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TNPSC Free Notes Economy In English – GST History

இந்தக் கட்டுரையில், TNPSC குரூப் 1, குரூப் 2, குரூப் 2A, குரூப் 4 மாநிலப் போட்டித் தேர்வுகளான TNUSRB, TRB, TET, TNEB போன்றவற்றுக்கான  முறைகள் இலவசக் குறிப்புகளைப் பெறுவீர்கள்.தேர்வுக்கு தயாராவோர் இங்குள்ள பாடக்குறிப்புகளை படித்து பயன்பெற வாழ்த்துகிறோம்.

GST History

Goods and Service Tax (GST)

Goods and Services Tax (GST) is the tax imposed on the supply (consumption) of goods and
It is a destination-based consumption tax and collected on those value-added items at each
stage of the supply chain.
GST Act was passed on April 12, 2017.
GST came into effect from 1 st July 2017.
It is the single biggest tax reform since Independence.
Several Countries like Russia, Canada, Australia, Singapore, China, etc. have already
introduced GST.
The right to levy tax is derived from the Constitution of India. To permit the Centre and the
States to levy taxes on the same goods and services needed unique amendment to the
Accordingly, 101 st Constitution Amendment Act 2016 was passed and the President’s
acceptance was received on September 8, 2016.
Under this Act, GST Council, a constitutional body was to be formed to implement GST.
A manufacturer in India, need not pay GST wherever he/she manufactures.
GST is applicable to all goods and services except alcohol and specified petroleum products.
GST Act has proposed four tax rates, i.e. 5%, 12%, 18% and 28%.
Traders having annual turnover, within a state, below Rs.20 lakhs are exempted from GST.
These small traders need not register under GST.
But the traders having inter-state business should register and pay GST even the turnover is
below Rs.20 lakhs.
Special provisions are there in the GST Act for the 8 North-eastern states and Himachal
Pradesh, Uttarakhand and Jammu and Kashmir.
Objectives of GST
The foremost objective of GST is to create a common market with uniform tax rate in India.
(One Nation, One Tax, One Market).
To eliminate the cascading effect of taxes, GST allows set-off of prior taxes for the same
transactions as input tax credit.
To boost Indian exports, the GST already collected on the inputs will be refunded and thus
there will be no tax on all exports.
To increase the tax base by bringing more taxpayers and increase tax revenue.
To simplify tax return procedures through common forms and avoidance of visiting tax
To provide online facilities for payment of taxes and submission of forms. Goods and
Services Network (GSTN), a robust Information Technology system has been created for
the operation of GST.

Benefits of GST
To the Society and Country
Unified common national market will attract more foreign investment. GST has
integrated the economy of all States and Union Territories.
It brings parity in taxation among imported goods and Indian manufactured goods.
It will boost manufacturing export.
Creation of more employment opportunities will result in poverty eradication.
It will bring more tax compliance (more taxpayers) and increase revenue to the
It is transparent and will improve India’s ranking in the ‘Ease of Doing Business’ in the
Uniform rates of tax will reduce tax evasion and rate arbitrage between States.
To Business Community
It was the Simpler Tax System with fewer exemptions. 17 taxes were abolished and one
tax exists today.
Input tax credit will reduce cascading effect of taxes. Reduction in average tax burden
will encourage manufacturers and help the “Make in India” campaign and make
India a manufacturing hub.
Common procedures, common classification of goods and services and timelines will
lend greater certainty to the taxation system.
Goods and Service tax Network (GSTN) facility will reduce multiple record keeping,
lesser investment in manpower and resources and improve efficiency.
All interactions will be through a common GSTN portal and will ensure corruption free
Uniform prices throughout the country. Expansion of business to all states is made easy.
To Consumers
Input tax credit allowed will lower the prices to the consumers.
All small retailers will get exemptions and purchases from them will cost less for the
Disadvantages of GST
Several Economists say that GST in India would impact negatively on the real estate market.
Another criticism is that Central goods and service tax (CGST), State goods and service tax
(SGST) are nothing but new names for Central Excise/Service Tax, Value Added Tax (VAT)
and Central Sales tax (CST).

A number of retail products currently have only four percent tax on them. After GST,
garments and clothes could become more expensive.
The aviation industry would be affected. Service taxes on airfares currently range from 6 to
9%. With GST, the tax rate is effectively double.
Adoption and migration to the new GST system would involve troubles.
GST Types and council

GST Types and council
The three types of GST — CGST, SGST/UGST, and IGST.
CGST (Central Goods and Services Tax) – It is imposed and collected by the Central
Government on all supply of goods within a state (intra-state) under CGST Act 2017.
SGST (State Goods and Services Tax) – It is imposed and collected by the State Governments
under State GST Act. Tamil Nadu GST Act 2017 passed by Tamil Nadu Govt.
UGST (Union Territory Goods and Services Tax) – It is imposed and collected by the five
Union Territory Administrations in India under UGST Act 2017.
IGST (Inter-State Goods and Services Tax) – It is imposed and collected by the Central
Government and the revenue shared with States under IGST Act 2017.
IGST on exports – All exports are treated as Inter-State supply under GST.
Since exports are zero-rated, GST is not imposed on all goods and services exported
from India.
Any input credit paid already on exports will be refunded.
Differences CGST SGST IGST
Meaning CGST means Central
Goods and Service
Tax to replace the
existing tax like
service tax, excise,
etc. and it is levied by
the central

SGST means State
goods and service tax,
replace the existing
tax like sales tax,
luxury tax, entry tax,
etc. and it is levied by
the state

IGST refers to the
Integrated Goods and
Services Tax and it is a
combined form of
CGST and IGST and it
is levied by the
central government.
Collection of tax Central government State government Central government
Applicability Intra-state supply Intra-state supply Inter-state supply
Registration No registration till the
turnover crosses 20
lakhs (10 lakhs for
northeastern states)

No registration till the
turnover crosses 20
Lakhs (10 lakhs for
northeastern states)

Registration is

Composition The dealer can use
the benefit up to 75
lakhs under the
composition scheme.

The dealer can use
the benefit up to 75
lakhs under the
composition scheme.

The composition
scheme is not
applicable in
interstate supply.


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