GST and Micro, Small and Medium Enterprises (MSMEs) in India

Contents: Part I: Taxation of Goods and Services in India Prior to the Introduction of GST: 1. Taxation of Goods and Services: Theoretical Settings. 2. Union Excise Duties, Modified Value Added Tax (MODVAT) and Central Value Added Tax (CENVAT). 3. Taxation of Services by the Central Government. 4. State Level Sales Tax/Value Added Tax (VAT). 5. Problems Created by Multiple Taxation of Goods and States’ Exclusion from Taxing Services. Part II: Early Thoughts, Preparations for GST and Current Constitutional Provisions Pertaining to Taxes: 6. Empowered Committee (EC) of State Finance Ministers and the Road Map for GST. 7. Enactment of Constitution (One Hundred and First Amendment) Act, 2016. 8. Establishment, Meetings and Decisions of Goods and Services Tax Council (GST Council). 9. Enactment of Central and State Legislations for Implementation of GST. 10. Current Constitutional Provisions Pertaining to Distribution of Taxation Powers between the Centre and the States. Part III: Basics of GST: 11. Meaning and Salient Features of GST. 12. Components of GST. 13. Concept of Supply and Levy of GST. 14. Input Tax Credit (ITC). 15. Exclusions, Exemptions, Threshold Limits of Turnover, Negative List, and Composition Levy Scheme. 16. Rate Structure of GST. Part IV: GST on Certain Special Entities/Sectors: 17. GST on Casual and Non-resident Taxable Persons. 18. GST on Charitable and Religious Trusts. 19. GST on Real Estate Sector. 20. Services of Goods Transport Agencies (GTAs) and Electronic Way Bill (E-way Bill) System. Part V: Implementation, Administration and Technological Infrastructure of GST: 21. Registration, Tax Invoice, Accounts and Records, and Returns. 22. GST Payments, Tax Deduction at Source (TDS), Tax Collection at Source (TCS), Reverse Charge Mechanism (RCM) and Refunds. 23. Assessment, Scrutiny, Audit, Advance Ruling, Appeals, and Offences and Penalties. 24. Anti-profiteering Provisions. 25. Technological Infrastructure and Institutional Set-up for GST. Part VI: Impact of GST on the Indian Economy: 26. GST: An All-India Unified, Uniform and Harmonized Indirect Tax System. 27. GST, Gross Domestic Product (GDP), Employment Generation and Formalization of the Economy. 28. GST, Industry and Trade. 29. GST and Prices. 30. GST, Exports and Imports. 31. GST and Government Revenues. 32. GST and the Changed Landscape of Fiscal Federalism in India. Part VII: GST-MSMEs Interface: 33. Why Are MSMEs Important in the Indian Economy? 34. Goods and Services Exempted from GST. 35. Goods and Services Supplied by Businesses within Prescribed Threshold Limits of Aggregate Turnover. 36. Composition Levy Scheme for MSMEs. 37. Soft Tax Rate Policy for MSMEs. 38. Simplified Compliance Procedures for MSMEs. 39. Sector-specific Concessions and Reliefs. Part VIII: A Critical Review of GST: 40. Challenges and Issues Facing GST. 41. GST: An Incomplete Journey. Bibliography. Index.

After missing several deadlines and overcoming almost a decade of political differences, Goods and Services Tax (GST) in India was finally rolled out on July 1, 2017. Undoubtedly, GST represents the biggest tax reform in the fiscal history of India.

The pre-GST system of indirect taxes was marked by multiplicity of taxes and rates at the Central and State levels which resulted in a complex tax structure ridden with hidden costs for trade and industry.  

In sharp contrast to the earlier system, GST is an all-India unified, uniform and harmonized indirect tax system. The old system was mainly manual and opaque while the new system is technology-based and hence transparent.

GST subsumed a profusion of Central and State indirect taxes to create a single unified market. In all, 8 Central and 9 State taxes/duties were abolished to pave way for the introduction of GST.

The new tax is contributing to make India a seamless national market, boosting trade and industry and, in turn, economic growth. Common tax bases and common tax rates—across goods and services and across States and between Centre and States—are facilitating administration and improved compliance while also rendering manageable the collection of taxes on inter-State supply of goods and services.

Though a game-changing fiscal innovation, GST is a complex and evolving phenomenon. It is by no means easy, particularly for the non-experts, to understand its riddles and cobwebs.

The present work is an attempt to explain various aspects of GST in simple, lucid and non-technical language. It would be helpful for a cross-section of readers including teachers and students of economics, commerce, law, public administration, business management, and chartered accountancy. It will also serve the needs of legislators, business executives, policy analysts, entrepreneurs and investors, and others interested in understanding the basics of GST.