Unit - 3

Unit - 3

Discuss the provisions relating to registration under the CGST Act, 2017. (Q.22)
SECTION 22: PERSON LIABLE FOR REGISTRATION
Person whose Aggregate Turnover exceeds the minimum threshold limit.
Where Business of a Taxable person has been transferred(including Succession) to another
person as a going concern, the later should be liable to register from the date of transfer.
Demerger/Amalgamation of 2 Companies, Transferee shall be registered as on the date from
giving effect to High Court order. Person who was registered under previous law (ex. VAT)
Aggregate Turnover – Value of all outward supplies of person having same PAN on all India
Basis.

SECTION 23: PERSON NOT LIABLE FOR REGISTRATION

Person supplying goods or services which are wholly exempt or not liable to tax.
An agriculturist, to the extent of supply of produce out of cultivation of land.
Category of persons specified by notification issued by government
Person supplying such goods or services where tax is to be paid by the recipient under
reverse charge
Handicraft Dealers making Inter State Supply having aggregate turnover up to 20 lakhs
Supplier of services who supply services through Electronic commerce operator where
aggregate turnover is not exceeding 20 lakhs
Casual taxable persons making taxable supplies of handicraft goods having aggregate
turnover up to 20 lakhs
Persons making inter State supplies of taxable services upto 20 lakhs

SECTION 24 : COMPULSORY REGISTRATION

Person making inter state Taxable supply
CTP making Taxable Supply
Person who is required to pay tax under RCM
NRTP making Taxable Supply
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Every ECO who is required to collect tax at source under section 52

Person who is required to pay tax u/s 9(5)
Person who is required to Deduct tax u/s 51,whether or not separately registered under the act
persons who make taxable supply of goods or services or both on behalf of other taxable
persons whether as an agent or otherwise
Input Service Distributor whether or not separately registered under this Act
every person supplying online information and database access or retrieval services from a
place outside India to a person in India, other than a registered person
persons who supply goods or services or both, other than supplies specified under subsection 5
of section 9 through such electronic commerce operator who is required to collect tax at source
under section 52

SECTION 25 : PROCEDURE FOR REGISTRATION

Person who is liable for registration u/s 22 or 24 – apply within 30 days of becoming liable
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 1. CTP & NRTP – At least 5 days before commencement of business. Single Registration for
Single State however where multiple POB are there, separate registration may be granted for
each POB.
2. Voluntary Registration may be taken.
3. Person who has obtained or person who is required to be obtained more than one
registration, whether in one state or UT or more than one state of UT, then for each such
registration be treated as distinct persons for the purpose of this act.
4. AADHAR Authentication of the applicant mandatory from 01/04/2020 where applicant fails
to undergo AADHAR authentication, the registration shall be granted only after physical
verification of the principle place of business in the presence of the said person.
5. PAN is required for registration but person who are required to deduct tax u/s 51 registration
may be done with TAN.
6. NRTP- Passport can be used for registration
7. Suo moto Registration can be done by dept if person doesn’t apply for registration even
when becoming liable.
8. If Registration applied within 30 days of becoming liable; effective date will be, date of
becoming liable, Otherwise grant of registration certificate.
9. Bank account details now can be given after registration but up to 45 days from the date of
grant pf registration or the date of furnishing return under section 39 (Which ever is earlier).
If this provision is violated (Rule 10A) registration is liable to be cancelled.

What is dual GST model? Explain the salient features of GST.

Introduction:
The dual GST model or the dual GST structure means levying tax with two different taxation
components. In India, both the Central Goods and Service Tax (or CGST)and the State Goods
and Service Tax (or SGST) are the components levied on a single transaction within a state due
to its federal nature.

Features of the Dual GST Model

a) The GST or Goods and Service Tax has two components – one levied by the central
government (referred to as Central GST or CGST), and the other collected by the State
governments (referred to as State GST or SGST)
b) Both CGST and SGST apply to all transactions pertaining to goods and services
c) Both CGST and SGST are paid to the respective accounts of the Central
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governments individually
d) CSGT and SGST are treated individually, implying that the taxes paid against the CGST are
allowed to be considered as Input Tax Credit (or ITC)
e) Cross utilization of the Input Tax Credit between CGST and SGST is not permitted, except for
the inter-state supply of goods and services
f) Credit accumulation based on the GST refund is to be avoided by both the Central and State
governments except in the case of exports, input tax at a higher rate than output tax, and
purchase of capital goods, among others
g) There is a uniform procedure for collection of both CGST and SGST, as prescribed in their
respective legislation
h) The composition or compounding scheme for GST has an upper ceiling and a floor tax rate
concerning the gross annual turnover
i) As a taxpayer, you must submit periodic returns, in a standard format, to both the CGST and
SGST authorities
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 Benefits of Dual GST
The Dual GST structure is a transparent and straightforward tax model with a pre-defined set of
CGST and SGST rates. The benefits of having a dual GST structure include –
a) Reduction in the total number of taxes levied by the Central and State governments
b) A decrease in the effective tax rate for different goods
c) Elimination of the existing cascading effect of taxes
d) Reduction of the taxpayer’s transaction costs through simplified tax compliance
e) Increased tax collections based on a broader tax base and improved compliance

Impact and Implications of Dual GST Model

The dual GST model has been a replacement for the overly complicated tax structure that
existed before. So, the biggest beneficiaries of the new system have been the merchants and
businesses who had to track, record, collect and file multitudes of taxes every month.
Another area of improvement, which was also a goal of the new GST Model, was the rate of final
goods and services to the consumer. The Dual GST model aims to eliminate the cascading
effect of indirect taxation on the final goods and services. Thus, if the benefits of lower taxes
pass on to the consumers, they should experience lower prices.
Since dual GST means both State and Central Governments can impose and collect taxes, there
is a possibility of dispute. The GST Council is expected to draw the guidelines for resolving such
disputes.
Ultimately, the dual GST model should benefit the taxpayers and consumers the most. It is
simpler to follow and provides easier tax filing methods, which small business owners can easily
manage.

Explain the term and state the impacts of GST on business of accounts. +
(Explain the benefits of GST to trade, industry, e-commerce and service sector.)
Introduction:
Goods and Services Tax or GST is an indirect tax regime used in India on the supply of goods
and services. GST came into action from July 1st, 2017 through the implementation of the One
Hundred and First Amendment of the Constitution of India by the Government of India. It
replaced existing multiple taxes levied by the central and state governments. Impact
GST On Business Accounts:
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Impact of GST on Service Providers - As per the report of March 2014, there were 12lac+
service tax assessees in India but only the top 50 paid more than half of the tax collected
nationwide. Most of the tax is collected by domains such as IT services, the Insurance industry,
telecommunication services, business support services, Banking and Financial services, etc. All
these pan-India businesses are already working in a unified market and will see reduced
compliance burden after GST. The benefits all come with GST also need an important step from
the service provider side now they will have to separately register every place of their business
in each state.

GST Impact on Agriculture - As you already know that With around 16% of Indian GDP, the
agricultural sector is doing the largest contribution in the overall Indian GDP. But it doesn’t mean
that everything was profitable in this sector Before the GST one of the major issues of this
sector was the transportation of agri-products across state lines all over India. GST with less
taxation is helping is but it is still much, thus it is expected through GST to resolve the issue of
transportation.
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 GST Impact on Automobiles - There is a huge benefit with GST on Cars. GST actually provided
the best benefits to the buyer and almost every part of this sector. The Indian automobile
industry is a vast business producing a large number of cars annually. There were several types
of taxes applicable to this sector like excise, VAT, sales tax, road tax, motor vehicle tax,
registration duty before GST but now everything is adjusted in GST. Buyer has to pay extra cess
rate along with applicable GST.
GST Impact on FMCG - The FMCG sector is also getting some benefits due to the new taxation
regime, It is experiencing notable savings in logistics and distribution costs. It happens because
the GST has eliminated the need for multiple sales depots.
GST Impact on Freelancers - Freelancing in India is still not a vast industry, thus the rules and
regulations for this growing industry are still up in the air. GST’s online scheme makes most of
the thing much easier for freelancers to file their taxes online. In the GST regime, they are taxed
as service providers, and the new tax structure brought clarity and accountability in this sector.
GST Impact on E-commerce - The Ecommerce sector is growing rapidly in India and GST is
supporting the ecom sector’s continued growth In many ways, the long-term effects are going
to be particularly interesting because the GST law introduces a Tax Collection at Source (TCS)
mechanism. E-commerce companies are not too happy with TCS now however currently the rate
of TCS is at 1%. Recently a new section is included, section 194-O defines the applicability of
TDS on E-commerce transactions.
GST Impact on Logistics - India is a vast country and probably the logistics sector forms the
backbone of the economy. We can easily assume that a well established and mature logistics
industry has the potential to give a boost to the “Make In India” initiative of the Government of
India to a desired and suitable position soon.
GST Impact on Pharma - If we observe the performance of pharma and healthcare industries
then we can clearly see that the GST is benefiting these industries. The GST created a level
playing field for generic drug makers and also boosting medical tourism. Additionally, It
simplified the tax structure. However, there is concern relates to the pricing structure only and
the sector is hoping for a tax respite, and if it happens then it will make healthcare easier,
affordable and in reach of everyone.
GST Impact on Real Estate - It is one of the most pivotal sectors of the Indian economy, Real
Estate is playing an important role in employment generation in India. The impact of GST can’t
be seen soon due to the dependency on the tax rates. However, the real estate sector will see
substantial gains from GST implementation, because it brought transparency and accountability
in this sector.
GST Impact on Startups - It brings some beneficial changes already for this sector such as
increased limits for registration, a DIY compliance model, tax credit on purchases, and a free
flow of goods and services. Before the GST, many Indian states had 31/03/23,
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their own different VAT laws
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which were confusing for companies that have a panIndia presence, especially the e-commerce
sector. Most of the issues have been solved under GST.
GST Impact on Telecommunications - We have seen a bit of price cut in this sector too, but
due to the regular changes finding the accurate answer is hard. However, in the telecom sector,
prices decreased after GST for some time. Manufacturers will save costs through efficient
management of inventory and by combining their warehouses. Similarly, it will be much easier
for Handset manufacturers to sell their stuff or equipment as the GST system has negated the
requirement to set up state-specific entities, and transfer stocks which will result in saving up on
logistics costs.

Explain the term supply and state the transaction which are taxable even when no
consideration is paid.
Introduction:
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 As per Schedule 1 of GST, some specified transaction between the related person for supply
without consideration shall be treated as supply under GST. The normal GST provisions are
applicable to these supplies too. Generally, the supply is between the related person that may
be between a principal and agent or agent and principal etc. As these transactions between
related parties are treated as a supply the taxpayer has to pay tax. However, they can claim input
tax credit depending upon the criteria under supply without consideration under GST
Transactions between the related persons
The transactions between related person are important as the prices of the goods or services or
both can be unfair when compared with the transactions between the two parties that are not
related. As per GST, all the transactions are not deemed as supply without consideration
between related parties until it is for the furtherance of business. As per explanation to Section
15 of CGST Act, the following list consists of persons that are deemed to be related persons
o When the persons are the director or officer of a business/businesses are also the director or
officer of another business/businesses
o Any persons who are legally recognized as partners in business
o When such person has employer and employee connection o Any person who owns, controls
and hold 25% share or voting power of both of them either directly or indirectly.(for example, the
recipient holds the 25% of equity of the supplier's business)
o When the affairs of business are controlled by one of the person either directly or indirectly.
o If both the persons involved in the transaction are in the control of a third person either
directly or indirectly.
o If both the persons involved in the transaction controls the third person either directly or
indirectly.
o When the persons are members of the same family.

The term "Person" also includes

o Legal persons
o Persons shall be deemed to be related who are associated in the business of one another
where one is the sole agent/sole distributor/sole concessionaire or howsoever described of the
other. Moreover, there are some conditions that are applicable on the employer and employee
relation that is if an employer gives a gift to the employee than it shall not be treated as supply
without consideration providing that the value of gift shall be less than 50,000 INR.
2.Specified Imports
Any imports carried out by a taxable person who receives the supply from a related person or
from any outside/ abroad establishment whether for the furtherance31/03/23,
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be treated as supply and the supply of such goods or services or both shall be taxable.
3.Supply by/to the Agent
Irrespective of the threshold limit an agent shall be registered under GST. Any supply shall be
considered as supply made without consideration if it meets the following requirement and
consideration excludes in GST.
4.Transfer/Disposal of business assets where ITC was already claimed
Any transfer or disposal of business assets where ITC was already taken/availed also falls under
the supply without consideration criteria. The assets can be transferred or disposed from one
business to another by any means which may include gifting, write-off, impairment etc. The
transfer so made shall be permanent in nature in other words the goods shall be permanently
transferred.
5. How to determine the value of supply between the related person?
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 There are two cases where the value of supply is determined between related person Supply
other than to/from agent The open market value of the product or services shall be considered
as the value of supply between related persons. As the value of the supply can be influenced in
the case of a related person.

Analyse the provisions relating to levy and collection of GST under the Central GST Act,
2017.++(Define CGST and SGST. )
1. Explain the Central Goods and Services Tax (CGST):
Under GST, CGST is a tax levied on Intra State supplies of both goods and services by the
Central Government and it is governed by the CGST Act. SGST is also levied on the same
Intra State supply, but it is governed by the State Government. This implies that both the
Central and the State governments agree on combining their levies with an appropriate
proportion (usually 50% - 50% ratio) for revenue sharing between them. However, it is
clearly mentioned in Section 8 of the GST Act that the taxes be levied on all Intra-State
supplies of goods and/or services, but the rate of tax should not exceed14%, each. ie., 28%
for both the taxes put together.
2. Explain State Goods and Services Tax (SGST):
Under GST, SGST is a tax levied on Intra State supplies of both goods and services by the
State Government and it is governed by the SGST Act. In this case, CGST is also levied on
the same Intra State supply, but it is governed by the Central Government. Any tax liability
obtained under SGST can be set off against SGST or IGST input tax credit only. Similarly, any
tax liability obtained under CGST can be set off against CGST input tax credit only.

TAX LIABILITY ON COMPOSITE AND MIXED SUPPLIES (Sec. 8):

The tax liability on a composite or a mixed supply is determined in the following manner,
namely:-
(a) a composite supply comprising two or more supplies, one of which is a principal supply, shall
be treated as a supply of such principal supply; and
(b) a mixed supply comprising two or more supplies is treated as a supply of that particular
supply which attracts the highest rate of tax.

LEVY AND COLLECTION (Sec.9):

(1) There shall be levied a tax called the central goods and services tax on all intra-State
supplies of goods or services or both, except on the supply of alcoholic liquor for human
consumption, on the value determined under section 15 and at prescribed rates, not exceeding
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twenty per cent., as notified by the Government and it shall be paid by the taxable person.
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(2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly
known as petrol), natural gas and aviation turbine fuel shall be levied with effect from notified
date.

(3) The Government may specify categories of supply of goods or services or both, the tax on
which shall be paid on reverse charge basis by the recipient of such goods or services or both.
All the provisions of this Act apply to such recipient as if he is the person liable for praying the
tax in relation to the supply of such goods or services or both.
(4) The central tax in respect of the supply of taxable goods or services or both by a supplier,
who is not registered, to a registered person is paid by such person on reverse charge basis as
the recipient.
All the provisions of this Act apply to such recipient as if he is the person liable for paying the tax
in relation to the supply of such goods or services or both.
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 (5) The Government may specify categories of services, the tax on intra-State supplies of which
shall be paid by the electronic commerce operator, if such services are supplied through it.

All the provisions of this Act shall apply to such electronic commerce operator as if he is the
supplier liable for paying the tax in relation to the supply of such
services.
However, if an electronic commerce operator does not have a physical presence in the taxable
territory, any person representing such electronic commerce operator for any purpose in the
taxable territory shall be liable to pay tax.
Further, if an electronic commerce operator does not have a physical presence in the taxable
territory and also he does not have a representative in the said territory, such electronic
commerce operator shall appoint a person in the taxable territory for the purpose of paying tax
and such person is liable to pay tax.

Composition levy (Sec 10)

Composition levy is a mechanism available to taxpayers wherein they can choose to pay tax at a
fixed percentage on the state turnover.
Such a scheme is introduced to provide a very simple, hassle free compliance scheme for small
tax payers.
The major benefits enjoyed by taxpayers opting this scheme are,
• Non maintenance of elaborate books of accounts
• Quarterly returns
• Quarterly payment of tax.

Six marks
Write a brief note on dual model of GST.(taxation)+
Dual GST model or dual GST structure is a simple tax with two different taxation components.
Central Goods and Service Tax (CGST) and the State Goods and Service Tax (SGST) are the tax
components that can be levied on a single transaction in India within a state on account of its
federal nature.
Moreover, both governments have been assigned distinct responsibilities, as prescribed under
the division of powers statute of the Constitution. Overall, a dual GST
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structure is designed to
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align with the Constitutional requirements of fiscal federalism.

Features of the Dual GST Model

a) The GST or Goods and Service Tax has two components – one levied by the central
government (referred to as Central GST or CGST), and the other collected by the State
governments (referred to as State GST or SGST).
b) Both CGST and SGST apply to all transactions pertaining to goods and services.
c) Both CGST and SGST are paid to the respective accounts of the Central and the States
governments individually.
d) CSGT and SGST are treated individually, implying that the taxes paid against the CGST are
allowed to be considered as Input Tax Credit (or ITC).
e) Cross utilization of the Input Tax Credit between CGST and SGST is not permitted, except for
the inter-state supply of goods and services.
:
 f) Credit accumulation based on the GST refund is to be avoided by both the Central and State
governments except in the case of exports, input tax at a higher rate than output tax, and
purchase of capital goods, among others.
g) There is a uniform procedure for collection of both CGST and SGST, as prescribed in their
respective legislation.
h) The composition or compounding scheme for GST has an upper ceiling and a floor tax rate
concerning the gross annual turnover.
i) As a taxpayer, you must submit periodic returns, in a standard format, to both the CGST and
SGST authorities.
j) Each taxpayer is allotted a 14-15 digit PAN-linked taxpayer identification number.

Write a note on compensation law to state governments.+

The Goods and Services Tax (Compensation to States) Bill, 2017 was introduced in Lok Sabha
on March 27, 2017. The Bill provides for compensation to states for any loss in revenue due to
the implementation of GST.
Period of compensation: Compensation will be provided to a state for a period of five years
from the date on which the state brings its State GST Act into force.
Projected growth rate and base year: For the purpose of calculating the compensation amount
in any financial year, year 2015-16 will be assumed to be the base year, from revenue will be
projected. The growth rate of revenue for a state during the five-year period is assumed be 14%
per annum.
Base year revenue: The base year tax revenue consists of the states’ tax revenues from: (i)
state Value Added Tax (VAT), (ii) central sales tax, (iii) entry tax, octroi, local body tax, (iv) taxes
on luxuries, (v) taxes on advertisements, etc. However, any revenue among these taxes arising
related to supply of (i) alcohol for human consumption, and (ii) certain petroleum products, will
not be accounted as part of the base year revenue.
Calculation and release of compensation: The compensation payable to a state has to be
provisionally calculated and released at the end of every two months. Further, an annual
calculation of the total revenue will be undertaken, which will be audited by the Comptroller and
Auditor General of India.
Levy and compensation of GST compensation cess: A GST Compensation Cess may be levied
on the supply of certain goods and services, as recommended by the GST Council. The receipts
from the cess will be deposited to a GST Compensation Fund. The receipts will be used for
compensating states for any loss due to the implementation of GST.
The cess will be capped at: (i) 135% for pan masala, (ii) Rs 400 per tonne
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290% per 1,000 sticks of tobacco, and (iv) 15% for all other goods and services including motor
cars and aerated water.
Any unutilised money in the Compensation Fund at the end of the compensation period will be
distributed in the following manner:
(i) 50% of the fund to be shared between the states in proportion to revenues of the states, and
(ii) the remaining 50% will be part of the centre’s divisible pool of taxes.

Time of supply under GST.

Time of supply is a relevant measure under the GST law for every transaction entered into by the
supplier of goods and services. It means the point in time when goods have been deemed to be
supplied or services have been deemed to be provided for determining when the taxpayer is
liable to pay taxes. While this article dwells upon the time of supply for goods, there is a
separate article for time of supply for services.
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 Time of supply under normal charge
The time of supply of goods shall be the earlier of the following dates:
(a) The date of issuing of invoice (or the last day by which invoice should have been issued) Or
(b) The date of receipt of payment

Time of supply under reverse charge

Reverse charge means the liability to pay tax is by the recipient of goods/services instead of the
supplier. In case of reverse charge, the time of supply shall be the earliest of the following dates
—
(a) the date of receipt of goods
OR
(b) the date of payment
(c) the date immediately after THIRTY days from the date of issue of invoice by the supplier (60
days for services).
If it is not possible to determine the time of supply under (a), (b) or (c), the time of supply shall
be the date of entry in the books of account of the recipient.

Time of supply for vouchers

In case of supply of vouchers the time of supply is-
(a) The date of issue of the voucher, if the supply can be identified at that point.
OR
(b) The date of redemption of the voucher, in all other cases.

When time of supply cannot be determined

If it is not possible to determine the time of supply by the above provisions, then it will be-
(a) The date on which a periodical return has to be filed
OR
(b) The date on which the CGST/SGST is paid, in any other case.
In the GST regime, the tax collection event will be the earliest of the dates as given above. The
various events like issuing invoice/making payment in case of supply of goods /services or
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completion of event-in case of supply of service triggering the tax levy, Page
confirms
9 of 12 that the
Government wants to ensure tax is collected at the earliest point of time.
There are multiple parameters in determining ‘time’ of supply. Thus, businesses continue to face
a challenge in maintaining and reconciling between revenue as per financials and as per GST.

G.S.T.N Portal.

GSTN
GSTN, short for Goods and Service Tax Network, is a non-profit non-government company. It
provides shared IT infrastructure and service to both central and state governments including
taxpayers and other stakeholders. The registration Front end services, Returns, and payments to
all taxpayers will be provided by GSTN. In a nutshell, it will act as the interface between the
government and the taxpayers.The GST System Project is one of a kind and complex IT initiative.
What makes it unique is the way it seeks, for the first time to establish a uniform interface for the
taxpayer and a common and shared IT infrastructure between the Centre and States.
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 Key Features of the GSTN
Below listed are the prominent features of GSTN-

• National Information Utility

The GST Network has been considered to be a trusted National Information Utility(NIU). What
this means primarily is that the network is in charge of providing reliable, strong as well as,
seamless IT infrastructure and information passing.

• Ownership
It is partially owned by the Central Government (49%) and the rest by private players (51%)
which includes Banks and Financial Institutions

• Robust Infrastructure and Complex Operations

The basic function of GSTN is to help taxpayers to register themselves, make tax payments, and
claim GST returns to generate business analytics among others. Furthermore, the network is
also responsible for calculating and settling the Integrated GST (IGST) along with the Input Tax
Credit (ITC). The GST network thus focuses to provide holistic solutions to difficult and
exhaustive taxation solutions

• Information Security
A major share of the GST network is owned by the central government as compared to any other
individual player. Hence the major chunk of the responsibility for confidentiality as well as the
security of the information provided by the taxpayers.
The central government will handle the composition of the board, special resolutions
mechanism, shareholder’s agreement, and the agreements made between the network and
other state governments.

• Payment
The GST network has provided the taxpayers with the options of payment through both online
and offline methods-

• Online: Online payment can be availed through internet banking. The RBI has allocated
certain banks (Agency Banks ) for the same purpose with authority to collect payments
made in favor of GST. The taxpayer will have to make the payment by selecting from a list of
the agency banks authorized by RBI to collect the tax.Once selected, the taxpayer needs to
login to the respective bank’s online portal and make the payment and download the challan
generated for the said payment of GST.

• Offline: Taxpayers can also make payments through offline methods. The government has
also made the provision of payment of GST offline via “over the counter” payments. You can
directly visit the respective bank to make the payment for GST. Bank will further notify the
RBI as well as the GST portal to update all the relevant details. 31/03/23, 1 52 PM
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Write a note on exemption of tax under GST.

Power to grant exemption from tax (Sec.11)
(1) The Government in public interest may exempt generally, either absolutely or subject to
specified conditions, goods or services or both of any specified description from the whole or
any part of the tax leviable thereon with effect from specified date.
Analysis- The Central or the State Governments are empowered to grant exemptions from tax,
subject to the following conditions:
(i) Exemption should be in public interest;
(ii) By way of issue of notification;
(iii) On recommendation from the Council;
:
 Absolute exemption – Complete exemption such as services by way of renting of residential
dwelling for use as residence.
Conditional Exemption – The Central Government has exempted the tax payable under the
CGST/ UTGST/ IGST Acts by any taxable person on supply of “Services by a hotel, inn, guest
house, club or campsite, by whatever name called, for residential or lodging purposes, having
declared tariff of a unit of accommodation less than ` 1000/- per day”.

(2) The Government, in public interest, may, by special order in each case, under circumstances
of an exceptional nature, exempt from payment of tax any goods or services or both on which
tax is leviable.
Analysis- Exemption by way of special order (and not notification) may be granted by citing the
circumstances which are of exceptional nature. The GST Law specifies that a registered person
supplying the goods and / or services is not entitled to collect a tax higher than the effective
rate, where the supply enjoys an absolute exemption.

(3) For the purpose of clarifying the scope or applicability of any notification or order, the
Government may insert an explanation in such notification or order, at any time within one year
of issue of the notification.

Every such explanation has the effect as if it had always been the part of the first such
notification or order.
Explanation:- If an exemption in respect of any goods or services or both from the whole or part
of the tax leviable thereon has been granted absolutely, the registered person supplying such
goods or services or both should not collect the tax, in excess of the effective rate, on such
supply of goods or services or both.

Write a note on impact of GST on GDP of India.

GST Positive Impact of GDP

There is only one tax rate for all which will create a unified market in terms of tax implementation
and the transaction of goods and services will be seamless across the states.
The same will reduce the cost of the transaction. In a survey, it was found that 10-11 types of
taxes levied on the road transport businesses. So the GST will be helpful to reduce
transportation cost by eliminating other taxes.
After GST implementation the export of goods and services will become competitive because of
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nill effect of cascading effect of taxes on goods and products. In a research done
Page 11 of 12 by NCAER, it
was suggested that GST would be the key revolution in Indian Economy and it could increase the
GDP by 1.0 to 3.0 percent.
GST is more transparent in comparison to the previous law provision so it will generate more
revenue to the Government and will be more effective in reducing corruption at the same time.
Overall GST will improve the tax Compliances.
The Make In India programme will benefit from the GST structure.
GST will reduce excise duty, resulting in increased GDP.
The GST has the potential to extend the GDP by 2% and improve indirect revenues to the
government, leading to increased income for developmental projects and urban financing.

GST Negative Impact on GDP

In a report, DBS bank noted that initially, GST will lead to the rise in inflation rate which will
remain for a year but after that GST will affect positively on the economy.
:
 As we know Real Estate also plays an important role in Indian economy but some expert thinks
that GST will impact the Real Estate business negatively as it will add up the additional 8 to 10
percent to the cost and reduce the demand about 12 percent.
GST is applied in the form of IGST, CGST AND SGST on the Center and State Government, but
some economists say that there is nothing new in the form of GST although these are the new
names of Central Excise, VAT, CST and Service Tax etc.
As every coin has two faces in the same way we tried here to familiarize the things related
to GST with both perspective i.e. positively and negatively in this article. Despite having some
factor which is being expected to affect the Economy adversely there are so many other things
which are expected with a positive impact on GDP.

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