GST Rules

The 101st Constitution Amendment Act of 2016 was principally responsible for the establishment of GST. GST is supplemented by CGST, SGST, and IGST.

GST would replace numerous existing taxes across the country, establishing an unified taxation structure that will allow enterprises to conduct business across the country while paying uniform taxes.

There shall be 3 types of taxes under the GST; CGST, SGST and the IGST

CGST – Central GST is levied by the Central Government

SGST – State GST is levied by the State Government

IGST – Integrated GST is levied for the Inter-state supply of goods and services.table-responsive.text-left

CGST Act of 2017

On April 12, 2017, the President signed this Act into law. It authorizes the Central Government to impose and collect taxes on the intra-State provision of products or services, or both, as well as on things related to or incidental to such provision.

• It applies to the whole country of India, with the exception of the state of Jammu & Kashmir.
• CGST must be levied on all forms of supply, namely, all forms of supply of commodities or services or both, such as sale, transfer, barter, exchange, license, rental, lease, or disposal agreed to by two parties; and import of services agreed to by two parties.
• A maximum tax levy of 20% is levied dependent on the item delivered.

Composition levy

1. Notwithstanding anything to the contrary contained in this Act but subject to the provisions of subsections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but not exceeding, -

(a) one per cent. of the turnover in State or turnover in Union territory in case of a manufacturer,

(b) two and a half per cent. of the turnover in State or turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and

(c) half per cent. of the turnover in State or turnover in Union territory in case of other suppliers,

subject to such conditions and restrictions as may be prescribed:

Provided that the Government may, by notification, increase the said limit of fifty lakh rupees to a higher amount, not exceeding one crore rupees, as may be recommended by the Council.

2. The registered person shall be eligible to opt under sub-section (1), if,

(a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II;

(b) he is not engaged in making any supply of goods which are not eligible to be taxed under this Act;

(c) he is not engaged in making any inter-State outward supplies of goods;

(d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52, and

(e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council:

3. The option availed of by a registered person under sub-section (1) shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1).

4. A taxable person to whom the provisions of sub-section (1) apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.

5. If the proper officer has reasons to believe that a taxable person has paid tax under sub-section (1) despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax and penalty.

The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section.

SGST Act of 2017

The GST Act empowers states to enact their own GST legislation. An Act to provide for the imposition and collection of tax on intra-state supplies of commodities or services, or both.

SGSTs are often divided into chapters that contain various tax-sharing measures.

The following sections are addressed by the SGST Act:

Chapter I - Preliminary

Chapter II - Administration

Chapter III - Levy And Collection Of Tax

Chapter IV - Time And Value Of Supply

Chapter VI - Registration

Chapter VII - Tax Invoice, Credit And Debit Notes

Chapter VIII - Accounts And Records

Chapter IX - Returns

Chapter X - Payment Of Tax

Chapter XI - Refunds

Chapter XII - Assessment

Chapter XIII - Audit

Chapter XIV - Inspection, Search, Seizure And Arrest

Chapter XV - Demands And Recovery

Chapter XVI - Liability To Pay In Certain Cases

Chapter XVII - Advance Ruling

Chapter XVIII - Appeals And Revision

Chapter XIX - Offenses And Penalties

Chapter XX - Transitional Provisions

Chapter XXI – Miscellaneous

IGST

The IGST Act will govern the IGST, which is a tax levied on all supplies of goods and/or services between states under GST. IGST shall pertain to any supply of goods and/or services in both circumstances of import into India and export from India.

Exports would have been zero-rated under IGST. The federal and state governments would levy the tax.

In addition to the Goods and Services Tax Act 2017, as indicated above, it is critical to comprehend the following Acts outlined in the GST Act. Four of these 18 Acts are expressly relevant to GST, while the remaining 14 are not; however, a number of the terminologies used in those Acts have been included into the GST Act.

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