Benefits, Features & Objectives of GST | Goods and Services Tax (GST) - B Com PDF Download

 Page 1


Benefits of GST 
For Central and State Governments 
• Simple and Easy to administer: Because multiple indirect taxes at the central and state 
levels are being replaced by a single tax “GST”. Moreover, backed with a robust end to 
end IT system, it would be easier to administer. 
• Better control on leakage: Because of better tax compliance, reduction of rent seeking, 
transparency in taxation due to IT use, an inbuilt mechanism in the design of GST that 
would incentivize tax compliance by traders. 
• Higher revenue efficiency: Since the cost of collection will decrease along with an 
increase in the ease of compliance, it will lead to higher tax revenue. 
For the Consumer 
• The single and transparent tax will provide a lowering of inflation. 
• Relief in overall tax burden. 
• Tax democracy that is luxury items will be taxed more and basic goods will be tax-free. 
For the Business Class 
• Ease of doing business will increase due to easy tax compliance. 
• Uniformity of tax rate and structure, therefore, better future business decision making 
and investments by the corporate. 
• Removal of cascading effects of taxes. 
• Reduction in transactional cost will lead to improved competitiveness. 
• Gain to the manufacturer and exporters. 
• It is expected to raise the country . GDP
For the implementation of GST, apart from the Constitution Amendment Act, some other 
statutes are also necessary. Recently 5 supporting laws to the GST were recommended by the 
council. Four of the bills should be passed by the parliament, while the 5th one should be passed 
by respective state legislatures. The details are given below. 
Page 2


Benefits of GST 
For Central and State Governments 
• Simple and Easy to administer: Because multiple indirect taxes at the central and state 
levels are being replaced by a single tax “GST”. Moreover, backed with a robust end to 
end IT system, it would be easier to administer. 
• Better control on leakage: Because of better tax compliance, reduction of rent seeking, 
transparency in taxation due to IT use, an inbuilt mechanism in the design of GST that 
would incentivize tax compliance by traders. 
• Higher revenue efficiency: Since the cost of collection will decrease along with an 
increase in the ease of compliance, it will lead to higher tax revenue. 
For the Consumer 
• The single and transparent tax will provide a lowering of inflation. 
• Relief in overall tax burden. 
• Tax democracy that is luxury items will be taxed more and basic goods will be tax-free. 
For the Business Class 
• Ease of doing business will increase due to easy tax compliance. 
• Uniformity of tax rate and structure, therefore, better future business decision making 
and investments by the corporate. 
• Removal of cascading effects of taxes. 
• Reduction in transactional cost will lead to improved competitiveness. 
• Gain to the manufacturer and exporters. 
• It is expected to raise the country . GDP
For the implementation of GST, apart from the Constitution Amendment Act, some other 
statutes are also necessary. Recently 5 supporting laws to the GST were recommended by the 
council. Four of the bills should be passed by the parliament, while the 5th one should be passed 
by respective state legislatures. The details are given below. 
• The Central Goods and Services Tax Bill 2017 (The CGST Bill). 
• The State Goods and Services Tax Bill 2017 (The SGST Bill). 
• The Integrated Goods and Services Tax Bill 2017 (The IGST Bill). 
• The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill). 
• The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation 
Bill). 
Tax slabs are decided as 0%, 5%, 12%, 18%, and 28% along with categories of exempted and 
zero rated goods for different types of goods and services. 
Further, a cess would be levied on certain goods such as luxury cars, aerated drinks, Pan Masala 
and tobacco products, over and above the rate of 28% for payment of compensation to the 
States. However, which goods and services fall into which bracket is still an enormous task to 
be completed by the GST council. 
Highest tax slab is pegged at 40%. 
The Principle of GST 
• The Centre will levy and collect the Central GST. 
• States will levy and collect the State GST on the supply of goods and services within a 
state. 
• The Centre will levy the Integrated GST (IGST) on the inter-state supply of goods and 
services, and apportion the state’s share of tax to the state where the good or service is 
consumed. 
• The 2016 Act requires Parliament to compensate states for any revenue loss owing to 
the implementation of GST. 
Issues Arisen OR Unresolved 
a) Not all items are covered: Taxation for certain items such as Alcohol, Tobacco etc. are still 
not under the GST domain. States argue that including them would hamper their revenue and 
they would suffer a huge resource. However, some experts say that the real reason is the nexus 
of politicians with some business class and high profile lobbying. Further, the Finance minister 
of India has said in the parliament that the consensus to include alcohol and tobacco under GST 
regime is possible in foreseeable future. 
b) Decision criteria for the tax bracket: There are apprehensions that how to decide about the 
items and the criteria that which item will fall into which tax bracket. It may lead to lobbying. 
To this, the Finance minister has said that the decision will be taken by the GST Council only 
and after due diligence and most probably by the consensus. 
Page 3


Benefits of GST 
For Central and State Governments 
• Simple and Easy to administer: Because multiple indirect taxes at the central and state 
levels are being replaced by a single tax “GST”. Moreover, backed with a robust end to 
end IT system, it would be easier to administer. 
• Better control on leakage: Because of better tax compliance, reduction of rent seeking, 
transparency in taxation due to IT use, an inbuilt mechanism in the design of GST that 
would incentivize tax compliance by traders. 
• Higher revenue efficiency: Since the cost of collection will decrease along with an 
increase in the ease of compliance, it will lead to higher tax revenue. 
For the Consumer 
• The single and transparent tax will provide a lowering of inflation. 
• Relief in overall tax burden. 
• Tax democracy that is luxury items will be taxed more and basic goods will be tax-free. 
For the Business Class 
• Ease of doing business will increase due to easy tax compliance. 
• Uniformity of tax rate and structure, therefore, better future business decision making 
and investments by the corporate. 
• Removal of cascading effects of taxes. 
• Reduction in transactional cost will lead to improved competitiveness. 
• Gain to the manufacturer and exporters. 
• It is expected to raise the country . GDP
For the implementation of GST, apart from the Constitution Amendment Act, some other 
statutes are also necessary. Recently 5 supporting laws to the GST were recommended by the 
council. Four of the bills should be passed by the parliament, while the 5th one should be passed 
by respective state legislatures. The details are given below. 
• The Central Goods and Services Tax Bill 2017 (The CGST Bill). 
• The State Goods and Services Tax Bill 2017 (The SGST Bill). 
• The Integrated Goods and Services Tax Bill 2017 (The IGST Bill). 
• The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill). 
• The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation 
Bill). 
Tax slabs are decided as 0%, 5%, 12%, 18%, and 28% along with categories of exempted and 
zero rated goods for different types of goods and services. 
Further, a cess would be levied on certain goods such as luxury cars, aerated drinks, Pan Masala 
and tobacco products, over and above the rate of 28% for payment of compensation to the 
States. However, which goods and services fall into which bracket is still an enormous task to 
be completed by the GST council. 
Highest tax slab is pegged at 40%. 
The Principle of GST 
• The Centre will levy and collect the Central GST. 
• States will levy and collect the State GST on the supply of goods and services within a 
state. 
• The Centre will levy the Integrated GST (IGST) on the inter-state supply of goods and 
services, and apportion the state’s share of tax to the state where the good or service is 
consumed. 
• The 2016 Act requires Parliament to compensate states for any revenue loss owing to 
the implementation of GST. 
Issues Arisen OR Unresolved 
a) Not all items are covered: Taxation for certain items such as Alcohol, Tobacco etc. are still 
not under the GST domain. States argue that including them would hamper their revenue and 
they would suffer a huge resource. However, some experts say that the real reason is the nexus 
of politicians with some business class and high profile lobbying. Further, the Finance minister 
of India has said in the parliament that the consensus to include alcohol and tobacco under GST 
regime is possible in foreseeable future. 
b) Decision criteria for the tax bracket: There are apprehensions that how to decide about the 
items and the criteria that which item will fall into which tax bracket. It may lead to lobbying. 
To this, the Finance minister has said that the decision will be taken by the GST Council only 
and after due diligence and most probably by the consensus. 
c) Multiple tax rates and brackets: The philosophical idea that GST means “One Nation one 
Tax” is currently diluted due to multiple tax rates and brackets. To this, the Finance minister 
has said that since the target consumer of goods and services have different capabilities and 
therefore there must be a system similar to the democratic lines where higher value consumer 
pays more taxes. 
d) Power to impose tax taken away by Central Government from the Parliament: The Central 
GST Bill, 2017 allows the central government to notify CGST rates, subject to a cap. This 
implies that the government may change rates subject to a cap of 20%, without requiring the 
approval of Parliament. Under the Constitution, the power to levy taxes is vested in Parliament 
and state legislatures. Though the proposal to set the rates through delegated legislation meets 
this requirement, the question is whether it is appropriate to do so without prior parliamentary 
scrutiny and approval. 
e) Confusion regarding the control over taxation: To avoid dual control, the GST council has 
reached a compromised formula. 90 percent of tax assesses with an annual turnover of Rs 1.5 
crores or less, will be assessed by states and the rest by the Centre. For those with a turnover of 
over Rs 1.5 crores, the states and the Centre will share it equally. However, this ‘solution’ has 
its own set of issues. For example, if an entity with a turnover of less than Rs 1.5 crores in one 
year, posts a turnover of Rs 1.5 crores in the following financial year, who would be the new 
authority to take over the assessment? And, how will the existing investigations, if any, against 
the entity be addressed, and by whom? “There are a lot of procedural issues, and if these issues 
are not addressed properly, they would lead to litigations. 
f) The issue of casual taxable person: If a person registered in one state moves to another state 
for a short period for some business transaction  say to participate in a fair or exhibition, then –
that person would have to get himself registered in that state for that period. 
The salient features of GST are as under: 
(i) Supply would be the Taxable event: GST would be applicable on supply of goods or services 
as against the present concept of tax on the manufacture of goods or on sale of goods or on 
provision of services (Refer Section 7 of CGST Act, 2017) 
(ii) Destination Based Taxation: Consuming state will gain due to this shift from origin based 
taxation to destination based taxation; Parliament shall by law, on recommendation of GST 
council, provide for compensation to states for loss of revenue arising on account of 
implementation of GST upto 5 years as per clause 18 of the constitutional (One hundred and 
First) amendment Act, 2016 
Page 4


Benefits of GST 
For Central and State Governments 
• Simple and Easy to administer: Because multiple indirect taxes at the central and state 
levels are being replaced by a single tax “GST”. Moreover, backed with a robust end to 
end IT system, it would be easier to administer. 
• Better control on leakage: Because of better tax compliance, reduction of rent seeking, 
transparency in taxation due to IT use, an inbuilt mechanism in the design of GST that 
would incentivize tax compliance by traders. 
• Higher revenue efficiency: Since the cost of collection will decrease along with an 
increase in the ease of compliance, it will lead to higher tax revenue. 
For the Consumer 
• The single and transparent tax will provide a lowering of inflation. 
• Relief in overall tax burden. 
• Tax democracy that is luxury items will be taxed more and basic goods will be tax-free. 
For the Business Class 
• Ease of doing business will increase due to easy tax compliance. 
• Uniformity of tax rate and structure, therefore, better future business decision making 
and investments by the corporate. 
• Removal of cascading effects of taxes. 
• Reduction in transactional cost will lead to improved competitiveness. 
• Gain to the manufacturer and exporters. 
• It is expected to raise the country . GDP
For the implementation of GST, apart from the Constitution Amendment Act, some other 
statutes are also necessary. Recently 5 supporting laws to the GST were recommended by the 
council. Four of the bills should be passed by the parliament, while the 5th one should be passed 
by respective state legislatures. The details are given below. 
• The Central Goods and Services Tax Bill 2017 (The CGST Bill). 
• The State Goods and Services Tax Bill 2017 (The SGST Bill). 
• The Integrated Goods and Services Tax Bill 2017 (The IGST Bill). 
• The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill). 
• The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation 
Bill). 
Tax slabs are decided as 0%, 5%, 12%, 18%, and 28% along with categories of exempted and 
zero rated goods for different types of goods and services. 
Further, a cess would be levied on certain goods such as luxury cars, aerated drinks, Pan Masala 
and tobacco products, over and above the rate of 28% for payment of compensation to the 
States. However, which goods and services fall into which bracket is still an enormous task to 
be completed by the GST council. 
Highest tax slab is pegged at 40%. 
The Principle of GST 
• The Centre will levy and collect the Central GST. 
• States will levy and collect the State GST on the supply of goods and services within a 
state. 
• The Centre will levy the Integrated GST (IGST) on the inter-state supply of goods and 
services, and apportion the state’s share of tax to the state where the good or service is 
consumed. 
• The 2016 Act requires Parliament to compensate states for any revenue loss owing to 
the implementation of GST. 
Issues Arisen OR Unresolved 
a) Not all items are covered: Taxation for certain items such as Alcohol, Tobacco etc. are still 
not under the GST domain. States argue that including them would hamper their revenue and 
they would suffer a huge resource. However, some experts say that the real reason is the nexus 
of politicians with some business class and high profile lobbying. Further, the Finance minister 
of India has said in the parliament that the consensus to include alcohol and tobacco under GST 
regime is possible in foreseeable future. 
b) Decision criteria for the tax bracket: There are apprehensions that how to decide about the 
items and the criteria that which item will fall into which tax bracket. It may lead to lobbying. 
To this, the Finance minister has said that the decision will be taken by the GST Council only 
and after due diligence and most probably by the consensus. 
c) Multiple tax rates and brackets: The philosophical idea that GST means “One Nation one 
Tax” is currently diluted due to multiple tax rates and brackets. To this, the Finance minister 
has said that since the target consumer of goods and services have different capabilities and 
therefore there must be a system similar to the democratic lines where higher value consumer 
pays more taxes. 
d) Power to impose tax taken away by Central Government from the Parliament: The Central 
GST Bill, 2017 allows the central government to notify CGST rates, subject to a cap. This 
implies that the government may change rates subject to a cap of 20%, without requiring the 
approval of Parliament. Under the Constitution, the power to levy taxes is vested in Parliament 
and state legislatures. Though the proposal to set the rates through delegated legislation meets 
this requirement, the question is whether it is appropriate to do so without prior parliamentary 
scrutiny and approval. 
e) Confusion regarding the control over taxation: To avoid dual control, the GST council has 
reached a compromised formula. 90 percent of tax assesses with an annual turnover of Rs 1.5 
crores or less, will be assessed by states and the rest by the Centre. For those with a turnover of 
over Rs 1.5 crores, the states and the Centre will share it equally. However, this ‘solution’ has 
its own set of issues. For example, if an entity with a turnover of less than Rs 1.5 crores in one 
year, posts a turnover of Rs 1.5 crores in the following financial year, who would be the new 
authority to take over the assessment? And, how will the existing investigations, if any, against 
the entity be addressed, and by whom? “There are a lot of procedural issues, and if these issues 
are not addressed properly, they would lead to litigations. 
f) The issue of casual taxable person: If a person registered in one state moves to another state 
for a short period for some business transaction  say to participate in a fair or exhibition, then –
that person would have to get himself registered in that state for that period. 
The salient features of GST are as under: 
(i) Supply would be the Taxable event: GST would be applicable on supply of goods or services 
as against the present concept of tax on the manufacture of goods or on sale of goods or on 
provision of services (Refer Section 7 of CGST Act, 2017) 
(ii) Destination Based Taxation: Consuming state will gain due to this shift from origin based 
taxation to destination based taxation; Parliament shall by law, on recommendation of GST 
council, provide for compensation to states for loss of revenue arising on account of 
implementation of GST upto 5 years as per clause 18 of the constitutional (One hundred and 
First) amendment Act, 2016 
(iii) Dual Taxing Structure: The new Article 246A intends to grant concurrent powers to the 
Union and state legislatures to make laws with respect to GST. The power to make laws in 
respect of supplies in the course of inter-state trade or commerce will be vested only in the 
Union Government. States will have the right to levy GST on intra-state transactions including 
services. It would be a dual GST with the Centre and the States simultaneously levying it on a 
common base. The GST to be levied by the Centre would be called Central GST (CGST) and 
that to be levied by the States would be called State GST (SGST). 
(iv) Integrated GST (IGST): It would be levied on inter-State supply (including stock transfers) 
of goods or services. This would be collected by the Centre so that the credit chain is not 
disrupted. 
(v) BCD + IGST on Imports of Goods: It would be treated as inter-State supplies and would be 
subject to IGST in addition to the applicable customs duties (BCD) 
(vi) IGST on Import of Services: Import of services would be treated as inter-State supplies and 
would be subject to IGST. 
(vii) Central taxes that would be subsumed within the GST 
- Central Excise duty (Entry 84) 
- Duties of Excise (Medicinal and Toilet Preparations) (Entry 84) 
- Additional Duties of Excise (Goods of Special Importance) (Entry 84) 
- Additional Duties of Excise (Textiles and Textile Products) (Entry 84) 
- Additional Duties of Customs (commonly known as CVD) (Entry 83) 
- Special Additional Duty of Customs (SAD) (Entry 83) 
- Service Tax (Entry 92C) 
- Cesses and surcharges insofar as far as they relate to supply of goods or services (Article 271) 
(viii) State taxes that would be subsumed within the GST 
- State VAT (Entry 54) 
- Central Sales Tax (Entry 54) 
- Purchase Tax (Entry 54) 
- Luxury Tax (Entry 62) 
- Entry Tax (All forms) (Entry 52) 
- Entertainment Tax (not levied by the local bodies) (Entry 62) 
- Taxes on advertisements (Entry 55) 
- Taxes on lotteries, betting and gambling (Entry 62) 
- State Cesses and surcharges insofar as far as they relate to supply of goods or services 
(ix) Potable Alcohol Excluded: GST would apply to all goods and services except Alcohol for 
human consumption (Constitutional Exclusion) 
(x) Petroleum products also excluded for the time being: GST on petroleum products would be 
applicable from a date to be recommended by the Goods & Services Tax Council in terms of 
clause 5 of Article 279A 
Page 5


Benefits of GST 
For Central and State Governments 
• Simple and Easy to administer: Because multiple indirect taxes at the central and state 
levels are being replaced by a single tax “GST”. Moreover, backed with a robust end to 
end IT system, it would be easier to administer. 
• Better control on leakage: Because of better tax compliance, reduction of rent seeking, 
transparency in taxation due to IT use, an inbuilt mechanism in the design of GST that 
would incentivize tax compliance by traders. 
• Higher revenue efficiency: Since the cost of collection will decrease along with an 
increase in the ease of compliance, it will lead to higher tax revenue. 
For the Consumer 
• The single and transparent tax will provide a lowering of inflation. 
• Relief in overall tax burden. 
• Tax democracy that is luxury items will be taxed more and basic goods will be tax-free. 
For the Business Class 
• Ease of doing business will increase due to easy tax compliance. 
• Uniformity of tax rate and structure, therefore, better future business decision making 
and investments by the corporate. 
• Removal of cascading effects of taxes. 
• Reduction in transactional cost will lead to improved competitiveness. 
• Gain to the manufacturer and exporters. 
• It is expected to raise the country . GDP
For the implementation of GST, apart from the Constitution Amendment Act, some other 
statutes are also necessary. Recently 5 supporting laws to the GST were recommended by the 
council. Four of the bills should be passed by the parliament, while the 5th one should be passed 
by respective state legislatures. The details are given below. 
• The Central Goods and Services Tax Bill 2017 (The CGST Bill). 
• The State Goods and Services Tax Bill 2017 (The SGST Bill). 
• The Integrated Goods and Services Tax Bill 2017 (The IGST Bill). 
• The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill). 
• The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation 
Bill). 
Tax slabs are decided as 0%, 5%, 12%, 18%, and 28% along with categories of exempted and 
zero rated goods for different types of goods and services. 
Further, a cess would be levied on certain goods such as luxury cars, aerated drinks, Pan Masala 
and tobacco products, over and above the rate of 28% for payment of compensation to the 
States. However, which goods and services fall into which bracket is still an enormous task to 
be completed by the GST council. 
Highest tax slab is pegged at 40%. 
The Principle of GST 
• The Centre will levy and collect the Central GST. 
• States will levy and collect the State GST on the supply of goods and services within a 
state. 
• The Centre will levy the Integrated GST (IGST) on the inter-state supply of goods and 
services, and apportion the state’s share of tax to the state where the good or service is 
consumed. 
• The 2016 Act requires Parliament to compensate states for any revenue loss owing to 
the implementation of GST. 
Issues Arisen OR Unresolved 
a) Not all items are covered: Taxation for certain items such as Alcohol, Tobacco etc. are still 
not under the GST domain. States argue that including them would hamper their revenue and 
they would suffer a huge resource. However, some experts say that the real reason is the nexus 
of politicians with some business class and high profile lobbying. Further, the Finance minister 
of India has said in the parliament that the consensus to include alcohol and tobacco under GST 
regime is possible in foreseeable future. 
b) Decision criteria for the tax bracket: There are apprehensions that how to decide about the 
items and the criteria that which item will fall into which tax bracket. It may lead to lobbying. 
To this, the Finance minister has said that the decision will be taken by the GST Council only 
and after due diligence and most probably by the consensus. 
c) Multiple tax rates and brackets: The philosophical idea that GST means “One Nation one 
Tax” is currently diluted due to multiple tax rates and brackets. To this, the Finance minister 
has said that since the target consumer of goods and services have different capabilities and 
therefore there must be a system similar to the democratic lines where higher value consumer 
pays more taxes. 
d) Power to impose tax taken away by Central Government from the Parliament: The Central 
GST Bill, 2017 allows the central government to notify CGST rates, subject to a cap. This 
implies that the government may change rates subject to a cap of 20%, without requiring the 
approval of Parliament. Under the Constitution, the power to levy taxes is vested in Parliament 
and state legislatures. Though the proposal to set the rates through delegated legislation meets 
this requirement, the question is whether it is appropriate to do so without prior parliamentary 
scrutiny and approval. 
e) Confusion regarding the control over taxation: To avoid dual control, the GST council has 
reached a compromised formula. 90 percent of tax assesses with an annual turnover of Rs 1.5 
crores or less, will be assessed by states and the rest by the Centre. For those with a turnover of 
over Rs 1.5 crores, the states and the Centre will share it equally. However, this ‘solution’ has 
its own set of issues. For example, if an entity with a turnover of less than Rs 1.5 crores in one 
year, posts a turnover of Rs 1.5 crores in the following financial year, who would be the new 
authority to take over the assessment? And, how will the existing investigations, if any, against 
the entity be addressed, and by whom? “There are a lot of procedural issues, and if these issues 
are not addressed properly, they would lead to litigations. 
f) The issue of casual taxable person: If a person registered in one state moves to another state 
for a short period for some business transaction  say to participate in a fair or exhibition, then –
that person would have to get himself registered in that state for that period. 
The salient features of GST are as under: 
(i) Supply would be the Taxable event: GST would be applicable on supply of goods or services 
as against the present concept of tax on the manufacture of goods or on sale of goods or on 
provision of services (Refer Section 7 of CGST Act, 2017) 
(ii) Destination Based Taxation: Consuming state will gain due to this shift from origin based 
taxation to destination based taxation; Parliament shall by law, on recommendation of GST 
council, provide for compensation to states for loss of revenue arising on account of 
implementation of GST upto 5 years as per clause 18 of the constitutional (One hundred and 
First) amendment Act, 2016 
(iii) Dual Taxing Structure: The new Article 246A intends to grant concurrent powers to the 
Union and state legislatures to make laws with respect to GST. The power to make laws in 
respect of supplies in the course of inter-state trade or commerce will be vested only in the 
Union Government. States will have the right to levy GST on intra-state transactions including 
services. It would be a dual GST with the Centre and the States simultaneously levying it on a 
common base. The GST to be levied by the Centre would be called Central GST (CGST) and 
that to be levied by the States would be called State GST (SGST). 
(iv) Integrated GST (IGST): It would be levied on inter-State supply (including stock transfers) 
of goods or services. This would be collected by the Centre so that the credit chain is not 
disrupted. 
(v) BCD + IGST on Imports of Goods: It would be treated as inter-State supplies and would be 
subject to IGST in addition to the applicable customs duties (BCD) 
(vi) IGST on Import of Services: Import of services would be treated as inter-State supplies and 
would be subject to IGST. 
(vii) Central taxes that would be subsumed within the GST 
- Central Excise duty (Entry 84) 
- Duties of Excise (Medicinal and Toilet Preparations) (Entry 84) 
- Additional Duties of Excise (Goods of Special Importance) (Entry 84) 
- Additional Duties of Excise (Textiles and Textile Products) (Entry 84) 
- Additional Duties of Customs (commonly known as CVD) (Entry 83) 
- Special Additional Duty of Customs (SAD) (Entry 83) 
- Service Tax (Entry 92C) 
- Cesses and surcharges insofar as far as they relate to supply of goods or services (Article 271) 
(viii) State taxes that would be subsumed within the GST 
- State VAT (Entry 54) 
- Central Sales Tax (Entry 54) 
- Purchase Tax (Entry 54) 
- Luxury Tax (Entry 62) 
- Entry Tax (All forms) (Entry 52) 
- Entertainment Tax (not levied by the local bodies) (Entry 62) 
- Taxes on advertisements (Entry 55) 
- Taxes on lotteries, betting and gambling (Entry 62) 
- State Cesses and surcharges insofar as far as they relate to supply of goods or services 
(ix) Potable Alcohol Excluded: GST would apply to all goods and services except Alcohol for 
human consumption (Constitutional Exclusion) 
(x) Petroleum products also excluded for the time being: GST on petroleum products would be 
applicable from a date to be recommended by the Goods & Services Tax Council in terms of 
clause 5 of Article 279A 
(xi) Tobacco and tobacco products: They would be subject to GST. In addition, the Centre 
could continue to levy Central Excise duty (Excise duty + GST) 
(xii) Stamp Duties will continue: Stamp duties, typically imposed on legal agreements by the 
state, will continue to be levied by the states 
(xiii) Administration of GST will be the responsibility of the GST Council, which will be the 
apex policy-making body for GST: It will recommend Rates, rate bands, base, thresholds, taxes 
to be subsumed; Special provisions for Arunachal Pradesh, Assam, J&K, Manipur, Meghalaya, 
Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; Date for application 
of GST to petroleum products etc. 
(xiv) Members of the GST Council are Central and State ministers in charge of the finance 
portfolio: In the GST Council, the Centre will have a one-third vote and all states combined 
will have two-third vote. Quorum for GST Council is 50% of total members and for majority 
of Council decisions 75% of the weighted votes of the members present and voting. 
(xv) GST Council (GSTC): Newly inserted Article 279A in the constitution of India provides 
for the constitution of GST Council (GSTC) by the president within 60 days from the date of 
the passing of the Bill and also provides for the appointment of members of the GST Council 
and its composition and powers to make recommendations. 
The GSTC has been notified with effect from 12th September, 2016. GSTC is being assisted 
by a Secretariat. Fourteen meetings of the GSTC have been held so far.  
The following major decisions have been taken by the GSTC: 
- The threshold exemption limit would be 20 Lakh. For special category States enumerated in `
Article 279A of the Constitution, threshold exemption limit has been fixed at 10 Lakh. `
- Composition threshold shall be `50 lakhs. Composition scheme shall not be available to inter-
State suppliers, service providers (except restaurant service) and specified category of 
manufacturers. 
- Existing tax incentive schemes of Central or State governments may be continued by 
respective government by way of reimbursement through budgetary route. The schemes, in the 
present form, would not continue in GST. 
- There would be four tax rates namely 5%, 12%, 18% and 28%. Besides, some goods and 
services would be under the list of exempt items. Rate for precious metals is yet to be fixed. A 
cess over the peak rate of 28% on certain specified luxury and demerit goods would be imposed 
for a period of five years to compensate States for any revenue loss on account of 
implementation of GST. The Council has released rates of various goods and services fitted in 
these four slabs keeping in view the present incidence of tax in its 14th meeting. 
- The five laws namely CGST Law, UTGST Law, IGST Law, SGST Law and GST 
Compensation Law have been recommended. 
- In order to ensure single interface, all administrative control over 90% of taxpayers having 
turnover below 1.5 Crore would vest with State tax administration and over 10% with the `