Taxation

Introduction

• Definition of Tax
• Purpose of Taxation
• Quasi federal nature of constitution
• Important terms and their meanings: Assesse,
Person, Financial year, Assessment year,
• The word tax is based on the latin word taxo which
means to estimate. To tax means to impose a
financial charge or other levy upon a taxpayer, an
individual or legal entity, by a state or the functional
equivalent of a state such that failure to pay is
punishable by law. 
• Taxation has existed since the birth of early
civilization. In ancient times taxes were either
material or money like goods or services in the
primitive society. The subjects used to pay a
share of their income to the Head of a tribe or
to the King who in return provided them with
the administration security from foreign
aggression and other civic amenities.
• In the present time, taxation is not just a
means of transferring money to the
government to spend it for meeting the public
expenditures or raise revenue to the
government, but taxes have become beside
that, as a tool for national development,
redistribution of income and wealth in the
societies in the countries
• The taxes collected have been used by the government to
carry out many functions. Some of these include:
• • expenditures on war,
• the enforcement of law and public order,
• protection of property,
• economic infrastructure (roads, legal tender, enforcement of
contracts, etc.),
• • public works,
• • social engineering, and
• • the operation of government itself.
Governments also use taxes to fund welfare and public
services. These services can include :
• education systems,
• health care systems,
• pensions for the elderly,
• unemployment benefits
• energy, water and waste management systems,
common public utilities, etc.
 CHARACTERSTICS OF TAXES

• Tax is compulsory
• Tax is contribution
• Tax is for public benefit
• No direct benefit
• Tax is paid out of income of the tax payer
• Government has the power to levy tax
• Tax is for the economic growth and public
welfare
 Who are liable for tax?
• Individual
• HUF
• Companies
• Firms
• Associations
• Local authorities
• Artificial judicial person
Corporate Tax in India

For the purpose of calculation of taxes under Income tax act, the types of
companies can be defined as under : 

Domestic Company: Domestic company is one which is registered under the

Companies Act of India and also includes the company registered in the foreign
countries having control and management wholly situated in India. A domestic
company includes private as well as public companies. 

Foreign Company: Foreign company is one which is not registered under the

companies act of India and has control & management located outside India.
Canons of Taxes
 Classification before GST
Income tax

Wealth tax
Direct tax
Gift tax

Capital
Tax gain tax

VAT

Octroi tax
Indirect tax
Service tax

Custom
duty
Point of difference Direct Tax Indirect Tax

incidence & impact a tax is said to be direct when impact and if impact of tax is on one person and
incidence of a tax are on one and same person. incidence on the another, the tax is called
‘indirect’

Burden direct tax is imposed on the individual indirect tax is imposed on commodities and
organisation and burden of tax cannot be allows the tax burden to shift.
shifted to others.

Viability of payment direct taxes are lesser burden then indirect taxes indirect taxes are borne by the consumers of
to people as direct taxes are based on income commodities and services irrespective of
financial ability as the MRP Includes all
earning ability of people. taxes.

administrative the administrative cost of collecting direct taxes Cost of collecting indirect taxes is very less
viability is more and improper administration may result as indirect taxes are wrapped up in prices of
goods and services and cannot be evaded.
in tax evasion.

Penalty it is levied on the assessee. it is levied on supplier of Goods &

Services.
 GST 1 July 2017
st

• Its multi staged destination based tax

• GST replaced
1. Sales tax
2. Central excise duty
3. Entertainment tax
4. Octroi
5. Service tax
6. Purchase tax
 Contribution of Direct Taxes to Total Tax Revenue

Financial Year Direct Taxes Indirect Taxes Total Taxes Direct Tax As % Of
Total Taxes
2000-01 68305 119814 188119 36.31%

2001-02 69198 117318 186516 37.10%

2002-03 83088 132608 215696 38.52%

2003-04 105088 148608 253696 41.42%

2004-05 132771 170936 303707 43.72%

2005-06 165216 199348 364564 45.32%

2006-07 230181 241538 471719 48.80%

2007-08 314330 279031 593361 52.97%

2008-09 333818 269433 603251 55.34%

2009-10 378063 243939 622002 60.78%

2010-11 445995 343716 789711 56.48%

2011-12 493987 390953 884940 55.82%

2012-13 558989 472915 1031904 54.17%

2013-14 638596 495347 1133943 56.32%

2014-15 695792 543215 1239007 56.16%

2015-16 741945 711885 1454180 51.03%

2016-17 849818 861515 1711333 49.66%

2017-18 1002037 915256 1918210 52.24%

2018-19* 1137685 939018 2076703 54.78%

 AN OVERVIEW OF FINANCE BILL
Finance Bill as part of the union Budget is presented usually in
the month of February every year and this bill
contains amendments in direct as well as indirect taxes. it is
presented in the Parliament by the union Finance Minister.
• Finance Bill Presented by Finance Minister
• Recommendation / Suggestion considered and changes
made to Finance Bill
• Parliament Approval
• President’s approval
• Finance Act
• website http ://[Link]/

•
Basics of Income Tax
• Income Tax Act
• Annual Finance Act
• Income Tax Rules,1962 : For implementation of the act and for administration of
the direct taxes Central Board of direct taxes (CBDT) is empowered to frame these
rules from time to time.

• Notifications : Notifications are issued either by Central Government or by CBDT to

take care the procedural aspects of the Act from time to time.
•
• Circulars/Clarifications : Circulars and clarifications are issued by the CBDT to
clarify the doubts regarding the scope and meaning of certain provisions of the law
and primarily to provide guidance to the Income Tax officers.

• Judicial Decisions (Case Laws)

Section 14 Heads of income
Section 2(31) Person
Section 2(7) assessee
Section 2(9) assessment year
Section 3 Previous year
Section 2(24) income
Section 2(45) total income
Section 4 Charge of income tax
Section 6 residential Status
Section 5 Meaning and Scope of total income
Section 9 income are deemed to accrue or arise in India
 HEADS OF INCOME [SECTION 14]

• income under the head Salary : earned by employee from his

employer
• income under the head House Property : rental income
earned by a landlord from house property
• Income under the head Profits and Gains from Business and
Profession(PGBP) : Business income
• income under the head Capital Gains: income by sale/transfer
of Capital asset
• income under the head Other Sources: residual head of
income.
 ASSESSEE [SECTION 2(7)]

• As per Section 2(7) of Income Tax Act, assessee is A person

– by whom any tax or
– any other sum of money
• is payable under income tax act. it includes every person :
• in respect of whom any proceeding under income tax act has been taken for
assessment of
– his income or
– fringe benefits or
– the income of any other person in respect of which he is assessable or
– the loss sustained by him or by such other person or
– the amount of refund due to him or to such other person
• who is deemed to be an assessee under any provision of income tax act;
• who is deemed to be an assessee in default under any provision of income tax act;
• accordingly, assessee is a person by whom tax or any other sum is payable under
the act. the expression
 AY & PY
“Assessment year” [SECTION 2(9)] means the period of twelve
months commencing on 1st April every year. Therefore, the
period beginning on 1st April of one year and ending on 31st
March of the next year. income of previous year of an assessee is
taxed during the following assessment year at the rates
prescribed by the relevant Finance act.
PREVIOUS YEAR [SECTION 3] income tax is payable on the
income which is earned during the Previous year and it is
assessed in the immediately succeeding financial year which is
called an Assessment Year.
 INCOME [SECTION 2(24)]
• “Income is the consumption and savings opportunity gained by an entity within a
specified timeframe, which is generally expressed in monetary terms. However, for
households and individuals, “income is the sum of all the wages, salaries, profits,
interests payments, rents, and other forms of earnings received in a given period
of time.”
• in general terms, income is a periodical monetary return with some sort of
regularity. However, the income tax act, even certain income which does not arise
regularly are treated as income for tax purposes e.g. Winnings from lotteries,
crossword puzzles.
• The definition of Income as given in Section 2(24) of the Act starts with the word
includes therefore the list is inclusive not exhaustive. The definition enumerates
certain items, including those which cannot ordinarily be considered as income but
are treated statutorily as such.
 Tax Rate

Total Income (Rs.) Tax Rate Tax liability (Rs.)

upto 2,50,000 Nil Nil

2,50,001 – 5,00,000 5% 5% of (Total Income – 2,50,000)

5,00,001 – 10,00,000 20% 20% of (Total Income – 5,00,000) + 12,500

above 10,00,000 30% 30% of (Total Income – 10,00,000) + 1,12,500

Resident individual of the age of 60 years or more but less
than eighty years at any time during the previous year

Total Income (Rs.) Tax Rate Tax liability (Rs.)

upto 3,00,000 Nil Nil

3,00,001 – 5,00,000 5% 5% of (Total Income – 3,00,000)

5,00,001 – 10,00,000 20% 20% of (Total Income – 5,00,000) + 10,000

above 10,00,000 30% 30% of (Total Income – 10,00,000) + 1,10,000

 Resident individual of the age of 80 years or more at any time during the previous year

Total Income (Rs.) Tax Rate Tax liability (Rs.)

upto 5,00,000 Nil Nil

5,00,001 – 10,00,000 20% 20% of (Total Income – 5,00,000)

above 10,00,000 30% 30% of (Total Income – 10,00,000) + 1,00,000

Cess
Governments resort to imposition of cess for meeting specific expenditure
education Cess and Senior and Higher education Cess are additional levy on
the basic tax liability + surcharge, if applicable.
Rate of Education Cess is 2%
Rate of SHEC is 1%.
Rate of Health Cess is 1%.
Residential Status
 Basic Conditions
• under Section 6(1) of the income-tax act, an individual is said
to be resident in India in any previous year if he:
• is in India in the previous year for a period or periods
amounting in all to one hundred and eighty-two days or more
i.e., he has been in India for at least 182 days during the
previous year; or,
• has been in India for at least three hundred and sixty-five days
(365 days) during the four years preceding the previous year
and has been in India for at least sixty days (60 days) during
the previous year.
 
Exception to the basic condition
in the case of following individual –
being a citizen of India, who leaves India in any previous year as
a member of the crew of an Indian ship or for the purposes of
employment outside India,
• A person is deemed to be of Indian origin if he, or either of his parents or
any of his grandparents, was born in Undivided India. It may be noted that
grandparents include both maternal and paternal grand parents.

• Note: Notwithstanding anything contained in clause (1), an individual,

being a citizen of india, having total income, other than the income from
foreign sources, exceeding fifteen lakh rupees during the previous year
shall be deemed to be resident in india in that previous year, if he is not
liable to tax in any other country or territory by reason of his domicile or
residence or any other criteria of similar nature. [Amendment vide
Finance Act, 2020]
 Non-Resident
• if an individual does not satisfy any of the above basic condition then, he
will be treated as Non-resident. It must be noted that the fulfillment of
any one of the above conditions (a) or (b) as applicable will make an
individual resident in India for tax purposes. Further it is to be noted that
these conditions are alternative and not cumulative in their application.
Resident and Ordinarily Resident (ROR)
an individual may become a resident and ordinarily resident in india if he
satisfy both the following conditions given u/s 6(1)besides satisfying any one
of the above mentioned conditions:
• he is a resident in atleast any two out of the ten previous years
immediately preceding the relevant previous year, and
• he has been in india for 730 days or more during the seven previous years
immediately preceding the relevant previous year.
 Resident but Not Ordinarily Resident (RNOR)
an individual is not ordinarily resident in any previous year if –
• he has been a non-resident in India in nine out of the ten previous years preceding
that year, or
• he has during the seven previous years preceding that year been in India for a
period of, or periods amounting in all to, seven hundred and twenty-nine days (729
days) or less.
• a citizen of India, or a person of Indian origin, having total income, other than the
income from foreign sources, exceeding fifteen lakh rupees during the previous
year, who has been in India for a period or periods amounting in all to one
hundred and twenty days or more but less than one hundred and eighty- two days;
or
• a citizen of india who is deemed to be resident in India under clause (1a)
• Explanation: “income from foreign sources” means income which accrues or arises
outside India (except income
• derived from a business controlled in or a profession set up in India.
Steps for computation of Total Income

Step 1 – Determination of residential status

Step 2 – Classification of income under different heads

Step 3 - Exclusion of income not chargeable to tax There are certain income which are
wholly exempt from income-tax e.g. Agricultural income. These income have to be
excluded and will not form part of Gross Total Income. Also, some incomes are partially
exempt from income-tax e.g. House Rent Allowance, Education Allowance. These
incomes are excluded only to the extent of the limits specified in the Act. The balance
income over and above the prescribed exemption limits would enter computation of
total income and have to be classified under the relevant head of income.

Step 4 - Computation of income under each head Income is to be computed in

accordance with the provisions governing a particular head of income. Under each head
of income, there is a charging section which defines the scope of income chargeable
under that head. There are deductions and allowances prescribed under each head of
income. For example, while calculating income from house property, municipal taxes and
interest on loan are allowed as deduction.
Step 5 – Clubbing of income of spouse, minor child etc. In case of individuals, income-
tax is levied on a slab system on the total income. The tax system is progressive i.e. as
the income increases, the applicable rate of tax increases. Some taxpayers in the
higher income bracket have a tendency to divert some portion of their income to
their spouse, minor child etc. to minimize their tax burden. In order to prevent such
tax avoidance, clubbing provisions have been incorporated in the Act, under which
income arising to certain persons (like spouse, minor child etc.) have to be included in
the income of the person who has diverted his income for the purpose of computing
tax liability.

Step 6 – Set-off or carry forward and set-off of losses An assessee may have different
sources of income under the same head of income. He might have profit from one
source and loss from the other. For instance, an assessee may have profit from his
textile business and loss from his printing business. This loss can be set-off against the
profits of textile business to arrive at the net income chargeable under the head
“Profits and gains of business or profession”.
Step 7 – Computation of Gross Total Income. The final figures of
income or loss under each head of income, after allowing the
deductions, allowances and other adjustments, are then aggregated,
after giving effect to the provisions for clubbing of income and set-off
and carry forward of losses, to arrive at the gross total income.

Step 8 – Deductions from Gross Total Income There are deductions

prescribed from Gross Total Income.

Step 9 – Total income The income arrived at, after claiming the above
deductions from the Gross Total Income is known as the Total Income. It is also
called the Taxable Income. It should be rounded off to the nearest Rs.10.
Capital Gains

Capital gain is denoted as the net profit that an investor makes after selling a
capital asset exceeding the price of purchase. The entire value earned from selling
a capital asset is considered as taxable income.

Buildings, lands, houses, vehicles, Mutual Funds, and jewelry are a few examples
of capital assets.

The following are not included under capital assets – 

• Any stock, consumables or raw materials that are held for the purpose of
business or profession.
• Goods such as clothes or furniture that are held for personal use.
• Land for agriculture in any part of rural India.
• Special bearer bonds that were issued in 1991.
• Gold bonuses issued by the Central Government such as the 6.5% gold bonus
of 1977, 7% gold bonus of 1980 and defense gold bonus of 1980.
• Gold deposit bonds that were issued under the gold deposit scheme (1999) or
the deposit certificates that were issued under the Gold Monetisation Scheme
(2015).
•Short term capital gain
If an asset is sold within 36 months of acquisition, then the profits earned
from it is known as short term capital gains. For instance, if a property is
sold within 27 months of purchase, it will come under short term capital
gains. 
However, tenure varies in the case of different assets. For Mutual Funds
and listed shares, Long term capital gain happens if an asset is sold after
holding back for 1 year.

•Long term capital gain

The profit earned by selling an asset that is in holding for more than 36
months is known as long-term capital gains. After 31st March 2017, a
holding period for non-moveable properties was changed to 24 months.
However, it is not applicable in case of movable assets such as jewelry,
debt-oriented Mutual Funds, etc. 
Furthermore, a few assets are considered as short-term capital assets if the
holding period is less than 12 months. Here is a list of assets that are
considered according to the rule mentioned above – 

•Equity shares of any organization listed on a recognized Indian stock

exchange.
•Securities like bonds, debentures, etc. that are listed on any Indian stock
exchange.
•UTI units, regardless of being quoted or unquoted.
•Capital gain on Mutual Funds that are equity-oriented, whether they are
quoted or not.
•Zero-coupon bonds.
 Here is a duration chart on an income generated against the sale of assets
Short term Long term
Type of asset
duration  duration 
Immovable
assets (e.g. real Less than 2 More than 2
years years
estate)
Moveable Less than 3 More than 3
property(e.g.
years  years
Gold)
More than 1
Listed Shares Less than 1 year
year 
Equity Oriented Less than 1 year More than 1
Mutual Funds year
Debt Oriented Less than 3 More than 3
Mutual Funds years years
Calculation of Capital Gains

Full value consideration – 

It is the consideration that is received by a seller in return for a capital asset. 
Cost of acquisition – 
The cost of acquisition is the value of an asset when a seller acquires it.
Cost of improvement – 
The cost of improvement is the amount of expenses incurred by a seller in making
any additions or alterations to a capital asset.

Indexed Cost of Acquisition/Improvement

The indexed cost of acquisition can be estimated as the ratio of the Cost Inflation
Index (CII) of the year when an asset was sold by a seller and that of the year when
the property was acquired or the financial year 2001-2002, whichever is later
multiplied by the Cost of acquisition.
Suppose, a person acquired an asset at Rs. 50 Lakh in the financial year 2004-2005
and she decided to transfer the property in the fiscal year 2018-19. The CII of the
financial year 2004-05 and 2018-19 were 113 and 280 respectively.
Therefore, the indexed cost of acquisition will be 50 X 280 / 113 = Rs. 123.89 Lakh.
Example to Calculate long term Capital Gains

Given below is an example to calculate long term Capital Gains:

Assumptions:

Price house was purchased for: Rs.35 lakh

Financial Year house was purchased: 2011-2012

Financial Year house was sold: 2019-2020

Amount house was sold for: Rs.60 lakh

Inflation adjusted cost: (289/184) x 35 = 54.97 lakh

long term Capital Gains: 60 lakh – 54.97 lakh = Rs.5,03,000 (approx)

Example for Calculation of short term Capital Gains

Given below is an example of how short term Capital Gains is calculated:

Assumptions:
Price the house was sold for: Rs.55 lakh

Expenses for brokerage, commissions etc: Rs.30,000

Net sale consideration: Rs.54,70,000

Price the house was bought for: Rs.35 lakh

Amount spend for the improvement of house: Rs.3 lakh

Gross short term Capital Gain: Rs.16,70,000

Net short term Capital Gain: Rs.16,70,000

Short Term Capital Gains: 30% of Rs.16,70,000: Rs.5,01.000

Advance tax

Any person whose tax liability for the year is expected to be Rs 10,000 or more is
required to pay their tax within the financial year in four instalments.

Accordingly, by June, 15% of the total tax liability must be paid

By September 14, 45 percent must be paid. This includes the instalment paid in
June.

By December 15, the liability is 75 percent which includes instalments of June and
September.

By March 15, the entire tax must be paid.

Any shortfall or default in paying any of these instalments will add an interest
burden for the taxpayer.
Tax Deducted at Source (TDS)

It is normally understood that a person receiving an income is the one who must
pay income tax. Yet, TDS is responsibility of a person who pays, rather than one
who receives that income.

For example: When an employee receives salary , they must pay tax on that
income. Instead, section 192 of the Act requires the employer to deduct tax from
the salary and pay balance amount to the employee.

Similarly, when a contractor is hired for a project, contract fee is paid after
reducing the TDS amount as specified under section 194C. Rent paid by a tenant
to a landlord is subject to the TDS provisions of section 194IB.

These TDS amounts must be deposited on behalf of the payee into the government
treasury within a specified time.
Self-assessment tax

Finally post the financial year when transactions are assessed, there is
clarity on the precise tax liability. This is compared with total tax credits
reflecting in form 26AS by way of TDS, TCS or Advance taxes.

If there is a shortfall in payments, the difference must be paid as self-

assessment tax along with interest if any while filing the Income tax
return.

In case of an excess payment, the taxpayer can claim a refund in their

income tax return.
Can subsidy received by the assessee from the Government of West Bengal under
the scheme of industrial promotion for expansion of its capacities, modernization
and improving its marketing capabilities be treated as a capital receipt?

Solution: Rasoi Ltd (Calcutta High Court)

The object of the subsidy is to enable the assessee to run the business more
profitably, the receipt is a revenue receipt. On the other hand, if the object of the
assistance is to enable the assessee to set up a new unit or to expand an existing
unit, the receipt would be a capital receipt. Therefore, the object for which subsidy is
given determines the nature of the subsidy and not the form of the mechanism
through which the subsidy is given.
What would be the nature of the repair and reconditioning expenditure incurred on
a machine which broke down years ago – Revenue or Capital?

Solution: Bharat Gears Ltd (Delhi High court)

The machinery which was repaired had outlived its utility and huge expenditure was
incurred in replacing many vital parts in order to make the same functional. The
expenditure was of such nature that it brought into existence a new machinery
altogether and consequently, there was a benefit of enduring nature to the assessee
even though technically no new asset came into existence. Therefore, the Delhi High
Court observed that it is in the nature of capital expenditure on which depreciation
can be claimed.
Would expenditure incurred on feasibility study conducted for examining proposals for
technological advancement relating to the existing business be classified as a revenue
expenditure, where the project was abandoned without creating a new asset?

Solution: Priya Village Roadshows Ltd (Delhi High court)

Since the feasibility studies were conducted by the assessee for the existing business
with a common administration and common fund and the studies were abandoned
without creating a new asset, the expenses were of revenue nature.
 GST framework
• 2 forms of GST in India
• Intra state level and inter state level
• At the inter-state level IGST (Or Integrated
Goods and Services Tax) shall be levied.
• At intra state
– CGST
– SGST
 Why GST
• Cascading effect , multi-layered taxing
• Corruption, tax leakages
• More compliance cost and maintaining record
• GST important indirect tax reform
• GST have replaced a myriad of indirect taxes
such as VAT, customs duty, Excise, CST, Service
Tax, Entertainment Tax with a single tax called
the Goods and Services Tax.
 GST
• Single tax from manufacturer to customer
• The input tax credit paid at each stage will be
available in the subsequent stage of value addition.
• It is end customer who will bear only the GST
charged by last dealer in the supply chain with
setoff benefits at all the previous stage
• With streamlining of multiple taxes final cost to the
customer will turn out to be low because of
elimination of double charging system
 GST
• GST is a destination based tax on consumption
of goods and services.
• It is proposed to be levied at all stages right
from manufacture up to final consumption
with credit of taxes paid at previous stages
available as setoff.
Types of GST and its Explanation

As per the newly implemented tax system, there are 4 different

types of GST:

[Link] Goods and Services Tax (IGST)

[Link] Goods and Services Tax (SGST)

[Link] Goods and Services Tax (CGST)

[Link] Territory Goods and Services Tax (UTGST)

1. Integrated Goods and Services Tax or IGST

The Integrated Goods and Services Tax or IGST is a tax under the GST regime
that is applied on the interstate (between 2 states) supply of goods and/or
services as well as on imports and exports.

The IGST is governed by the IGST Act. Under IGST, the body responsible for
collecting the taxes is the Central Government. After the collection of taxes, it is
further divided among the respective states by the Central Government.

For instance, if a trader from West Bengal has sold goods to a customer in
Karnataka worth Rs.5,000, then IGST will be applicable as the transaction is an
interstate transaction. If the rate of GST charged on the goods is 18%, the trader
will charge Rs.5,900 for the goods. The IGST collected is Rs.900, which will be
going to the Central Government.
2. State Goods and Services Tax or SGST

The State Goods and Services Tax or SGST is a tax under the GST regime that
is applicable on intrastate (within the same state) transactions. In the case of
an intrastate supply of goods and/or services, both State GST and Central
GST are levied. However, the State GST or SGST is levied by the state on the
goods and/or services that are purchased or sold within the state. It is
governed by the SGST Act. The revenue earned through SGST is solely
claimed by the respective state government.

If a dealer in Rajasthan, selling goods to consumers within the state, makes a

sale of INR 20,000 at 18% GST rate. Then the dealer will collect INR 3,600 as
total tax. In this case CGST and SGST will be shared by Centre and State
equally as INR 1,800 each.
3. Central Goods and Services Tax or CGST

Just like State GST, the Central Goods and Services Tax of CGST is a tax under
the GST regime that is applicable on intrastate (within the same state)
transactions. The CGST is governed by the CGST Act. The revenue earned from
CGST is collected by the Central Government.

Let’s suppose Rajesh is a dealer in Maharashtra who sold goods to Anand in

Maharashtra worth Rs. 10,000. The GST rate is 18% comprising of CGST rate of
9% and SGST rate of 9%. In such case, the dealer collects Rs. 1800 of which Rs.
900 will go to the Central Government and Rs. 900 will go to the Maharashtra
Government.
4. Union Territory Goods and Services Tax or UTGST

The Union Territory Goods and Services Tax or UTGST is the counterpart
of State Goods and Services Tax (SGST) which is levied on the supply of
goods and/or services in the Union Territories (UTs) of India.

The UTGST is governed by the UTGST Act. The revenue earned from
UTGST is collected by the Union Territory government. The UTGST is a
replacement for the SGST in Union Territories. Thus, the UTGST will be
levied in addition to the CGST in Union Territories.

Currently, there are 8 union territories in India:

Lakshadweep
Dadra and Nagar Haveli and Daman and Diu
Andaman and Nicobar Islands
Delhi
Puducherry
Ladakh
Jammu & Kashmir
But out of these Delhi and Puducherry levy SGST and not UTGST because
they have their own elected members and Chief Minister.
Who is eligible to register under GST? 

All the businesses supplying goods whose turnover exceeds Rs 40 lakh in a

financial year are required to register as a normal taxable person. However, the
threshold limit is Rs 10 lakh if you have a business in north-eastern states, J&K,
Himachal Pradesh and Uttarakhand. 

The turnover limit is Rs 20 lakh, and in case of special category States, Rs 10 lakh,
for the service providers. 
[Link]