Unit 1: Central Goods and Service Tax (CGST) & State Goods and Service Tax (SGST)

1. Introduction to GST

Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is divided into:

• CGST (Central Goods and Services Tax): Levied by the Central Government on intra-state supplies.
• SGST (State Goods and Services Tax): Levied by State Governments on intra-state supplies.
• IGST (Integrated Goods and Services Tax): Applied on inter-state supplies and imports.

2. Important Definitions under GST Act, 2017

Some key terms and their definitions as per the GST Act:

• Goods: Every kind of movable property excluding money and securities but includes actionable claims.
• Services: Anything other than goods, including transactions related to money.
• Taxable Person: Any individual registered under GST liable to pay tax.
• Aggregate Turnover: Total value of all taxable supplies, exempt supplies, exports, and inter-state supplies.

3. Meaning and Scope of Supply

Supply includes:

• Sale, transfer, barter, exchange, license, rental, lease, or disposal.
• Supply for consideration in the course of business.
• Import of services, whether or not in the course of business.

4. Levy and Collection of GST

GST is levied on the supply of goods and services except on exempted items. The tax rates range from 0% to 28% based on the classification.

GST Tax Rates

Category	GST Rate
Essential Goods	5%
General Goods and Services	12% - 18%
Luxury Goods	28%

5. Input Tax Credit (ITC)

Businesses can claim credit for taxes paid on inputs, thereby reducing tax liability.

Eligibility for ITC:

• Must be a registered taxable person.
• Goods and services must be used for business purposes.
• Tax invoice must be available.

6. GST Exemptions

Certain goods and services are exempt from GST to benefit essential sectors.

Exempted Categories:

• Unprocessed food grains and vegetables.
• Healthcare services.
• Educational services.
• Public transportation services.

7. GST Compliance and Returns

Registered businesses must file GST returns:

• GSTR-1: Monthly return for outward supplies.
• GSTR-3B: Summary return for tax payment.
• GSTR-9: Annual return.

8. Conclusion

GST simplifies taxation, reduces cascading tax effects, and promotes business growth.

Unit 2: CGST/SGST - Detailed Explanation

1. Time and Value of Supply of Goods and Services

The time of supply determines when GST is applicable, and the value of supply determines the taxable amount.

Time of Supply

• For Goods: The earliest of invoice date, payment receipt date, or goods delivery.
• For Services: The earliest of invoice date or payment receipt date.

Value of Supply

The transaction value is considered as the taxable value, including additional charges like packaging, commission, and taxes.

2. Input Tax Credit (ITC)

ITC allows businesses to reduce their GST liability by claiming credit for the tax paid on purchases.

• ITC can be claimed only for business purposes.
• Goods and services must be received to avail ITC.
• Proper documentation like tax invoices is required.

3. Transitional Provisions

These provisions help businesses transition from the previous tax regime to GST.

• Carry forward of input tax credit from the old tax system.
• Credits on stocks held on transition date.
• Submission of relevant forms within the deadline.

4. Registration under CGST/SGST Act

Businesses with a turnover exceeding ₹20 lakh (₹10 lakh for special category states) must register for GST.

Steps for Registration:

1. Visit the GST portal and fill Form GST REG-01.
2. Submit necessary documents.
3. Receive GSTIN after verification.

5. Filing of Returns and Assessment

Regular GST returns must be filed by taxpayers.

Return Type	Filing Frequency	Applicable To
GSTR-1	Monthly/Quarterly	Businesses with sales
GSTR-3B	Monthly	All registered taxpayers

6. Payment of Tax including Reverse Charge Mechanism

Tax must be paid before filing returns.

Reverse Charge Mechanism (RCM)

In certain cases, the recipient pays GST instead of the supplier.

• Applicable on specified goods and services.
• Common in import transactions.

7. Refund under GST

Refunds are provided in cases of excess tax payment, export of goods/services, or ITC claims.

Steps to Claim Refund

1. File Form GST RFD-01 online.
2. Provide necessary supporting documents.
3. Approval and refund disbursement.

Conclusion

This unit provides an in-depth understanding of crucial aspects like ITC, GST registration, time and value of supply, and tax payment under CGST/SGST.

Unit 3: CGST/SGST - Accounts, Composition, Exemptions & Recovery

1. Maintenance of Accounts and Records

Under the CGST/SGST Act, every registered person must maintain proper records of all transactions, including:

• Sales and Purchases
• Stock Register
• Tax Liability Register
• Input Tax Credit (ITC) Records

These records should be maintained for at least **six years** from the last filing date.

2. Composition Scheme

The **Composition Scheme** is an optional scheme for small taxpayers to pay GST at a fixed rate without input tax credit benefits.

Eligibility Criteria:

• Turnover limit: **Up to ₹1.5 crore**
• Cannot supply goods through e-commerce operators
• Service providers cannot opt (except for limited categories)

Tax Rates under Composition Scheme:

Business Type	GST Rate
Manufacturers & Traders	1%
Restaurants (not serving alcohol)	5%

3. Job Work and Its Procedure

**Job work** refers to processing goods owned by another registered entity. The principal can send goods to a job worker without payment of tax under **ITC-04 form**.

Conditions:

• Goods must be returned within **one year** (inputs) or **three years** (capital goods).
• Principal can avail Input Tax Credit (ITC).

4. Various Exemptions under GST

Some goods and services are exempt from GST to promote economic activities and reduce tax burden.

Examples of GST Exemptions:

• Agricultural Produce
• Educational and Healthcare Services
• Unprocessed Food Items
• Public Transport (Non-AC)

5. Demand and Recovery under GST

When GST is not paid or short-paid, the tax authorities initiate demand and recovery proceedings.

Process:

1. Show Cause Notice (SCN) is issued.
2. Taxpayer gets an opportunity to respond.
3. If unpaid, demand order is issued.
4. Recovery proceedings start (seizure, bank attachment, etc.).

6. Miscellaneous Provisions under GST

Some important provisions under GST include:

• Anti-Profiteering Measures: Ensuring businesses pass GST benefits to consumers.
• Audit: GST authorities can conduct audits based on turnover.
• Penalties: Late filing attracts **₹50 per day penalty**.

Conclusion

GST compliance requires businesses to maintain proper accounts, follow prescribed procedures for job work and composition schemes, and adhere to exemption rules. Demand and recovery provisions ensure proper tax collection.

Unit 4: Integrated Goods and Services Tax (IGST)

1. Scope of IGST

IGST (Integrated Goods and Services Tax) is applicable to inter-state transactions of goods and services, ensuring a seamless flow of tax credits across states.

• IGST is levied under the **Integrated Goods and Services Tax Act, 2017**.
• Applies to transactions between **different states** and **union territories**.
• Ensures a **unified tax system** and avoids double taxation.

2. Important Terms & Definitions

Key terms under the **IGST Act, 2017**:

• Inter-state Supply: Supply between different states or union territories.
• Intra-state Supply: Supply within the same state (taxable under CGST & SGST).
• Zero-rated Supply: Export of goods and services with a **0% tax rate**.
• Place of Supply: Location where goods/services are consumed.

3. Levy and Collection of IGST

IGST is levied under **Section 5 of the IGST Act** and collected on:

• Import transactions: IGST applies to all imports.
• Inter-state transactions: Movement of goods/services across states.
• E-commerce Transactions: IGST is applicable when online sellers sell across states.

"The tax liability is determined based on the place of supply, ensuring correct tax distribution."

4. Principles for Determining the Place of Supply

The **place of supply** determines the applicability of IGST. It depends on whether the supply involves goods or services.

For Goods:

• When goods are moved, the **place of supply** is the location where delivery is received.
• If goods are supplied without movement, the place of supply is where the goods are located at the time of sale.

For Services:

• For **B2B services**, the place of supply is the location of the recipient.
• For **B2C services**, the place of supply is usually the location of the supplier.
• For **performance-based services**, the location where services are performed is considered.

5. Zero-Rated Supply

Zero-rated supply refers to exports of goods/services where **no GST is charged**. This ensures that Indian businesses remain competitive in the global market.

Key Features:

• Applies to **exports** and supplies to **SEZ (Special Economic Zones)**.
• Businesses can **claim a refund** on input tax credit (ITC) for zero-rated supplies.
• No tax is payable on outward supply.

Supply Type	Tax Rate	Refund Eligibility
Domestic Sales	5% - 28%	No
Export (Zero-Rated)	0%	Yes

6. Conclusion

IGST plays a crucial role in ensuring **seamless taxation** for inter-state transactions, exports, and e-commerce. It eliminates tax cascading and helps businesses remain competitive in the global market.

Unit 5: Customs

1. Role of Customs in International Trade

Customs play a crucial role in international trade by regulating the import and export of goods. The primary objectives of customs are:

• Preventing illegal trade and smuggling
• Collection of duties and taxes
• Ensuring compliance with national and international trade laws
• Protecting domestic industries from unfair competition

2. Important Terms & Definitions under the Customs Act, 1962

• Assessable Value: The value of imported goods on which customs duty is calculated.
• Baggage: Personal belongings of a traveler which may be duty-free or subject to duty.
• Bill of Entry: A legal document filed by importers declaring details of imported goods.
• Dutiable Goods: Goods on which customs duty must be paid.
• Importer: A person or entity bringing goods into the country.

3. Types of Duties

Customs duties are categorized into different types:

• Basic Customs Duty (BCD): Charged on imported goods based on assessable value.
• Countervailing Duty (CVD): Imposed to counter subsidies given to exporters in foreign countries.
• Anti-Dumping Duty: Levied to prevent the dumping of goods at lower than market prices.

4. Prohibition of Import & Export of Goods

The government regulates the import and export of certain goods to safeguard national security, public health, and domestic industries. Prohibited goods include:

• Narcotics and hazardous chemicals
• Counterfeit and pirated goods
• Endangered animal products

5. Import of Goods: Free & Restricted Import

Imports are classified into:

• Free Imports: Goods that can be imported without restrictions.
• Restricted Imports: Goods that require prior government approval.

6. Import Procedures

Importers must follow a structured process:

• Obtain an Importer Exporter Code (IEC)
• File a Bill of Entry
• Pay customs duties
• Get goods cleared by customs authorities

7. Export Procedures

Exporters must:

• Obtain an IEC
• File a Shipping Bill
• Pay applicable export duties
• Get clearance from customs

8. Bill of Lading & Letter of Credit

A Bill of Lading is a legal document between a shipper and carrier detailing the shipment, while a Letter of Credit ensures payment to the exporter upon fulfilling conditions.

9. Import of Personal Baggage & Stores

Personal baggage includes a traveler's personal belongings, while stores refer to goods used for ships or aircraft operations.