INTRODUCTION TO GST UNIT 1 8 MARK QUESTIONS

1. GIVE AN ACCOUNT OF INTRODUCTION OF GST IN INDIA AND WHY IT IS CALLED

AS SINGLE TAX STRUCTURE? (OR) WRITE A DETAIL NOTE ON INDIAN GST MODEL?
a. gst was introduced in india on 1st july 2017. dual model of gst is exercised in india. It means that
both state government and union government are responsible for administrating taxation across the
country.

Transactions occuring within a single state are levied with CGST and SGST by the central and state
government. IGST is levied by central government on transactions occuring between different states
or union territories and on imported goods and services.

Gst is considered as one of the most important indirect tax reforms in india as it is a single, unified
tax. It helps in eliminating various problems arised due to the previous indirect taxation system. It
subsumes various taxes like state level VAT, service tax, surcharges, additional customs duty, central
excise duty etc.

It can be levied on all kinds of transactions including purchases, sales, import, transfer or lease of
goods and services. It has eliminated the need for different type of taxes during various kinds of
transactions.

2. DEFINE GST. EXPLAIN ITS ORIGIN AND IMPORTANT CONCEPTS?

a. gst is a value added tax levied on manufacture, sale and consumption of goods and services. It
was introduced on 1st july 2017.

Gst offers comprehensive and continuos chain of tax credits from the producer’s point/service
provider’s point upto retailer’s level thereby taxing only the value added at each stage of supply
chain.

The supplier at each stage is permitted to avail credit of gst paid on purchase of goods and services
and can set off this credit against the gst payable on the supply of goods and services to be made by
him. Thus, only the final consumer bears the gst charged by the last supplier in the supply chain,
with set off benefits at all previous stages.

Since only the value added at each stage is taxed under gst, there is no tax on tax or cascading of
taxes under gst system.

3. EXPLAIN THE CONCEPTS OF CANCELLATION AND REVOCATION OF GST

REGISTRATION?
a. cancellation of registration means that the taxable person will not be a gst registered person
anymore. There is no need for him to pay or collect gst.

Situations under which gst can be done are:

1. shut down of business
2. change in form of business . Eg: move from partnership to pvt ltd.
3. taxable person becomes no longer liable under gst laws.
4. improper place of business.
5. violation of provisions of act.
6. registered person doesn’t furnish returns for 6 months.

Revocation of registration:
revocation of cancellation of registration means reversing the decision to cancel the registration.
This is applicable only when the tax officer has cancelled the registration of a taxable person on his
own motion. It does not apply to cases where there has been an application for cancellation.

If the proper officer cancels the registration , the taxable person is liable for applying revocation of
cancelled registration within period of 30 days from the date of cancellation of order.

4. EXPLAIN THE CONCEPT OF REGISTRATION UNDER GST (OR) WHAT ARE THE
ADVANTAGES OF TAKING REGISTRATION IN GST AND WHICH ARE THE CASES FOR
WHICH GST REGISTRATION IS COMPULSARY?
a. businesses whose annual turnover crosses 40 lakh per annum have to register under gst for
normal category states and 20 lakh for special category states.

Mandatory registration cases:

1. sellers on e-commerce platforms.
2. e-commerce operators.
3. casual and non resident taxable persons.
4. persons involved in taxable and interstate supply.
5. business liable to pay tax under reverse charge.
6. agents supplying on name of taxable persons.
7. persons responsible to deduct tds( govt departments)
8. persons supplying online information from abroad to an unregisterd person in india.
9. input service distributors.

Advantages of gst registration:

1. it removes cascading effect of taxes.
2. it implements uniformity in taxes.
3. it removes dual taxation of similar transaction.
4. it develops acceptance to tax throughout the economy.
5. it reduces production cost.

5. TYPES OF GST RETURNS

a. Types of GST Returns and their Due Dates
Type Purpose Frequency and Due Date
Turnover < Rs. 1.5 crore
To be filed by all the normal taxpayers stating their – Quarterly, 31st of the month
GSTR-
outward supplies of goods and services during the succeeding the quarter
1
applicable tax period.
Turnover > Rs. 1.5 crore – Monthly, 11th of the succeeding
month

GSTR-
2 Details of inward supplies of goods and services Monthly, 15th of the succeeding
including those under reverse charge basis month
Suspended

GSTR-
3 All details of the outward and inward supplies, as Monthly, 20th of the succeeding
mentioned in Forms GSTR-1 & GSTR-2 month
Suspended

To be filed by all the normal taxpayers declaring their Monthly, 20th of the
GSTR-3B
summary GST liabilities for the applicable tax period succeeding month
CMP-08 To declare summary of outward supplies and import of Quarterly, 18th of
 the month succeeding
(Earlier GSTR-4, for services liable to reverse charge mechanism
the quarter
composition-scheme
taxpayers only)

GSTR-5 To be filed by non-resident taxpayers when they do not Monthly, 20th of the
wish to claim Input Tax Credit (ITC) succeeding month
(for non-resident taxpayers)

To be filed by Online Information and Database Access

Monthly, 20th of the
GSTR-5A or Retrieval (OIDAR) service providers outside India
succeeding month
for their services to unregistered persons in India
To be filed by Input Service Distributors for distribution
of ITC Monthly, 13th of the
GSTR-6
succeeding month

To declare TDS liability by the authorities deducting tax at source Monthly, 10th of
GSTR-
the succeeding
7
month
Monthly, 10th of
GSTR-
To declare Tax Collected at Source (TCS) by e-commerce operators the succeeding
8
month
To be filed by all the normal taxpayer declaring the details of Annually,
GSTR-
purchase, sales, input tax credit, refund claimed, demand created, 30th November’19
9
etc. for FY 2017-18
To be filed by GST composition scheme taxpayers declaring the
Annually,
GSTR- details of outward supply, inward supply, taxes paid, refund
30th November’19
9A claimed, demand created, input tax credit and reverse due to opting
for FY 2017-18
out or opting in to the composition scheme.

GSTR- To be filed by the taxpayers, whose GST Once, 3 months from the date of
10 registration has been canceled or surrendered cancellation or order of cancellation,
to file final GST returns. whichever is later
(Final Return)

To be filed by Unique Identity Number

Quarterly, not mandatory for UIN holders
(UIN) holders stating the supplied/received
GSTR- goods and services. who did not receive any inward supplies
11 during the quarter.
To claim GST refund through RFD-10
28th of the next month for which refund statement is filed

6. INPUT TAX CREDIT MECHANISM UNDER GST REGIME?

a.
Input credit means at the time of paying tax on output, you can reduce the tax you have already
paid on inputs and pay the balance amount.

When you buy a product/service from a registered dealer you pay taxes on the purchase. On
selling, you collect the tax. You adjust the taxes paid at the time of purchase with the amount of
output tax (tax on sales) and balance liability of tax (tax on sales minus tax on purchase) has to be
paid to the government. This mechanism is called utilization of input tax credit.

For example- you are a manufacturer: a. Tax payable on output (FINAL PRODUCT) is Rs 450 b.
Tax paid on input (PURCHASES) is Rs 300 c. You can claim INPUT CREDIT of Rs 300 and you
only need to deposit Rs 150 in taxes.