INDIRECT TAXATION (GST)
Comprehensive Exam Preparation Study Guide & Important Questions
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1. Introduction to Taxation & GST Overview
• Direct vs. Indirect Tax: Core conceptual differences, constitutional framework, merits, and demerits.
• Pre-GST Regime: Difficulties, operational deficiencies, and systemic limitations of the old indirect tax
structure (e.g., cascading tax effect, lack of cross-verification, fragmentation of markets).
• GST Council [Most Important]: Constitutional status (Article 279A), organizational structure, voting
power patterns, major roles, and recommendatory mandates.
• GSTN (Goods and Services Tax Network): IT shared infrastructure backbone, core responsibilities,
user portal functions, and data-driven fraud management roles.
• Benefits & Limitations of GST: Macroeconomic impact on production/logistics, corporate ease of
doing business, compliance overhead costs, and administrative challenges.
2. Core Concepts & Threshold Limits
• Aggregate Turnover Limit (Computation): How to calculate aggregate turnover dynamically (कैसे
निकाले क्या लेिा क्या िह ीं):
• Inclusions: All taxable supplies, exempt supplies, exports of goods/services, and inter-state
supplies of persons having the same PAN across India.
• Exclusions: Central Tax (CGST), State Tax (SGST), UT Tax (UTGST), Integrated Tax (IGST),
Compensation Cess, and value of inward supplies taxable under RCM.
• Composition Scheme Thresholds: Eligible limit is ₹1.5 Crore for standard states, and ₹75 Lakhs for
designated Special Category States.
• RCM (Reverse Charge Mechanism): Statutory scenarios under Section 9(3) and 9(4) outlining who is
legally liable to pay tax to the government (Recipient of supply vs. Supplier).
• Value of Supply (VOS) — Section 15: Mechanics of adjusting transaction values:
• Additions (5 Items): Any taxes/fees levied outside GST, supplier liability met by recipient,
incidental expenses charged by supplier, interest/penalty for delayed payment, and direct
subsidies linked to price.
• Deductions (1 Item): Discounts given before or at the time of supply (if recorded in invoice),
or post-supply discounts established in a prior agreement linked to specific invoices.
3. GST Returns & Statutory Compliance Rules
Form Type Compliance Purpose / Coverage Legal Provision
GSTR-1 Details of outward supplies of taxable goods Section 37 / Rule 59
and/or services.
GSTR-3B Monthly self-declared summary return with Rule 59(4)(a)
automated tax payment tally.
GSTR-4 Annual simplified return for composition Section 39(2)
taxpayers.
GSTR-9 Comprehensive Annual Return summarizing all Section 44
transactions.
GSTR-10 Final Return filed upon cancellation or surrender Section 45
of registration.
4. Input Tax Credit (ITC) Framework
• Section 16 (Eligibility & Conditions): Mandatory requirements including possession of a tax invoice,
actual receipt of goods/services, filing of returns, and payment of underlying tax to the government
by the supplier.
• Section 17(5) (Blocked Credits): Ineligible expenses where credit is expressly prohibited (e.g., motor
vehicles with exceptions, food and beverages, catering, club memberships, personal consumption
items).
• Rule 42 & 42A (Proportionate Reversal): Pro-rata calculation models for reversing credit when
inputs/input services are used partly for business and partly for non-business or exempt supplies.
5. Registration under GST law
• Section 22 (Persons Liable): Threshold-based mandatory registration based on pan-India aggregate
turnover.
• Section 23 (Persons Exempt): Categories explicitly excluded from registration requirements (e.g.,
exclusively agriculturalists, fully exempt supply providers).
• Section 24 (Compulsory Registration): Mandatory cases irrespective of threshold limits (e.g., Inter-
state taxable suppliers, casual taxable persons, e-commerce operators, RCM taxpayers).
• Section 29 (Cancellation & Suspension): Administrative statutory mechanics to cancel or legally
suspend active GST registrations.
CRITICAL REGISTRATION THRESHOLDS:
• ₹40 Lakhs: Standard baseline for exclusive suppliers of goods.
• ₹20 Lakhs: Standard baseline for service providers and mixed suppliers, or suppliers in specific hill
states.
• ₹10 Lakhs: Special Category States threshold limit (e.g., Manipur, Mizoram, Nagaland, Tripura).
Made by Vicky Mishra
Instagram: @mishrr_ji