CHAPTER 1. BASIC CONCEPTS OF GST




·         GST law extents to whole of India (i.e., Inc. J&K, bcoz Article 246A overrides articles 246 and 254).
·         GST is a destination based tax
·         Alcohol and electricity outside GST
·         Petroleum products will be covered from notified date
·         GST rates- 0%, 5%, 12%, 18%, 28%
·         Small tax payers limit – 20 lakhs (exempted from GST)
·         Composition limit – 2 crore
·         Exports treated as 0  rated supplies
·         IGST applicable on imports(bcz incidence of tax will follow destination principle)
·         Actionable claims are treated as goods but GST not applicable except lottery, betting and gambling(shc.iii excludes)
·         Transactions in securities are outside GST
·         E-commerce operators to pay tax
·         Perquisites are not liable to GST
·         Taxable event under GST-supply of goods or services or both
BENEFITS OF GST
TO TRADE:
  1. ·         Reduction in multiplicity of taxes
  2. ·         Mitigation of cascading effect
  3. ·         More efficient neutralization
  4. ·         Development of common national market
  5. ·         Simpler tax regime

TO CITIZENS:

  1. ·         Simpler tax regime
  2. ·         Reduction in prices
  3. ·         Uniform prices
  4. ·         Transparency in taxation
  5. ·         Increase in employment opportunities

Branches in two or more states or foreign branches or business verticals treated as deemed separate persons (so separate reg. required)

GOODS

  1. ·         Securities are not goods
  2. ·         Money is not goods
  3. ·         Actionable claim is goods
  4. ·         Movability
  5. ·         Marketability
SERVICES
Anything other than-

  1. ·         Goods
  2. ·         Money and
  3. ·         Securities
But includes:
·         The use of money,
·         Its conversion from one form to another,
For which separate consideration is received

Key features of services
·         Economic activity
·         Intangible
·         Cannot be stored
·         Cannot be returned or transferred

TAXABLE EVENT-SUPPLY OF GOODS AND SERVICES OR BOTH

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