CS Executive · Tax Laws and Practice

Basics of Goods and Services Tax: formula sheet

Full chapter guide

Key formulas

Basic GST chain rule: Net GST payable = Output tax − Input tax credit; Each supplier pays only on the value it adds. The credit mechanism is what removes cascading.
Direct vs indirect tax test: Direct: impact and incidence on the same person. Indirect: impact on the supplier, incidence on the consumer.; Use this one line to answer any 'difference' question.
Dual GST structure: Intra-State supply: CGST + SGST/UTGST. Inter-State supply: IGST.; Both Centre and States tax the same supply under the dual model.
Destination principle: Tax accrues to the State or place of consumption; This is the opposite of an origin-based tax, where the producing State gets the revenue.
Intra-State supply: GST = CGST + SGST (or UTGST in a Union territory); Both are normally charged at equal rates. The Centre collects CGST and the State or UT collects SGST/UTGST.
Inter-State supply: GST = IGST; Levied by the Centre. Under Article 246A(2), Parliament has exclusive power to make laws on GST where the supply takes place in the course of inter-State trade or commerce.
Article 246A: Parliament and State Legislatures have power to make laws on GST; Inserted by the 101st Amendment. Under Article 246A(2), Parliament alone makes law on GST for supplies in the course of inter-State trade or commerce.
Article 279A: GST Council = Union Finance Minister (Chairperson) + Union Minister of State in charge of Revenue or Finance + State Ministers in charge of Finance or Taxation; Council recommends on rates, exemptions, thresholds, model laws, special provisions for some States. Its recommendations are the basis for notifications.
Registration threshold (section 22(1)): Aggregate turnover above ₹20 lakh in a financial year; ₹10 lakh for special category States; Government may enhance on Council recommendation: special category States up to ₹20 lakh; goods-only suppliers up to ₹40 lakh, as notified.
National Appellate Authority (section 101A): President + Technical Member (Centre) + Technical Member (State); Constituted by the Government, on the Council's recommendation, by notification with effect from the date specified in it, to hear appeals under section 101B. The President is a person who has been a Supreme Court Judge, or is or has been a High Court Chief Justice, or is or has been a High Court Judge for not less than five years. President's term: three years or till age 70, whichever is earlier. Technical Members: five years or till age 65, whichever is earlier.
Condition (a): general practice: A practice was, or is, generally prevalent regarding levy of central tax (including non-levy) on any supply of goods or services or both; The practice must be general, not one taxpayer's own view. Non-levy also counts as a practice.
Condition (b): supplies actually liable: Supplies were, or are, liable to (i) central tax where none was levied, or (ii) a higher amount than what was levied under the practice; This covers both non-levy and short-levy.
Procedure: Government satisfied + Council's recommendation + notification in the Official Gazette; All three are needed before relief operates.
Effect of notification: Whole tax (non-levy) or the excess tax (short-levy) need not be paid on those supplies; Relief is limited to supplies in accordance with the practice.
Parallel provision: Section 6A of the IGST Act, 2017 for integrated tax; Same wording, with integrated tax in place of central tax.
Who decides eligibility and approval: Section 48(1): approval, eligibility, duties, obligations, removal and other conditions = as prescribed; The Act delegates the details to the rules. Do not cite a section of the Act for qualifications.
Functions a registered person may authorise: Section 48(2): outward supplies details (section 37) + returns (section 39, 44 or 45) + other prescribed functions; The authorisation is by the registered person, and the practitioner must be approved.
Responsibility for correctness: Section 48(3): responsibility stays with the registered person, notwithstanding section 48(2); Applies to the return and to other details filed by the practitioner.
Change made to the section: Inward supplies under section 38 omitted w.e.f. 1-10-2022; 'other functions' inserted w.e.f. 1-2-2019; Useful to show updated knowledge; do not list section 38 as a current function.
Who may be rated: Section 149(1): every registered person may be assigned a GST compliance rating score by the Government; Applies to registered persons only. The word 'may' makes it a power, not a duty.
Basis of the score: Record of compliance with the provisions of the CGST Act (section 149(1)); parameters as may be prescribed (section 149(2)); The Act does not list the parameters. They are prescribed.
Updating and publication: Section 149(3): updated at periodic intervals, intimated to the registered person, placed in the public domain in the prescribed manner; Remember the three actions: update, intimate, publish.

Quick revision

GST is a destination-based tax with a dual model: Centre and States both levy on the same supply.
Section 11A CGST and section 6A IGST are parallel provisions on general practice.
Under general practice, the Government must be satisfied that a practice was or is generally prevalent on levy, including non-levy.
The supplies must have been liable to tax, or to a higher tax than was levied under the practice.
Relief comes by notification in the Official Gazette, on the recommendation of the Council.
Sections 11A and 6A were inserted with effect from 1 November 2024.
Section 48: approval, eligibility, duties and removal of practitioners are as prescribed.
A practitioner may furnish outward supply details under section 37 and returns under section 39, 44 or 45, and other prescribed functions.
Under section 48(3), responsibility for correctness of returns stays with the registered person.
Section 116 lets a person appear through an authorised representative, except where personal appearance on oath or affirmation is required.
A person dismissed from Government service or convicted of a related offence is permanently disqualified from representing under section 116.
Section 149: every registered person may be assigned a compliance rating score, based on prescribed parameters and placed in the public domain.

Common mistakes

Saying GST is paid by the supplier as the final burden. Fix: State that the supplier collects and pays it, but the final consumer bears it. That is the nature of an indirect tax.
Calling GST an origin-based tax. Fix: Write that GST is destination-based: the tax goes to the place of consumption.
Saying only the Centre or only the States levy GST. Fix: Write that both levy GST concurrently on the same supply under the dual model, with IGST on inter-State supply levied by the Centre.
Mixing up Article 246A and Article 279A. Fix: Remember 246A = power to legislate; 279A = GST Council.
Saying relief applies automatically once a practice exists. Fix: Always state that the Government must notify the relief, on the Council's recommendation, in the Official Gazette.
Treating section 11A as covering only non-levy. Fix: Remember both limbs: non-levy (whole tax) and short-levy (the excess over what was levied).
Saying the practitioner is liable for errors in the return. Fix: Quote section 48(3). The responsibility for correctness continues to rest with the registered person.
Listing inward supply details under section 38 as a function of a practitioner. Fix: Remember that those words were omitted with effect from 1 October 2022. Mention only section 37 and returns under sections 39, 44 and 45, plus other prescribed functions.
Saying every person in India is given a compliance rating. Fix: Write that only a registered person may be assigned a score under section 149(1).
Writing that the Government must rate every registered person. Fix: Say the Government may assign the score. The section confers a power.

Exam tips

Answer 'why GST' questions in a fixed order: old structure, problems, GST solution, benefits, conclusion.
Always add a one-line example of cascading. It shows understanding and earns marks.
Mention the dual model and the three components CGST, SGST/UTGST and IGST even if the question only asks about features.
Use short numbered points. Examiners in descriptive papers reward clear structure over long paragraphs.
Keep the introduction brief and save your time for later GST topics such as supply, credit and returns.
In theory answers, begin with the constitutional source: 101st Amendment, then Article 246A, then Article 279A.
Learn the Council's composition as a short list. Examiners often ask for it in a few lines.
Use a short table-like list in your answer sheet: tax, who levies, when it applies.