Value Addition
• Continuous chain of Credit
• Burden borne by Final Consumer
• No Cascading effect

Constitutional Amendment
• The Constitutional provisions had given separate powers for the Centre and the States to impose taxes.
• The Central Government levied excise duty on all goods produced or manufactured in India.
• States levied Value Added Tax once the goods were sold.
• Services were exclusively taxed by the Centre.
• There were State specific levies like entry tax, luxury tax, entertainment tax, lottery and betting tax, local
taxes levied by Panchayats etc.
• With respect to goods imported from outside the country into India, Centre levied basic customs duty
and additional duties of customs together with applicable cesses, if any.
• Consequently, a Constitutional amendment was needed to enable integration of the central excise duty
including additional duties of customs, State VAT, CST and certain State specific taxes and service tax
levied by the Centre into a comprehensive goods and service tax. Constitution (101st Amendment) Act,
2016 was enacted on 8th September, 2016.

Important Articles to the Constitution of India

Article 246A Article 269A Article 270 Article 279A
Power to make laws Levy and collection of GST Distribution of GST between GST Council
with respect to GST on inter-State supply the Centre and the States

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 Indirect Taxes by CA Kedar Junnarkar
Benefits of GST
Benefits to Economy Simplified Tax Easy tax compliance Advantages for trade and
Structure industry
• Creation of unified • Ease of doing • Automated • Benefits to agriculture and
national market business procedures with Industry
• Boost to ‘Make in • Certainty in tax greater use of IT • Mitigation of ill effects of
India' initiative administration • Reduction in cascading
• Enhanced investment compliance costs • Benefits to small traders
and employment and entrepreneurs

Central levies to be subsumed State levies to subsumed

• Central Excise Duty & Additional Excise • State surcharges and cesses in so far as they
Duties relate to supply of goods & services
• Service Tax • Entertainment Tax (except those levied by local
• Excise Duty under Medicinal & Toilet bodies)
Preparation Act • Tax on lottery, betting and gambling
• CVD & Special CVD • Entry Tax (All Forms) & Purchase Tax
• Central Sales Tax • VAT/Sales tax
• Surcharges and Cesses in so far as they • Luxury Tax
relate to supply of goods & services • Taxes on advertisements

Dual GST Model

• India has adopted a dual GST which will be imposed concurrently by the Centre and States, i.e. Centre
and States will simultaneously tax goods and services.
• Centre will have the power to tax intra-State sales & States will be empowered to tax services.
• GST will extend to whole of India (GST Provisions are applicable to the State of Jammu and Kashmir)
• GST is a destination based tax applicable on all transactions involving supply of goods and services for a
consideration subject to exceptions thereof.

Applicability
India is a summation of three categories of territories:
a) States: For every State, there shall be a Legislature

b) Union Territories with Legislature: Union Territories of Delhi and Puducherry have been provided
with Legislatures with powers and functions as required for their administration.
(It will include UT of Jammu and Kashmir)

c) Union Territories without Legislature: It shall be administered by the President through an

‘Administrator’ appointed by him. (It will include UT of Ladakh)

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 Indirect Taxes by CA Kedar Junnarkar
Central Goods and Services Tax Act, 2017 State Goods and Services Tax Act (passed by each
Central Goods and Service Tax (CGST) - levied State)
and collected by Central Government. SGST is levied and collected by State Governments/UTs
with State Legislatures.
Union Territory Goods and Services Tax Act, Integrated Goods and Services Tax Act, 2017
2017 Inter-State supplies of taxable goods and/or services will
Union Territory Goods and Service Tax (UTGST) be subject to Integrated Goods and Service Tax (IGST).
- levied and collected by Union Territories IGST will approximately be a sum total of CGST and
without State Legislatures, on intra-State SGST/UTGST and will be levied by Centre on all inter-
supplies of taxable goods and/or services. State supplies.

Special Provisions for Union Territories

• UTs without State legislatures (Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli
and Daman and Diu, Chandigarh, Ladakh) will be governed by UTGST Act, 2017 for levying UTGST
• Union territories with their own legislatures (Delhi / Puducherry / Jammu and Kashmir) have to enact
their own GST legislation for levying SGST.

Types of Supplies
Intra State Supplies Inter State Supplies
Location of the supplier and Place of supply are in
Same State or UT (a) 2 Different States or (b) 2 different UTs or (c) a State and a UT
CGST + SGST / UTGST IGST will be charged (Rate = CGST + SGST / UTGST)

Compensation Cess
• A GST Compensation Cess at specified rate has been imposed under the GST (Compensation to States)
Cess Act, 2017 on the specified luxury items or demerit goods, like pan masala, tobacco, manufactured
tobacco substitutes, aerated waters, motor cars etc., computed on value of taxable supply.
• Compensation Cess is leviable on intra-State supplies and inter-State supplies with a view to provide for
compensation to the States for the loss of revenue arising on account of implementation of the GST.

Rules Regulation
Power to make Rules is with Central Government. Power to make Regulations is with Board (CBIC)
Every rule, regulation and every notification issued by the Central Government shall be laid, as soon as may
be after it is made or issued, before each House of Parliament.

Note
• Notifications are issued by Central Government on recommendations of GST Council whereas Circular
and Instructions are issued by CBIC (Central Board of Indirect Taxes and Customs)
• As per section 172 of CGST Act / 25 of IGST Act, if any difficulty arises in giving effect to any provisions
of this Act, the Government may, on the recommendations of the Council, by a general or a special
order published in the Official Gazette, make such provisions not inconsistent with the provisions of this
Act or the rules or regulations, as may be necessary or expedient for removing the said difficulty within
5 years from commencement of this Act i.e. within 5 years from 1.7.2017 (w.e.f. 30.6.2020)

Section 170: Rounding off of tax, etc.

Tax, interest, penalty, fine or any other sum payable, and the amount of refund or any other sum due shall
be rounded off to the nearest rupee.
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