A Case Study on Regular GST

SYNOPSIS
INDEX [Link]
CHAPTER 1: 2-5
Introduction
CHAPTER 2: 6-14
Industry Profile and Company Profile
CHAPTER 3: 15-28
Structure and components of GST
CHAPTER 4: 29-41
GST Audit and Assessment
CHAPTER 5: 42-54
GST Future Scope and Recommendations

CHAPTER 6: 55-62
Case Study and SWOT Analysis

CHAPTER 7: 63-65
Major Findings and Suggestions

Annexure 66-70
Questionnaire
Bibliography

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CHAPTER 1
INTRODUCTION

● Significance of the study

● Objectives
● Methodology
● Limitations
● Expected outcomes

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Introduction
The Goods and Services Tax (GST) is a comprehensive, indirect tax reform
introduced in India to streamline the taxation system. Implemented on July 1,
2017, GST has significantly impacted businesses, economy, and tax structure.
This project, "A Case Study on Regular GST with Special Reference to Ajith
Kumar Associates," aims to analyse the impact of GST on businesses, and other
sectors along with the registration, return filing and audit assessment etc. The
study will examine the challenges, opportunities, and benefits of GST
implementation for the organization.
Through this study, the project seeks to provide insights into GST compliance, tax
planning, and its effects on business operations. The findings of this study can
contribute to a better understanding of GST's implications for businesses and
inform strategies for optimization and compliance.
Significance of the Study
● Understanding GST Implementation: This study helps understand the
implementation of GST in India.
● Analysing GST Impact: It analyses the impact of GST on businesses,
economy, and tax structure.
● Business Decision-Making: The study provides insights for businesses to
adapt to GST regulations.
● Tax Planning: It helps businesses and individuals understand GST
compliance and planning.
● Policy Evaluation: The study evaluates the effectiveness of GST policies.
● Economic Growth: Understanding GST's impact can contribute to
economic growth.
● Tax Reforms: The study's findings can inform future tax reforms.
Business Strategy: Businesses can develop strategies to optimize GST
[Link] exploring the significance of our study, we can highlight its relevance
and potential impact on businesses, policymakers, and the economy.
Objectives:
 To understand GST: Analyze the concept, structure, and implementation
of Goods and Services Tax (GST) in India.

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● To examine GST impact: Evaluate the impact of GST on businesses,
economy, and tax structure.
● To analyze GST compliance: Examine the challenges and opportunities
in GST compliance for businesses.
● To evaluate GST benefits: Assess the benefits of GST for businesses,
consumers, and the economy.
● To identify areas for improvement: Identify areas where GST policies or
implementation can be improved.
● Case study analysis: Analyze the impact of GST on a specific business or
industry.
● Comparative analysis: Compare pre-GST and post-GST scenarios for
businesses or industries.
By achieving these objectives, our project report can provide valuable insights
into the implementation and impact of GST in India.
Methodology of the Study
1. Research Design:
● Descriptive Research: The study aims to describe the implementation and
impact of GST.
● Case Study: An imaginary business or industry is analyzed.
2. Data Collection: Collected from the firm and existing sources like books,
articles, websites and government reports.
3. Data Analysis: Analyzing numerical data, such as tax rates and revenue.
Limitations:
Data-Related Limitations:
● Limited access to data: Difficulty in obtaining accurate or comprehensive
data.
● Data reliability: Dependence on secondary data sources, which may have
limitations.
Scope-Related Limitations:
● Specific focus: The study focuses on regular GST, which might not cover
all aspects of GST.
External Limitations:
● Time constraints: Limited time frame for data collection and analysis.

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● Resource constraints: Limited resources, which might impact the scope
or depth of the study.
Other Limitations:
● Complexity of GST: GST is a complex topic, and the study might not
cover all nuances.
● Rapid changes in GST policies: GST policies and regulations might
change, impacting the study's relevance.
Expected Outcomes:
● Insights into GST Implementation: Understanding GST's impact on
businesses and economy.
● Recommendations: Providing suggestions for improvement in GST
policies or implementation.
By acknowledging these limitations, we can provide a more nuanced and realistic
interpretation of our study's findings.

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CHAPTER 2
INDUSTRY PROFILE AND
COMPANY PROFILE
● Background and about the GST
Council.
● Background of the company
Nature of business carried
Mission
Vision
Values, Goals and Objectives
Ownership patterns
Services

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GST COUNCIL PROFILE

GST COUNCIL

The GST Council

In order to implement GST, Constitutional (122nd Amendment) Bill (CAB in
short) was introduced in the Parliament which was passed by Rajya Sabha on 3rd
August, 2016 and Lok Sabha on 8th August, 2016 respectively. The CAB was
passed by more than 15 States which received Hon’ble President’s assent on 8th
of September, 2016.
On 16th September,2016, Government of India issued notifications bringing into
effect all the sections of CAB setting firmly into motion the rolling out of GST.
This notification set out an outer limit of time of one year, that is till 15th
September-9-2017 for bringing into effect GST.
As per Article 279A(1) of the Constitution, the GST Council had to be constituted
by the President within 60 days of the commencement of the Constitution (One
Hundred and First) Amendment Act, 2016. The notification for bringing into force
Article 279A with effect from 12th September, 2016 was issued on 10th
September, 2016.

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The GST Council is a 33-member governing body responsible for modifying,
reconciling, or procuring laws and regulations related to the Goods and Services
Tax (GST) in India.
Composition
As per Article 279A(2) of the Constitution, the GST Council shall consist of the
following members: -
● The Union Finance Minister
● The Union Minister of State in charge of Revenue or Finance.
● The Minister in charge of Finance or Taxation or any other Minister
nominated by each State Government
● Any person nominated by the Governor of the State where there is a
proclamation of emergency under Article 356 of the Constitution of India
● 2 members from the central government: Union Finance Minister (as
chairperson) and Union Minister of State in charge of revenue or finance
● 31 members from states and union territories with legislature: ministers of
states in charge of finance or taxation
Key Functions
● Recommending GST rates and laws to the Parliament of India.
● Modifying, reconciling, or procuring laws and regulations related to GST.
● Ensuring a unified and streamlined GST system across India.
● Taxes, cesses, and surcharges levied by the Centre, States and local bodies
which may be subsumed in the GST.
● Goods and services which may be subjected to or exempted from GST.
● Model GST laws, principles of levy, apportionment of IGST and principles
that govern the place of supply.
● Threshold limit of turnover below which goods and services may be
exempted from GST.
● Rates including floor rates with bands of GST.
● Special rates to raise additional resources during any natural calamity.
● Special provision with respect to Arunachal Pradesh, Jammu and Kashmir,
Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal
Pradesh and Uttarakhand.
● Notify the rates under which the goods and services should fall.

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● It prescribes a proper refund mechanism.
● It provides GST returns and threshold limits for composition schemes.
● It decides the rate of GST to increase or decrease.
● It laid down the rules to conduct business in the GST council.
Powers of GST Council
As per Article 279A (4), the Council will make recommendations to the Union
and the States on important issues related to GST:
1. The goods and services that may be subjected or exempted from GST.
2. Principles that govern place of supply.
3. Threshold limits.
4. GST rates including the floor rates with bands, specific rates for raising
additional resources during natural calamities disasters or RNR.
5. Special provisions for certain States, etc.
6. Transition Provisions.
Quorum and Decision-Making Process
● The GST Council makes decisions based on a three-fourths majority vote.
● The central government and state governments have equal representation,
ensuring a balanced decision-making process.
Meetings and Resolutions
● The GST Council meets regularly to discuss and resolve GST-related
issues.
● Meetings are usually held quarterly, with special meetings convened as
needed.
Archives
First Discussion Paper on GST
GST SAGA
CEA report on Revenue Neutral Rates

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PROFILE OF THE FIRM

AJITH KUMAR ASSOCIATES CHARTERED ACCOUNTANTS

The Firm.
Ajith Kumar Associates is a prestigious Chartered Accountancy firm with a rich
experience spanning over 40 years in Direct Taxation and Auditing. Known for
its depth of expertise and comprehensive approach, the firm has become a
cornerstone in the financial advisory sector.
Established in 1982, Ajith Kumar Associates located on Kuvempu Road in
Shimoga is a prominent player in the finance consulting industry. This well-
known firm serves customers locally and from other areas of Shimoga, offering
comprehensive Financial services under one roof. Throughout its journey, the
business has solidified its position in the sector. Emphasizing customer
satisfaction alongside their services has enabled the establishment to build a large
and growing customer base. The team at Ajith Kumar Associates is committed to
their roles, working diligently to achieve the company's common vision and
broader objectives. Situated in a prime location on Kuvempu Road, commuting to
this establishment is convenient due to the availability of various transportation
options.
The client base primarily comprises trading firms specializing in the distribution
of agricultural products such as areca nuts, paddy, maize, and other produce. In
addition to this, the firm also caters to a diverse range of sectors, including large
hospitals, manufacturing industries, government enterprises, and educational
institutions.

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Vision.
Our goal is to establish ourselves as the most esteemed professional firm,
renowned for establishing enduring and solid bonds with our clients. By providing
dependable, value-driven, individualised, and superior services, we hope to
accomplish this. Customers can have faith that a trustworthy firm that enjoys
working with them and one another is handling their interests and enterprises.
In order to help businesses navigate complex situations in today's rapidly evolving
business landscape through informed decision-making, we aim to provide
complete business and tax-related services.
Mission.
At Ajith Kumar Associates, our objective is to uphold dedication to excellence by
maintaining the highest standards of ethical behaviour and professional service.
We are committed to fostering long-lasting relationships with our clients, based on
honesty, integrity, and the consistent delivery of outstanding results.
Our goals include:
● Enhancing the community through our actions and efforts.
● Providing clients with valuable guidance to increase the profitability of
their businesses.
● Ensuring that our billing policy is transparent.
● Meeting and exceeding client expectations consistently.
● Leveraging our legal and regulatory expertise to benefit our clients.
● Promoting a culture of cooperation and respect among our employees.
● Establishing a productive and enjoyable workplace for our employees.
Founder

Ajith Kumar Iddya

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CA Ajith Kumar Iddya completed his [Link] and secured 3rd Rank in the
Examination.
Later, he completed his CA Final Examination in 1980 in Mangalore. After two
years as an Accounts Manager in a private company, he began his own practice in
1982. Later converted to Ajith Kumar Associates in 1983. He obtained the DISA
qualification in 2001.
He also served as President in the Rotary Club for 2 years during the 2008-09.
With 45 years of experience as a CA, Ajith Kumar Iddya has conducted the
Audits of Co-Operative society, Banks and Government Banks Etc and
successfully handled numerous complex cases in Shimoga, Davangere, and
Mangalore, providing invaluable assistance to the business community.
Partner/Founder.
Partner

Sujan J
CA Sujan J is a dedicated professional with a strong background in commerce and
finance. He graduated with a [Link] from Jain University, Bangalore, in 2018 and
passed the CA examination in 2020. He also achieved an All India 44th Rank in
the Cost Accounting (CMA) examination, showcasing his commitment to
excellence.
In 2023, Sujan became a full-time partner at Ajith Kumar Associates. Based in
Shivamogga, he specializes in taxation, auditing, and financial consulting, helping
clients navigate their financial and regulatory needs effectively.
Sujan is also passionate about sharing knowledge. He has spoken at various
colleges in Shimoga, simplifying practical issues related to GST and Income Tax
for students and aspiring professionals.

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Services
1) Audit and Assurance
● Statutory Audits, Tax Audits
● Certification, Special Purpose Audits
2) Private Client Solutions
● Family Trust structures
● Taxation and Compliance for High net worth Individuals (HNIs), Family
Trusts, HUF
● Home Office Services, Estate Planning, drafting wills
● Family business structuring and management strategy, Family charter
● Family Business compensation management, Succession planning
3) Taxation
● Tax computation and filing, Tax Audits
● Tax advisory and structuring & Tax Scrutiny and Assessment handling
● International taxation, including BEPS requirement
● Withholding tax advisory and filing requirements
● Transfer Pricing study and assessments and Tax Appellate proceedings
● Certification and attestation
4) Business Registration
● PAN and TAN and Professional Tax Registration
● Shops and Establishments Registration
● PF, ESI and IEC Registration
● GST Registration
● Ongoing regulatory filings and compliance support
5) Overseas Foray
● Tax computation and filing
● Tax Audits
● Tax advisory and structuring
● Tax Scrutiny and Assessment handling
● International taxation, including BEPS requirement
● Withholding tax advisory and filing requirements
● Transfer Pricing study and assessments
● Tax Appellate proceedings

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● Certification and attestation
6)GST
● Registrations under GST Act
● Application of LUT
● Filing of Monthly and Annual Returns
● GST Audit.
● Assistance in GST Refunds
● GST Scrutiny and Assessments
● Consulting and Advisory Service
Career
Articled Training
Ajith Kumar Associates is a great place to do your articled training!
The firm offers the right mix of practical job exposure, academic training and soft
skill training, plus a fun environment. We believe that attitude and aptitude count
equally in one's professional life, and our recruitment & assessment process gives
due weightage to professionals.
Through exposure to a wide range of clients and work areas, you will, over the
three year articled period become confident in dealing with all levels of
professionals in all kinds of organizations. We believe in a balanced environment
for learning, and make every effort to support each trainee in becoming a well-
rounded professional.
Here are some of the reasons Ajith Kumar Associates attracts the best candidates
every year.
● Mentoring system for new joinees that allows them to settle in faster
● Performance based progress in work profile and remuneration
● Dedicated days for in-house training sessions
● Well-defined processes and systems
● Exposure to various work areas
● Exposure to large corporate clients
● Guidance and opportunities to develop communication, personality &
presentation skills
● Easy access to managers and partners

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CHAPTER 3
STRUCTURE AND COMPONENTS OF
GST
● Categories of GST
● Structure of GST
● Time and Place of Supply
● Impact of GST on Business
Operations
● Pros and Cons of GST
● Input Tax Credit (ITC)
● Output Tax Liability (OTL)

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AN OVERVIEW ON GST
In India, the Goods and Services Tax (GST) is a comprehensive, multi-stage,
destination-based tax that is levied on every value addition. It was introduced on
July 1, 2017, and has since become the primary indirect tax system in the country.
GST replaced multiple indirect taxes that existed before, such as the excise duty,
VAT (Value Added Tax), and service tax.

CATEGORIES OF GST
1. Central Goods and Services Tax (CGST)
This is the portion of GST collected by the Central Government on intra-state
(within the same state) transactions.
Example: If a product is sold within the state of Maharashtra, CGST will be
levied on the transaction, and the amount will go to the central government.
Rate: The rates for CGST are similar to the rates set for other taxes under GST,
such as 5%, 12%, 18%, and 28% (depending on the goods or services).
2. State Goods and Services Tax (SGST)
This is the portion of GST that is collected by the State Government on intra-state
transactions.
Example: For a sale of goods or services within Maharashtra, the state
government will collect the SGST portion of the tax.
Rate: Just like CGST, SGST also applies at the same rate (5%, 12%, 18%, 28%)
depending on the nature of the goods or services.
*Note: In the case of intra-state transactions (goods or services sold within the
same state), both CGST and SGST are levied on the sale. The total GST in this
case is split equally between the Central and State governments.*
3. Integrated Goods and Services Tax (IGST)
IGST is applicable on inter-state transactions, i.e., transactions between two
different states or Union Territories (UTs).
Example: If a product is sold from Maharashtra to Tamil Nadu, IGST will be
levied on the transaction, and the collected amount will be shared between the
Central Government and the state where the goods or services are received (Tamil
Nadu in this case).

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Rate: IGST rates are generally in line with the CGST and SGST rates (5%, 12%,
18%, 28%). The IGST collected on inter-state supplies is then transferred to the
respective state governments.
Summary of Categories of GST and Their Application:
What is the structure of GST in India?
The structure of GST in India is a framework decided by the GST Council, which
consists of a four-tier system. This structure's primary purpose is to ensure that all
essential goods and a few edibles are included in the lower tax bracket. At the
same time, high-value goods and services are placed in the upper tax bracket. The
four-tier GST tax structure includes 0%, 5%, 12%, 18%, and 28%, respectively.
55th GST Council Meeting
The GST Council in its upcoming meeting merging tax slabs to simplify the
existing GST structure to introducing another tax rate of 35%, the meeting is a
must to watch.
Moreover, one can expect decrease in GST rates for essential items and an
increase for luxury goods.
Importance of understanding GST structure
Understanding the GST structure in India is key to follow the rules, lessen tax
burdens, and run your business honestly and responsibly. This knowledge lets you
make smart choices, dodge possible fines, and guard your financial health.

Structure of GST
There are different taxes levied under the structure of GST in India. To help you
understand what these mean, we will explain each one of them here:

Tax Type Description

Central GST Central GST or CGST is the tax incorporated by the central
(CGST) government. This tax is Imposed on the movement of goods and
services within the state.

State GST State GST or SGST is the tax levied by the state government.
(SGST) This tax is appropriated in the state where the transaction occurs
or where the goods are sold and consumed.

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Integrated For interstate supplies, there is a tax included in the GST
GST (IGST) structure in India called the integrated GST or IGST. This tax is
imposed on all the goods and services traded between two or
more states or union territories.

Union If there is a supply of goods and services within the Indian

Territory Union Territories, which the central government government, a
GST(UTGST) tax called Union Territory GST or UTGST is imposed.

1. Introduction to zero rates in GST

Zero rates in GST means a nil tax rate levied on the goods and services. In other
words, a zero rate is equivalent to tax exemption. The government decides the
goods and services that are eligible for a zero-tax rate. Some examples include
fresh fruits, bread, milk, curd. Also supplies made to SEZ developers or Special
economic zones and overseas come under zero-rate tax.

2. Lower rate (5%)

A lower rate means 5% GST is applied to commodities and services. Some
examples include footwear under Rs. 500, clothing under Rs. 1000, packaged food
items, branded paneer, cream, skimmed milk powder, etc.

3. Standard rate (12-18%)

The standard rate comes into play when a 12-18% GST is applied. The standard
rate of 12% includes butter, cheese, frozen meat products, ghee, animal fat,
sausages, packaged dry fruits, namkeen, fruit juices, ketchup & sauces, etc. 18%
GST is applied for pastries, pasta, cakes, hairdryers, panels, vacuum cleaners,
wires, telecom services, IT services, etc.

4. When will a higher rate (18% and 28%) of GST apply

A higher rate is applied when luxury items are considered. For items such as paint,
washing machines, cement, automobiles, shampoo, aerated water, sunscreen,
motorcycles, etc., a 28% GST is applied. Some items are under the 28% slab for
which the government fixes an additional cess.

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Time and Place of Supply in GST
Under GST, 3 types of taxes can be charged in the invoice. SGST and CGST in
case of an intra-state transaction and IGST in case of an interstate transaction. But
deciding whether a particular transaction is inter or intrastate is not an easy task.
Think about an online training where customers are sitting in different parts of the
world, or where goods are sold on a train journey passing through different states.
To help address some of these situations, the GST act lays down certain rules
which define whether a transaction is inter or intrastate. These rules are called the
place of supply rules.
Why are time, place and value of supply important?
Time of supply means the point in time when goods/services are considered
supplied’. When the seller knows the ‘time’, it helps him identify due date for
payment of taxes.
Place of supply is required for determining the right tax to be charged on the
invoice, whether IGST or CGST and SGST will apply.
Value of supply is important because GST is calculated on the value of the supply.
If the value is calculated incorrectly, then the amount of GST charged is also
incorrect.
Time of Supply
Time of supply means the point in time when goods/services are considered
supplied’. When the seller knows the ‘time’, it helps him identify due date for
payment of taxes.
CGST and SGST or IGST must be paid at the time of supply. Goods and services
have a separate basis to identify their time of supply. Let’s understand them in
detail.
Time of Supply of Goods and services
1) Time of supply of goods
Time of supply of goods is earliest of:
1. Date of issue of invoice
2. Last date on which invoice should have been issued
3. Date of receipt of advance/ payment.
2) Time of Supply for Services
Time of supply of services is earliest of:

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Date of issue of invoice
Date of receipt of advance/ payment.
Date of provision of services (if invoice is not issued within prescribed
period)
Place of supply
It is very important to understand the term ‘place of supply’ for determining the
right tax to be charged on the invoice.

Place of Supply of Goods

Usually, in case of goods, the place of supply is where the goods are delivered.
So, the place of supply of goods is the place where the ownership of goods
changes.
What if there is no movement of goods. In this case, the place of supply is the
location of goods at the time of delivery to the recipient.
Place of Supply for Services
Generally, the place of supply of services is the location of the service recipient.
In cases where the services are provided to an unregistered dealer and their
location is not available the location of service provider will be the place of
provision of service.
Special provisions have been made to determine the place of supply for the
following services:
Services related to immovable property
● Restaurant services
● Admission to events
● Transportation of goods and passengers
● Telecom services
● Banking, Financial and Insurance services
In case of services related to immovable property, the location of the property is
the place of provision of services.

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IMPACT OF GST ON BUSINESS OPERATIONS

Challenges

● Pricing adjustments: Businesses have had to adjust prices due to different

GST rates.
● Increased compliance: Regular returns, registration, and GSTIN
requirements.
● Supply chain management: Maintaining documentation for input tax
credit claims.

Benefits

● Simplified tax structure: Removal of cascading effect of multiple taxes.

● Reduced tax burden: Easier input tax credit claims.
● Increased transparency: Simplified tax system and easier inter-state
trade.

Specific Impact on E-commerce

● New registration requirements: E-commerce platforms must register

under GST.
● Tax collection: E-commerce platforms must collect taxes from sellers.

In conclusion, businesses have had to adapt to the new tax structure and increased
compliance requirements, leading to increased costs. However, GST has also
brought several benefits for businesses, such as simplification of the tax structure,
reduction of the overall tax burden, and increased transparency. The GST council
has been actively working to make GST more business-friendly and reduce
compliance burden over the time. Businesses should stay updated with the GST
rules and regulations to reap the benefits of GST in the long run.

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PROS AND CONS OF GST

Benefits/advantages of implementing GST

[Link] BENEFITS

1. Uniformity in taxation

2. Helping Government Revenue find Buoyancy

3. Cascading if Taxes

4. Higher Threshold for Registration

Tax Threshold Limits (₹)

Excise 1.5 crore

VAT 5 lakhs in most States

Service Tax 10 lakhs

GST(Goods) 40 lakhs (20 lakhs for special category

states)

5. Simple and Lesser Number of Compliances.

6. Common Procedures

7. Common Portal.

8. Simple and Easy Online Procedure

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II. Benefits to the Common Man

● A good number of products and/or services are either exempt from tax or
charged at 5% or less.
● The poor will receive their due.
● Simplified tax structure with fewer exemptions.
● Products and services will be allowed to move freely across the country.
● Increased competition between manufacturers and businesses will benefit
consumers.
● Items such as movie-ticket prices, two-wheelers, televisions, stoves,
washing machines, SUVs and luxury cars, two-wheelers, etc. will be
cheaper.
III. Benefits to the Economy

● Creation of a unified common market.

● Increase in manufacturing processes.
● Enhancement of exports and investments.
● Generation of more jobs through enhanced economic activity.

IV. Benefits to Industry and Trade

 Easy compliance
 Uniformity of tax rates and structures.
 Removal of Cascading.
 Improved competitiveness
 Gain to manufacturers and exporters.
 Helps to small scale supplier

V. Benefits to Central and State Government.

 Simple and easy to administer.

 Better controls on leakage.
 Higher revenue efficiency.

VI. Benefit to the Consumer

● Under GST, there would be only one tax from the manufacturer to the
consumer, leading to transparency of taxes paid to the final consumer.

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● Relief in overall tax burden because of efficiency gains and prevention of
leakages, the overall tax burden on most commodities will come down,
which will benefit consumers.

VII. Benefit to States alone

● Expansion of the tax base as they will be able to tax the entire supply
chain from manufacturing to retail.
● Power to tax services, which was hitherto with the Central Government
only, will boost revenue and give States access to the fastest growing
sector of the economy.
● GST being destination based consumption tax will favour consuming
States.
● Improve the overall investment climate in the country which will naturally
benefit the development in the States.

Input Tax Credit (ITC)

Input Tax Credit (ITC) is the Tax paid during the initial purchase of goods that
reduces the tax liability while selling the goods or services. All dealers are liable
for output tax on taxable sales done in the process of their business. With the help
of input tax credit, they can offset the output tax against their input tax already
paid.
GST Input Tax Credit is calculated using the following steps:
Step 1: Add up the GST paid on purchases made during the tax period.
Step 2: Identify the inputs that are eligible for ITC.
Step 3: Calculate the amount of ITC by multiplying the total eligible GST paid on
purchases by the percentage of eligible input.
Step 4: Subtract the ITC from the GST payable on sales made during the tax
period.
Features:
• ITC is available to registered businesses with a valid GSTIN.
• ITC can be claimed only on inputs used for business purposes.
• Valid tax invoices, debit notes, or credit notes are required.
• ITC must be claimed within 6 months from the date of issuance of
the tax invoice.

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• ITC may be reversed if inputs are used for non-business purposes
or exempt from GST.
• ITC can be utilized to offset tax liability on output supplies.
• Unutilized ITC can be carried forward to subsequent tax periods.
Benefits:
• Reduces tax burden by allowing credit for taxes paid on inputs.
• Improves cash flow by reducing tax payable on output supplies.
• Encourages compliance with GST regulations by providing a
Financial benefit.
• Increases business efficiency by reducing tax costs.
• Enhances competitiveness by allowing businesses to pass on tax
credits to customers.
• Simplifies tax compliance by reducing the number of tax returns
and payments.
• Reduces the risk of tax penalties and fines by ensuring accurate
tax reporting.
Claiming Input Tax Credit under GST
Registered individuals can claim ITC under GST if the meet the below-mentioned
conditions:-
• Supplier must be Paid On-Time: The supplier must be paid by 180
days from the date of the invoice. In case the payment is not
made, interest will be levied.
• Lot-Based: Claiming credit is allowed only when the entire lots are
received.
• Furnishing Returns: Relevant returns must be furnished to claim
the credit.
• Tax Payment: Supplier must pay the tax amount.
• Tax Invoice: The tax invoice is required and must be valid.
How Input Tax Credit works :-
Input Tax Credit Eligible & Ineligible Purchases
● The following circumstances are eligible for claiming input tax credits:-
• Must be registered under GST
• Must possess a tax invoice or debit note issued by the supplier

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• Must have received the goods or services
• Goods or services must be used or intended for business purposes
• Supplier must have paid GST to the government
• Must have filed GST returns (GSTR-3B)
• ITC must be availed within 6 months from the date of invoice
• ITC not available on blocked credits (taxes paid on personal
consumption)
• ITC must be reversed if goods or services are used for nonbusiness
purposes or sold without GST payment
● The following circumstances are ineligible for claiming input tax
credits:-
• Goods bought from unregistered dealers.
• Goods bought from registered dealers who have chosen Composition
Scheme.
• Goods notified in the negative list by respective state governments.
• Goods purchased without Invoice.
• Goods purchased with Invoice but without a separate mention of amount
of tax.
• Goods purchased for manufacturing exempted goods other than exports.
• Goods that are in stock which have been taxed previously in an Act
though they are categorized as exempted goods under VAT Act.
• Goods purchased for personal consumption or received for free as gift.
• Goods purchased from abroad.
The input tax credit of these components of GST would be allowed in the
following manner:-
Credit of CGST: Allowed 1st for payment of CGST and the balance can
be utilized for the payment of [Link] of CGST is not allowed for
payment of SGST.
Credit of SGST/UTGST: Allowed 1st for payment of SGST/UTGST and
the balance can be utilized for the payment of IGST. Credit of
SGST/UTGST is not allowed for payment of CGST.
Credit of IGST: Allowed 1st for payment of IGST, then for payment of
CGST and the balance for payment of SGST/UTGST.

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This has been explained in the following table

Output Tax Liability (OTL)

Output Tax Liability, as defined in Section 2(82) of the CGST Act, refers to the
money a business owes to the government for selling taxable goods and services.
This amount is usually collected from customers at the time of sale.
GST output tax liability is calculated using the following formula:
Output tax liability = total taxable value of supply applicable GST rate
For instance, if you have sold a product for ₹20,00,000 and the applicable GST on
the same is 18%, then you have to pay an output tax amounting to
₹20,00,000*18% = ₹3,60,000.
Features:
It levies tax only on the total amount of sale value at every stage of sale. It does
not re-consider the original sale value of the product while levying tax. It allows
you to offset your input tax credit against your output tax liability. It helps you to
maintain a proper book of accounts in compliance with the provisions of GST. It
helps in passing on the reduced GST liability to consumers through reduced
prices.
Benefits:
• Output tax credit generates revenue for businesses.
• Output tax credit can be used to offset input tax paid on purchases.
• Output tax credit reduces tax liability for businesses.
• Output tax credit ensures compliance with tax laws and regulations.
• Timely output tax credit payment avoids penalties and fines.
• Output tax credit improves a business’s cash flow.
• Output tax credit simplifies tax compliance and provides clarity on tax
obligations.

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Output Tax Credit Eligible and Ineligible Sales:
The following circumstances are Eligible for claiming Output Tax Credit:-
• Sales of taxable goods and services.
• Sales to registered businesses with a valid GSTIN.
• Sales of goods and services that are not exempt from GST.
• Sales that are not subject to reverse charge.
• Sales with a valid tax invoice.
• Sales where the recipient is liable to pay tax under the RCM.
• Sales of goods and services that are used for business purposes.
• Sales that are not subject to TDS (Tax Deducted at Source).
• Sales where the supplier has paid the applicable GST.
The following circumstances are ineligible for claiming Output Tax Credit :-
• Sales of exempt goods and services.
• Sales to unregistered businesses or individuals.
• Sales of goods and services that are subject to reverse charge.
• Sales without a valid tax invoice.
• Sales where the recipient is not liable to pay tax under the RCM

Features ITC OTL

Nature Credit received on purchases Tax owed on sales
Applicability Purchases and Imports Sales and supplies
Basis of calculation GST paid on Inputs GST on Output
Adjustment Reduces Output tax Offset by ITC

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CHAPTER 4
GST AUDIT AND ASSESSMENT
● GST Audit and it’s types
● GST Audit Process and Documentation
● GST Assessment
● GST Return Filing
● Registration Process
● Registration Cancellation
● GST Notice
● E-Way Bill
● Types of Returns, Due dates and Penalties
● GST Audit and Assessment for Non-
Compliance

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GST Audit and Assessment

Introduction
The implementation of the Goods and Services Tax (GST) marked a significant
milestone in India's tax reform journey. Ensuring compliance and preventing tax
evasion are crucial to the success of any tax system. GST audit and assessment
play a vital role in verifying the accuracy of GST returns, payments, and records
maintained by taxpayers. Through audits and assessments, tax authorities can
identify errors, prevent revenue leakage, and promote taxpayer discipline.
GST Audit
A GST audit is the examination of records, returns, and other documents
maintained by a registered person to verify the correctness of turnover declared,
taxes paid, refunds claimed, and input tax credit (ITC) availed.
Types of GST audits
1. Turnover-Based Audit (Section 35(5)) – Now Withdrawn
 Status: Applicable till FY 2019-20. Withdrawn from FY 2020-21 onward.
 Who Conducted It: By a Chartered Accountant (CA) or Cost Accountant
(CMA) appointed by the taxpayer.
 When It Applied: When annual turnover exceeded ₹2 crore.
 Filing Requirement: GSTR-9C (Reconciliation Statement + Auditor
Certification).

2. Departmental Audit (Section 65)

 Who Conducts It: GST officers or authorized personnel.
 When Initiated: Commissioner or authorized officer can order it.
 Notice Period: At least 15 days prior notice (Form GST ADT-01).
 Place: Can be at the registered place of business or department office.
 Post-Audit: Findings communicated in Form ADT-02 within 30 days.

3. Special Audit (Section 66)

 Who Orders It: GST officer with prior approval of the Commissioner.
 Who Conducts It: Chartered Accountant or Cost Accountant nominated
by the Commissioner (not taxpayer's choice).

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 When Ordered: If complexity of the case warrants further scrutiny (value
misclassification, input credit issues, etc.).
 Timeline: Report to be submitted within 90 days (extendable by 90 more).
 Cost: Paid by the government.

4. Audit by CAG or AG (Comptroller and Auditor General / Accountant

General)
 Authority: Based on powers under the Constitution of India and
applicable statutes.
 Scope: Government departments and undertakings.
 Relevance: Mainly for public sector enterprises and government-
registered GST entities.

GST Audit Process and Documentation

 Step-by-Step GST Audit Process:
 Issuance of Notice (Form GST ADT-01) – The taxpayer is informed 15
days in advance.
 Examination of Financial Records – Includes GST returns, invoices, tax
payments, ITC claims, and ledgers.
 Audit Completion – Must be finalized within the prescribed time limit.
 Issuances of Audit Report (Form GST ADT-04) – Details of tax
liabilities, penalties, or discrepancies are documented.
 Action on Non-Compliance – If issues are found, authorities may impose
penalties or demand additional taxes.
● Documents Required for GST Audit:
 GSTR-1, GSTR-3B, and GSTR-9 returns.
 Sales and purchase invoices.
 Input Tax Credit (ITC) claims.
 Stock registers and financial statements.
 Bank reconciliation statements.
 Consequences of Non-Compliance in GST Audits
 Failure to comply with GST audits can result in:
 Penalty for incorrect tax filings under Sections 73 & 74.
 Interest on unpaid taxes under Section 50.
 Legal action or prosecution for fraudulent claims.

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GST Assessment
GST assessment is the process of determining a taxpayer’s tax liability to ensure
accurate tax payment and compliance with GST laws.
Types of Assessment under GST:
1. Self-Assessment
 Done by the taxpayer.
 Tax is calculated and returns are filed on one’s own for each tax period.

2. Provisional Assessment
 Requested by the taxpayer when they’re unsure about value or tax rate.
 Requires a written request and a bond with security.
 Final assessment must be done within 6 months (extendable).
 Interest:
Extra tax payable → Interest up to 18%.
Refund due → Interest up to 6%.

3. Scrutiny Assessment
 Officer checks returns for discrepancies.
 If explanation is: Satisfactory → No further action.
Not satisfactory → Officer may initiate:
 Audit (Sec 65)
 Special audit (Sec 66)
 Inspection/search
 Demand and recovery

4. Best Judgment Assessment

 Done by officer based on available info if:
 Taxpayer hasn’t filed returns.
 Person is liable but not registered under GST.
 Officer estimates liability impartially.
5. Assessment of Non-Filers
 Applied when registered taxpayers don’t file returns.
 Officer assesses tax liability using best judgment.

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6. Assessment of Unregistered Persons
Applied to those who are liable to register but haven’t done so officer
assesses liability using best judgment.
7. Summary Assessment
 Used in urgent cases to protect revenue.
 Done with prior permission of higher authority.
 Can be withdrawn if later found to be erroneous.

GST Return Filing

The following is a step-by-step guide on how to file GSTR 3B online.
Step 1: Log in to the GST portal with your user ID and password. Next, navigate to the
returns dashboard after going to Services > Returns > Returns Dashboard.

Step 2: On the ‘Return Dashboard’, a page opens with options to select the Financial
Year, Quarter and Period (month). Enter the relevant details and click on ‘SEARCH’.
Step 3: A page opens with return forms relevant to the GSTIN. For example, if you are a
regular taxpayer, the page will show forms like GSTR-1, GSTR-2A (view only), GSTR-
2B and GSTR-3B.

Step 4: Choose the return form that you need to file and select ‘Prepare Online’. Fill in all
the relevant details, save the form and click on ‘Submit’. Once submitted, you must
navigate to ‘Track Return Status’. The status should show as ‘Submitted’.

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Step 5: Once the return status shows as ‘Submitted’, click on ‘Payment of Tax’. A
‘Check Balance’ option will be displayed, which needs to be clicked. This will display the
credit and cash balances available
Step 6: Next, click on the ‘Offset liability’ option and make a payment in cash for the
remaining amount post the offset of input tax credit.
Step 7: Once the payment has been completed, proceed to file the GST return by
checking the declaration box, selecting the authorised signatory, and clicking on ‘File
Form with DSC’/’File Form with EVC’ as applicable.

Who Needs to Register

• Businesses with aggregate turnover above threshold (Rs. 20/40 lakhs depending
on state/type).
• Casual taxable persons, non-resident taxable persons.
• E-commerce operators.
• Inter-state suppliers , and others as per GST Act.
Documents that are required to register:-
 PAN Card of the Business or Applicant
This is because GSTIN (Goods & Service Tax Identification Number) is linked to the
PAN of the business.
1. Identity and Address Proof of Promoters
Documents like PAN, Passport, Driving license, Aadhaar card or Voters identity card
of all the directors, partners or promoters must be submitted for Identity proof and
address proof.
2. Business Registration Document
All documents verifying the registration of the business must be submitted by all
registered entities. The documents may differ depending on the type of registration.
Private Limited Company: Certificate of Incorporation, Memorandum of
Articles and Articles of Association
Limited Liability Partnership: Certificate of Incorporation and LLP Agreement
3. Address Proof for Place of Business
All documents that verify the place of business operations mentioned in the GST
registration application must be submitted. These include rental agreement or sale
deed, copies of electricity bill or latest property tax receipt or municipal khata copy.
4. Bank Account Proof

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An attested and scanned copy of the first page of bank passbook must be submitted. This
copy must be for the bank account mentioned in the registration application and must also
include few transactions and address of the business.
5. Digital Signature
All GST registration applications are mandatorily required to be signed and submitted
by authorized signatory using Class 2 or 3 digital signatures. In case of
proprietorship, a digital signature is not required.

GST Registration Process (Online via GST Portal):

1. Visit GST Portal – Go to [Link]
2. Click “Register Now” – Under ‘Taxpayers’, click “Register Now”.
3. Part A – New Registration:
1. Fill details: PAN, mobile number, email, state.
2. Verify with OTP.

3. Receive Temporary Reference Number (TRN).

4. Part B – Application Form:
 Login using TRN.
 Upload documents: PAN, proof of business, address proof, bank
details, photos, etc.
 Submit using DSC or EVC

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5. ARN Generation & Verification: Receive Application Reference Number (ARN).

6. Application is processed and either approved or sent back for clarification.
7. GSTIN & Certificate – Once approved, GSTIN (15-digit) is issued with the GST
certificate.

GST Registration Cancellation:-

GST cancellation refers to the process of canceling a Goods and Services Tax
registration. This can be done voluntarily by the taxpayer or compulsorily by tax
authorities due to non-compliance. Cancellation results in the taxpayer no longer being
required to comply with GST laws. However, the taxpayer remains liable for taxes due
prior to cancellation.
Who Can Cancel:
• The taxpayer (voluntarily).
• GST officer (in cases of non-compliance).
• Legal heirs (in case of death of proprietor)
Reasons for Cancellation:
• Business discontinued or transferred.
• Change in business constitution.
• No longer liable to be registered under GST.
• Misuse of registration, non-filing, or fraud.

Steps to Cancel (Voluntarily):

1. Login to GST Portal.
2. Go to: Services > Registration > Application for Cancellation of Registration.
3. Fill in details:

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 Reason for cancellation.
 Date of cancellation.
 Outstanding liabilities.
 Stock and capital asset details (if applicable).
4. Submit using DSC/EVC.
5. ARN is generated.
6. If everything is in order, the officer issues cancellation order in Form GST REG-
19 within 30 days.
*Note: If your registration is cancelled by officer, you can file for revocation using Form
GST REG-21 within 30 days of the order.*
Notice under GST
A GST notice is a formal communication from GST authorities to taxpayers. It
serves to:
 Alert them about defaults or irregularities.
 Request additional information.
 Take action on suspicious activities or non-compliance.
Common Reasons for GST Notices:
 Not registering under GST despite being liable.
 Delay or failure in filing GST returns.
 Non-payment or short payment of GST.
 Wrong or excessive Input Tax Credit (ITC) claims.
 Transactions not reported in returns.
 Movement of goods or services without proper documentation.
Types of Notices:
 Show Cause Notice (SCN)
 Scrutiny Notice
 Demand Notice
Most common reasons for GST Notices:
 Mismatch in details reported between GSTR-1 & GSTR-3B: scrutiny
notice
 Differences in Input tax credit claims made in GSTR-3B visa-versa GSTR-
2B/2A.
 Delay in filing of GSTR-1 and GSTR-3B consecutively for more than six
months

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 Inconsistent declaration in GSTR-1 and e-way bill portal
 Non-payment of GST liability (tax) or the short-payment of the tax with or
without the intent to defraud: show cause notice (SCN)
 GST Refund is wrongly made with or without the intent to defraud: show
cause notice (SCN)
 The Input tax credit is wrongly availed or utilized
 Where a business is liable but has failed to obtain GST registration and not
discharged the tax and other liabilities under the GST Act
 For furnishing any information related to records to be maintained by a
taxpayer
 Conduct of the audit by tax authorities
 Where information return was required to be furnished before tax
authorities, but not submitted within the time limit stipulated.

E-way Billing
The E-way bill, also known as an electronic waybill, is a paper required under the
GST regime before transporting or shipping goods worth more than INR 50,000
within states. The courier or the person in charge of the conveyance must have a
physical copy of the e-way bill, which would contain details such as merchandise,
buyer, consignor, and transporter
A specific e-Way Bill Number (EBN) is made available to the provider, receiver,
and transporter when an e-Way Bill is issued. The e-Way Bill replaces the Way
Bill, which was a physical document used for the transportation of goods under
the VAT system.
Components of an e-way bill
E-Way bill is divided into two components i.e.
Part A:
 Details of GSTIN of recipient,
 Place of delivery (PIN Code),
 Invoice or challan number and date,
 Value of goods,
 HSN code,

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 Transport document number (Goods Receipt Number or Railway
Receipt Number or Airway Bill Number or Bill of Lading Number)
and
 Reasons for transportation
Part B: it comprises of the transporter details (for eg: Vehicle number)
E-Way Bill - Exemptions
 An E-Way Bill is not required in the following cases:
 Non-motor vehicle transport
 Customs-related movements
 From customs port to ICD/CFS for clearance
 Under customs supervision or seal
 Under customs bond between customs stations
 Transit cargo to/from Nepal or Bhutan
 Empty cargo container transport
 Weighment movements (within 20 km, with delivery challan)
 Rail transport (by Central/State Government or local authority)
 Exempt goods (specified in State/UT GST Rules
 Specified goods (listed in Schedule III or Central Tax Rate
notifications)
Partial Exemption
Part B of e-Way Bill is not required for transport within the same state, if the
distance between consigner/consignee and transporter is less than 50 km.
Benefits of E-way Bill
 Traders do not need to visit tax offices to collect or submit waybill
forms.
 The average waiting time at mobile squad reduces, as verifications for
the E-way bill on a common portal.
 A trader while uploading gives the identification of the buying trader
who will account for the transaction automatically.
 Officials save the monotonous work of collecting and matching it the
manual way.
 Generation of GSTR-1 returns.
When Should E-way Bill be issued

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E-Way bill will be generated when there is a movement of goods in a vehicle/
conveyance of value more than Rs.50,000 (either each Invoice or in aggregate of
all invoices in a vehicle/conveyance)
Therefore, E-Way Bills must be generated on the common portal for all these
types of movements. For certain specified Goods, the e-way bill needs to be
generated mandatorily even if the value of the consignment of Goods is less than
Rs. 50,000

Types of GST Returns, their Due dates and their late fee
Return Description Due Date Late Fee for Non-
Type Filing
₹50/day (₹20/day for
Details of outward 11th of next Nil return); Max
GSTR-1 supplies (sales) month ₹10,000
Summary return of 20th of next ₹50/day (₹20/day for
sales, purchases & tax month (varies by Nil return); Max
GSTR-3B paid state) ₹10,000
Annual return for 30th April of ₹50/day (₹20/day for
composition scheme next financial Nil return); Max ₹500
GSTR-4 taxpayers year (Nil), ₹2,000 (Others)
20th of next
Return for non- month or 7 days
resident taxable from registration ₹50/day (₹20/day for
GSTR-5 persons expiry Nil return)
Return for Input
Service Distributors 13th of next ₹50/day (₹20/day for
GSTR-6 (ISD) month Nil return)
Return for TDS 10th of next ₹50/day (₹20/day for
GSTR-7 deductors month Nil return)
Return for e-
commerce operators 10th of next ₹50/day (₹20/day for
GSTR-8 (TCS) month Nil return)

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31st December ₹200/day (₹100 CGST
Annual return for of next financial + ₹100 SGST); Max
GSTR-9 regular taxpayers year 0.25% of turnover
Reconciliation 31st December
GSTR- statement/audit of next financial
9C (Turnover > ₹5 Cr) year Same as GSTR-9
Final return after ₹100/day (₹50 CGST
cancellation of GST Within 3 months + ₹50 SGST); Max
GSTR-10 registration of cancellation ₹5,000
Return for UIN
holders (e.g. 28th of ₹50/day (₹20/day for
GSTR-11 embassies) following month Nil return)

*Note:- Late Fee are not applicable to IGST*

GST Audits and Assessments for Non-Compliance
Non-compliant businesses may be subjected to a GST audit, during which:
 Discrepancies in Returns: Businesses must pay the due tax with penalties
and interest if discrepancies are found.
 Assessments: The tax authorities may conduct an assessment to determine
the unpaid tax.
Impact of GST Non-Compliance on Businesses
GST non-compliance can severely impact a business:
 Financial Burdens: Accumulation of penalties, late fees, and interest can
strain your business’s finances.
 Business Reputation: Consistent non-compliance can tarnish your
business’s credibility with suppliers, customers, and the government.
 Legal Consequences: Repeated non-compliance could result in audits,
seizures of goods, and criminal charges.

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CHAPTER 5
GST FUTURE SCOPE AND
RECOMMANDATIONS
 GST Council and its role
 Impact of GST on various sectors.
 Impact of technology in GST
Compliance
 GSP
 GSP Ecosystem

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GST FUTURE SCOPE AND RECOMMANDATIONS

GST Council
The Goods and Services Tax Council is a constitutional body that is responsible
for managing all aspects of the Goods and Services Tax (GST) in India. This
includes decisions on tax rates, administration, and other related matters.

Designation Designation
Union Finance Minister Chairperson
Union Minister of State - In charge of Revenue or Finance Member

Minister in charge of finance or taxation or nominated Minister Members

by each State Government

How is the GST Council structured?

Structure of the GST Council according to Article 279(1) of the Indian
Constitution:
The GST Council serves as a joint forum for both Central and State Governments
to discuss and decide on matters related to Goods and Services Tax (GST) in
India.
GST Council recommendations
The GST Council, as per Article 279A (4) of the Indian Constitution, is tasked
with making recommendations to both the UTs and the states on crucial matters
related to GST. These recommendations encompass determining which goods and
services will be subject to or exempted from GST, establishing GST laws, and
defining principles governing various aspects such as:
 Place of supply
 Threshold limits
 GST rates on goods and services
 Special rates for raising additional resources during natural calamities or
disasters
 Special GST rates for certain states

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Key features of the GST Council
 Establishment of the GST Council office in New Delhi
 Appointment of the Revenue Secretary as the Ex-officio Secretary to the
GST Council
 Inclusion of the Central Board of Indirect Taxes and Customs (CBIC)
Chairperson as a permanent invitee (non-voting) to all GST Council
proceedings
 Creation of the post of Additional Secretary to the GST Council
 Establishment of four posts of commissioner in the GST Council
Secretariat (equivalent to Joint Secretary level)
 Inclusion of officers from both Central and State Governments on
deputation basis in the GST Council Secretariat

Funding for the expenses (both recurring and non-recurring) of the GST
Council Secretariat is provided by the cabinet, with the entire cost borne by
the Central government.

Background of the Goods and Services Tax Council

The background of the Goods and Services Tax Council can be traced back to the
101st Amendment Act of 2016, which paved the way for the introduction of GST
in India. This tax regime necessitated cooperation and coordination between the
central and state governments for its smooth administration. To facilitate this
consultation process, the amendment introduced Article 279-A in the Constitution,
empowering the President to constitute a GST Council through an order.
Accordingly, the President issued the order in 2016 to establish the Council, with
its Secretariat located in New Delhi. The Union Revenue Secretary serves as the
ex-officio Secretary to the Council.
Role of the GST Council
The GST council is responsible for recommending tax rates, procedures, and other
administrative matters related to GST. Some of the key responsibilities of the
council include:
 Setting tax rates: One of the primary roles of the GST Council is to set the
tax rates for different goods and services. The council is authorized to set

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multiple rates for items based on their nature, and the decision on rates needed
to be in consensus.
 Addressing GST-related issues: The council addresses complaints, issues,
and challenges related to GST implementation. The council is required to meet
regularly to refine and improve the GST structure as needed.
 Approval of GST rules: The GST Council is responsible for approving the
GST rules and regulations that govern the GST implementation in India. This
includes procedures for registration, payment of taxes, GST return filing, and
other related matters. .
 Monitoring GST implementation: The GST Council continuously tracks the
performance of GST implementation in India. The council monitors
compliance with GST regulations, reviews tax collections, and takes
corrective measures as needed.

Importance of the GST council

The GST Council plays a significant role in facilitating the implementation of
GST in India. Its decisions have far-reaching effects on businesses in India. Some
of the benefits of the GST council's decisions for business include:
 Predictability: The GST council's regular meetings, stable tax rates, and clear
guidelines help businesses plan and budget more effectively, making it easier
for them to conduct their operations. .
 Ease of compliance: The GST council's decisions, including simplification of
paperwork and other processes, have made it easier for businesses to comply
with the GST regulations, saving them time and money. .
 Transparency: The GST Council's decision-making process is transparent,
ensuring that all stakeholders are aware of the rationale behind its decisions.
 Alignment with international standards: The GST council's decisions are in
alignment with international standards, which can improve India's position in
the global market

Vision and Mission of the GST Council

The GST Council, in its operations, is guided by the objective of establishing a
harmonized GST structure and fostering the development of a unified national
market for goods and services. Additionally, the Council determines the

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procedural framework for carrying out its functions. Here's a breakdown of its
vision and mission:
Vision: To establish the highest standards of cooperative federation in the
Council's operations, being the first constitutional federal body empowered to
make all major decisions related to GST.
Mission: To evolve, through extensive consultation, a GST structure that is driven
by information technology and is user-friendly.

Composition of the Goods and Services Tax Council

The Council serves as a collaborative platform for both the central and state
governments. It consists of the following members: The Union Finance Minister
as the Chairperson. The Union Minister of State in charge of Revenue or Finance.
The Minister responsible for Finance, Taxation, or any other nominated Minister
from each state government. The members from the states must select a Vice-
Chairperson from among themselves, and they can determine the term of the
Vice-Chairperson. The Chairperson of the Central Board of Excise and Customs
(CBEC) is included as a permanent invitee (non-voting) to all Council
proceedings as per the decision of the Union Cabinet.
Working of the GST Council
Decisions within the Council are made during its meetings. A quorum,
constituting one-half of the total number of members, is required to conduct a
meeting. Each decision of the Council must be supported by a majority of not less
than three-fourths of the weighted votes of the members present and voting.
The voting system is based on the following principles:
 The central govt's vote holds a weightage of one-third of the total votes cast.
 The combined votes of all state governments carry a weightage of two-thirds
of the total votes cast.
No act or proceeding of the Council will be deemed invalid due to the following
reasons:
1. The presence of any vacancy or deficiency in the Council's constitution.
2. Any flaw in the appointment of a person as a Council member.
3. Any procedural irregularity of the Council that does not impact the merits
of the case.

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Functions of the Goods and Services Tax Council

The Council is tasked with making recommendations to both the central and state
governments on various aspects of GST, including:
 Consolidate central, state, and local taxes into GST.
 Determine goods/services subject to GST or exempt.
 Set GST rates, including floor rates with bands.
 Recommend compensation to states for revenue loss.
 Make special provisions for natural disasters and specific states.

Impact of GST on various sectors

 Impact on Supply Chain Management:
Differential taxes based on geographic location have an impact on supply
chain structure. Logistics companies are encouraged to consolidate their
warehouses rather than maintaining one in each state to avoid the central tax
by removing several state fees. As inventory costs and inventory carrying
costs decrease, the overall cost of the product decreases. This has a direct
impact on the product's final cost, lowering the selling price. The money saved
by businesses as a result of the GST can be put towards improving
serviceability. Following the implementation of GST, supply chain
architecture will be centered on customer service and logistics costs. It also
allows for demand and supply matching flexibility. GST would also allow
businesses to improve prediction accuracy. Smaller warehouses can also be
consolidated into one larger warehouse, resulting in space savings.
The advantages that businesses have reaped since the establishment of GST:
 Obtaining raw materials from across state lines
 Negotiation of the price
 Better forecasting and quality improvement
 Inventory control has been improved.
 Better cost-benefit analysis and client service
 Manufacturing with more flexibility
 FMCG (Fast Moving Consumer Goods) :
The fast-moving consumer goods and retail industries applauded the Budget
proposal to implement GST in April of next year, claiming that the measure

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will boost the FMCG business significantly. The Budget expresses a long-term
vision for economic growth, one that envisions improved facilities,
infrastructure, skill development, and job opportunities. The FMCG business
will profit from the focus on broad-based growth. A definite roadmap for
corporate tax reduction, ease of doing business, and GST, along with
increasing investments in MGNREGA (Mahatma Gandhi national rural
employment guarantee act) and social security, is highly reassuring for long-
term balanced growth and augurs well for the sector.
 GST and Its Impact on Banks
The GST would replace at least 17 federal and state levies with a single,
unified taxation system that will affect nearly every industry. The GST will
provide regions that will benefit customers while also introducing areas where
customers would have to pay more.
 The Effect on Small Businesses:
In the GST system, there will be three types of small businesses. Those who
do not meet the criteria are not required to register for GST. Those with
turnovers between the threshold and composition will have the choice of
paying a turnover-based tax or joining the GST regime.
 Textile Industry in India:
Textile industries contribute significantly to the growth of the Indian economy
in terms of GDP, export promotion, employment, and so on. It is one of India's
oldest industrial industries. The textile sector, which employs both skilled and
unskilled workers, is the second largest. The government allows 100 percent
FDI in this area under the Automatic Route. Textile exports account for more
than 10% of total exports.
 Education Sector in India:
The Goods and Services Tax (GST) is beginning to have an influence on the
education industry. The GST on colouring books, exercise books, notebooks,
and crayons will be 12%, while the GST on pens and school bags would be
18%, according to the longawaited adjustment. When it comes to services,
some educational institutions will be exempt from the GST, and conventional
courses will follow a similar pattern. The impact on competitive test coaching
schools will be significant, as they will be subject to a GST of up to 18%.

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GST AND TECHNOLOGY
GST Network (GSTN)
It is a non-profit, non-government organization that manages the IT system for the
GST portal, acting as the backbone of the entire GST ecosystem in India. It serves
as a central interface between taxpayers, the Central and State Governments,
banks, and accounting bodies. GSTN allows taxpayers to register, file returns,
make payments, and access other tax-related services.
Ownership Structure:
● Government (Central + States): 49%
● Private Institutions: 51%
(Including HDFC, ICICI Bank, NSE, LIC Housing Finance, etc.)
Leadership:
● Chairman: Dr. Ajay Bhushan Pandey
● CEO: Shri Prakash Kumar
● First Chairman: Mr. Navin Kumar
Vision:
To provide a trusted, efficient IT backbone supporting a unified national market
with low compliance costs.
Mission:
● Offer shared IT infrastructure for all stakeholders
● Provide registration, return, and payment services
● Collaborate with partners and GSPs (GST Suvidha Providers)
● Support tax departments and promote compliance
● Aid in policy execution and combat evasion and fraud.
Core Values:
Inclusiveness, Efficiency, Transparency, Commitment, Collaboration, Excellence,
Innovation, and Accountability
Features:
● Robust IT platform
● Common taxpayer interface
● Developed by Infosys with ₹315 crore grant.
● Facilitates real-time tax tracking and analytics.

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Structure of GSTN
Private players own 51% share in the GSTN, and the rest is owned by the
Government. The authorized capital of the GSTN is ₹10 crore (US$1.6 million),
of which 49% of the shares are divided equally between the Central and State
Governments, and the remaining is with private banks.
The GSTN has also been approved for a non-recurring grant of 315 crores. The
contract for developing this vast technological backend was awarded to Infosys in
September 2015.
The GSTN is chaired by Mr. Navin Kumar, an Indian Administrative Service
servant (1975 batch), who has served in many senior positions with the Govt. of
Bihar, and the Central Government.
The Equity Structure of GSTN

Shareholder Shareholding

Central Government 24.5%

State Governments & EC 24.5%

HDFC 10%

HDFC Bank 10%

ICICI Bank 10%

NSE Strategic Investments Co 10%

LIC Housing Finance Ltd 11%

Total 100%

Salient Features of GST Network (GSTN):

The GSTN is a robust IT-based system designed to provide a common platform
for taxpayers and ensure a unified interface between the Centre and States.
Features:
 Strong IT Infrastructure: Facilitates taxpayer registration, return filing, tax
payments, and business analytics, while core statutory functions remain with
tax officials.

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 Registration Processing: Handles initial validation and scrutiny of
registration applications before forwarding them to respective tax authorities;
discrepancies are communicated via the portal.
 Payment of GST by Taxpayers: Allows for online GST payments to enhance
accuracy and reliability, though it is not mandatory.
Payment Options for Taxpayers under GST
Taxpayers can pay GST using two methods:
 Online Payment: Through RBI-authorized agency banks. The taxpayer
selects a bank, makes the payment online, and downloads the challan as proof.
 Offline Payment (Over the Counter): The taxpayer prints the challan and
pays at the bank. The bank then sends confirmation to the RBI and GST
portal.
*Note: It's important to note that GSTN does not handle the tax funds
directly; it only receives payment confirmations from banks.*
 Filing of Returns: A common return is used for CGST, SGST, and IGST.
The system checks Input Tax Credit (ITC) claims by matching invoices,
including for inter-state supplies.
 Ownership Structure: The Central Government owns 24.5%, States hold
24.5% collectively, and private entities (like banks) own 51%. Despite the
private stake, government control ensures data confidentiality.
 Technology Partner: Infosys is the official technology partner, ensuring a
reliable and efficient GST system.
 Trusted National Information Utility: GSTN serves as a secure and efficient
IT backbone for GST operations across India.
 Complex Transaction Handling: GSTN enables the complex adjustment and
settlement of IGST among states and the Centre using strong IT infrastructure.
 Data Security: Strategic government control over GSTN ensures taxpayer
data remains secure and confidential.
 Cost Sharing: GSTN operational costs are shared equally by the Central and
State Governments, with State costs further divided based on the number of
taxpayers.
GSTN is expected to assist in the 4 phases they are:
 Phase 1- GST Registration/ Returns/ Payments.

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 Phase 2 - Review of Pilot & Project development of NSDL.
 Phase 3 - GST planning and implementation.
 Phase 4 - GST solution development.

Volume of Type of expenses

expenses

Maximum IT system designed by Infosys.

expenses

2nd part Fraud Analytics Tools, security audit and other security
functions (will be outsourced based on tender)

3rd part Operating expenses such as salary, rent, office expenses, and
Internal IT facilities.

Functions of GSTN
The Goods and Services Tax Network (GSTN) serves as the digital backbone of
the GST system, acting as the interface between taxpayers and the government. It
supports online GST processes including registration, invoice processing, and
return filing for millions of taxpayers.
 Facilitating Registration: Manages GST registration and shares data with tax
authorities.
 IGST Computation & Settlement: Handles calculations and distribution of
Integrated GST.
 Return Filing: Assists in unified return filing for CGST, SGST, and IGST.
 Bank Integration: Matches tax payments with banking transactions.
 Taxpayer Profiling: Verifies and shares taxpayer data with authorities.
 Management: Calculates and manages Input Tax Credit.
 Reporting: Provides Management Information System (MIS) reports to
governments.
 Invoice Matching: Matches sales and purchase invoices for ITC validation.
 Appeals: Enables taxpayers to appeal decisions made by adjudicating
authorities under GST laws.

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 Audit: Assists in auditing taxpayer records to verify turnover, tax payments,
refunds, and Input Tax Credit compliance.
 Fund Transfer: Manages accounting of fund transfers between Central and
State Governments.

GST Suvidha Provider (GSP)

GST Suvidha Providers (GSPs) are licensed entities authorized by the Goods and
Services Tax Network (GSTN) to offer innovative and user-friendly solutions for
taxpayers to interact with the GST system. They help businesses with tasks such
as registration, invoice uploading, and return filing through software interfaces
provided by Application Service Providers (ASPs).
GSTN appointed Infosys as the Managed Service Provider and selected 73
companies (including one state tax authority) as GSPs. GSPs act as a bridge
between taxpayers and the GST system, making compliance processes more
efficient and accessible.
To access the GST system, eligible third parties can obtain a GST Suvidha
Provider (GSP) License from the GSTN. GSPs are authorized to create third-party
applications, often in collaboration with Application Service Providers (ASPs), to
facilitate taxpayer interactions with the GST system through secure APIs. These
applications can be used on various platforms like desktop and mobile.
GSPs play a strategic role in simplifying processes such as registration, invoice
uploading, and return filing. The GSTN supports the development of a GSP
ecosystem by encouraging capable enterprises through an open and transparent
framework.
While a government-run G2B portal is available for taxpayers, GSP-provided
apps offer more flexibility and convenience. There are two levels of interaction:
between the taxpayer and the GSP app, and between the GSP and the GST system.
In some cases, the app provider and GSP may be the same entity, and data may
directly flow from the user to the GST system via the GSP. The diagram below
gives the most generic case.
Overview of GST Suvidha Ecosystem
A common GST system will provide linkage to all State/UT commercial Tax
departments, Central Tax authorities, taxpayers, Banks and other stakeholders.

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The ecosystem consists of all stakeholders starting from taxpayer to tax
professional to tax officials to GST portal to banks to accounting authorities.
Core functionalities such as entity registration, invoice uploading, and return
filings are all accessible through these APIs.
 All GST System functionalities like registration of entities, uploading of
invoices, filing of returns will all be available through APIs.
 GSTN believes in creating an ecosystem of Services Providers viz GST
Suvidha Provider (GSP) providing innovative se solutions (Portal, Mobile
App, Enriched API) either themselves or through its third party partners for
making tax filing more easy and convenient to taxpayers.
 GSTN envisages a very important role of GSPs in making GST rollout easy
and convenient for taxpayers.

 As shown in the diagram above, GSP providers are allowed to create GST
applications themselves or allow third-party se application developers to
access the GSTN through them. qui Also, taxpayers are free to choose an
Application Provider. or GSP of his/her choice, irrespective and independent
to the other. Thus, a taxpayer can choose a set of services from one GSP and
the rest from other GSPs. For example, a taxpayer can obtain GST registration
through one GSP or ASP, while filing a GST return through another GSP or
ASP. (ASP-Application Service Provider)

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CHAPTER 6
CASE STUDY ON REGULAR GST
AND
SWOT ANALYSIS

 Sales
 Purchases
 Filing of GSTR-1
 Filing of GSTR-3B

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Tetragon Trading Co,

April month Sales
Invoice Amount Tax CGST SGST IGST Total
date Customers Status
01-04-
2025 Aarav 5,666 Exempt - - - 5,666
02-04-
2025 Aishwarya 47,194 Taxable 4,247 4,247 - 55,689
05-04-
2025 Ananya 13,168 Taxable - - 2,370 15,538
06-04-
2025 Arnav 27,007 Exempt - - - 27,007
06-04-
2025 Dev 13,685 Exempt - - - 13,685
08-04-
2025 Isha 19,678 Exempt - - - 19,678
08-04-
2025 Kunal 10,665 Taxable 960 960 - 12,585
08-04-
2025 Manish 28,809 Taxable 2,593 2,593 - 33,995
15-04-
2025 Meena 9,338 Taxable - - 1,681 11,019
17-04-
2025 Mohit 43,798 Taxable 3,942 3,942 - 51,682
19-04-
2025 Nandini 25,942 Exempt - - - 25,942
20-04-
2025 Neha 37,018 Taxable - - 6,663 43,681
21-04-
2025 Priya 8,975 Exempt - - - 8,975
22-04-
2025 Rahul 18,230 Taxable 1,641 1,641 - 21,511
22-04-
2025 Rakesh 9,031 Taxable 813 813 - 10,657
23-04-
2025 Ritu 31,033 Exempt - - - 31,033
24-04-
2025 Siddharth 24,447 Taxable - - 4,400 28,847
24-04-
2025 Sneha 15,140 Taxable 1,363 1,363 - 17,865
27-04-
2025 Tanvi 28,613 Taxable - - 5,150 33,763
30-04-
2025 Varun 34,740 Taxable 3,127 3,127 - 40,993

TOTAL 4,52,177 18,686 18,686 20,264 5,09,811

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GOODS USED FOR PERSONAL USE ARE NOT ELIGIBLE FOR

Tetragon Trading Co,

April month Purchases

Taxable ITC
Inv. no Date Name CGST SGST IGST Total (Y/N)
Value
Suryodaya
1021 2.4.25 Traders 19,696 - - - 19,696 N
4563 3.4.25 Kaveri Traders 23,062 - - - 23,062 N
Krishna Food 2,000
3392 4.4.25 & Beverages 180 180 - 2,360 N
8745 6.4.25 Vijay Motors 5,00,000 45,000 45,000 - 5,90,000 N
GreenLeaf
2290 7.4.25 Naturals 29,118 - - - 29,118 N
Navratna
1183 9.4.25 Fashion 38,284 - - 6,891 45,175 Y
Annapurna
6624 10.4.25 Organics 5,488 - - 988 6,476 N

102 10.4.25 City Club 5,000 450 450 - 5,900 N

Eastern Spices
3901 12.4.25 Ltd 8,850 - - - 8,850 N
9410 12.4.25 Apple Store 89,900 8,091 8,091 - 1,06,082 N
Reliance
5723 15.4.25 Digitals 22,000 1,980 1,980 - 25,960 N

4837 16.4.25 Shivam Traders 6,191 - - 1,114 7,305 Y

Vishwas
3049 22.4.25 Technologies 32,842 2,956 2,956 - 38,754 Y
Bhoomi Agro
6682 23.4.25 Mart 27,078 2,437 2,437 - 31,952 Y
Royal
7520 30.4.25 Furnishings 25,240 - - - 25,240 N
TOTAL 8,34,749 61,094 61,094 8,993 9,65,930

*Note:- N = ITC NOT ELIGIBE

Y= ITC ELIGIBLE

CLAIMING ITC.*

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PURCHASES
SUMMARY
USED
TRADERS NAME STATE GSTIN ITEMS FOR
Maharashtra
Suryodaya Traders 27ABCDE1234F1Z7 Printer Business
Navratna Fashions Gujarat 24BCDEF2345G1Z3 Dress material Business
Krishna Food & Karnataka Packaged
Beverages 29DGFHM0258P2ZI snacks Personal
Karnataka
Vijay Motors 29POIKL9632O3ZM Tata car Personal
Tamil Nadu
Annapurna Organics 33CDEFG3456H1Z1 Millet flour Business
Eastern Spices Ltd West Bengal 19DEFGH4567I1Z6 Dried red chilies Business
UttarPradesh Plastic
Shivam Traders 09EFGHI5678J1Z5 containers Business
Karnataka
City Club 29WDVH8642Q4ZA Membership Personal
Royal Furnishings Rajasthan 08FGHIJ6789K1Z8 Velvet curtains Business
Karnataka
Apple Store 29SDFOG2199G4ZS MacBook Personal
Karnataka Washing
Reliance Digitals 29RELOV2563H5ZL machine Personal
Karnataka Unprocessed
Kaveri Traders 29GHIJK7890L1Z2 grains Business
Karnataka
GreenLeaf Naturals 29HIJKL8901M1Z9 Herbal teas Business
Karnataka
Vishwas Technologies 29IJKLM9012N1Z4 Wi-Fi routers Business
Karnataka Pesticide
Bhoomi Agro Mart 29JKLMN0123P1Z0 sprayers Business

GST Return Filing - Regular Scheme

GSTR-1
No. of Taxable
Type Invoice value CGST SGST IGST

B2B -

B2C 13 3,20,191 18,686 18,686 20,264

Exports
NIL
Rated 7 1,31,986 - - -

*Note:- GSTR-1 Filed on 10th may 2025 *

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Calculation of payment for filing GSTR-3B

ITC Paid through

Tax type Tax Liability Set-off
Available Cash

IGST 20,264 8,005 8,005 12,259

CGST 18,686 5,393 5,393 13,293

SGST 18,686 5,393 5,393 13,293

*Note:- GSTR-3B Filed on 20th may 2025 *

GSTR-3B Summary
Taxable
Sec Details Value IGST CGST SGST
Outward taxable supplies (other than
3.1(a) zero rated, nil rated and exempted) 3,20,191 20,264 18,686 18,686
Outward taxable supplies (zero
3.1(b) rated) - - - -
Other outward supplies (nil rated,
3.1(c) exempted) 1,31,986 - - -
Inward supplies liable to reverse
3.1(d) charge 25,240 4,543 - -

3.1(e) Non-GST outward supplies - - - -

ITC on inward supplies Liable to
4(A)1 RCM - - - -

4(A)2 ITC on imports - - - -

4(A)5 All other ITC - -

4(B) ITC Reversed - 8,005 5,393 5,393

4(C) Net ITC Available 32,812 5,393 5,393

5.1 GST Payable in Cash 12,259 13,293 13,293

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QUESTION BASED ON THE ABOVE CASE STUDY

Describe the GSTR-1 filing process, including "Prepare Online" mode,

submission, and filing. How is the authenticity of GSTR-1 filing ensured
using Electronic Verification Code (EVC) or Digital Signature Certificate
(DSC)? What precautions should be taken before filing GSTR-1 to avoid
errors and ensure seamless ITC claims for buyers? Also explain the GSTR-
3B filing process and its importance.

In the GST filing system, GSTR-1 is a critical return where a taxpayer reports all
outward supplies made during a tax period. In the case study, the taxpayer filed
GSTR-1 using the "Prepare Online" mode on the GST portal. In this mode, each
invoice detail is entered manually for outward taxable supplies as well as exports.
The taxpayer recorded 13 invoices for B2C sales within India and 7 invoices
were classified under NIL-rated supplies. Once all the invoice data is entered and
saved, it is submitted for validation by the portal. After submission, the taxpayer is
not allowed to edit the data unless the return is reset or amended later.

Filing GSTR-1 requires authentication to maintain data security and legal sanctity.
This authentication can be done through an Electronic Verification Code (EVC),
which is OTP-based and linked to the taxpayer’s registered mobile number or
email, or through a Digital Signature Certificate (DSC) for businesses that require
additional security layers. In the given case study, the taxpayer authenticated the
GSTR-1 using an EVC, ensuring the filing process was secure and verifiable.

Before filing GSTR-1, several precautions must be taken to avoid errors. The
taxpayer must reconcile all outward supplies with books of accounts to ensure
there are no mismatches. Proper GSTINs should be mentioned for B2B invoices,
correct taxable values and tax rates should be applied, and supplies should be
accurately classified into taxable, exempt, or NIL-rated categories.

Inaccurate filing can cause a mismatch in buyers’ GSTR-2B, delaying or denying

their Input Tax Credit (ITC). In the case study, the taxpayer separated outward
taxable supplies amounting to ₹3,20,191 and NIL-rated export supplies amounting
to ₹1,31,986 properly, ensuring smooth ITC flow to buyers.

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After filing GSTR-1, the next critical step is filing GSTR-3B. GSTR-3B is a
monthly self-declaration where the taxpayer reports summarized details of
outward supplies, inward supplies, eligible ITC, and net tax payable. In the case
study, GSTR-3B was filed on 20th May 2025, after accounting for outward
supplies, inward supplies liable under Reverse Charge Mechanism (RCM), and
claiming eligible ITC. The taxpayer initially claimed an Input Tax Credit of
₹32,812, but after reversing ₹5,393 of ineligible ITC under CGST and SGST each
(due to personal purchases like car and washing machine), the net ITC was
adjusted against the output liability. The balance GST liability was paid through
the electronic cash ledger.

Timely and accurate filing of GSTR-1 and GSTR-3B is essential not just to
comply with legal requirements but also to maintain credibility with buyers and
suppliers. It ensures that buyers are able to claim ITC without disputes, avoids
penalties, and keeps the working capital cycle smooth.

SWOT ANALYSIS BASED ON THE ABOVE CASE STUDY

Strengths
 Rigorous compliance regime: GSTR-1 (filed 10 May) and GSTR-3B
(filed 20 May) were submitted on schedule with fully matching sales data,
minimizing audit risk
 Precise tax accounting: Correct bifurcation of CGST, SGST and IGST on
sales (4.5L+ turnover) ensures accurate tax liability reporting and reduces
errors in multi-state transactions.
 Effective ITC utilization: A substantial net input tax credit (=32.8K
IGST, ₹5.4K CGST/SGST) was claimed, significantly offsetting cash tax
outflows despite the necessary reversals
 Comprehensive record-keeping: Detailed documentation of purchases
from multiple states and vendors demonstrates strong internal controls and
supports audit readiness.

Weaknesses
 Mixed-use expenditures: Personal-use purchases (eg. car, electronics, and
home appliances) in the procurement mix force ITC reversals (18.8K),
eroding tax credit benefits.
 High RCM liability: Significant inward supplies under reverse charge
(25.2K value, 24.5K IGST) increase immediate cash tax demands and
complicate compliance tracking.

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 Large exempt sales: A sizable exempt/nil-rated turnover (~₹1.32L)
generates no output tax, resulting in underutilized input credits on those
supplies.
 Limited B2B Invoicing: Absence of B2B sales (all turnover from B2C)
suggests reliance on smaller consumer transactions, potentially
constraining economies of scale and the input credit chain.

Opportunities
 Refine procurement policy: Segregating personal vs business expenses
(e.g. enforcing business-use only purchases) can maximize ITC retention
and improve cash flows.
 Expand B2B/Interstate business: Targeting more business clients and
inter-state supplies would align with the available IGST credits and unlock
higher-margin growth opportunities
 Leverage compliance reputation: Using the strong filing track record to
build trust with banks and suppliers can secure better credit terms and
smoother audit interactions.
 Automate GST processes: Implementing ERP/GST accounting tools for
RCM calculations and classification would reduce manual errors, freeing
resources for strategic planning.
Threats
 Heightened audit scrutiny: Mixed-use ITC claims and RCM
complexities could trigger tax authority reviews, risking disallowance of
credits or penalties.
 Cash flow pressure: Heavy cash tax payments (especially under reverse
charge) may strain liquidity if not proactively managed, impacting
operational budgets.
 Regulatory changes: Future GST rule tightening (eg. stricter ITC
eligibility or anti-abuse measures) could reduce current tax advantages and
require process overhauls.
 Competitive disadvantage: Higher effective tax costs (from reversals and
RCM outlays) may limit pricing flexibility compared to competitors with
simpler compliance profiles.

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CHAPTER 7
MAJOR FINDINGS AND
SUGGESTIONS

 Benefits
 Challenges
 Suggestions
 Conclusion

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Major Findings and Suggestions
Benefits
 Simplified Tax Structure: GST has simplified the tax structure, reducing
complexity and cascading tax effects. This has led to a more efficient and
transparent taxation system.
 Increased Compliance: GST has led to increased tax compliance, as
businesses are required to maintain digital records and file regular returns.
This has helped in reducing tax evasion and increasing revenue collection.
 Reduced Tax Evasion: GST has reduced tax evasion, as businesses are
required to maintain digital records and file regular returns.
 Increased Transparency: GST has increased transparency, as businesses
are required to disclose their tax details online.
 Improved Efficiency: GST has improved efficiency, as businesses can
now file returns and pay taxes online.
Challenges
 Problems in Implementation: Challenges were faced during GST
implementation, including understanding new regulations and adapting to
changes. Many businesses struggled to comply with the new system.
 Varying Impact on Businesses: GST has had varying impacts on
businesses, depending on their industry, size, and type. Some businesses
have benefited from reduced tax rates, while others have faced increased
costs.
 Technical Glitches: Technical glitches and website issues have been
faced by businesses while filing returns and paying taxes online.
 Compliance Burden: The compliance burden has increased for small and
medium-sized enterprises (SMEs) due to the complexity of GST
regulations.
 Rate Changes: Frequent changes in GST rates have caused confusion and
difficulties for businesses.
Suggestions
 Regular GST Updates: Businesses should stay updated on GST
regulations and rate changes. This will help them to comply with the law
and take advantage of any benefits.

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 GST Training: Businesses should provide GST training to employees to
enhance understanding and compliance. This will help to reduce errors and
ensure smooth compliance.
 Effective GST Planning: Businesses should engage in effective GST
planning to minimize tax liability and optimize benefits. This can help to
reduce costs and improve competitiveness.
 Technology Adoption: Businesses can leverage technology to streamline
GST compliance and improve efficiency. This can help to reduce the
burden of compliance and improve productivity.
 GST Record Keeping: Businesses should maintain accurate and detailed
records of GST transactions to ensure compliance and facilitate audits.
 GST Expert Consultation: Businesses can consult with GST experts or
chartered accountants to ensure compliance and optimize GST benefits.

Conclusion
This Case study on Regular GST highlights its impact on businesses and the
economy. While GST implementation presented challenges, it has also brought
benefits such as simplified tax structure and increased compliance. By
understanding GST regulations, leveraging technology, and engaging in effective
GST planning, businesses can optimize GST benefits and maintain
competitiveness. This study provides valuable insights for businesses navigating
the GST landscape, helping them to make informed decisions and stay ahead in
the competitive market.
The study's findings have significant implications for policymakers, businesses,
and stakeholders. By understanding the benefits and challenges of GST,
policymakers can make informed decisions to improve the taxation system.
Businesses can use the study's findings to develop effective GST strategies and
stay competitive. Overall, the study contributes to a better understanding of GST
and its impact on the economy.

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A Case Study on Regular GST

Annexure
 Questionnaire
 Bibliography

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A Case Study on Regular GST
Questionnaire on Regular GST

Dear Respondent
We are the students of ATNCC, Shivamogga. We are doing this project to gain
more knowledge about Regular GST and its impacts.
1. NAME :
2. E-mail :
3. [Link] :
4. Are you aware of the difference between Regular GST and
Composition Scheme?

YES

NO

MAY BE

5. Which category do you fall under as a taxpayer?

Regular GST taxpayer

Composition Scheme
taxpayer
Not registered under
GST
Unsure

6. How often do you file GST returns?

Monthly

Quarterly

Annually

I don't file
returns myself

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7. On a scale of 1 to 5, how easy do you find the GST return filing

process?
(1 = Very Difficult, 5 = Very Easy)

80

60

40

20

0
1 2 3 4 5

8. Do you use any software or service for GST return filing?

Yes, GST portal only

Yes, third-party
software (e.g., Tally,
ClearTax)
No, I do it manually

I take help from a

professional

9. What challenges do you face while complying with Regular GST

requirements?

Complex filing
process
Lack of
knowledge
Technical glitches
on the portal
High cost of
compliance
None

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A Case Study on Regular GST

10. Do you feel regular GST offers transparency and accountability in

business transactions?

Yes
No
Not sure

11. Do you think the current GST rates under the Regular scheme are fair
for your industry or business?

Yes
No
Can't say

12. Any suggestions to improve the Regular GST system?

a) Must improve the GST Portal workings.

b) End customer who pays GST on any products/service should also get
some % of benefit
c) Must improve in the means of adaptation
d) Change the whole tax slabs
e) Simplifying return filing processes
f) Exempt GST on medicine.
g) Stable GST Rates
h) Decrease rate of taxes
i) GST slab should even more reduce!

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A Case Study on Regular GST

BIBLIOGRAPHY

Books:

 “Goods and Services Tax”, Vasanth Kumara HG

 “Goods and Services Tax”, R.G. Saha, Usha Devi N, and
others.
 “GST Law and Practice”, [Link], Ganesh N.K. and
others.
 Shanlax International Journal of Economics.

Websites:

 [Link]
 [Link]
 [Link]
 [Link]
 [Link]
 [Link]
 [Link]
 [Link] (Chatgpt)

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