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Comprehension:

GST: One Nation, One Tax, One Market

GST is the biggest tax reform in the country since independence and was rolled out on the mid-night of 30 June/1 July, 2017 during a special midnight session of the Parliament. The 101th Constitution Amendment Act received assent of the President of India on 8 September, 2016. The amendment introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. Thereafter CGST Act, UTGST Act and SGST Acts were enacted for GST. GST has simplified the multiplicity of taxes on goods and services. The laws, procedures and rates of taxes across the country are standardised. It has facilitated the freedom of movement of goods and services and created a common market in the country. It is aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets. It will also result into higher economic growth as GDP is expected to rise by about 2%. Compliance will also be easier as all tax payment related services like registration, returns, payments are available online through a common portal www.gst.gov.in. It has expanded the tax base, introduced higher transparency in the taxation system, reduced human interface between Taxpayer and Government and is furthering ease of doing business.

However, certain products have been kept out of the ambit of GST for the time being. Alcohol for human consumption continues to be taxed under the State Excise duty framework and is not covered by GST. Similarly, five petroleum products — namely crude oil, petrol, diesel, natural gas, and aviation turbine fuel (ATF) — have been temporarily kept outside the GST regime and continue to be subject to the existing central and state tax structures until the GST Council decides to bring them under GST. Tobacco and tobacco products, on the other hand, are covered under GST at the highest slab rate of 28%, along with an additional compensation cess levied on top of it.

Suppose, a laptop has been purchased by Aman, a resident of Delhi from AX computers Pvt Ltd based in Gurugram, Haryana. Which type of GST will be levied on the laptop sold?

Solution

✅ Correct Option: 3

Option 1 -> CGST is levied only on intra-state supplies (within the same state), not applicable here.

Option 2 -> SGST is also levied only on intra-state supplies, not applicable here.

Option 3 -> IGST applies as this is an inter-state supply from Haryana to Delhi.

Option 4 -> Laptops are covered under GST at 18% rate, not exempt.


Hence, IGST only -> Since the seller (AX Computers Pvt Ltd) is located in Gurugram, Haryana and the buyer (Aman) is a resident of Delhi, this constitutes an inter-state supply. For inter-state transactions in GST, IGST (Integrated Goods and Services Tax) is levied instead of CGST and SGST. Delhi and Haryana are different states/territories for GST purposes, making this clearly an inter-state transaction subject to IGST. -> correct

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