Long Questions (For 10 Marks)

Q. Explain the term GST and impact of GST on business of accounts

Q. Discuss the exemption on the sale and purchase of securities in GST
Q. Explain the term supply and state the transaction which are taxable
even when no consideration is paid.
Q. Explain the law relating to imposition of GST for Union Territories in
India
Q. Analyse the provisions relating to levy and collection of GST under the
Central GST AcI,2017.
Q. Explain the benefits of GST to trade, industry, e-commerce and service
sector.
Q. Define C.G.S.T and S.G.S.T. Explain levy and collection of G.S.T. on
supply.
Q. What is dual G.S.T. model? Explain the salient features of G.S.T
Q. Define the term UTGST? Explain the impact of GST on state revenue.
Q. Define the term securities, transactions tax? Explain in brief the
exemptions on sale and purchase of securities.
Q. Discuss the provisions relating to determination of nature of supply and
place of supply under the Integrated Goods and Services Tax Act, 2017.
Q. Point out the features of GST Compensation law to State Governments.

Short Questions (For 6 Marks)

Q. Write a note on Dual GST taxation.
Q. Write a note on exemption of tax under GST
Q. Write a note on refund of tax.
Q. Write a note on Registration under GST.
Q. Write a note on impact of GST on GDP of India.
Q. Write a note on compensation law to State Governments.
Q. Write a note on GST exemption on sale and purchase of securities
Q. Write a brief note on Securities Transaction Tax
Q. Write a note on Time of supply under GST
Q. Write a note on G.S.T.N. Portal
Q. Write a note on IGST
Q. Write a note on demand and recovery under GST
Q. Write a brief note on dual model of GST.
Q. Write a note on "Need to Provide Compensation to States".
Q. Write a short note on lnput Tax Credit Mechanism.

Basics of GST

Direct Taxes Indirect Taxes

1. Payer of the tax and sufferer of the 1. Payer of tax is not the sufferer of
tax are same. (i.e. impact and tax whereas sufferer of tax is not
incidence on the same person) paying it directly to the Government.
(i.e. impact on one person and
incidence on another)
2. Income based taxes. 2. Supply based taxes.
3. Rate of taxes are different from 3. Rate of duties does not differ from
person to person. person to person.
4. Entire revenue goes to central 4. Revenue source to Central
government of India. Government as well as State
Government. (i.e. CGST and SGST)
5. Previous year income assessed in 5. There is no previous year and
the assessment year. assessment year concept.
6. Central Board of Direct Taxes 6. Central Board of Indirect Taxes
(CBDT) is the highest executive and Customs (CBIC) is the highest
authority. executive authority (Central Board of
Excise and Custom is renamed as
Central Board of Indirect Taxes and
Customs)
Progressive in nature. Regressive in nature.
CONSTITUTION [101ST AMENDMENT] ACT, 2016
Constitution (122nd Amendment) Bill, 2014 received the assent of the President
of India on 8th September, 2016 and became Constitution (101st Amendment)
Act, 2016, which paved the way for introduction of GST in India.
Constitution (101st Amendment) Act, 2016 was enacted on 8th September,
2016, with following significant amendments:
(a) Concurrent powers on Parliament and State Legislatures to make laws
governing goods and services. It means there will be dual control of State and
Central authorities for all assessees.
(b) As per Article 246A, the power to levy GST has been given to the
Parliament as well as to Legislature of every State.
a. CGST – enacted by Central Government of India.
b. IGST – enacted by Central Government of India.
c. SGST – enacted by respective State Governments
d. UTGST – enacted by Central Government of India
(c) IGST will be apportioned between Centre and the States in the manner
provided by Parliament by Law as per the recommendation of the GST Council.
(d) GST will be levied on all supply of goods and services except alcoholic
liquor for human consumption.
(e) The explanation to Article 269A of Constitution of India provides that the
import of goods or services will be deemed as supply of goods or services or
both in the course of inter-State trade or commerce. In case of import of goods
IGST will be levied along with the Basic Customs duty. It means IGST is levied
in replacement of CVD + Spl. CVD. In case of import of services only IGST
will be levied.
(f) Principles for determining the place of supply and when a supply takes place
in the course of inter-state trade or commerce shall be decided by the
Parliament.
(g) The power to levy Central Excise duty on goods manufactured or produced
in India is available in respect of the following products:
a. Petroleum crude;
b. High speed diesel;
c. Motor spirit (commonly known as petrol);
d. Natural gas;
e. Aviation turbine fuel; and
f. Tobacco and tobacco products.
However, once GST is imposed there will be no duty on manufacture of these
goods.
(h) The power to impose tax on sale of the following products is still provided
to the State Governments:
a. Petroleum crude;
b. High speed diesel;
c. Motor spirit (commonly known as petrol);
d. Natural gas;
e. Aviation turbine fuel; and
f. Alcoholic liquor for human consumption
However, once GST Council has recommended the date from which GST is
imposed on these products (except alcoholic liquor for human consumption),
and no sales tax will be imposed on these products.
As per definition given in article 366(12A), GST covers all the goods except
alcoholic liquor for human consumption. It means no GST can be levied on
Alcoholic liquor for human consumption. Present system of State Excise duty
and sales tax on Alcoholic liquor for human consumption will continue.
As a result, the following bills became an Act on 12th April 2017:
● Central Goods and Services Tax Bill, 2017
● Integrated Goods and Services Tax Bill, 2017
● Union Territory Goods and Services Tax Bill, 2017
● Goods and Services Tax (Compensation to States) Bill, 2017
The Central Government notified 1st July, 2017 as the date from which the
much-awaited indirect tax reform in India, i.e. Goods and Services Tax (GST)
will be implemented. Accordingly, Goods and Services Tax (GST) has been
implemented in India w.e.f. 1st July, 2017.
WHAT IS GST
● Goods and services tax means a tax on supply of goods or services, or both,
except taxes on supply of alcoholic liquor for human consumption (Article 366
(12A) of Constitution of India).
● GST is a value added tax levy on sale or service or both.
● GST is a destination-based consumption tax.
● GST offers comprehensive and continuous chain of tax credit.
● GST where burden borne by final consumer.
● GST eliminate cascading effect of tax.
● GST brings uniform tax structure all over India.

ADVANTAGES OF GST
(a) One Nation One Tax.
(b) Removal of bundled indirect taxes such as VAT, CST, Service tax, CAD,
SAD, and Excise.
(c) Removal of cascading effect of taxes i.e. removes tax on tax.
(d) Increased ease of doing business;
(e) Lower cost of production, increases demand will lead to increase supply.
Hence, this will ultimately lead to rise in the production of goods. Resultantly
boost to make in India initiative.
(f) It will boost export and manufacturing activity, generate more employment
and thus increase GDP with gainful employment leading to substantive
economic growth;

DUAL GST MODEL

India adopted a dual GST where tax imposed concurrently by the Central and
States.
SGST  State GST
 Collected by the State Government
CGST  Central GST
 Collected by the Central Government
 IGST  Integrated GST
 Collected by the Central Government on inter-state
supply of goods and services

Central Goods and Services Tax Act, 2017 (CGST):

CGST levied and collected by Central Government. It is a revenue source to the
Central Government of India, on intra-state supplies of taxable goods or
services or both.
State Goods and Services Tax Act, 2017 (SGST):
SGST levied and collected by State Governments/Union Territories with State
Legislatures (namely Delhi and Pondicherry) on intra-state supplies of taxable
goods or services or both. It is a revenue source of the respective State
Government.
Union Territory Goods and Services Tax (UTGST):
UTGST levied and collected by Union Territories without State Legislatures, on
intra-state supplies of taxable goods or services or both.
Note: India is a Union of States. The territory of India comprises of the
territories of the States and the Union Territories. Currently, there are 29 States
and 7 Union Territories; of which, two (Delhi and Pondicherry) are having
Legislature.
GST – in Union Territories without Legislature:
Supplies within such Union territory, Central GST will apply to whole of India
and hence, it would be applicable to all Union Territories, with or without
Legislature.
To replicate the law similar to State GST to Union Territories without
Legislature, the Parliament has the powers under Article 246(4) to make such
laws. Alternatively, the President of India may use his general powers to
formulate such laws.
Hence, law same as similar to State GST can be formulated for Union Territory
without Legislature, by the Parliament.
The following are Union Territories without Legislature:
1. Chandigarh
2. Lakshadweep
3. Daman and Diu
4. Dadra and Nagar Haveli
5. Andaman and Nicobar Islands

Integrated Goods and Services Tax Act, 2017 (IGST):

IGST is a mechanism to monitor the inter-state trade of goods and services and
ensure that the SGST component accrues to the Consumer State. It would
maintain the integrity of ITC chain in inter-state supplies. The IGST rate would
broadly be equal to CGST rate plus SGST rate. IGST would be levied and
collected by the Central Government on all inter-State transactions of taxable
goods or services.
The revenue of inter-state sales will not accrue to the exporting state and the
exporting state will be required to transfer to the Centre the credit of
SGST/UTGST used in payment of IGST.

SUPPLY (Please refer Section 7 of CGST Act, 2017)

Taxable Event:
Taxable event under GST law is supply of goods or services or both. It means
no supply no GST. The term, “supply” has been inclusively defined in the Act.
The meaning and scope of supply under GST can be understood in terms of
following six parameters, which can be adopted to characterize a transaction as
supply:
1. Supply of goods or services. Supply of anything other than goods or services
does not attract GST. 2. Supply should be made for a consideration.
3. Supply should be made in the course or furtherance of business.
4. Supply should be made by a taxable person.
5. Supply should be a taxable supply.
6. Supply should be made within the taxable territory
Exceptions:
(1) Any transaction involving supply of goods or services without consideration
is not a supply, barring few exceptions, in which a transaction is deemed to be a
supply even without consideration.
(2) Further, import of services for a consideration, whether or not in the course
or furtherance of business is treated as supply.
Section 7(1)(a) of CGST Act, 2017:
all forms of supply of goods or services or both such as
(i) sale,
(ii) transfer,
(iii) barter,
(iv) exchange,
(v) licence,
(vi) rental,
(vii) lease or
(viii) disposal made or agreed to be made for a consideration by a person in the
course or furtherance of business;
Note:
The above activities are specified as an example as they are preceded by words
‘such as’.
● Sale: The term sale is defined under various states VAT laws. Sale means a
sale of goods made within the State for cash or deferred payment or other
valuable consideration but does not include a mortgage, hypothecation, charge
or pledge.
Sale involves transfer of property in goods from one person to another person
for consideration.
Under CGST Law sale is treated as supply leviable to GST. However, the
definition of Sale has not been provided under the GST Law.
Note: mortgage, hypothecation, charge or pledge is not supply and hence GST
will not be levied.
COMPOSITE AND MIXED SUPPLIES
Composite and Mixed Supplies (Section 8 of CGST Act, 2017):
Composite supply is when two or more goods are sold in a combination, it
becomes difficult to identify the rate of tax to be levied.
For such goods or services, CGST Act, 2017 has provided with two terms:
(i) Composite supply and
(ii) Mixed supply.
Composite supply is similar to the concept of “bundled service” as under
service tax laws in the existing regime. Both Composite supply and Mixed
supply consist of two or more taxable supplies of goods or services or both but
the main difference between the two is that Composite supply is naturally
bundled i.e., goods or services are usually provided together in normal course of
business and cannot be separated. Whereas in Mixed supply, the goods or
services can be sold separately.
(1) Composite Supply: Composite supply consists of two or more
goods/services, which is naturally supplied with each other in the ordinary
course of business and one of them is a principal supply. The items cannot be
supplied separately.
Note: Principal supply means the supply of goods or services, which constitute
the predominant element of a composite supply and to which another supply is
ancillary/secondary.
Following two conditions are necessary for composite supply:
(a) Supply of two or more goods or services together, AND
(b) It should be a natural bundle and they cannot be separated.
(2) Mixed supply: In Mixed supply two or more individual supplies
combination of goods or services with each other for a single price. Each of
these items can be supplied separately and is not dependent on each other. In
other words, the combination of goods or services are not bundled due to natural
necessities, and they can be supplied individually in the ordinary course of
business.
For tax liability purpose, mixed supply consisting of two or more supplies shall
be treated as a supply of that item which has the highest tax rate.
GOODS AND SERVICES TAX NETWORK (GSTN)
Goods and Services Tax Network (GSTN) is a [Section 8 of the Companies Act,
2013, (i.e. not for profit companies)], non-Government, private limited
company. Technology backbone for GST in India. GST being a destination-
based tax, the inter- state trade of goods and services (IGST) would need a
robust settlement mechanism amongst the States and the Centre. This is possible
only when there is a strong IT Infrastructure and Service back bone which
enables capture, processing and exchange of information amongst the
stakeholders (including tax payers, States and Central Governments,
Accounting Offices, Banks and RBI).
As a result, Goods and Services Tax Network (GSTN) has been set up.
Functions of the GSTN (i.e. Role assigned to GSTN):
Creation of common and shared IT infrastructure for functions facing taxpayers
has been assigned to GSTN and these are:
• filing of registration application,
• filing of return,
• creation of challan for tax payment,
• settlement of IGST payment (like a clearing house),
• generation of business intelligence and analytics etc.
All statutory functions to be performed by tax officials under GST like approval
of registration, assessment, audit, appeal, enforcement etc. will remain with the
respective tax departments.

GST COUNCIL
As per Article 279A of the Constitution of India, the President of India is
empowered to constitute Goods and Services Tax Council. The President of
India constituted the GST Council on 15th September, 2016.
The GST Council shall consist of Union Finance Minister as a Chairperson,
Union Minister of State in charge of Finance as a member, the State Finance
Minister or State Revenue Minister or any other Minister nominated by each
State as a member of the Council. The GST Council shall select one of them as
Vice Chairperson of Council.
Guiding principle of the GST Council:
The mechanism of GST Council would ensure harmonization on different
aspects of GST between the Centre and the States as well as among States. It
has been provided in the Constitution (101st Amendment) Act, 2016 that the
GST Council, in its discharge of various functions, shall be guided by the need
for a harmonized structure of GST and for the development of a harmonized
national market for goods and services.
Functions of the GST Council:
GST Council is to make recommendations to the Central Government and the
State Governments on
• tax rates,
• exemptions,
• threshold limits,
• dispute resolution,
• GST legislations including rules and notifications etc.

Input Tax Credit

ITC is core provision of GST Input Tax Credit (ITC) is the core concept of GST
as GST is destination-based tax.
ITC avoids cascading effect of taxes and ensures that tax is collected in the
State in which goods or services or both are consumed.
“Input tax credit” means credit of ‘input tax’- section 2(56) of CGST Act.
Burden of proof on taxable person availing input tax credit – Where any person
claims that he is eligible for input tax credit under this Act, the burden of
proving such claim shall lie on such person - section 155 of CGST Act.
Input Tax
Section 2(62) of CGST Act defines ‘input tax’ as follows—
“Input tax” in relation to a registered person, means the Central tax (CGST),
State tax (SGST), Integrated tax (IGST) or Union territory tax (UTGST)
charged on any supply of goods or services or both made to him and includes—
(a) the integrated goods and services tax charged on import of goods
(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9
[reverse charge of CGST]
(c) the tax payable under the provisions of sub-sections (3) and (4) of section 5
of the Integrated Goods and Services Tax Act [reverse charge of IGST]
(d) the tax payable under the provisions of sub-section (3) and sub-section (4) of
section 9 of the respective State Goods and Services Tax Act [reverse charge of
SGST] or
(e) the tax payable under the provisions of sub-section (3) and sub-section (4) of
section 7 of the Union Territory Goods and Services Tax Act [reverse charge of
UTGST],
but does not include the tax paid under the composition levy. Input Tax Credit
is eligible only when it is credited to electronic credit ledger of taxable person.
Manner of taking input tax credit
Every registered taxable person shall, subject to such conditions and restrictions
as may be prescribed and, in the manner, specified in section 49 of CGST Act,
be entitled to take credit of input tax charged on any supply of goods or services
or both to him which are used or intended to be used in the course or
furtherance of his business and the said amount shall be credited to the
electronic credit ledger of such person - section 16(1) of CGST Act.
Input Tax Credit only if invoice complete in all respects - Input tax credit
shall be availed by a registered person only if all the applicable particulars as
prescribed in Invoice Rules are contained in the said document, and the relevant
information, as contained in the said document, is furnished in form GSTR-2 by
such person - Rule 36(2) of CGST and SGST Rules, 2017.
Input tax credit cannot be taken after one year from date of invoice or
filing of annual return
No Input tax credit if GST was paid by supplier on advance paid to him
Securities Transaction Tax (STT)
What is STT?
The STT full form is the Securities Transaction Tax (STT), and it is a type of
financial transaction tax payable in India on every purchase or sale of securities
that are listed on the Indian stock exchanges. The two main stock exchanges are
the National Stock Exchange, or the NSE, and the BSE, or the Bombay Stock
Exchange. This would include shares, derivatives or equity-oriented mutual
funds investment units (excluding commodities and currency). The tax is not
applicable on off-market transactions or on commodity or currency transactions.
The rates of STT are prescribed by the Central / Union Government through its
Budget from time to time.
In tax parlance, this is categorized as a direct tax. Collection of this tax is a
statutory requirement which a broker needs to follow. This means that the
liability of applying the tax is on the broker, when the client undertakes
transactions in the stock market. The collected amount is then paid to the
government. The charges and rate of STT are reflected on the contract notes
which a broker provides to its clients for every execution of trades. The rate of
tax varies with different types of transactions and securities. They are worth
finding out about before you select a broker for any transactions in the markets.
Brokers may have some additional fees for transactions carried out, and these
must not be mistaken for the taxes that must be levied on any client.
The securities transaction tax (STT) was introduced in India a few years ago, to
stop tax avoidance of capital gains tax. In the year of 2013, the Government of
India was forced to curb the rate of taxation for the Securities Transaction Tax
due to a large amount of protests by investors and brokers. The trading
community, in general, wished this tax to be lowered as high taxes mean profits
are compromised for investors.

The SST Charge and Its Features

SST is a direct tax of the simplest form. It is not complex in its applicability or
levy. The features of this easy, but important tax are given below in brief:
 The charge of SST is levied on every sell transaction in the case of
futures and options contracts.
 All the sell transactions pertaining to any futures and options contracts
will have an SST tax levied upon them. For the purpose of calculation of
this tax, every future contract gets valued at the true traded price. In the
case of options contracts, the trade is valued at a premium.
 In terms of the amount of SST that is payable by a clearing member, the
total of all SST taxes of trading persons under them must be paid.
STT Applicability
Now that you know the answer to the question, “What is STT?”, you may
require some clarity on which securities the tax is applicable. As far as the
domestic stock exchanges of India go, STT is levied on any transactions that
apply. Based on the Securities Contract Act of 1956, the following security
transactions are covered:
 Bonds, shares, debentures, and any other marketable security traded at the
stock market.
 Any derivatives which are traded in the markets.
 Any units which are issued to customers by a scheme of collective
investment.
 Any interests or rights in securities.
 Mutual funds based on trading in equities.
 Any government securities that have the nature of equity.

CENTRAL GOODS AND SERVICE TAX (CGST), STATE GOODS AND

SERVICE TAX (SGST) AND INTEGRATED GOODS AND SERVICE
TAX (IGST)

A federal country such as India, where both the Centre and the States have been
assigned the powers to levy and collect taxes. Both centre and state government
have distinct responsibilities to perform, as per the Constitution, for which they
need to raise resources.

The GST to be levied by the Centre on intra state supply of goods and / or
services is Central GST (CGST) and that by the States is State GST (SGST). On
supply of goods and services outside the state, Integrated GST (IGST) will be
collected by Centre. IGST also applies on imports as well.

What determines which category of GST is applicable?

We need to understand whether the transaction is an intrastate or an interstate
supply of goods and services to determine which category of GST is applicable.

 Intrastate supply (SGST and CGST)

This arises when the place of supply (buyer), as well as the location of the
supplier (seller), happen to be in the same state. In this case, a seller must
collect both State Goods and Services Tax (SGST) and Central Goods and
Services Tax (CGST) from the buyer —here, the SGST gets deposited with the
state government, and CGST gets deposited with the central government.

 Interstate supply (IGST)

This arises when the place of the supply (buyer), as well as the location of the
supplier (seller), are in different states. Another scenario that counts as interstate
supply is in cases of the import or export of goods and services, or when the
goods and services are supplied to—or by—the SEZ unit. If the transaction is
inter-state, then the seller collects Integrated Goods and Services Tax (IGST)
from the buyer.

Now that we know where each category of GST is applicable, let’s explain
them.

What is the Integrated Goods and Services Tax (IGST)?

IGST is the category of GST that involves taxes levied on all interstate supplies
of goods and services. The tax is shared between the central and state
governments, and the exports are zero-rated.

The GST act governs Integrated Goods and Services Tax levies.

Under the GST regime, an Integrated GST (IGST) is levied and collected by the
Centre on Inter-State supply of goods and services. Under Article 269A of the
Constitution, the GST on supplies in the course of interstate trade or commerce
shall be levied and collected by the Indian Government, and such tax shall be
apportioned between the union and the states in the manner as may be provided
by Parliament by law on the recommendations of the Goods and Services Tax
Council.

What is the State Goods and Services Tax (SGST)?

SGST is the other category of GST that is levied on intrastate supplies of goods
and services by the state government. The SGST Act of each country governs
levies of this tax.
For the State Goods and Services Tax to be introduced, some taxes must be
subsumed into it. Some of them include VAT, state sales tax, entertained tax
(only when the local bodies do not levy it), luxury tax, entry tax (not in lieu of
Octroi), taxes on lottery, gambling, and betting, and state cesses and surcharges
(if they relate to supply of goods and services).

Under SGST, if there is any tax liability, it can only be set off against SGST or
IGST input tax credits.

What is the Central Goods and Services Tax (CGST)?

CGST is the final category of GST. It’s a tax levied on intrastate supplies of
goods and services by the central government, and it is governed by the CGST
Act. Since SGST falls under intrastate supply, it is levied in the same way, but it
is now regulated by the state government.

For the Central Goods and Services Tax to be introduced, some taxes must be
subsumed. They include central sales tax (CST), additional customs duty—
countervailing duty (CAD), central excise duty, service tax, special additional
duty of customs (SAD), and surcharges and cesses.

So, what does this mean? It means that both the central and state governments
will come to an agreement that sees them combine their levies in an appropriate
proportion aimed at revenue sharing between them.

Section 8 of the GST Act mentions that taxes are levied on all intrastate supplies
of goods and/or services. However, the rate should not surpass 14% each.

Why does the split of GST to IGST, SGST and CGST arise?

The split of GST to IGST, SGST and CGST arise when both the central and
state governments have the power to levy and collect taxes. It happens mostly
when a country has a federal structure, and so both central and state
governments have responsibilities to perform and need to raise taxes to carry
out these duties. To ensure the one nation, one tax policy, the central and state
governments must levy GST.

**Further reading is suggested.

GOODS AND SERVICES TAX (COMPENSATION TO STATES) ACT,
2017

The Goods and Services Tax (Compensation to States) Act, 2017 provides for a
mechanism to compensate the States on account of loss of revenue which may
arise due to implementation of the Goods and Services Tax read together with
the Constitutional (one Hundred and First Amendment) Act, 2016, for a period
of 5 years.

This Act, inter-alia provides:

(a) That the base year during the transition period shall be reckoned as the
financial year 2015-16 for the purpose of calculating compensation amount
payable to the States;

(b) That the revenue proposed to be compensated would consist of revenues

from all taxes that stands subsumed into the GST law, as audited by the CAG;

(c) For reckoning the growth rate of revenue subsumed for a State at 14% per
annum;

(d) That the compensation will be released bi-monthly based on the provisional
numbers furnished by the Central Accounting Authorities and the final
adjustment to be done after the accounts are subjected to audit by CAG;

(e) That the revenue foregone on account of grant of exemption in the 11 special
categories State (Article 279A), be counted for the purpose of determining
revenue for the base year 2015-16;

(f) That the revenue of States directly devolved to Mandi / Municipalities would
be considered as revenue subsumed;

(g) Levy of a cess over and above the GST on certain notified goods to
compensate States for 5 years on account of revenue loss suffered by them;

(h) That the proceeds of the cess will be utilised to compensate States that
warrant payment of compensation;

(i) That 50% of the amount remaining unutilised in the fund at the end of the
fifth year will be transferred to the Centre and the balance 50% would be
distributed amongst the State and Union Territories in the ratio of total revenues
from SGST / UTGST of the fifth year;

Salient features of the GST Compensation Act:

I. Levy of cess:

 GST Compensation Cess (under Section 8 of the Act) will be levied on all
intra-State and inter-State supplies of goods or services or both, including
import of goods.

II. Determination of Base Year Revenue:

 The Compensation amount to be paid in any year during the transition period
is to be computed taking the base year as 2015-16 only.

 The provisions of Section 5(1) of the said Act lists the taxes imposed by
State / Union that stand subsumed into the GST while the proviso to Section
5(1) lists out the taxes that shall not be included for calculation of base year
revenue. The revenue collected by the States on account of the said taxed
detailed in Section 5(1) of the Act alone would be considered for the
determination of Base Year Revenue;

 The revenue collected would always be reckoned as ‘net of refunds’;

 The transition period will be the period of 5 years from the date when the
respective SGST Acts commence.

III. Input Tax Credit and returns:

 Input Tax Credit on inward supplies liable to cess can be utilized only for
payment of cess on outward supplies liable to cess under the Act.

 A taxable person effecting supplies chargeable to cess is required to file

returns along with the returns prescribed under the CGST Act.

IV. General:

 All provisions of CGST Act and IGST Act including input tax credit,
assessment, offences, penalties, interest, non-levy and short-levy will apply in
relation to the levy and collection of cess on intra-State and inter-State supply,
respectively.