Write two main objectives of GST?

---- 2020 (2 marks)

Define GST. Who is liable to pay GST. ---- 2020 (7 marks)

The Goods and Service Tax (GST) is a tax levy on the consumption, manufacture or sale of
goods and services in India. It is a system of indirect taxation that has replaced most other
indirect taxes in the country. The Indian Government had introduced this tax on 1st July
2017. GST is levied every time there is a value addition that is made to a product or service.
The taxation also takes place at every point of sale.

Types of GST
There are four different types of GST levied on the goods and services in India that are as
follows:
 Central Goods and Services Tax (CGST) – The Central Government of India charges
the CGST on transactions related to goods and services within a state.
 State Goods and Service Tax (SGST) – The State Governments in India charge the
SGST on transactions related to goods and services within a state. It gets charged
along with the CGST.
 Union Territory Goods and Service Tax (UGST) – The Union Territories in India charge
the UGST on transactions related to goods and services within their boundaries. It
gets charged along with the CGST.
 Integrated Goods and Service Tax (IGST) – If the transaction related to goods and
services is between two states, the government will impose the Integrated GST. It is
also applicable to imports and exports. The Taxes charged under IGST are shared
both by the centre and state.

Objectives of GST
The main objectives of GST are as follows:
 It helps create a common market in India with a uniform taxation system and curb
tax evasion in the country. The laws for GST are far more stringent compared to the
erstwhile indirect tax laws. The aim is to have a nationwide surveillance system
under GST, making it easier to catch defaulters and tax evaders.
 It removes the cascading effect of the indirect taxes on a single transaction. It also
allows the setting off for prior taxes that are related to the same transactions in the
form of the input tax credit. Under GST, the tax is applicable only on the net value
added during each stage of the supply chain.
 The government aims to reduce the need for multiple documentation under the
previous taxation system by introducing a consolidated tax like GST. The idea is to
help companies with an uncomplicated tax filing procedure that will improve their
efficiency and cut down the overall costs associated with business processes.
 It helps to subsume most indirect taxes into a single taxation system that reduces
the burden of compliance for taxpayers and eases the government’s tax
administration process. The main aim of this taxation system is to simplify the entire
process of paying taxes and simplify compliance. Compared to the erstwhile indirect
taxes, almost the whole GST process, including registration, returns filing, refunds
and e-way bill generation, has shifted to the online mode.
 One of the primary objectives of GST is to widen the tax base in India. Most of the
erstwhile indirect taxes had their threshold limits for registration based on the
 turnover of a business. Under GST, there is greater scope for an increase in the
number of firms coming under the tax registration net because it includes all
transactions related to goods and services in the country.
Objectives
1 To create a common market with a uniform tax rate in India. (One Nation, One
Tax, One Market)
2 To eliminate the cascading effect of taxes, GST allows the set-off of prior taxes for
the same transactions as an input tax credit.
3 To boost Indian exports, the GST already collected on the inputs will be refunded
and thus there will be no tax on all exports.
4 To increase the tax base by bringing more number of taxpayers and increase tax
revenue.
5 To simplify tax return procedures through common forms and avoidance of
visiting tax departments.
6 To provide online facilities for payment of taxes and submission of forms.

Who is liable to pay GST?

In general, the supplier of goods or services is liable to pay GST. However, in specified cases
like imports and other notified supplies, the liability may be cast on the recipient under the
reverse charge mechanism. Further, in some notified cases of intra-state supply of services,
the liability to pay GST may be cast on e-commerce operators through which such services
are supplied. Also Government Departments making payments to vendors above a specified
limit [2.5 lakh under one contract as per S.51(1)(d)] are required to deduct tax (TDS) and E-
commerce operators are required to collect tax (TCS) on the net value [i.e. aggregate value
of taxable supplies of goods and/or services but excluding such value of services on which
the operator is made liable to pay GST under Section 9(5) of the CGST Act, 2017] of supplies
made through them and deposit it with the Government.
When does liability to pay GST arises?
Liability to pay arises at the time of supply of Goods as explained in Section 12 and at the
time of supply of services as explained in Section13.
The time is generally the earliest of one of the three events, namely receiving payment,
issuance of invoice or completion of supply. Different situations envisaged and different tax
points have been explained in the aforesaid sections.

While the ultimate burden of an indirect tax is to be borne by the consumer, the
responsibility to collect and deposit in such cases rests with the supplier.  Thus Supplier as
defined in Section 2(105) means the person supplying the goods or services or both in
relation to any goods or services or both and shall include an agent acting as such on behalf
of such supplier in relation to the goods or services or both supplied. Such a supplier shall be
liable for collection and deposit of GST provided he is a taxable person as per the GST Act.
This article covers topics like who is liable to pay GST, liability of taxpayer under GST and
much more. Taxable Person or person liable to pay GST means a person who carries on any
business at any place in India in case of Central Goods and Services Tax Act, 2017 or
respective State in case of State Goods and Services Tax Act, 2017 and who is registered or
required to be registered under Section 22 or Section 24 of the CGST Act, 2017. Thus, in case
a person is not carrying any business, he shall not be called a taxable person and no liability
as a supplier of output tax liability can be fastened on such person. The following categories
of persons have been specified in Act, who shall requires to obtain registration and pay GST
under the new regime:

1. Supplier making supplies above basic threshold Limit: Every supplier shall be liable to
be registered under this Act in the State from where he makes a taxable supply of
goods and/or services if his aggregate turnover in a financial year exceeds Rs twenty
lakh.  This threshold of Rs. ten lakh will apply only if the taxable person conducts his
business in any of the Special Category States or States specified in Article 279A(4)(g)
of the Constitution namely:
1.  Assam
2.  Jammu & Kashmir
3.  Manipur
4.  Meghalaya
5.  Mizoram
6.  Nagaland
7.  Sikkim
8.  Tripura
9.  Himachal Pradesh
10.  Uttarakhand
11.  Arunachal Pradesh
12.  Persons already registered under an earlier law which are subsuming under
GST.
13.  Transferee, or the successor of a business
14.  Transferee in case of amalgamation or de-merger
15.  Persons making any inter-State taxable supply of goods
16.  Casual taxable person
17.  Persons who are required to pay tax under reverse charge
18.  Electronic Commerce operators liable to pay tax under the act
19.  non-resident taxable persons
20.  persons who are required to deduct tax under section 51
21.  persons who are required to collect tax under section 52
22.  persons who supply goods and/or services on behalf of other registered
taxable persons whether as an agent or otherwise, irrespective of the
threshold specified under paragraph 1
23.  input service distributor
24.  persons who supply goods and/or services, other than supplies specified in
section 8(4), through electronic commerce operator
25.  every electronic commerce operator
26.  person supplying online information and database access or retrieval
services from a place outside India to a person in India, other than a
registered taxable person
27.  such other person or class of persons as may be notified by the Central
Government or a State Government on the recommendations of the Council.

All the above persons (except in the first case) are required to obtain registration
irrespective of their turnover.  Such taxable persons shall be required to pay tax under law. 
Further, however, there are certain persons who are excluded from the definition of Taxable
persons and thus, even when such persons are engaged in business and makes supply, they
shall not be classified as taxable person for all GST Acts. Such persons as are excluded are:
 Agriculturist for the purpose of agriculture.
 Persons who are required to be registered under the Act but have a turnover less
than 20 Lakhs [10 Lakhs in Special Category States and States mentioned in Article
279A(4)(g) of the Constitution].
 any person engaged in the business of exclusively supplying goods and/or services
that are not liable to tax under GST Act.

Conclusion
GST is vital for the functioning of the Indian economy. The government aims to simplify the
entire taxation procedure and bring more businesses under the taxation system. It will help
them generate significant revenue from these taxes, which they can use for the
developmental activities within the country.