Current Taxation System & GST Model

At present, the taxes levied by center and state are different. The center levies custom duties, excise duty, central sales tax and service tax. Whereas, the state levies VAT, luxury tax, electricity duty, entertainment tax, entry tax, and octroi.

GST Model

GST structure is expected to have two components: One levied by the Centre - Central GST (CGST), and the other levied by the State - State GST (SGST). Both components would be applicable on all taxable transactions of goods and services. The Centre and the States would have simultaneous jurisdiction for all tax-payers in the value chain. The CGST and the SGST would be levied simultaneously on every transaction of goods and services, except for the services and goods which are beyond the purview of GST.

  • Exemptions: Custom Duty, Excise duty on Tobacco products, Specific cess, Taxes on liquor, Electricity cess, Property Tax, Toll Tax, and Stamp Duty are exempted as of now from the purview of GST but subjected to changes introduced by the government.
  • GST Tax Rates: A four-tier GST tax structure of 5%, 12%, 18% and 28%, with lower rates for essential items and the highest for luxury and de-merits goods that would also attract an additional cess is introduced. Essential items like food and basic necessities will be taxed at zero percent. (Tax rates subject to latest Annexure by the government). The returns will be filed in the prescribed format available on the government online portal. In the table below, we have provided details of all the returns which are required to be filed under the GST Law.
Return Form What to file? By Whom? By When?
GSTR - 1 Details of outward supplies of taxable goods and/or services effected

Registered Taxable Supplier

10th of the next month
GSTR - 2 Details of inward supplies of taxable goods and/or services effected claiming input tax credit.

Registered Taxable Recipient

15th of the next month
GSTR - 3 Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax.

Registered Taxable Person

20th of the next month
GSTR - 4 Quarterly return for compounding taxable person.

Composition Supplier

18th of the month succeeding quarter
GSTR - 5 Return for Non-Resident foreign taxable person

Non-Resident Taxable Person

20th of the next month
GSTR - 6 Return for Input Service Distributor

Input Service Distributor

13th of the next month
GSTR - 7 Return for authorities deducting tax at source.

Tax Deductor

10th of the next month
GSTR - 8 Details of supplies effected through e-commerce operator and the amount of tax collected. E-commerce Operator/Tax Collector 10th of the next month
GSTR – 9 Annual Return

Registered Taxable Person

31st December of next financial year
GSTR - 10 Final Return

Taxable person whose registration has been surrendered or cancelled.

Within three months of the date of cancellation or date of cancellation order, whichever is later.
GSTR - 11 Details of inward supplies to be furnished by a person having UIN Person having UIN and claiming refund 28th of the month following the month for which statement is filed

All these returns are required to be filed digitally online through a common portal to be provided by GSTN, non-government, private limited company promoted by the central and state governments with the specific mandate to build the IT infrastructure and the services required for implementing Goods and Services Tax (GST).

Taxes to be subsumed

Following are the taxes, proposed to be subsumed under the dual component structure GST:

  • CGST Will Subsume: Central Excise Duty, Additional Excise Duties, Excise Duty levied under the Medicinal and Toiletries Preparation Act, Service Tax, Additional Customs Duty commonly known as Countervailing Duty (CVD), Special Additional Duty of Customs, Surcharges and Cesses.
  • SGST Will Subsume: VAT, Central Sales Tax (CST), Entertainment tax (unless it is levied by the local bodies), Luxury tax, State Cesses and Surcharges, Entry tax not in lieu of Octroi, Purchase Tax.

The GST would replace the following taxes