The Taxes that will be included and replaced by GST are excise
duty, countervailing duty, cess, service tax, and state level VATs, etc.
The GST Regime will be two-fold, with Central GST (CGST) at
the central level, and by individual States on the second level (SGST).
Business has been widely defined to include
trade, commerce, manufacture, profession, vocation or any other similar activity,
including transactions related or incidental thereto, irrespective of volume or
frequency, as well as supply of goods/services in connection with commencement
or closure of business (S.2 (17) of CGST Act) Indian Kanoon.
CGST will be levied on all intra-State supplies
of goods or services or both (on the supply of alcoholic liquor for human
consumption), at rates not exceeding 20%; by virtue of S.9 (1) of the CGST Act,
GST is expected to rectify the cascading effect
of multiple taxes, by bringing into operation a single and unified taxation
system, integrating the various indirect taxes.
GST is leviable only if aggregate turnover is
more than 20 Lakhs, and the computation of aggregate supplies would be by
addition of the turnover of all supplies made by the person.
The Tax slab for 11 special category States is
Rs.10 Lakhs, instead of the Rs.20 Lakhs slab applicable to the other States.
Government has retained the right to impose excise duty on petroleum and tobacco products, while State
Governments would continue to be eligible to impose VAT on the sale. State
Governments have also reserved their right to impose electricity duties.
Import of services by a taxable person from a
related person or from any of his other establishments outside India in the
course or furtherance of business, would be considered as a “supply” within the
meaning of the Act, even if made without consideration, by virtue of Schedule I
of the Act which lists activities that are to be treated as supply even if made
Any treatment or process which is applied to
another person's goods is to be regarded as a supply of services, by Schedule
II of the Act. The Schedule lists the range of activities which are to be
treated as supply of goods or services.
Services by an employee to the employer in the
course of or in relation to his employment; or services by any court or
Tribunal; Services of funeral, burial, crematorium or mortuary including
transportation of the deceased, etc. shall not be treated as supply of goods or
services, under Schedule III of the Act (enlisting activities which shall not
be treated as supply of goods or services).