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GST Basic Concepts – Ultimate Guide for Students

In today’s fast-paced and dynamic world, taxation systems play a crucial role in the economic growth and development of nations. In India, the Goods and Services Tax (GST) has emerged as a game-changer, revolutionising the way goods and services are taxed. Whether you’re a student, a business owner, or simply a curious individual seeking to broaden your understanding of taxation, it is essential to grasp the GST basic concepts.

Understanding the GST basic concepts is not only crucial for students pursuing commerce or taxation-related courses but also for entrepreneurs and individuals engaged in various businesses.

Table of Contents on GST Basic Concepts

What is gst, how does gst work.

• Different Types of GST in India

History of GST

Objectives of gst, advantages of gst, disadvantages of gst, difference between gst and vat, new compliances under gst.

In this article, we will deep dive into the GST basic concepts that students of a GST Certification Course should go through while studying.

Goods and Services Tax (GST) is a multi-stage tax scheme that is levied on the selling of both goods and services. This taxing scheme is implemented based on the concept of “One Nation One Tax” or Single Indirect Tax System to be used throughout India and is primarily intended to reduce the cascading impact of a variety of previous indirect taxes prevailed earlier in India. It is a comprehensive indirect tax on manufacture, sale, and consumption of goods and services throughout India. It was introduced on July 1, 2017.

Prior to the GST system, indirect tax like VAT, Excise Duty was charged at different stages of product movement starting from manufacturers to consumers.

GST is a comprehensive, multi-stage, destination-based tax system.

Comprehensive – With the advent of GST system, there will only one tax i.e. GST (No VAT, Excise Duty) on every value addition with product movement from manufacturer to consumer.

Multi-Stage – A product moves multiple hands (multi stage) as per supply chain. Each stage like buying raw materials, selling to wholesaler, selling to retailer and selling to end consumers.

Destination based – It is based on the consumption of goods or services. The goods and services are taxed at the place where they are consumed or used but not at the place of their origin.

Different Types or Components of GST in India

Goods and Services Tax (GST) is an indirect tax levied on the supply of goods and services in India. There are four types of GST in India:

• Central Goods and Services Tax (CGST): It is the tax levied by the central government on the supply of goods and services within a state. The Central Government collects CGST, and the respective state governments collect SGST.
• State Goods and Services Tax (SGST): It is the tax levied by the state government on the supply of goods and services within a state. The revenue collected through SGST is retained by the state government (the state of consumption of the goods/service). The Central Government collects CGST, and the respective state governments collect SGST.
• Integrated Goods and Services Tax (IGST): It is the tax levied by the central government on the supply of goods and services between two states or between a state and a Union territory. Both the Central Government and the State Government share the IGST revenue. The revenue collected as IGST is distributed equally between the Central Government and the government of the state to which the goods/service is supplied (the state of consumption of the goods/service).
• Union Territory Goods and Services Tax (UTGST): It is the tax levied by the union territory government on the supply of goods and services within a union territory. The revenue collected through UTGST is retained by the union territory government. The Central Government collects CGST, and the respective union territory governments collect UTGST.

You can also learn about the GST Return Types and add some value to your knowledge .

Overall, having a good understanding of the basic concepts of GST is crucial for businesses to effectively manage their tax compliance and minimize the impact of GST on their operations.

Check out the complete guide on Types of GST in India and learn from the basic level to enhance your skills

The idea of Goods and Services Tax (GST) was first proposed in India in the year 2000 by the Prime Minister Atal Bihari Vajpayee’s government. The proposal aimed to streamline the complex indirect tax system in India, which was causing inefficiencies and hindering economic growth.

The task force headed by Vijay Kelkar submitted a report to the government in 2003, which recommended the implementation of GST in India. However, due to opposition from various states and political parties, the proposal could not be implemented at that time.

In 2006, the then Finance Minister of India, P. Chidambaram, announced the government’s intention to implement GST by 2010. However, the proposed timeline was further delayed due to opposition from states over the loss of revenue they would incur under the new system.

Finally, in 2014, the Constitution (122nd Amendment) Bill was introduced in the Indian Parliament to enable the implementation of GST. After several rounds of discussions and negotiations with states, the bill was passed by both houses of Parliament in 2016.

On July 1, 2017, the GST system was implemented nationwide, replacing multiple indirect taxes such as central excise duty, service tax, value-added tax, and others. The introduction of GST was considered as one of the biggest tax reforms in the history of independent India.

The GST system has undergone several changes and revisions since its introduction, including the reduction of tax rates on various goods and services, simplification of compliance procedures, and the introduction of new provisions to address issues faced by taxpayers.

• Simplifying the Tax Structure: GST aims to achieve the “One Nation One Tax” system and simplify the tax structure by replacing multiple indirect taxes such as excise duty, service tax, VAT, etc., with a single tax. This simplification of the tax structure is expected to reduce the compliance burden on taxpayers and make the tax system more transparent.
• Creating a Common Market: GST aims to create a common market by eliminating the barriers to trade between states. Earlier there were multiple tax jurisdictions and tax rates, which used to increase the cost of doing business and hinders the free flow of goods and services across state borders.
• Boosting Economic Growth: GST aims to boost economic growth by promoting ease of doing business, reducing the cost of production, and increasing competitiveness. It is expected to reduce the cascading effect of taxes and make the tax system more business-friendly, which would help in attracting more investment and generating more employment opportunities.
• Decreasing Tax Compliance: GST aims to decrease tax compliance by creating a robust IT infrastructure and providing a single platform for taxpayers to file their returns. This is expected to reduce the scope for tax evasion and increase the tax base.
• Reducing the Burden of Tax on the Common Man: GST aims to reduce the burden of tax on the common man by eliminating the cascading effect of taxes. It will provide relief to the end consumer.

A. Unified Tax System

Eliminating multiple levies from the Indian tax system was one of the main objectives of the GST’s implementation. There were many taxes such as VAT, service tax, and others before the GST was established. Almost all such taxes have been abolished with the introduction of the GST. Nowadays, there is only one tax.

B. Reduced Compliance to be Obeyed

There were a number of different indirect taxes in place before the GST statute went into effect in 2017. Naturally, each of these taxes had its own set of compliance requirements, which was a time taking process .

There has only been one consolidated return for taxpayers to file from the start of the new tax system. For regular dealers only the main GSTR-1 must be manually filled out when completing these forms; the GSTR 2A, GSTR 2B and GSTR 3B are filled out automatically.

C. Easy Access

The GST site is accessible to anyone at any time sitting anywhere. The filing of taxes is made easier by this. For all different kinds of businesses, this is quite advantageous.

D. Logistics Efficiency

Several prior tax structures, including VAT, have been replaced by GST. Therefore, there is no need to pay state-level taxes during interstate movement (the firm previously used to pay to the center and state before the transportation of products) which improves logistics and operations.

E. India’s “Make in India” Program

Promoting “Make in India” items was one of the main goals of the Goods and Services Tax’s implementation. Manufacturing competitive products is made easier by the GST. However, the government has not yet clarified how the GST helps with this initiative.

F. Elimination of cascading effect

“One Nation One Tax” or “Single Indirect Tax System” used throughout India is intended to reduce the cascading impact of a variety of previous indirect taxes prevailed earlier in India.

G. Increase in Revenue

There is no option of tax evasion under the new GST. More suppliers will pay the tax amount if the tax terms are made simpler. Hence ultimately increasing revenue levels.

H. Transparency

The tax administration has started operating more efficiently. The new GST Return filing process has improved transparency.

In Spite of multiple benefits there are certain issues with GST. Let’s discuss few of them.

A. Cost increases

To continue operating, businesses must upgrade from their outdated accounting software to ERP or GST-compliant software. The cost of obtaining, setting up, and training workers to use GST-compliant software should be considered by businesses. Additionally, as both big and small businesses now need to retain tax experts in order to comply with GST, operating costs have increased.

B. An increase in software costs

Most Indian firms used basic ERP or accounting software to conduct their daily operations prior to the adoption of the GST system. Due to the introduction of GST, businesses are now required to upgrade to more expensive GST-compliant software or specialized GST software. This suggests that as a result of software purchases and personnel training, operating expenses will increase.

Businesses must adhere to a number of compliance obligations under the Goods and Services Tax (GST) system. Following are a few of the new regulations that the GST has introduced:

• E-Invoice : E-invoicing is the process of electronically creating an invoice in a format that is recognised by the Invoice Registration Portal (IRP) of the government. The e-invoicing system was developed to improve efficiency and lower mistake rates in the invoicing process.
• QR Code: As part of the new GST compliance, certain companies must create a QR code to print on their invoices. The tax authorities may scan and verify the vital information on the invoice included in the QR code.
• Dynamic QR : Dynamic QR codes for B2C transactions: a taxpayer having Turnover of more than 50 crores is required to generate a dynamic QR code for enabling digital payments on all B2C invoices. Information about the invoice, including the GSTIN, invoice number, and invoice date, must be included in the dynamic QR code.
• Annual Return: Form GSTR-9, (which contains a summary of all the transactions made during the financial year) is needed to be filed by every registered entity under GST. However few prescribed persons and entities are not required to file GSTR 9.
• E-way Bill: Electronic Way bill is generated on the e Way Bill Portal for movement of goods. It is necessary for the transfer of items costing more than Rs. 50,000 regardless of the size of the consignment, enterprises must provide an e-way bill. However, few prescribed persons and entities are not required to prepare E-way Bill.
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A Comprehensive Guide to GST Basic Concepts for Students

In this comprehensive guide, we will dive into the complexity of GST. Here we will explore its types, history, objectives, advantages, disadvantages, and the new compliance measures it introduced. The guide has framed all the GST basic concepts in one single platform for easy understanding.

India’s introduction of the Goods and Services Tax (GST) on July 1, 2017, marked a significant shift in its taxation landscape. GST was considered a game-changer that aimed to simplify and streamline the complex web of indirect taxes. It had plagued the country’s businesses for decades.

Let’s discuss few important GST basic concepts now.

Table of Content

• What is GST?

History of GST

Objectives of gst, how does gst work, what are the 4 types of gst, advantages of gst, disadvantages of gst, difference between gst and vat, difference between gst and older tax system, new compliances under gst, gst basic concepts – what is gst.

GST stands for Goods and Services Tax. It is a new tax system in India that replaced multiple indirect taxes like excise duty, service tax, and VAT. GST is a single tax that is levied on the sale of goods and services across India.

The main goal of GST is to simplify the tax structure in India and make it more transparent. It also aims to boost economic growth by removing tax barriers between states and reducing compliance burdens for businesses.

Following are a few benefits of GST:

• It simplifies the tax structure by replacing several different indirect taxes with a single tax.
• It eliminates tax barriers between states, which can boost trade and investment.
• It reduces compliance burdens for businesses.
• It makes taxation more transparent.

GST is still a relatively new tax system, and some challenges need to be addressed. However, it has the potential to be a major positive force for the Indian economy.

We hope this information will give you a general idea of basic GST concepts. Let’s move with the history behind GST.

The Goods and Services Tax (GST) was first proposed in India in 2000. The idea was to create a single tax system that would replace the many different indirect taxes that were in place at the time. This would simplify the tax system and make it more efficient.

However, there were many challenges to implementing GST. One challenge was that the different states in India had different interests and were not always willing to agree on a common tax system. Another challenge was that the GST would require a significant amount of IT infrastructure to be built, and this was not easy to do.

Despite these challenges, GST was finally implemented nationwide on July 1, 2017. This was a major achievement, and it has the potential to simplify the tax system and promote economic growth in India.

The implementation of GST has been a major undertaking, and there have been some challenges along the way. However, it is a significant step towards simplifying the tax system and promoting economic growth in India.

Knowing the history of GST can help you understand why it was created, what problems it was meant to solve, and how it has evolved over time. This small basic concepts of GST will help you a lot in creating strong knowledge base.

To clearly understand GST basic Concepts firstly you need to understand it’s objective. Knowing the objectives of GST can help you understand how it simplifies taxation, promotes economic growth, reduces tax cascading, and ensures a more transparent and efficient tax structure. All these features ultimately benefits both the government and taxpayers.

The following are the main objectives behind GST implementation:

• Simplifying the tax structure: GST aims to simplify the tax structure by replacing multiple indirect taxes with a single, unified tax. It will make it easier for businesses to comply with tax laws and will reduce the cost of doing business.
• Creating a common market: It eliminates tax barriers between states, creating a common market for goods and services. It will make it easier for businesses to sell their products and services across India and will boost economic growth.
• Boosting economic growth: GST aims to boost economic growth by reducing the cost of production, increasing competitiveness, and attracting investment. Thus it will create jobs and improve the standard of living for all Indians.
• Decreasing tax compliance: GST will help to decrease tax compliance by introducing a robust IT infrastructure and a single platform for filing returns. It will make it easier for businesses to comply with the tax laws and will reduce the scope for tax evasion.
• Reducing the tax burden on the common man: It aims to reduce the tax burden on the common man by eliminating the cascading effect of taxes. It means that businesses will only pay tax on the value they add to goods and services, and the tax will not be passed on to consumers.

Now we hope that you have an understanding of basic concepts of GST. We will move to the next part and see How it works with real-life examples.

Even you can explore GST Course to learn complete GST basic concepts.

Goods and Services Tax (GST) is a tax levied on the supply of goods and services in India. It is a multi-stage, destination-based tax, which means that the tax is collected at various stages of the supply chain and is ultimately paid by the end consumer.

Learning how GST works is essential for understanding its basic concepts of GST. It can help you and businesses to  accurately calculate GST. Even you can claim input tax credit, and comply with GST laws and regulations.

Let’s start learning the complete process.

• Transition from Previous Tax System: Before GST, India had a complex tax system, including VAT, Excise Duty, and others, each with different tax rates and compliance procedures. GST simplified this by creating a unified tax system.
• Multi-Stage and Destination-Based Tax: GST is multi-stage because it applies at multiple stages of the supply chain, from raw material purchases to end consumer sales. It’s destination-based, meaning taxes are collected where goods or services are consumed, not where they originate.
• Understanding Value Addition: GST’s key principle is to tax only the value added at each stage of production and distribution, reducing the cascading effect of taxation.

We are committed to creating content that will help you learn and grow. We aim to provide you with valuable information and insights that will give you the latest updates and expertise in a variety of topics related to GST . While keeping this point in our mind we tried to deliver a good GST basic Concept guide to you.

To understand how GST works,let’s take a look at a real-life example. Imagine you buy a television from a local electronics store. Here’s how GST is applied at various stages of this transaction

• Manufacturer: The manufacturer sells the television to a distributor. The GST charged by the manufacturer is based on the selling price of the television. If the GST rate for televisions is 18% and the manufacturer sells the television to the distributor for 20,000 rupees. The GST charged would be 3,600 rupees (18% of 20,000 rupees).
• Distributor: The distributor then sells the television to a retailer. Again, GST is charged based on the selling price. If the distributor sells the television to the retailer for 25,000 rupees. The GST charged would be 4,500 rupees (18% of 25,000 rupees).
• Retailer: You, as the consumer, buy the television from the retailer. The retailer charges GST based on the selling price of the television. If the retailer sells the television to you for 30,000 rupees. The GST charged would be 5,400 rupees (18% of 30,000 rupees).

In this example, the total GST collected throughout the supply chain for this television transaction is 13,500 rupees (3,600 + 4,500 + 5,400).

It is important to note that the actual GST rates and calculations can vary based on product categories, locations, and applicable tax rates. However, this example illustrates the process of how GST is levied at different stages of the supply chain. Here we can analyze, how it eventually contributes to the final price paid by the end consumer.

If you are a student all these GST basic concepts will help to boost your knowledge and confidence. As a business owner, this guide helps you to understand the complex GST easily.

You can also explore GST courses to learn complete concepts on GST

Moving forward take a look at the different types of GST in India. All GST types are contributing to Indian economic growth.

There are four types of GST implemented in India as mentioned below:

• Central Goods and Services Tax (CGST): The CGST is a tax levied by the central government on the supply of goods and services within a state. The revenue from the CGST goes to the central government.
• State Goods and Services Tax (SGST): The SGST is a tax imposed by the state government on the supply of goods and services within a state. The revenue from the SGST goes to the respective state government.
• Integrated Goods and Services Tax (IGST): The IGST is a tax charged by the central government on the supply of goods and services between two states or between a state and a Union territory. The revenue from the IGST is shared between the central government and the state of consumption.
• Union Territory Goods and Services Tax (UTGST): The UTGST is a tax levied by union territory governments on the supply of goods and services within union territories. The revenue from the UTGST goes to the respective union territory government.
• Unified tax system: GST eliminates multiple levies, such as excise duty, service tax, and VAT, and offers a single tax structure across India. This makes it easier for businesses to comply with tax laws and reduces the cost of doing business.
• Reduced compliance burden: GST simplifies compliance for businesses by introducing consolidated returns and automated processes. It means that businesses only have to file one return for all their GST transactions, and they can do so online.
• Easy accessibility: The GST system is accessible online, making it easy for businesses to file their returns and stay up-to-date on the latest tax laws.
• Improved logistics efficiency: GST eliminates the need to pay state-level taxes during interstate movement of goods. It reduces the time and cost of transporting goods across India.
• Support for “Make in India”: GST promotes “Make in India” by simplifying the taxation of manufacturing. It makes it more attractive for businesses to set up manufacturing operations in India.
• Elimination of cascading effect: GST eliminates the cascading effect of taxes, which means that businesses only pay tax on the value they add to goods and services. It ultimately reduces the overall cost of goods and services.
• Increase in revenue: GST reduces tax evasion, increasing overall tax revenue. It can be used to fund government programs and services.
• Enhanced transparency: The new GST return filing process enhances transparency in tax administration. It makes it easier for businesses to track their tax payments and for the government to monitor tax compliance.
• Cost increases for businesses: Businesses had to incur additional costs when transitioning to GST. Businesses have upgraded to GST-compliant software and hiring tax experts increases the business cost.
• Higher software costs: Businesses had to upgrade to more expensive GST-compliant software, which increased their operating costs.

Till now we have seen the GST basic concepts in terms of its working structure, benefits, and disadvantages. Now we will discuss its comparison with the previous tax system and VAT.

• E-Invoice: E-invoicing is a system of generating and transmitting invoices electronically. It aims to improve efficiency and accuracy in the invoicing process by eliminating the need for paper invoices. E-invoices are also more secure and can be easily tracked by the tax authorities.
• QR Code Implementation: Some businesses must implement QR codes on their invoices. QR codes are scannable codes that contain information about the invoice, such as the invoice number, date, and amount. QR codes allow tax authorities to verify invoice information quickly and easily.
• Annual Return (GSTR-9): Every registered entity under GST must file an annual return summarizing all transactions during the financial year. The annual return is a comprehensive document that provides a detailed overview of the taxpayer’s GST compliance.
• E-Way Bill: An e-way bill is a document that is required for the movement of goods across India. It is a digital document that contains information about the goods being transported, such as the consignment number, value, and destination. E-way bills are mandatory for the movement of goods costing more than Rs. 50,000, regardless of the consignment size.

Goods and Services Tax (GST) has simplified India’s taxation landscape by replacing multiple indirect taxes with a single tax system. It has also fostered a unified market by eliminating tax barriers between states.

We hope that this guide will empower businesses and individuals with the knowledge they need to thrive in India’s GST-driven economy. As GST continues to evolve and adapt to the changing economic landscape, staying informed is key to success.

You can stay updated and learn GST under the ICA expert’s guidance. Check out the GST course

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Hopefully, all these articles will help you clear your basic concepts of GST. Stay connected with our article for more information and tips.

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Essay on GST for Students and Children

500+ words essay on gst.

Goods and Services Tax (GST) refers to an indirect tax. The implementation of this tax is in India. The collection of this tax takes place from the point of consumption. This is in contrast to collection from the point of origin like previous taxes. Furthermore, this tax’s imposition is at every step in the production process. The refund is for all the parties in the various stages of production. Also, GST includes almost all indirect taxes.

Explanation of GST

First of all, Goods and Services Tax (GST) is a single tax system. The imposition of this tax takes place jointly by the center and the state. Furthermore, the imposition happens with the recommendation of a federal council.

In GST, the goods and services are divided into five different tax slabs. This is for the purpose of the tax collection. Above all, the tax slabs are – 0%, 5%, 12%, 18% and 28%. Also, petroleum products, alcoholic drinks, and electricity do not come under GST. Rough precious and semi-precious stones carry a special rate of 0.25%. Gold also carries a special rate of 3%.

GST certainly subsumed several taxes and levies. These include central excise duty, services tax, and additional customs duty. Furthermore, state-level VAT , surcharges, and Octroi also come under GST. The GST regime has done away with levies. Also, these levies were applicable to inter-state transportation of goods. Most noteworthy, the application of GST is on all transactions. These transactions are sale, purchase, transfer, lease, and import.

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Benefits of GST

First of all, the cascading tax effect refers to a tax on tax. Most noteworthy, GST eliminates the cascading effects of Tax. This is because GST is a comprehensive indirect tax. It certainly brings almost all indirect taxation under one umbrella.

Another notable advantage of GST is the increase in the threshold for registration. Earlier, a VAT was applied if the turnover was more than Rs 5 lakh. This VAT’s application was upon a business. Furthermore, there was no service tax when turnover was less than Rs 10 lakh. In contrast, under GST this threshold is Rs 20 lakh. Hence, this means an exemption for many small traders and service providers.

Small businesses can certainly benefit significantly under GST. Furthermore, these small businesses have a turnover of Rs 20 to 75 lakh. The benefit of these small businesses takes place due to the composition scheme. Under GST, there is an option for small businesses to lower taxes. They can do so by utilizing the composition scheme.

The entire process of GST is available online. Most noteworthy, it is an easy and simple online process. Therefore, it is really beneficial for start-up businesses. This is because they don’t have to struggle to get different registrations. In conclusion, GST has been a revolutionary tax system for India. Most noteworthy, many experts hail it as one of the biggest tax reforms. GST certainly is beneficial for the entire population of India.

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Introduction

GST is an acronym for goods and services tax. The GST has been introduced as a part of the reforms in India's taxation system to make the process simplified and more transparent. In this essay, we will discuss what GST is, how it is applied, the problem faced by businesses as well as common people due to GST implementation and the possible solutions that the government can take to mitigate those problems.

What is GST?

GST stands for Goods and Services Tax, and it is a tax that is levied on the manufacture, sale, or consumption of goods and services at a national level. The GST replaces all the indirect taxes that are currently being levied in India, such as service tax, value-added tax (VAT), central excise duty, etc.

The GST is levied on every transaction that takes place within India's territory, and it will be the responsibility of the buyer to pay the applicable taxes for any goods or services purchased. GST aims to do away with all indirect taxes like service tax, VAT, etc., making India a single market.

How is GST Applied?

The GST is a destination-based tax, and it will be levied on the value of the goods or services that are consumed within India's territory. The tax will be collected by the person who is responsible for the final consumption of the good or service. For example, if an item is produced in India and is sold to a consumer in another state, the GST will be levied by the state in which the final consumption takes place.

The GST is a multi-stage tax, and it will be levied at every stage of production and distribution of goods and services. The rate of GST at each stage will be based on the value addition that has taken place at that stage.

The GST aims to simplify the taxation system by ensuring a single tax rate across India's territory, thus making sure that goods and services are not taxed multiple times at different rates even if they cross through multiple states before reaching their destination.

Essay on GST

GST was firstly launched in 1954 in France. Currently, 160 countries in the world have implemented GST. As the Canadian model of GST has a federal structure, India has chosen the Canadian model of dual GST. GST stands for goods and service tax which has been applicable in India since July 1st 2017, so July 1st is declared as 'GST day. More specifically, Asam was the first state to get applied with GST. During the passing of the 'GST Bill' in the parliament, 336 votes were with it, and 11 votes were against it. The previous structure of indirect taxes in India was very complex, and quantitative taxes were levied by the central government and state government on goods and services. It has been a long-pending issue to streamline a variety of indirect taxes and implement a 'single taxation' system. 

GST requires businesses who have exceeded the prescribed threshold value to register and must keep records of all inputs and outputs. It is exempted from a few products such as alcohols, natural gas, motor spirits and crude petroleum products. GST is simple in a calculation, simply multiplying taxable amount by GST rate. GST rates are covered under 5 tax slabs as 0%, 5%, 12%, 18% and 28%. Most goods fall under the tax slab of 5%, 12% and 18%, while certain services are under 18%. Cement, tobacco lies under the highest tax slab of 28%.

The GST system is categorised into Central GST, also known as CGST, State GST known as SGST and Integrated GST known as IGST. CGST is levied by the central government, SGST by the state government and IGST by the central government on inter-state supplies. In short, while selling within the same state, CGST and SGST need to be paid, and in Inter-state, IGST is.

Due to the implementation of GST, the count of incidences of tax evasion came down in the country, which brings an increase in tax collection for the government. GST has been implemented under Article 279 of the Indian Constitution. The existence of sales tax, service tax, customs duty, excise duty, VAT, Octroi tax etc., vanished. Moreover, A very common procedure for registration of taxpayers, refund of taxes, uniform format of tax returns. With minimum tax or even no tax, the exporters are encouraged to export with the best quality and increase the economy. 

GST proved beneficial with more transparency, efficient compliance to central and state manufactures. GST assists in the growth of the Gross Domestic Products (GDP). GDP is expected to increase by 2%. Before the implementation of GST, the prices of the commodity were varying state to state. But, the prices became uniform throughout the country as the GST applied. The implementation of GST has proven a great decision for the country's people. The common man has gained momentum in life due to GST. True life is lived when a few changes occur in it. In addition, GST makes the Indian companies more compatible with the foreign companies and the Indian market more stable than the previous one.

GST is a country-wide tax and was introduced as The Constitution (One Hundred and First Amendment) Act 2017. GST had brought uniformity in the indirect taxation system, which had differently levied by states and centres before now. Different taxes, such as central excise duty, state VAT, etc., have been unified under one single umbrella of GST. Now, businesses do not have to pay taxes as per the state they belong to. Moreover, it has simplified tax calculation as well as returns filing. Under GST, businesses that exceed the prescribed threshold value must register themselves, keep records of input and output, and file their GST returns regularly.

GST is a 'one country-one tax' system. It requires businesses that have exceeded the prescribed threshold value to register and keep records of all inputs and outputs. There are five tax slabs under GST, that is 0%, 5%, 12%, 18% and 28%. Most goods fall under the 5%, 12%, and 18% tax slab, while certain services are subject to 18%. Cement, tobacco lies under the highest tax slab of 28%.

GST is governed by three different acts: The Central Goods and Services Tax Act 2017, Integrated Goods and Services Tax Act 2017, and Union Territory Goods and Services Tax Act 2017. It includes central excise duty that falls under One Hundred and the First Amendment of the Constitution of India.

FAQs on GST Essay

1.What is GST?

GST stands for Goods and Services Tax, a tax that has been applicable in India since July 1st, 2017. It is a single tax that is levied on goods and services, and it replaces the previous structure of indirect taxes in India, which were very complex. GST simplifies the calculation of taxes by multiplying the taxable amount by the GST rate. The tax rates are covered under 5 tax slabs which are 0%, 5%, 12%, 18% and 28%. One of the benefits of GST is that it brings more transparency and efficiency to the compliance of taxes by both central and state manufacturers. Businesses that exceed the prescribed threshold value are required to register and must keep records of all inputs and outputs.

2.How is GST beneficial?

There are many benefits of GST, such as the implementation of a simple taxation system that enables businesses to calculate their taxes easily. It eliminates the indirect taxes, including VAT, CST, Excise Duty and Service Tax. Also, it encourages exports which in turn leads to an increase in GDP. The government's revenue also increases since there is a reduction in tax evasion and the expenses on tax collection and compliance drop. Moreover, GST makes goods and services more affordable as most of them are now under the 18% tax slab. Businesses are no longer required to register multiple times for different indirect taxes, which means that the compliance process becomes easier, and there is less chance of error.

3.What is the difference between Central and State GST?

Central GST is also known as CGST, and State GST is also known as SGST. The main difference between the two is that CGST is levied by the Central Government, and SGST is levied by the State government. IGST is levied by the Central government on inter-state supplies. All three taxes (CGST, SGST and IGST) are collected by the Government of India and then distributed among the states. One should know that the tax rates for CGST, SGST and IGST are different. Different states have different tax slabs. One should be aware of the tax slab for their state in order to pay the correct GST. This will ensure that one is not required to pay more than the amount due.

4.What is the impact of GST on businesses?

The implementation of GST has positively impacted businesses as it has brought more transparency and efficiency to the compliance process. Businesses are now required to register only once and keep track of all input and output transactions. The tax rates are also clearer, making it easier for businesses to calculate their taxes. There is a reduction in tax evasion and the overall expenses on tax collection and compliance. GST has also made Indian businesses more competitive in the global market as it is now aligned with international taxation standards.

5.What are the benefits of GST for consumers?

The main benefit of GST for consumers is that it makes goods and services more affordable as most of them are now under the 18% tax slab. GST has also removed the cascading effect of taxes, which means that there is no tax on tax. This results in a decrease in the prices of goods and services. Consumers are now required to pay tax only on the amount they receive from the business. The benefits of GST for consumers also include a reduction in turn-around time for businesses since there is no need to register multiple times. This means that they receive their goods and services faster. The implementation of GST has had a positive impact on most sectors. The transportation, banking and insurance, telecom and IT sectors have all received benefits from GST.

Beginner's Guide to GST

This guide is for businessmen and students who wants to have a basic working knowledge of GST. The guide is arranged in a logical manner and written in easy to understand language. We recommend to read chapters one by one but feel free to jump the part which is not applicable to you. Leave a comment in case you have any query, we will try our best to reply. So just bookmark this page and start reading.

BASICs OF GST

(chapter 1).

Goods and Service Tax (GST) is applicable in India from 1st July 2017. GST system in India contains three types of GST – Central GST (CGST), State GST (SGST), Integrated GST (IGST). CGST & SGST is applicable on intra-state sales (i.e sales within same state) and IGST is applicable on inter-state sales (i.e sales outside state). Total rate of GST will be same in both the cases.

Registration

(chapter 2).

Persons whose turnover exceeds the specified limit are compulsory required to get registered. Persons who are selling goods/services through E-commerce operators like Amazon, Flipkart are also required to get registered even if turnover is less. A person may also register voluntarily and all provisions also applicable on him. No fees is charged by government for registering under GST. The registration can be done at www.gst.gov.in

Composition Scheme

(chapter 3).

A person engaged in trading of goods, manufacturing, restaurant and whose turnover is less than Rs. 1 crore can register under Composition Scheme. The person registered in composition scheme needs to pay tax at concessional rate of 1% (for trading and manufacturing) or 5% (for restaurant) rather than paying GST at normal rates. Such person can not take input tax credit on purchase of goods and services. There are also certain other restrictions on such person.

(Chapter 4)

There is no specific format of invoices to be issued under GST. There are certain details to be compulsorily included in a invoice such as Name, Address, GSTIN, date, invoice number in a serial, rate of GST, place of supply, taxable value, HSN/SAC etc. There is also time limit for issue of invoices in case of sale of goods and sale of services. Person registered in Composition Scheme is required to issue Bill of Supply in place of invoice.

Input tax Credit

(chapter 5).

Input Tax Credit (ITC) refers to the tax already paid by a person at time  of purhase of goods or services or capital goods and which is available as deduction from tax payable. Person registered under Composition Scheme is not allowed to take any ITC. There are certain goods and services for which taking ITC is not allowed or allowed only in certain cases. ITC is allowed only when you claim it before the specified time limit.

Reverse charge mechanism

(chapter 6).

Normally, GST is to be collected by the person who is selling good and services. But in some cases GST is to be collected by the purchaser of goods/service and not by seller. This is called Reverse Charge Mechanism, RCM in short. Reverse charge is applicable in case of  Supply of specific goods or services notified by government. GST under RCM has to be paid through cash only. The rate of tax to be used is the rate which is applicable on such goods/service.

Payment of GST

(chapter 7).

GST is to be paid before filing of 20th of the next month. GSTR-3B cannot be filed before making payment. Interest @ 18% is to be paid if the payment is not made before due date. You can pay amount of only up to Rs. 10,000 per challan per month in a bank branch. Payment above this amount should be done through net banking only.  You can not make payment through Debit Card/Credit Card.

(Chapter 8)

An e-way bill is required to be generated if goods are required to be moved from one place to another and value of goods is more than Rs. 50,000. E-way bill is not required if goods are moving through non motorized vehicle. If e-way bill number is mentioned in invoice then it is sufficient. Printout of e-way bill is not mandatory. You can generate e-way bill from https://ewaybill.nic.in/. You need to do a separate registration on this portal.

Accounting for GST

(chapter 9).

IGST is payable on inter-state sales and CGST + SGST is payable on intra-state sales. Separate ledger should be maintain for each type of GST.  The person who is registered in Union Territory has to pay UTGST and thus maintain UTGST account in lieu of SGST account. GST is not an expense nor income for the business so its entries should not be passed through profit and loss account. 

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GST PPT – Presentations on Goods & Service Tax

Updated on : Feb 8th, 2023

GST – The Goods and Services Tax – is the mother of all tax reforms in India. It is crucial for all businesses to understand the implications of GST on their brands. Since GST is a new law and crucial processes like return filing and invoicing have been changed, it is even more important that business owners and tax professionals understand the nuances of these new laws so that they can be GST-compliant.

As the wise men once said, being forewarned is being forearmed. If you have been looking for the right information on GST in the form of easy-to-understand GST PPT, you will find the following presentations created by our experts helpful and informative. Peruse these GST PPTs at your own time to understand the intricacies of GST procedures and processes. For more, you can also read our expertly-written blogs, or drop us a line so we can get back to you. Happy learning!

PPT 1 : GST Overview

By now you know that GST is the biggest tax reform India has seen since Independence. What makes it such a big deal? And what are the ways in which it would impact your current business? This GST PPT helps you familiarize yourself with the basics of the new tax system – how and when it is levied, what are its various components, and the future implications.

GST Overview – Know about Goods and Service Tax in India

PPT 2: GST ITC

ITC (Input Tax Credit) is the backbone of the GST taxation system. One of the reasons why GST is beneficial for businesses is because it will help them claim ITC seamlessly and in a more efficient manner than in the previous regime. However, there are certain conditions associated with a successful ITC claim. This GST PPT can help you understand those in detail.

GST Input Tax Credit

PPT 3: GST TRANSITION PROVISION

Businesses transitioning from VAT to GST need to follow certain guidelines, as laid out in the GST Law. By following these, businesses will be able to migrate to the new tax structure easily, and also claim ITC on the closing stock available from the previous regime. To learn more about transition provisions, please go through this GST PPT which lays out the rules in detail.

Transitional Provision Under GST

PPT 4: Guide on GSTR 3B

GSTR 3B is a simple return form introduced by the CBEC for the month of July and August. You must file a separate GSTR 3B for each GSTIN you have. To learn more about GSTR 3B Return Filing, Format, Eligibility & Rules, please go through this GSTR 3B PPT.

GSTR 3B Guide – ClearTax

Create GST Invoices in Excel with ClearTax GST Offline Software

ClearTax GST Offline is a “no-internet” billing software which works in MS Excel. You can create Free invoices and file returns on ClearTax GST with a single click. For lakhs of SMEs in India who do not have access to the internet, the ClearTax GST Offline tool is the easiest way to create invoices and file returns.

Cleartax GST Offline Guide

Quick Summary

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Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

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Practical Assignments : GST Accounts–Tally

The Practical Assignments-Tax Accounts- covers  Basic tasks of Maintaining GST Accounts, from set up, Data Entry to GST Reports, in Tally Prime Rel 3.x.  

This assignment is in continuation to Practical Assignments of Basic Financial Accounting & Basic Invoicing & Inventory Accounts. Maintain GST Accounts  in the same Company in which Basic Financial Accounts and Basic Invoicing &  Inventory Accounts Practical Assignments data were entered.  

Perform the operations for each Assignment as explained. Capture the screenshots (Prtscr) and paste it in MS Word file in 1×1 cell. Write the number and Name of screen shot as indicated. Explain the options and operational step.  

This way, capture the screenshots and place in MS Word file, in sequence. Don’t repeat same screenshot.  

After completing all assignments, take Back up of the data files. Now email to [email protected], attaching the Data Back Up file and screenshot zip file.       

GST Accounting – Practical Assignments

Continue in same Company after previous assignments

01-1 Company GST Features

[At Company >Click F11. At Company Features , under section Taxation , set Yes at Enable Goods & Services Tax (GST) . Next, At GST Details screen , under GST Registration Details section, enter the relevant details.]  

Capture Screenshot 1-1A : Company Features . 1-1B : Company GST Details set up  

For more details, visit

https://dvidya.com/goods-service-tax-gst/ https://dvidya.com/goods-services-tax-gst-set-up-composition-dealers-tally/ https://dvidya.com/goods-services-tax-gst-set-up-regular-dealers-tally/ https://youtu.be/STv3wbduT8A https://youtu.be/RwJJIYC6msE https://youtu.be/VSS48c_LZXY https://youtu.be/OjSvFYUJ_bI   https://youtu.be/mLrLyOeDX78 https://youtu.be/7wlTsturfks

02 GST Masters

02-1 Create SGST Ledger Account Master

[Select GoT>Create> Ledger. At Ledger Account creation , at Name , enter SGST; at Under , select Duties & Taxes ; at Tax Type , select SGST/UTGST ; At Inventory Values are affected , set No .  

Capture Screenshot 1-2 : SGST Ledger Account Creation.  

https://dvidya.com/gst-set-up-accounts-inventory-masters-tally/ https://youtu.be/x8VZLjVEeug https://youtu.be/XVZbi0-ufDY https://youtu.be/Uzsise4yZXg

02-2 Create CGST Ledger Account Master

[Select GoT>Create> Ledger. At Ledger Account creation , at Name , enter CGST; at Under , select Duties & Taxes ; at Tax Type. At Inventory Values are affected , set No .   Capture Screenshot 2-2 : CGST Ledger Account Creation.  

02-3 Create IGST Ledger Account Master

[Select GoT>Create> Ledger. At Ledger Account creation , at Name , enter IGST; at Under , select Duties & Taxes ; at Tax Type select I GST ; At Inventory Values are affected , set No .  

Capture Screenshot 2-3 : CGST Ledger Account Creation.  

https://youtu.be/XVZbi0-ufDY

02-4 UQC set up in UoM Master

Set UQC in UoM – Kilograms [Select GoT>Alter> Unit. Select Kilogram. At Unit Alteration , at Unit Quantity Code (UQC) , select KGS-Kilograms from the UQC list. Press Ctrl+A to save].  

Capture Screenshot 2-4 : UoM-UQC set up.  

https://youtu.be/KAKto78n9fQ

02-5 GST details set up in Stock Item Master

Set GST details in Stock Item Wheat, Select GoT>Alter> Item. Select Wheat, At Stock Item Alteration,  Under HSN/SAC & Related Details, at  HSN/SAC  Details , select Specify Details Here. At HSN Description – Food grains, HSN Code- 1234, At Description of Goods, select Specify Details Here , Under GST Rate and related Details, At GST Rate details, select Specify Details Here . At Taxability Type, select Taxable . At GST Rate, enter the GST Rate applicable for the Item. At Type of Supply, select Goods .  

2-5 : Capture Screenshot UoM-UQC set up.  

https://youtu.be/U7fuonC9dkI https://youtu.be/LK-df_Oh6Vk

02-6 Set GST details in Supplier Master

At Supplier Ledger Account, enter Tax related details [Select GoT>Alter>Ledger,  select ABC & Co. At Ledger Alteration, click F12:Configure. At Ledger Master Configuration screen, under Party Tax Registration details , set Yes at Provide GST Registration details . At Tax Registration details of Ledger Account Master, Enter Registration Type- Regular, GSTIN 19AAAC1234K1ZV. At Set Alter Additional Details, set Yes and then Place of Supply, select the State of the Party.  

Capture Screenshot : 2-6A: Ledger Account Master, 2-6B: Ledger Master Configuration screen,

https://youtu.be/1_jlZD8mXkI https://youtu.be/B6jEPMw26Tg  

03 GST Invoicing

3-1 Create GST Sales Invoice .

Create Sales Invoice for 10 kg of Wheat @25 per kg sold to ABC & Co on 1-5-21. [Select GoT>Vouchers. Click F8:Sales (or press F8). Select Sales Voucher type from List. Click Ctrl+H and select Item Invoice . Enter Voucher Date 1-5-21 . At Party A/c Name , select ABC & Co . At Sales Ledger, select Sales .  At Name of Item , select Wheat , At Quantity , enter 10 kg. at Rate , enter 25/kg. The amount 250 would be shown. In next line, select End of List . Next select SGST, the SGST amount (15.00) would be auto calculated. Next select CGST. the CGST amount (15.00) would be auto calculated. The total Invoice amount (250.00+15.00+15.00 = 280.00) is displayed. Press Ctrl+A to save the Voucher].  

Capture Screenshot : 3-1 GST Sales Invoice Entry ,

https://youtu.be/L57aR4Zb7GM https://youtu.be/S0y56oS7r1U

3-2 Print the Sales Voucher

Voucher dated 1-5-23 on ABC Co [Select GoT>Day Book . At Day Book display, press F2 and Date 1-5-23. Select the Sales Voucher from the list to get the Voucher Alteration. Press Ctrl+P to get the Print screen. Click I:Preview to View the  Print form of the Invoice on screen]    

Capture Screenshot : 3-2 GST Sales Invoice in Print ,

https://youtu.be/L57aR4Zb7GM https://youtu.be/S0y56oS7r1U  

03-03 GST Reports

• Display GSTR-1 for 1-4-23 to 31-7-23

[Select GoT>Display more reports>GST Reports>GSTR-1. Click F2:Period (or press F2) and enter Period from 1-4-23 to 31-7-23 to display GSTR-1 Report  

Capture Screenshot : 3-3 GSTR-1 Display, https://dvidya.com/gsrt-1-return-filing-tally/

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All about GST on Education Services- CBEC Guide

“Education” is not defined in the CGST Act but as per Apex Court decision in “Loka Shikshana Trust v/s CIT”, education is process of training and developing knowledge, skill and character of students by normal schooling.

Taxing the Education Sector has always been a sensitive issue, as education is seen more as a social activity than a business one. The government has a constitutional obligation to provide free and compulsory elementary education to every child. Thus, to promote education, it would be beneficial if educational services are exempted from tax. However, commercialisation of education is also a reality. The distinction between core and ancillary education is blurring and education is now an organised industry with huge revenues. The GST Act tries to maintain a fine balance where by core educational services provided and received by educational institutions are exempt and other services are sought to be taxed at the standard rate of 18%.

Classification of Education Services:

Education Services are classified in heading 9992 (as per Notification No. 11/2017-Central Tax (Rate) ) and are further sub-divided into six groups (as per the Annexure to the same notification) comprising of Pre-primary, primary, secondary, higher, specialised and other educational & support services as below:

Rate of GST:

The rates of GST on education services (as per Notification No. 11/2017-Central Tax (Rate) , Notification No. 11/2017-Central Tax (Rate) and Notification No. 12/2017-Central Tax (Rate) all dated 28.06.2017 as amended) are as below:

Thus , services provided by an educational institution to students, faculty and staff are exempt. Educational Institution means an institution providing services by way of:

i. pre-school education and education up to higher secondary school or equivalent;

ii. education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;

iii. education as a part of an approved vocational education course.

Within the term “educational institution”, sub-clause (ii) covers institutions providing services by way of education as a part of curriculum for obtaining a qualification recognised by any law for the time being in force. This is an area where doubts have persisted as to what would be the meaning of “ education as part of curriculum for obtaining qualification recognised by law ”. GST on services being a legacy carried forward from the Service Tax regime, the explanation given in the Education guide of 2012 can be gainfully referred to understand the meaning of the term which reads as under;

What is the meaning of ‘education as a part of curriculum for obtaining a qualification recognized by law’?

It means that only such educational services are in the negative list as are related to delivery of education as ‘a part’ of the curriculum that has been prescribed for obtaining a qualification prescribed by law. It is important to understand that to be in the negative list the service should be delivered as part of curriculum. Conduct of degree courses by colleges, universities or institutions which lead grant of qualifications recognized by law would be covered. Training given by private coaching institutes would not be covered as such training does not lead to grant of a recognized qualification.

Are services provided by way of education as a part of a prescribed curriculum for obtaining a qualification recognized by a law of a foreign country covered in the negative list entry?

No. To be covered in the negative list a course should be recognized by an Indian law.

Within the term “educational institution”, sub-clause (iii) covers institutions providing services by way of education as a part of approved vocational course , and institutions providing the above courses will come within the ambit of the term educational institution. Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 , defines approved vocational education course as under:

An “approved vocational education course” means, –

(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or

(ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship.

It is to be noted that only those institutions whose operations conform to the specifics given in the definition of the term “Educational Institution”, would be treated as one and entitled to avail exemptions provided by the law. This would mean that private coaching centres or other unrecognized institutions, though self-styled as educational institutions, would not be treated as educational institutions under GST and thus cannot avail exemptions available to an educational institution.

Thus, educational institutions up to Higher Secondary School level do not suffer GST on output services and also on most of the important input services. Some of the input services like canteen, repairs and maintenance etc. provided by private players to educational institutions were subject to service tax in pre-GST era and the same tax treatment has been continued in GST regime.

Thusoutput services of lodging/boarding in hostels provided by such educational institutions which are providing pre-school education and education up to higher secondary school or equivalent or education leading to a qualification recognised by law, are fully exempt from GST. Annual subscription/fees charged as lodging/boarding charges by such educational institutions from its students for hostel accommodation shall therefore, not attract GST.

Similarly, output services related to the specified courses provided by IIM’s would be exempt. Executive Development Programs run by the IIM’s are specifically excluded, hence such courses would be subject to GST.

Regarding, input services, it may be noted that where output services are exempted, the Educational institutions may not be able to avail credit of tax paid on the input side. The four categories of services known as Auxiliary Education services, which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, have been exempted (as per Notification No. 12/2017- Central Tax (Rate) ). Auxiliary education services other than what is specified above would not be entitled to any exemption. The exemption also comes with a rider. Such services are exempt only for educational institutions providing services by way of education up to higher secondary or equivalent. (from pre-school to HSC). Thus if such auxiliary education services are provided to educational institutions providing degree or higher education, the same would not be exempt. For instance, the services of conducting admission tests for admission to colleges in case of educational institutions are providing qualification recognized by law for the time being in force shall not be liable to GST.

Who will pay GST?

Education Services are under forward charge. Therefore, GST shall be paid by the supplier of services.

What will be the Place of Supply of Educational Services where the location of supplier of services and the location of the recipient of services is in India?

As per section 12(6) of the IGST Act, 2017 , the place of supply of services provided by way of admission to an educational or any other place and services ancillary thereto, shall be the place where the event is actually heldor such other place is located.

As per section 12(7) of the IGST Act, 2017, the place of supply of services provided by way of, — (a) organisation of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of services in relation to a conference, fair, exhibition, celebration or similar events; or (b) services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events, –

i. to a registered person, shall be the location of such person;

ii. to a person other than a registered person, shall be the place where the event is actually held and if the event is held outside India, the place of supply shall be the location of the recipient.

What will be the Place of supply of Educational Services where the location of the supplier of services or the location of the recipient of services is outside India?

As per section 13(5) of the IGST Act, 2017, the place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held.

Educational Institution run by charitable organizations.

Charitable Trusts running institutions conforming to the definition of Educational Institution as specified in the notification would be entitled to the exemptions discussed above. Apart from the general exemption available to all educational institutions, charitable activities of entities registered under Section 12AA of the Income Tax Act is also exempt. The term charitable activities are also defined in the notification. Thus, if trusts are running schools, colleges or any other educational institutions or performing activities related to advancement of educational programmes specifically for abandoned, orphans, homeless children, physically or mentally abused persons, prisoners or persons over age of 65 years residing in a rural area, activities will be considered as charitable and income from such services will be wholly exempt from GST in terms of Notification No.12/2017- Central Tax (Rate) dated 28th June, 2017 .

Composite and Mixed Supply in so far as Education is concerned.

Boarding schools provide service of education coupled with other services like providing dwelling units for residence and food. This may be a case of bundled services if the charges for education and lodging and boarding are inseparable. Their taxability will be determined in terms of the principles laid down in section 2(30) read with section 8 of the CGST Act, 2017 . Such services in the case of boarding schools are naturally bundled and supplied in the ordinary course of business. Therefore, the bundle of services will be treated as consisting entirely of the principal supply, which means the service which forms the predominant element of such a bundle. In this case since the predominant nature is determined by the service of education,the other service of providing residential dwelling will not be considered for the purpose of determining the tax liability and in this case the entire consideration for the supply will be exempt.

Let’s take another example where a course in a college leads to dual qualification only one of which is recognized by law. Would service provided by the college by way of such education be covered by the exemption notification? Provision of dual qualifications is in the nature of two separate services as the curriculum and fees for each of such qualifications are prescribed separately. Service in respect of each qualification would, therefore, be assessed separately.

If an artificial bundle of service is created by clubbing two courses together, only one of which leads to a qualification recognized by law, then by application of the rule of determination of taxability of a supply which is not bundled in the ordinary course of business, it shall be treated as a mixed supply as per provisions contained in section 2(74) read with section 8 of the CGST Act, 2017. The taxability will be determined by the supply which attracts highest rate of GST.

However incidental auxiliary courses provided by way of hobby classes or extra-curricular activities in furtherance of overall well-being will be an example of naturally bundled course, and therefore treated as composite supply. One relevant consideration in such cases will be the amount of extra billing being done for the unrecognized component viz-a-viz the recognized course. If extra billing is being done, it may be a case of artificial bundling of two different supplies, not supplied together in the ordinary course of business, and therefore will be treated as a mixed supply, attracting the rate of the higher taxed component for the entire consideration.

The Education guide of 2012 for the purpose of service tax has given the following important clarifications in respect of educational services. The same can be gainfully referred to, for the purpose of clarity under the GST regime:

“ The supply of placement services provided to educational institutions for securing job placements for the students shall be liable to service tax. Similarly, educational institutes such as IITs, IIMs charge a fee from prospective employers like corporate houses/ MNCs, who come to the institutes for recruiting candidates through campus interviews in relation to campus recruitments. Such services shall also be liable to service tax.”

Conclusion.

Education is fundamental to the nation building process. Right to Education is now a fundamental right of every child in India. GST Law recognises this and provides exemption to educational institutions,providing education up to higher secondary school or equivalent,from the levy of GST. Auxiliary services received by such educational institutions for the purpose of education up to Higher Secondary level is also exempt from GST. Other services related to education, not covered by the exemption, would be taxed at a standard rate of 18% with full admissibility of ITC for such taxable services in cases where the output service is not exempt. In a nutshell, every attempt is made to ensure that the core educational services are fully exempt from GST.

Our Recommendation on GST

Prepared by: national academy of customs, indirect taxes & narcotics, (republished with amendment as on 01.01.2018 – source- cbec).

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Whether Play group run by Private Sector in which Toddler Children’s (Age between 18 months to 30 months) are coming is liable for GST? Said play group does not have any affiliated to run as a school for pre primary or primary or secondary or Higher Secondary etc. Whether supplying of services of only play group fall under the definition of preschool as defined under GST for Educational institution?

is the international institute of information technology is exempt from tax

How to file GST return Of public school

what about exemption to publishers who publish educational books including drawing books whether taxable? if mixed taxable and nil rated then how to take itc

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Purchase Invoice Bills Sundry Creditors Sales Invoice Bills Sundry Debtors Purchase Invoice Bills Batch Wise Details

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