A PROJECT REPORT

ON
Taxation policy process at
CENTRAL COALFIELD LIMITED(CCL)

An internship report in the partial fulfillment of the

requirement for the Degree of Business Administration.
(Session:2020-2023)

UNDER THE GUIDANCE SUBMITTED BY:-

OF:-
Dr.Santoshi Aru NAME:-PRIYANKA DUTTA

Teacher,Ranchi Women’s college. ROLL NO.:-20VCBCBA051

IDR NO.:-200410981503
 CERTIFICATE

This is to certify that PRIYANKA DUTTA of RANCHI

WOMEN’S COLLEGE has successfully completed the
project titled “Taxation policy in CCL” and has submitted
the project file in the required format. The project was
completed under the guidance of Sir Abhijeet Sagar
Gautam.

PROJECT GUIDE
ACKNOWLEDGEMENT

I would like to express my gratitude and appreciation to all

those who gave me the possibility to complete the project.

I sincerely express my gratitude to my mentor Abhijeet Sagar

Gautam, for the invaluable advice and assistance in completing
the project on “Taxation in Central Coalfields Limited”. I am
thankful for providing me with this wonderful opportunity to work
on the project. The completion of the project would not have
been possible without the help and insights. It was a great
learning experience.

I am grateful to the college administration for providing me with

such a significant opportunity.

My profound thanks to my family and friends for their invaluable

assistance, and appreciation to everyone who has contributed
to the successful completion of this project.
 DECLARATION

This is to certify that I, PRIYANKA DUTTA being the Roll No.

20VCBCBA051 , session:-2020-2023 has successfully completed the
project on “TAXATION SYSTEM” from CCL under the guidance of “ Mr.
Abhijeet Sagar Gautam”.

The project report is submitted to the WOMEN’S COLLEGE , RANCHI in

partial fulfilment to the requirement for the award degree of BACHELOR
OF BUSINESS ADMINISTRATION (BBA) under the guidance of
Abhijeet Sagar Gautam, Manager Finance, Central Coalfields Limited,
RANCHI, during academic year 2020-2023.

The matter embodied in this project is genuine work done by the student
and has not been submitted whether to this University/Institute for the
fulfilment of the requirement any course of study.

Project Guide

Internal Examiner External Examiner

 TABLE OF CONTENT

SL CONTENT PAGE NO.

NO.
1.
Chapter:1-Executive Summary 1-2

1.1 Infrastructure 2
1.2 About Taxation 2
2.
Chapter:2-Background of the Study 3-5

2.1 Introduction of Taxation 3

2.2 Purpose of Taxation 3
2.3 Classes of Taxes 4-5
3.
Chapter:3-Company profile 6-36

3.1 About Coal India Limited 6-7

3.1.1 Introduction 6
3.1.2 History 6
3.2 About Central Coalfield Limited 8-10
3.2.1 Infrastructure 8
3.2.1 Vision,Mission and Objective of CCL 9
3.3 Overview of mining and its Types 11
3.4 History of Taxation 13-18
3.5 VAT 19-20
3.6 GST 21-36
3.7 CGST Act 21-34
3.8 IGST Act 35-36
4.
Chapter:4-Research Methodology 37-39

4.1 Data collection measures 37

4.2 Types of research design 37-38
4.3 Objectives of the study 38
4.4 Limitations of the study 39
5.
Chapter:5-Data Analysis 40-44

5.1 GST Annual return of CCL

6. 45
Conclusion
7. 46
Bibliography
Chapter-1
EXECUTIVE SUMMARY

Coal India Limited is one of the largest coal producing companies in the World .As of
30th April 2016, it operated 470 mines in 21 major coal fields across 8 states in india
including 164 opencast mines 275 underground mines and 31 mixed mines.

Coal mines raises serious environmental and social concerns, including soil erosion,
noise and water pollution and impact on local bio-diversity. The environment t and
social issue related with coal exploration and production such as displacement are of
specific nature as the coal reserves are located in the river basins such as Damodar,
Mahanadi and Barhani, etc. which are rich in forest cover an dare habitat for
precious wildlife and indigenous tribal communities. CIL and its subsidiaries being
profit making companies have sufficient resources to discharge its responsibilities
towards environment management, community and peripheral development.

The performance audit of CIL and its subsidiaries was conducted with a view to
assess whether the company was able to fulfil their Corporate Social
responsibilities(CSR)in an effective and efficient manner toward environment
protection, safety requirement and occupation health of workers and communities
and peripheral development.

The performance Appraisal System is a process of setting objective, making plans to

achieve those objectives and accomplishing the desired results .Reward and
recognition are the end stages of this process. Organisations use this system to
assess the performance of and individual, a team, a function and then the
organisation as a total.

Central Coalfields Limited (CCL) is a subsidiary of Coal India Limited (CIL), an

undertaking of the Government of India. CCL was established in 1956 as National
Coal Development Corporation Limited and is a Category- Mini Ratna company since
October 2007.[4][5] CCL manages the nationalized coal mines of the Coal Mines
Authority, Central division. CCL is headquartered at Darbhanga
House, Ranchi, Jharkhand.
1.1Infrastructure

CCL owns and operates the following:

• 43 operative mines (5 underground & 38 opencast)

• 7 operating coalfields. These coalfields are located in East
Bokaro, West Bokaro, North Karanpura, South
Karanpura, Ramgarh, Giridih and Hutar.
• 7 washeries
o 4 operational coking coal washeries
at Rajrappa, Kedla, Kathara and Sawang
o 1 operational non-coking coal washery at Piparwar
o 2 non operational non-coking coal washeries
at Gidi and Kargali
• 1 central workshop at Barkakana
• 2 regional workshops at Giridih and Bhurkunda
• 3 repair workshops at Jarangdih, Tapin North and Dakra

1.2 About Taxation

The word ‘tax’ is derived from the Latin word taxare or taxo. It means ‘to assess the
worth of something’. Taxes are imposed by government for the use and service of
the State. They are levied and collected by the State for the purchase or sale of
merchandise or a service.

There are two types of taxes – direct and indirect. Direct taxes are those that an
entity remits to the government directly, and include income tax, property tax, etc.
indirect taxes are those that an entity remits through third parties. Service tax is an
example of indirect tax imposed by the government of India.

Taxes are mandatory contributions collected by governments. The Internal Revenue

Service (IRS) collects federal income taxes in the United States. There are many
forms of taxes; most are applied as a percentage of a monetary exchange (for
example, when income is earned or a sales transaction is completed).
In India, the Central Government is liable and empowered to levy and collect taxes.
Tax is charged based on the income of the person. The income is categorized into
various slabs and whenever it exceeds the minimum threshold limit then it attracts
taxes as per the rates decided for various income slabs prescribed in the Income
Tax Act.

Any Indian citizen aged below 60 years is liable to pay income tax if their income
exceeds 2.5 lakhs. If the individual is above 60 years of age and earns more than
Rs.3 lakhs, they will have to pay taxes to the government of India.
Additionally, the following entities that generate income are liable to pay direct
taxes.
Chapter-2

BACKGROUND OF THE STUDY

2.1 INTRODUCTION OF TAXATION

Taxation means imposition of compulsory levies on individuals or entities by

governments. Taxes are levied in almost every country of the world, primarily to raise
revenue for government expenditures, although they serve other purposes as well.

In modern economies taxes are the most important source of governmental revenue.
Taxes differ from other sources of revenue in that they are compulsory levies and
are unrequited—i.e., they are generally not paid in exchange for some specific thing,
such as a particular public service, the sale of public property, or the issuance
of public debt. While taxes are presumably collected for the welfare of taxpayers as a
whole, the individual taxpayer’s liability is independent of any specific benefit
received. There are, however, important exceptions: payroll taxes, for example, are
commonly levied on labour income in order to finance retirement benefits, medical
payments, and other social security programs—all of which are likely to benefit the
taxpayer. Because of the likely link between taxes paid and benefits received, payroll
taxes are sometimes called “contributions” (as in the United States). Nevertheless,
the

payments are commonly compulsory, and the link to benefits is sometimes quite
weak. Another example of a tax that is linked to benefits received, if only loosely, is
the use of taxes on motor fuels to finance the construction and maintenance of roads
and highways, whose services can be enjoyed only by consuming taxed motor fuels.

2.2 PURPOSES OF TAXATION

During the 19th century the prevalent idea was that taxes should serve mainly to
finance the government. In earlier times, and again today, governments have utilized
taxation for other than merely fiscal purposes. One useful way to view the purpose of
taxation, attributable to American economist Richard A. Musgrave, is to distinguish
between objectives of resource allocation, income redistribution, and economic
stability. (Economic growth or development and international competitiveness are
sometimes listed as separate goals, but they can generally be subsumed under the
other three.) In the absence of a strong reason for interference, such as the need to
reduce pollution, the first objective, resource allocation, is furthered if tax policy does
not interfere with market-determined allocations. The second objective, income
redistribution, is meant to lessen inequalities in the distribution of income and wealth.
The objective of stabilization—implemented through tax policy, government
expenditure policy, monetary policy, and debt management—is that of maintaining
high employment and price stability.
 6
2.3 CLASSES OF TAXES

Direct and indirect taxes

In the literature of public finance, taxes have been classified in various ways
according to who pays for them, who bears the ultimate burden of them, the extent to
which the burden can be shifted, and various other criteria. Taxes are most
commonly classified as either direct or indirect, an example of the former type being
the income tax and of the latter the sales tax. There is much disagreement among
economists as to the criteria for distinguishing between direct and indirect taxes, and
it is unclear into which category certain taxes, such as corporate income
tax or property tax, should fall. It is usually said that a direct tax is one that cannot be
shifted by the taxpayer to someone else, whereas an indirect tax can be.

Direct taxes

Direct taxes are primarily taxes on natural persons (e.g., individuals), and they are
typically based on the taxpayer’s ability to pay as measured by
income, consumption, or net wealth. What follows is a description of the main types
of direct taxes. Individual income taxes are commonly levied on total personal net
income of the taxpayer (which may be an individual, a couple, or a family) in excess
of some stipulated minimum. They are also commonly adjusted to take into account
the circumstances influencing the ability to pay, such as family status, number and
age of children, and financial burdens resulting from illness. The taxes are often
levied at graduated rates, meaning that the rates rise as income rises. Personal
exemptions for

the taxpayer and family can create a range of income that is subject to a tax rate of
zero.
Taxes on net worth are levied on the total net worth of a person—that is, the value of
his assets minus his liabilities. As with the income tax, the personal circumstances of
the taxpayer can be taken into consideration.
Personal or direct taxes on consumption (also known as expenditure taxes or
spending taxes) are essentially levied on all income that is not channeled
into savings. In contrast to indirect taxes on spending, such as the sales tax, a
direct consumption tax can be adjusted to an individual’s ability to pay by allowing for
marital status, age, number of dependents, and so on. Although long attractive to
theorists, this form of tax has been used in only two countries, India and Sri Lanka;
both instances were brief and unsuccessful. Near the end of the 20th century, the
“flat tax”—which achieves economic effects similar to those of the direct
consumption tax by exempting most income from capital—came to be viewed
favourably by tax experts. No country has adopted a tax with the base of the flat tax,
although many have income taxes with only one rate.
Taxes at death take two forms: the inheritance tax, where the taxable object is
the bequest received by the person inheriting, and the estate tax, where the object is
the total estate left by the deceased. Inheritance taxes sometimes take into account
the personal circumstances of the taxpayer, such as the taxpayer’s relationship to
the donor and his net worth before receiving the bequest. Estate taxes, however, are
generally graduated according to the size of the estate, and in some countries they
provide tax-xempt transfers to the spouse and make an allowance for the number of
heirs involved. In order to prevent the death duties from
being circumvented through an exchange of property prior to death, tax systems may
include a tax on gifts above a certain threshold made between living persons (see gift
tax). Taxes on transfers do not ordinarily yield much revenue, if only because large
tax payments can be easily avoided through estate planning.
Indirect taxes
Indirect taxes are levied on the production or consumption of goods and services or
on transactions, including imports and exports. Examples include general and
selective sales taxes, value-added taxes (VAT), taxes on any aspect of manufacturing
or production, taxes on legal transactions, and customs or import duties.
General sales taxes are levies that are applied to a substantial portion of consumer
expenditures. The same tax rate can be applied to all taxed items, or different items
(such as food or clothing) can be subject to different rates. Single-stage taxes can be
collected at the retail level, as the U.S. states do, or they can be collected at a pre-
retail (i.e., manufacturing or wholesale) level, as occurs in some developing
countries. Multistage taxes are applied at each stage in the production-distribution
process. The VAT, which increased in popularity during the second half of the 20th
century, is commonly collected by allowing the taxpayer to deduct a credit for tax
paid on purchases from liability on sales. The VAT has largely replaced the turnover
tax—a tax on each stage of the production and distribution chain, with no relief for
tax paid at previous stages. The cumulative effect of the turnover tax, commonly

known as tax cascading, distorts economic decisions. Although they are generally
applied to a wide range of products, sales taxes sometimes exempt necessities to
reduce the tax burden of low-income households. By comparison, excises are levied
only on particular commodities or services. While some countries impose excises and
customs duties on almost everything—from necessities such as bread, meat, and salt,
to nonessentials such as cigarettes, wine, liquor, coffee, and tea, to luxuries such as
jewels and furs—taxes on a limited group of products—alcoholic beverages, tobacco
products, and motor fuel—yield the bulk of excise revenues for most countries. In
earlier centuries, taxes on consumer durables were applied to luxury commodities
such as pianos, saddle horses, carriages, and billiard tables. Today a main luxury
tax object is the automobile, largely because registration
requirements facilitate administration of the tax. Some countries tax gambling, and
state-run lotteries have effects similar to excises, with the government’s “take” being,
in effect, a tax on gambling. Some countries impose taxes on raw
materials, intermediate goods (e.g., mineral oil, alcohol), and machinery.
Some excises and customs duties are specific—i.e., they are levied on the basis of
number, weight, length, volume, or other specific characteristics of the good or
service being taxed. Other excises, like sales taxes, are ad valorem—levied on the
value of the goods as measured by the price. Taxes on legal transactions are levied on
the issue of shares, on the sale (or transfer) of houses and land, and on stock
exchange transactions. For administrative reasons, they frequently take the form of
stamp duties; that is, the legal or commercial document is stamped to
denote payment of the tax. Many tax analysts regard stamp taxes as nuisance taxes;
they are most often found in less-developed countries and frequently bog down the
transactions to which they are applied.
Chapter-3
Company profile
COAL INDIA LIMITED(CIL):-

Introduction:-
Coal India Limited is an Indian state controlled coal mining company headquarters in
Kolkata, West Bengal, India. It is the largest coal producer company in the world and
contributes around 82% of the coal production product in India. It is a public
company. It traded as BSE-533278, NSE-COAL INDIA, BSE SENSEX Constituent,
CNX NIFTY Constituent, ISIN_INE522F-01014. It is a mining and refinery company.
The company contributes to around 82% of the coal production in India. It produced
554.14 million tons of raw coal in 2016-2017, an increase from its earlier production
of 494.24 million tons of coal during 2014-15 and earned a revenue of RS. 95,435
crores(US $ 14 billion) from the sales of coal in the same financial year.

HISTORY:-
To take care of the energy requirements of India, the central govt. of India did a
nationalisation of coal industry in the 1970s.By 1972,it acquired most of the coking
coal mine in India through Bharat coking coal limited. Similarly ,it acquired all 711
non coking coal mines in India through coal mine authority limit. To consolidate the
business of the coking and none coking coal less that one entity .A formal holding
company in the form of coal India limited was formed in November 1975 to manage
both the companies.
As on 14 October 2015, Union Government of India owns CIL, and controls the
operation of CIL through Ministry of Coal. In April 2011, CIL was conferred the
Maharatna status by the Union Government if India, making it one of the seven
Maharatna.
As on October 2015, its market Coal India Limited is an Indian state-owned coal
mining and refinery company, head-quarter in Kolkata, West Bengal, India and the
largest coal producing company in the world and a Maharatna company. It was
founded in 1975, 44 years ago. The chairman and MD of CIL is Mr. ANIL KUMAR
JHA. Its main product is coal.
The revenue of CIL is Rs. 140,630 crores(US $ 20 billion) in 2019. Its operating
income is Rs. 27,125 crores (US $3.9 billion)in 2019. Its net income is Rs. 17,462
crores (US $2.5 billion)in 2019. Its total assets are Rs. 132,718 crores(US $ 19
billion) in 2019.Its total equity is Rs. 26,860 (US $3.9 billion)in 2019. The owner of
CIL is The Government of India(70.96%). The number of employees who are
working in the CIL is 285,479 in 2019.
It encompasses the whole gamut of identification of coal reserve, detailed
exploration followed by design and implementation and optimizing operation for coal
extraction in its:
1. Eastern coalfields limited (ECL), Sanatoria, West Bengal.

2.Bharat coking coal limited(BVVL). Dhanbad, Jharkhand.

3.Central coalfield limited9CCL), Ranchi ,Jharkhand.

4.South eastern coalfield limited(SECL), Chattisgarh.

5.Western coalfield limited (WCL), Nagpur, Maharastra.

6.Northern coalfield limited(NCL),Singrauli, MP.

7.The consultancy company is central mines planning and design institute limited
Ranchi.
 CENTRAL COALFIELD LIMITED

CCL is the subsidiary company of coal India Limited under ministry of coal and
mines government of India. CCL is one of the 7 coal production subsidiaries of coal
India limited under ministry of coal and mines. Company is governed by a Board of
Directors consisting 5 full time directors and 6 part time Directors. Full time Directors
are responsible for specific function of operation, projects, planning, finance, etc.
India is Third largest in coal. CCL means Coalfield India Limited .Central. Coalfield
Limited is a category – 1 Mini- Ratna company since October 2007.During 2009-
2010.Coal production of the company reached its highest ever figure of 47.08 million
tonnes ,with net worth amounting to Rs. 2644 crore against a paid-up capital of Rs
940 crore.
Formed on 1st November,1975 ,CCL(formerly National Coal Development
Corporation Ltd.) was one of the five subsidiaries of Coal India Ltd. Which was the
first holding company for coal in the country(CIL now has 8 subsidiaries)

The CMAL, with its three divisions continued upto 1st November 1975 when it was
renamed as Coal India Limited (CIL) following the decision of Government of india to
restructure the coal industry.
The central division of CMAL came to be known as central coalfields limited and
became a separate company with the status of a subsidiary of CIL, which became a
holding company.

INFRASTUCTURE:-
 1. Date Of Incorporation :- Coalfield India limited was formed as holding
company with 5 subsidiaries on 1.11.1975

2. Corporate status :- The company is Incorporated under the

Company Act, 1956 and is wholly owned by
The govt. of India.

3. Business :- Engaged in the mining of Coal, coal based

Products and mining consultancy.

VISION AND MISSION AND OBJECTIVES OF CCL:-

• VISION
To emerge as a national player in the primary energy sector, committed to
provide energy security .To the country ,by attaining environmentally and socially
sustainable growth through best practices from mine to market.

• MISSION
To produce and market the plant quantity of coal products efficiently and
economically in eco-friendly manner, with due regards to safety conservation and
quality.

OBJECTIVES OF CCL:-
Coal mining through efficiently operated mines.

Besides fulfilling coal needs of the customer in terms of quantity, focus in terms of
quality, value addition and beneficiation to the satisfaction of the customers.

The major objectives of CENTRAL COALFIELD LIMITED(CCL) are:-

(1) King water in the surrounding villages.

(2) To optimize generation of internal resource by improving productivity of

resources, prevent wastage and to mobilize adequate external resources to
meet investment need.

(3) To maintain high standards of safety and strive for an accident free mining of
coal.

(4) To lay emphasis on afforestation, protection of environment and control of

pollution.

(5) To undertake detailed exploration and plan for new project to meet the future
coal demand.

(6) To modernize existing mines.

(7) To develop technical know how an organisational capability of coal mining as

well as beneficiation and undertake, wherever necessary , applied research
and development work related to scientific exploration for greater extraction of
coal.

(8) To provide adequate number of skilled man power to run the operation and
impart technical and managerial training for upgradation of skill.

(9) To improve quality of life of employees and to discharge the corporate

obligations to society at large and the community around the coalfields in
partial

(10) To improve consumer satisfaction.

 OVERVIEW OF MINING AND ITS TYPES

Mining, process of extracting useful minerals from the surface of the Earth, including
the seas. A mineral, with a few exceptions, is an inorganic substance occurring in
nature that has a definite chemical composition and distinctive physical properties or
molecular structure. (One organic substance, coal, is often discussed as a mineral
as well.) Ore is a metalliferous mineral, or an aggregate of metalliferous minerals
and gangue (associated rock of no economic value), that can be mined at a profit.
Mineral deposit designates a natural occurrence of a useful mineral, while ore
deposit denotes a mineral deposit of sufficient extent and concentration to invite
exploitation.

Here are four main mining methods: underground, open surface (pit), placer, and in-
situ mining.

• Underground mines are more expensive and are often used to reach
deeper deposits.

• Surface mines are typically used for more shallow and less valuable
deposits.

• Placer mining is used to sift out valuable metals from sediments in river
channels, beach sands, or other environments.

• In-situ mining, which is primarily used in mining uranium, involves

dissolving the mineral resource in place then processing it at the surface
without moving rock from the ground.
CCL contributes Rs. 3421.61 Crore Towards the
GST Exchequer Awarded for being highest GST
payer in Jharkhand :-

Central Coalfields Limited (CCL) was awarded with “Commendation Certificate” for being
the highest Goods and Services Tax (GST) payer in mining sector under the jurisdiction of
CGST Ranchi Commissionerate and SGST Jharkhand for the FY 2018-19. Hon’ble Urban
Development Minister, Jharkhand Govt. Sri C P Singh gave away the award during a
function organized at BNR Chanakya, Ranchi. On this occasion, Sri Prashant Kumar, IAS,
Secretary, Commercial Tax and Monica Batra, IRS, Additional Commissioner, CGST. Shri
Ashok Kumar, GM (Finance) along with Shri Pradeep Singh, Dy. Manager (Fin) received the
prestigious award from Hon’ble Urban Development Minister.

CCL has contributed Rs.3421.61 Cr to the GST exchequer. The program was organized on
the occasion of 2nd Anniversary of implementation of the GST. CCL under the dynamic
leadership of its CMD Shri Gopal Singh has been one of the highest tax payers of Jharkhand
backed by its record breaking coal production year after year.

CCL has registered new benchmarks in almost all parameters whether it is production,
productivity, dispatch, OB removal etc. year after year. Moreover, CCL endeavour has been
equally towards the “Inclusive Growth” of its each and every stakeholder through its welfare
oriented “Kayakalp Scheme”. CCL has been executing more than 60 schemes in the area of
education, healthcare, sports, skill development, drinking water etc to bring the fruits of
development to the last person of Jharkhand.
HISTORY OF TAXATION
The word tax comes from taxare or tax, which is Latin and means to determine or
identify the worth of something. Government impose taxes to use services provided
by it. In simple, tax is the money that you have to pay to the governments so that it
can provide public services. Taxes are imposed and collected by the state. The state
then uses the money collected for various welfare schemes or services and runs the
government. The economic strength of a nation is dependent on how good the tax
systems of the nation are.

Earliest Taxes – Ancient Mesopotamia(6000 BC)

Mesopotamia is a name for the area of the Tigris-Euphrates river
system(corresponding to the most of Iraq, Kuwait, the eastern parts of Syria, and
regions along the Turkish-Syrian and Iran0Iraq borders).Widely considered to be one
of the cradles of civilisation by the western world, Bronze Age Mesopatamia included
Sumer and Akkadian, Babylonian and Assyrian empires,

The oldest examples of ancient Mesopotamia writings are documents concerned

with goods and trade and include records of taxes, tithes and tribute. The earliest tax
records known were from the ancient Mesopotamia city-state of Lagash in modern
day of Iraq, and were made in soft clay. The clay was then based and served as a
receipt, or account. The tax rates in Lagash were typically low, but in times of crisis
or wars, the rate would be 10% of all goods. The primary focus of early property
taxation was land and its production value and the taxes were often paid with a
portion of the crop yield, or some other food. These taxes were used to supply the
defence of the city state, and for trade with other city states.

Vedic Period
In the early vedic period, the king regularly imposed taxes on his subjects. These
taxes were called Bali and included 1/6 of the agricultural products or livestock for a
given person. Another form of Bali was the tributes that the King withdrew from
defeated enemies. This agreement was part of a bilateral treaty between the King
and the people. The people would work on the land and pay taxes to the king for his
protection. In later vedic times, the terms commonly used for taxes are Bali,bagha
and Shulka. The earliest tax collected was Kara-customery share of grains. As
offerings, Bali and Bhagha were based on personal relations between the giver and
the receiver and were made in kind.
According to the Manu Smrity, the King should arrange the collection of taxes in
such a manner that the tax payer did nit feel the pinch of paying taxes.He laid down
that traders and artisans should pay 1/5th of their profits in silver and gold , while the
agriculturists were to pay 1/6th , 1/8th and 1/10th of their produce depending upon
their circumstances.

Evolution of tax in India-(Pre-Independence)

In India, the system of direct taxation as it is known today has been in force in one
form or another even from ancient times

1860- The Tax was introduced for the first time by Sir James Wilson. India’s First
“Union Budget” Introduced by Pre-independence finance minister, James Wilson
on 7 April, 1860. The Indian Income Tax Act of 1860 was enforced to meet the
losses sustained by the government on account of the military mutiny of 1857.
Income was divided into four schedules taxed separately:
(1) Income from landed property;
(2) Income from professions and trades;
(3) Income from Securities;
(4) Income from Salaries and pensions.
1886- Separate Income tax act was passed. This act remained in force up to, with
various amendments from time to time. Under the Indian Income Tax Act of 1886,
income was divided into four schedules taxed separately:
(1) Salaries, pensions or gratuities;
(2) Net profits of companies;
(3) Interests on the securities of the Government of India;
(4) Other sources of income.

1918- A new income tax was passed. The Indian Income Tax Act of 1918 repealed
the Indian Income Tax Act of 1886 and introduced several important changes.

1922- Again it was replaced by another new act which was passed in 1922. The
organizational history of the Income-tax Department starts in the year 1922. The
Income-tax Act, 1922, gave, for the first time, a specific nomenclature to various
Income-tax authorities. The Income Tax Act of 1922 remained in force until the year
1961.
The Income Tax Act of 1922 had become very complicated on account of
innumerable amendments. The Government of India therefore referred it to the law
commission in1956 with a view to simplify and prevent the evasion of tax

Post- Independence
The act of 1922 remained in effect in India till 1961. The act was brought by the
British and later in 1956 Government of India referred to a law commission to make it
simpler.

The Indian Income Tax act of 1961 came into effect after consultation with the
Ministry of law. It was brought into force in April 1962. All citizens of India are bound
by this act. Since 1962 many amendments have been made to the act annually by
the Union Budget. The bills become acts after it is passed by both upper and lower
houses of parliament and get presidential assent to it. Currently, five categories of
income are considered for tax. They are as follows:

(1) Income from Salary;

(2) Income from House Property;

(3) Income from Profits and Gains of Business or Profession;

(4) Income from Capital Gains;

(5) Income from Other Sources.

The Income Tax act of 1961 is long. It has 23 chapters, 298 sections and 14
schedules in it.
CHANGES IN INCOME TAX SLAB AFTER
INDEPENDENCE

1949-1950:- This was the first time the tax rates were tinkered with in Independent
India. The then finance minister, John Mathai reduced tax on incomes up to Rs
10,000 by a quarter of an anna, from one anna to nine pies in the first slab, and from
two annas to "one nine pies" in the second slab.

1974-1975:- Y. B. Chavan cut the maximum marginal rate from an eye watering
97.75 per cent to 75 per cent. Taxes were lowered at all levels of personal incomes.
Here is what he did: No income-tax for those earning up to Rs.6,000; marginal rate
of basic income-tax was kept at 70 per cent on the income slab over Rs.70,000. The
rate of surcharge was reduced to a uniform level of 10 per cent for all categories.
The combined incidence of income-tax and surcharge would amount to 77 per cent
of the taxable income in the highest slab. Wealth tax was increased.

1985-1986:- Vishwanath Pratap Singh restructured the tax structure by reducing

the number of income tax slabs from eight to four. The highest marginal rate of
income tax on personal incomes decreased from 61.875 per cent to 50 per cent.
Those earning less than Rs.18,000 paid no tax, the rate of income tax on the slab of
Rs 18,001 to Rs 25,000 was fixed at 25 per cent; on the slab of Rs 25,001 to Rs
50,000 it was 30 per cent; on Rs 50,001 to Rs 1 lakh tax was 40 per cent; and on the
income in excess of Rs 1 lakh it was 50 per cent.

1992-1993:- Manmohan Singh reduced the number of slabs to three. Entry rate
was 20 per cent applicable for incomes Rs 30, 000 to Rs 50,000, a middle slab for
incomes between Rs 50,000 and Rs1 lakh with a tax of 30 percent, and a maximum
rate of 40 per cent for those earning above Rs1 lakh.

1994-1995:- After a gap of two years, Manmohan Singh adjusted the tax slabs but
kept the rates unchanged. The first slab was set at Rs 35,000 to Rs. 60,000, with the
same rate of 20 per cent tax, second slab was set as Rs 60,000 to Rs 1.2 lakh with
the same rate of 30 per cent tax, and maximum tax rate of 40 per cent was set for
income over Rs 1.2 lakh.

1997-1998:- Although V.P Singh and Manmohan Singh were the ones to cut the
number of slabs in their budgets, it was P. Chidambaram who presented the 'Dream
Budget'. He replaced the prevailing rates of 15, 30 and 40 per cent with 10, 20 and
30 per cent. Those in the first slab earning Rs 40,000 to Rs 60,000 paid a tax of 10
per cent, 20 per cent in the slab of Rs. 60,000 to Rs. 1.5 lakh, and 30 per cent for all
income above Rs. 1.5 lakh. He also increased the limit of standard deduction to Rs.
20,000, which would apply uniformly to all salaried taxpayers. Further, it was
announced that all employees drawing a salary of Rs 75,000 per annum and
contributing 10 per cent to the provident fund would have to pay no tax at all.

2005-2006:- After almost 10 years, it was once again Chidambaram who

announced some considerable changes in the tax brackets. He announced that
those earning up to Rs 1 lakh would pay no tax, those earning Rs 1 lakh to Rs 1.5
lakh were taxed at 10 percent, Rs1.5 lakh to Rs2.5 lakh were to be taxed at 20 per
cent, and those earning over Rs2.5 lakh were to pay 30 per cent as tax.

2010-2011:- After a gap of five years, Pranab Mukherjee, changed the income
slabs. He announced that those earning up to Rs 1.6 lakh would pay zero tax, those
in the income bracket of Rs 1.6 lakh to Rs 5 lakh would pay 10 percent, those in the
bracket Rs 5 lakh to Rs 8 lakh would pay 20 percent, and anyone earning more than
Rs 8 lakh would pay 30 per cent.

2012-2013:- Pranab mukherjee announced that those earning up to Rs 2 lakh a

year did not have to pay tax, those earning between Rs 2 lakh and Rs 5 lakh would
now pay 10 per cent, those earning Rs 5 lakh-Rs10 lakh would pay a tax of 20 per
cent, those earning above Rs 10 lakh would pay 30 per cent.

2014-2015:- With the passage of Finance Bill, 2015, wealth-tax was abolished with
effect from assessment year (AY) 2016-17. Arun Jaitley replaced the wealth tax with
a surcharge of 2 per cent on the super-rich with a taxable income of above Rs 1
crore. Taxpayers, therefore, were not required to file a wealth tax return from AY
2016-17 onward.

2017-2018:- Jaitley reduced the existing rate of taxation for individual assesses
with income between Rs 2.5 lakh and Rs 5 lakh to 5% from the present rate of 10%.
2020-2021:- In an unprecedented move, FM Niramala Sitharaman proposed a new
optional personal income tax system. To simplify the tax system and lower tax rates,
around 70 of over 100 income tax deductions and exemptions were done away with.
A taxpayers gets to choose between the old and new regimes at the beginning of a
new financial year and get taxed accordingly.

2020-2021:- In an unprecedented move, FM Niramala Sitharaman proposed a new

optional personal income tax system. To simplify the tax system and lower tax rates,
around 70 of over 100 income tax deductions and exemptions were done away with.
A taxpayers gets to choose between the old and new regimes at the beginning of a
new financial year and get taxed accordingly.
 INTRODUCTION OF VAT IN INDIA

VAT was introduced value added tax (VAT) into the Indian taxation system from 1
April 2005. The existing general sales tax laws were replaced with the Value Added
Tax Act (2005) and associated VAT rules.

A few states (Gujarat, Tamil Nadu, Rajasthan, Madhya

Pradesh, Chhattisgarh, Jharkhand, Uttarakhand and Uttar Pradesh) opted to stay out
of VAT taxation system during the initial introduction of VAT but adopted it later.

As of 2 June 2014, VAT has been implemented in all the states and union territories
of India except Pondicherry, Andaman and Nicobar
Islands and Lakshadweep Island.

What Is VAT?

Every commodity passes through different stages of production and distribution

before finally reaching the consumer. Some value is added at each stage of the
production and distribution chain: for instance, a forged metal tool is more valuable
than metal, which was itself more valuable than the ore that was originally mined.
Value Added Tax (VAT) is a tax on this value addition at each stage.

Under a VAT system, a dealer collects tax on his sales, retains the tax paid on his
purchase and pays the balance to the government. It is a consumption tax, because
it is borne ultimately by the final consumer. The tax paid by the dealer is passed on
to the buyer. It is not a charge on the dealer. VAT is instead a multipoint tax system
with provision for collection of tax paid on purchases at each point of sale.

Tax Rates Under VAT:-

Since every state has its own VAT legislation, VAT rates, taxable base and list of
taxable goods, VAT rates will differ from state to state. As an example, here are
Maharashtra’s tax rates as of June 2016:
• Schedule ‘A’ – Essential Commodities (Tax-free) – Nil

• Schedule ‘B’ – Gold, Silver, Precious Stones, Pearls etc. – 1%

• Schedule ‘C’ – Declared Goods and other specified goods – 5% (Rates for
items other than declared goods changed to 5.5%)

• Schedule ‘D’ – Foreign Liquor, Country Liquor, Motor Spirits, etc. – 20% and
above

• Schedule ‘E’ – All other goods (not covered by A to D) – 12.5% starting April
1, 2016.
 GOODS AND SERVICES TAX(GST)

The President of India approved the Constitution Amendment Bill for Goods and
Services Tax (GST) on 8 September 2016, following the bill’s passage in the Indian
parliament and its ratification by more than 50% of state legislatures. This law will
replace all indirect taxes levied on goods and services by the central government
and state government and implement GST by April 2017.

The implementation of GST will have a far-reaching impact on almost all the aspects
of the business operations in India. With more than 140 countries now adopting
some form of GST, India has long been a stand-out exception. GST is a value-added
tax levied at all points in the supply chain, with credit allowed for any tax paid on
input acquired for use in making the supply. It would apply to both goods and
services in a comprehensive manner, with exemptions restricted to a minimum. In
keeping with the federal structure of India,

it is proposed that the GST will be levied concurrently by the central government
(CGST) and the state government (SGST). It is expected that the base and other
essential design features would be common between CGST and SGSTs for
individual states. The inter-state supplies within India would attract an integrated
GST (IGST), which is the aggregate of CGST and the SGST of the destination state

TYPES OF GST
1) CGST
2) IGST
3) SGST
4) UGST
1) Central Goods And Services Tax
CGST stands for Central Goods and Services Tax. It subsumes all the taxes that
were earlier applicable as central indirect taxes. They are levied by the central
government for intrastate movement of goods and services. Intrastate means within
one state.

GST LAW :-
CGST ACT

SEC 7: Scope of Supply

Section 7 of the Goods and Services Tax (GST) Act, 2017, defines the scope of
supply under GST. The section outlines what activities can be considered as a
supply and what will be considered as taxable under the GST regime.
According to Section 7 of the GST Act, the term "supply" includes all forms of supply
of goods or services or both such as sale, transfer, barter, exchange, license, rental,
lease, or disposal made or agreed to be made for a consideration by a person in the
course or furtherance of business.
It also includes import of services or goods, made for a consideration whether or not
in the course or furtherance of business, and activities deemed to be a supply under
Schedule I of the Act, even if made without consideration.
Schedule I of the GST Act provides a list of activities that will be treated as a supply
even if made without consideration, such as the transfer of goods or services
between related persons, goods supplied by a principal to an agent, and supplies
made by a taxable person to a job worker.

In summary, Section 7 of the GST Act broadly defines the scope of supply and the
activities that will be considered taxable under GST. It is essential for businesses to
understand the provisions of this section to ensure compliance with the GST regime.
The scope of supply under the Goods and Services Tax (GST) Act is very broad and
includes all forms of supply of goods or services or both made for a consideration in
the course or furtherance of business. Here are a few examples of what can be
considered as a supply under the GST regime:

Sale of goods: When a business sells a product to a customer, it is considered as a

supply of goods. For example, when a mobile phone manufacturer sells a
smartphone to a retailer, it is considered a supply of goods.

Provision of services: When a business provides a service to a customer, it is

considered as a supply of services. For example, when a consultancy firm provides
advisory services to a client, it is considered a supply of services.

Barter or exchange: When goods or services are exchanged for other goods or
services without involving any money, it is still considered a supply under GST. For
example, when a furniture maker exchanges a table with a chair with another
furniture maker, it is considered a supply of goods.
Rental or lease: When a business rents or leases goods or services to
another business or individual for a consideration, it is considered a
supply under GST. For example, when a car rental agency rents out a
car to a customer, it is considered a supply of services.

Import of goods or services: When goods or services are imported into

India from another country, it is considered a supply under GST. For
example, when a business imports machinery from Germany for use in
its factory, it is considered a supply of goods.

Deemed supply: Certain activities are deemed to be a supply under the

GST Act, even if made without consideration. For example, when a
business transfers goods to its branch office without any consideration, it
is still considered a supply the goods under the GST Act.

SEC 8: Tax Liability on Composite and Mixed Supplies

GST Section 8 of the Central Goods and Services Tax Act, 2017 (CGST Act) deals
with the tax liability of a composite and mixed supply.
A composite supply refers to a supply made up of two or more goods or services that
are naturally bundled and are supplied together in the ordinary course of business. In
this case, the principal supply is the dominant component, and the tax liability is
determined based on the rate applicable to the principal supply.
On the other hand, a mixed supply refers to a supply made up of two or more goods
or services that are not naturally bundled and are supplied together. In this case, the
tax liability is determined based on the rate applicable to the item attracting the
highest rate of tax.
Section 8 of the CGST Act provides that where a composite supply includes goods
or services liable to tax at different rates, the tax liability shall be determined as if
such supply were a mixed supply. Similarly, where a mixed supply includes goods or
services liable to tax at different rates, the tax liability shall be determined as if such
supply were a composite supply, i.e., the tax rate applicable to the principal supply
shall be the rate of tax applicable to the mixed supply.

In summary, GST Section 8 provides a mechanism for determining the tax liability in
cases where a supply involves a combination of goods or services with different tax
rates.
Here are a few examples that illustrate the application of GST Section 8:
Composite supply example: A restaurant provides a meal comprising a burger,
fries, and a beverage. The burger, fries, and beverage are naturally bundled and
supplied together in the ordinary course of business. In this case, the tax liability will
be determined based on the rate applicable to the principal supply, which is the
burger.
Assuming the tax rate applicable to the burger is 5% and the tax rate applicable to
fries and beverage is 18%, the total tax liability on the composite supply will be
calculated based on the 5% rate applicable to the burger.

Mixed supply example: A stationery store sells a bundle comprising a pen, a

notebook, and a calculator. These items are not naturally bundled, and customers
may purchase them separately. In this case, the tax liability will be determined based
on the item attracting the highest rate of tax.
Assuming the tax rate applicable to pens is 12%, the tax rate applicable to
notebooks is 18%, and the tax rate applicable to calculators is 28%, the total tax
liability on the mixed supply will be calculated based on the 28% rate applicable to
the calculator.

Composite and mixed supply example: A construction contractor provides a

package of services, which includes the supply of cement, steel, and Labor. Cement
and steel are taxable at 18%, while Labor is taxable at 12%. In this case, the supply
of cement and steel is a mixed supply, and the supply of Labor is a composite
supply.
Therefore, the tax liability on the mixed supply of cement and steel will be calculated
based on the item attracting the highest rate of tax, which is 18%. The tax liability on
the composite supply of Labor will be calculated based on the rate applicable to
Labor, which is 12%. The total tax liability on the package of services will be the sum
of the tax liability on the mixed supply and the tax liability on the composite supply.

Sec 9: Levy and Collection

GST Section 9 of the Central Goods and Services Tax Act, 2017 (CGST Act) deals
with the levy and collection of GST on intra-state supplies.
Section 9(1) of the CGST Act provides that GST shall be levied on all intra-state
supplies of goods or services or both, except on the supply of alcoholic liquor for
human consumption. Intra-state supplies refer to supplies where the location of the
supplier and the place of supply are in the same state.
Section 9(2) of the CGST Act provides that GST shall be levied on the supply of
goods or services, or both made by a taxable person who is not registered under the
GST Act, if such supply is made to a registered person. In this case, the registered
person who receives the supply shall be liable to pay the GST under the reverse
charge mechanism.
Section 9(3) of the CGST Act provides that the government may, on the
recommendations of the GST Council, notify certain categories of supplies for which
the GST shall be paid by the recipient of the supply under the reverse charge
mechanism. This provision enables the government to shift the tax liability from the
supplier to the recipient for specific supplies to prevent tax evasion.
Section 9(4) of the CGST Act provides that the central government may, on the
recommendations of the GST Council, specify a special procedure for the payment
of GST by a person supplying online information and database access or retrieval
services from a place outside India to a person in India.

In summary, GST Section 9 provides the framework for the levy and collection of
GST on intra-state supplies of goods and services, including the reverse charge
mechanism and the special procedure for online services.
Here are a few examples that illustrate the application of GST Section 9:

Levy of GST on intra-state supplies: A manufacturer located in Karnataka sells

goods to a distributor located in Karnataka. In this case, GST will be levied on the
intra-state supply of goods, and the manufacturer is required to collect and pay GST
to the government.

Reverse Charge Mechanism: A registered dealer in Tamil Nadu purchases

services from an unregistered dealer in Tamil Nadu. In this case, the registered
dealer is liable to pay GST under the reverse charge mechanism, and the
unregistered dealer is not required to collect or pay GST.

Notification for Reverse Charge Mechanism: The government notifies that the
supply of certain specified goods or services will attract the reverse charge
mechanism. For example, legal services provided by an advocate to a business
entity will attract the reverse charge mechanism, and the business entity will be liable
to pay GST.

Special Procedure for Online Services: A company located outside India provides
online information and database access services to customers in India. The
government may specify a special procedure for the payment of GST in such cases.
The company may be required to register under the GST Act, and the GST
liability may need to be paid by the intermediary located in India, acting on behalf of
the company.

SEC 12: Time and Supply of Goods

GST Section 12 of the Central Goods and Services Tax Act, 2017 (CGST Act) deals
with the time of supply of goods and services. It specifies when the liability to pay
GST arises on the supply of goods or services or both.
Section 12(2) of the CGST Act provides that the time of supply of goods shall be the
earlier of the following dates:

• The date of issuance of invoice by the supplier, or

• The date on which the supplier receives the payment for the supply.

If the invoice is not issued within a prescribed time, the time of supply of goods shall
be the date of delivery of goods or the date on which the recipient shows the receipt
of goods in his books of account, whichever is earlier.
Section 12(3) of the CGST Act provides that the time of supply of services shall be
the earlier of the following dates:

• The date of issuance of invoice by the supplier, or

• The date on which the supplier receives the payment for the supply, or
• The date on which the supplier completes the provision of service.

If the invoice is not issued within a prescribed time, the time of supply of services
shall be the date of completion of the provision of services or the date on which the
recipient shows the receipt of services in his books of account, whichever is earlier.
Section 12(4) of the CGST Act provides that in case of continuous supply of goods
or services, the time of supply shall be the earliest of the following dates:

• The date of issuance of invoice, or

• The date of receipt of payment, or
• The date of completion of each event specified in the contract, or
• The date on which the recipient shows the receipt of goods or services in his
books of account.

In summary, GST Section 12 provides the rules for determining the time of supply of
goods and services for the purpose of levy and collection of GST.
Here are a few examples that illustrate the application of GST Section 12:
Time of supply of goods based on invoice: A manufacturer sells goods worth Rs.
1 lakh to a dealer and issues an invoice on 5th May 2023. In this case, the time of
supply of goods will be 5th May 2023, which is the date of issuance of the invoice.

Time of supply of services based on payment: An interior decorator provides

services worth Rs. 50,000 to a client and receives payment on 10th May 2023. In
this case, the time of supply of services will be 10th May 2023, which is the date of
receipt of payment.

Time of supply of goods based on delivery: A supplier delivers goods worth Rs. 2
lakhs to a customer on 15th May 2023. The supplier does not issue an invoice within
the prescribed time of 30 days. In this case, the time of supply of goods will be 15th
May 2023, which is the date of delivery of goods.

Time of supply of services based on completion: A builder provides construction

services worth Rs. 50 lakhs to a customer. The builder completes the work on 30th
June 2023 and issues an invoice on 5th July 2023. In this case, the time of supply of
services will be 30th June 2023, which is the date of completion of the provision of
services.

Time of supply of goods based on continuous supply: A supplier agrees to

supply goods worth Rs. 10 lakhs per month for a period of 12 months. The supplier
issues an invoice on 5th May 2023 and receives payment on 10th May 2023 for the
first month's supply. In this case, the time of supply of goods for the first month will
be 5th May 2023, which is the date of issuance of the invoice. For subsequent
months, the time of supply of goods will be determined based on the earlier of the
invoice date, receipt of payment, or completion of each event specified in the
contract.

SEC 13: Time of Supply of Services

GST Section 13 of the Central Goods and Services Tax Act, 2017 (CGST Act) deals
with the place of supply of goods or services or both. It specifies the place where a
supply of goods or services is deemed to have taken place for the purpose of
determining the applicable GST rate and the tax jurisdiction.
The place of supply is important as it determines whether a transaction is subject to
CGST and SGST (intra-state supply) or IGST (inter-state supply). The place of
supply is determined based on the nature of supply (goods or services), the location
of the supplier, and the place of delivery.
Section 13(2) of the CGST Act provides that the place of supply of goods shall
be as follows:
• For goods transported within India, the place of supply shall be the
location where the goods are delivered to the recipient.
• For goods that require installation or assembly, the place of supply shall
be the location where the installation or assembly is completed.
• For goods that are supplied on board a conveyance (ship, aircraft, train,
or motor vehicle), the place of supply shall be the location where the
goods are taken on board.
• For goods that are supplied by way of transfer of documents of title (such
as a bill of lading), the place of supply shall be the location of the
recipient of the goods.

Section 13(3) of the CGST Act provides that the place of supply of services
shall be as follows:
• For services provided to an individual, the place of supply shall be the
location of the recipient of the services.
• For services provided to a business entity (registered under GST), the
place of supply shall be the location of the recipient of the services,
provided that the recipient's location is available on record.
• For services that require the physical presence of the recipient or the
service provider, the place of supply shall be the location where the
services are performed.
• For services provided by way of electronic means (such as website
design, software development, or online advertising), the place of supply
shall be the location of the recipient of the services.

In summary, GST Section 13 provides the rules for determining the place of
supply of goods and services for the purpose of levy and collection of GST.
Here are a few examples that illustrate the application of GST Section 13:

Place of supply of goods transported within India: A manufacturer located in

Mumbai delivers goods to a customer located in Delhi. The place of supply for
this transaction will be Delhi, where the goods are delivered to the recipient.

Place of supply of goods that require installation or assembly: A supplier

located in Hyderabad supplies machinery to a customer located in Chennai,
which requires installation. The place of supply for this transaction will be
Chennai, where the installation is completed.
Place of supply of goods supplied on board a conveyance: A supplier located in
Jaipur supplies goods to a customer located in Singapore on board a ship. The place
of supply for this transaction will be Singapore, where the goods are taken on board.

Place of supply of goods by way of transfer of documents of title: A supplier

located in Kolkata transfers the title of goods to a customer located in Mumbai
through a bill of lading. The place of supply for this transaction will be Mumbai,
where the recipient of the goods is located.

Place of supply of services provided to an individual: A lawyer located in

Bangalore provides legal services to an individual located in Chennai. The place of
supply for this transaction will be Chennai, where the recipient of the services is
located.

Place of supply of services provided to a business entity: An advertising agency

located in Mumbai provides marketing services to a company located in Pune. The
place of supply for this transaction will be Pune, where the recipient of the services is
located and the location is available on record.

Place of supply of services that require physical presence: A fitness trainer

located in Delhi provides training services to a client located in Kolkata. The place of
supply for this transaction will be Kolkata, where the services are actually performed.

Place of supply of services provided by electronic means: An IT company

located in Chennai provides website development services to a client located in
Mumbai. The place of supply for this transaction will be Mumbai, where the recipient
of the services is located.

Sec 15: Value of Taxable Supply

GST Section 15 of the Central Goods and Services Tax Act, 2017 (CGST Act) deals
with the value of taxable supply. It specifies the value on which the GST is to be
calculated and collected by the supplier of goods or services or both.
The value of taxable supply is important as it determines the amount of GST that
needs to be paid on a transaction. GST is levied on the transaction value, which
includes all the expenses incurred in making the supply, such as packing,
commission, and any other incidental expenses.
Section 15 of the CGST Act provides that the value of taxable supply shall include
the following:
The consideration (in money or otherwise) received or receivable by the supplier for
the supply of goods or services or both.
Any amount that the supplier is liable to pay, but which has been incurred by the
recipient of the supply and is not included in the price actually paid or payable for the
goods or services or both.
Any amount charged for anything done by the supplier in respect of the supply of
goods or services or both at the time of or before the delivery of the goods or supply
of the services.
Any subsidy that is directly linked to the price of the goods or services or both and is
allowed by the government.
Any incidental expenses, such as packing, commission, and any other expenses
charged by the supplier of goods or services or both in connection with the supply of
goods or services or both.
It is important to note that certain transactions may be exempted from GST, and in
such cases, the value of the exempted supply will not be included while determining
the taxable value.

In summary, GST Section 15 provides the rules for determining the value of taxable
supply, which is the basis for calculating and collecting GST.
Here are some examples to illustrate the application of GST Section 15:

Value of taxable supply for sale of goods: A manufacturer sells goods worth Rs.
10,000 to a wholesaler, and charges GST at the rate of 18%. The value of taxable
supply for this transaction will be Rs. 10,000.

Value of taxable supply for services rendered: An IT company provides software

development services to a client for a fee of Rs. 50,000, and charges GST at the rate
of 18%. The value of taxable supply for this transaction will be Rs. 50,000.

Value of taxable supply for reimbursement of expenses: A consultant provides

consulting services to a client for a fee of Rs. 1,00,000, and incurs expenses of Rs.
10,000 on behalf of the client. The consultant bills the client for the expenses and
charges GST at the rate of 18%. The value of taxable supply for this transaction will
be Rs. 1,10,000 (i.e., Rs. 1,00,000 + Rs. 10,000).

Value of taxable supply for goods supplied with additional charges: A trader
sells goods worth Rs. 5,000 to a customer, and charges Rs. 500 as packing and
handling charges. The trader also charges GST at the rate of 18% on the total
amount of Rs. 5,500. The value of taxable supply for this transaction will be Rs.
5,500.

Value of taxable supply for subsidized goods: A government agency sells

subsidized food items worth Rs. 500 to a retailer. The government agency charges
GST at the rate of 5% on the actual price of the food items, which is Rs. 300. The
value of taxable supply for this transaction will be Rs. 300.
It is important to note that the value of taxable supply may vary based on the terms
of the transaction, such as the inclusion of any incidental expenses or subsidies, and
the applicability of GST rates.

Sec 16: Eligibility and Conditions for Taking Input Tax Credit

Section 16 of the Central Goods and Services Tax (CGST) Act, 2017 pertains to the
eligibility of registered taxpayers to claim Input Tax Credit (ITC) on their inward
supplies. In simple terms, it allows taxpayers to claim credit for the taxes paid on
their purchases of goods or services, which can be set off against the tax payable on
their outward supplies.

Some of the key points to note about Section 16 of the CGST Act are:

Eligibility for claiming ITC: A registered taxpayer can claim ITC only if the goods or
services for which credit is being claimed are used or intended to be used for
business purposes. Additionally, the taxpayer must possess a tax invoice or any
other prescribed document evidencing payment of tax on the inward supply.

Time limit for claiming ITC: A taxpayer can claim ITC only within a certain time
limit. The deadline for claiming ITC is the earlier of the following dates:
The due date for filing of the annual return for the financial year to which such
invoice or invoice relating to such debit note pertains; or
The date of filing of the relevant annual return.

Restrictions on claiming ITC: There are certain restrictions on claiming ITC under
Section 16. For example, a taxpayer cannot claim ITC for tax paid on purchases of
goods or services that are used for personal purposes or for non-business purposes.
Additionally, there are restrictions on claiming ITC in certain cases such as for motor
vehicles, food and beverages, and membership of a club, among others.
Reversal of ITC: If a taxpayer is unable to use the goods or services for which ITC
has been claimed, or if the taxpayer has used such goods or services for non-
business purposes, the ITC claimed on such goods or services must be reversed.
Here are a few examples that can help illustrate the application of Section 16 of the
CGST Act:

Example of eligible ITC claim:

Suppose a registered dealer purchases raw materials worth Rs. 50,000 from another
registered dealer and pays Rs. 9,000 as GST. The dealer uses these raw materials
to manufacture finished goods that are sold for Rs. 1,00,000, attracting a GST of Rs.
18,000. In this case, the dealer is eligible to claim ITC of Rs. 9,000, which is the GST
paid on the purchase of raw materials and can set it off against the GST payable on
the sale of finished goods.

Example of ineligible ITC claim:

Suppose a registered dealer purchases a car for personal use and pays GST of Rs.
1,50,000 on it. In this case, the dealer is not eligible to claim ITC on the GST paid,
since the car is not used for business purposes.

Example of time limit for ITC claim:

Suppose a registered dealer purchases goods worth Rs. 20,000 from another
registered dealer and pays Rs. 3,600 as GST. The dealer forgets to claim ITC on this
purchase in the relevant tax period. However, the dealer can still claim the ITC in
subsequent tax periods, subject to the time limit prescribed under Section 16, i.e.,
the earlier of the due date for filing of the annual return or the date of filing of the
relevant annual return.

Example of reversal of ITC:

Suppose a registered dealer purchases a laptop for business use and pays GST of
Rs. 9,000 on it. Later, the dealer decides to use the laptop for personal purposes and
removes it from the business premises. In this case, the dealer must reverse the ITC
claimed on the purchase of the laptop since it is no longer being used for business
purposes.
SEC 17: Apportionment of Credit And Blocked Credit

GST Section 17 of the Central Goods and Services Tax Act, 2017 (CGST Act) deals
with the apportionment of input tax credit and blocked input tax credit under GST.
Input tax credit (ITC) refers to the credit available to a registered person for the taxes
paid on the inputs used in the production or supply of goods or services or both. It is
an essential component of GST, as it helps to avoid the cascading effect of taxes
and makes the tax system more efficient.

Section 17 of the CGST Act specifies certain situations where ITC will not be
available or will be partially available to the registered person. These situations are
known as blocked credits.

The following are some of the circumstances where input tax credit is not available to
a registered person under GST:
Motor vehicles and other conveyances, except for those used for transportation of
goods or passengers, or for providing training on driving, flying, or navigating such
vehicles.

Goods or services used for personal consumption, such as food and beverages,
health services, and rent-a-cab services.
Goods or services used for construction of an immovable property, other than plant
and machinery, where such property is intended for use in the course or furtherance
of business or commerce.
Goods or services used for the composition scheme or goods, or services used for
non-business purposes.

Input tax credit availed in respect of goods or services used for the construction of a
taxable property that is not a capital asset.
Goods or services received by a taxable person for construction of an immovable
property on his own account, other than plant and machinery, even when used in the
course or furtherance of business or commerce.
Goods or services used for works contract services when the goods or services are
used for construction of immovable property.

In summary, GST Section 17 specifies the circumstances where ITC is not available
or partially available to a registered person, which are known as blocked credits. This
section helps to ensure that ITC is used only for the intended purpose
of avoiding the cascading effect of taxes and making the tax system more efficient.
Here are some examples to illustrate the application of GST Section 17:

Input tax credit not available for personal consumption: A company provides
lunch to its employees as a part of their employment contract. The company cannot
claim input tax credit on the GST paid for the food and beverages as they are used
for personal consumption.

Input tax credit not available for construction of immovable property: A builder
purchases cement, steel, and other construction materials for constructing an
apartment complex. The builder cannot claim input tax credit on the GST paid for the
construction materials used for the construction of the immovable property.

Input tax credit not available for motor vehicles: A company purchases a luxury
car for its managing director's personal use. The company cannot claim input tax
credit on the GST paid for the car as it is not used for transportation of goods or
passengers or for providing training on driving, flying, or navigating such vehicles.

Input tax credit not available for works contract services: A construction
company hires a contractor to construct a building. The construction company
cannot claim input tax credit on the GST paid for the works contract services used
for the construction of the immovable property.

Input tax credit not available for goods or services used for composition
scheme: A small business with an annual turnover of less than Rs. 1.5 crores
choose to opt for the composition scheme. The business cannot claim input tax
credit on the GST paid for the goods or services used for the composition scheme.

Input tax credit not available for goods or services used for non-business
purposes: A company purchases a TV for its employees' recreational room. The
company cannot claim input tax credit on the GST paid for the TV as it is used for
non-business purposes.
It is important to note that the blocked credits may vary based on the specific
circumstances of the transaction and the provisions of the GST law.
IGST ACT

SEC 10:

Section 10 of the IGST Act, 2017 deals with the place of supply of goods
imported into India. Here are some key explanations of Section 10:

Place of supply: The place of supply of goods imported into India is the
location of the importer, i.e., the recipient of the goods. This means that the
IGST will be levied at the location where the importer is registered under GST.

Valuation: The value of the imported goods for the purpose of levy of IGST
shall be determined as per the provisions of the Customs Act, 1962.

Payment of IGST: The IGST on imported goods shall be paid by the importer
at the time of import, in the same manner as customs duty.

Availability of credit: The IGST paid on imported goods shall be available as

credit to the importer, which can be utilized for payment of IGST on subsequent
supplies of goods or services.

Non-applicability of IGST: If the imported goods are intended for further

supply as such or after processing, the IGST paid on the import shall not be
levied, provided certain conditions are met.
Overall, Section 10 of the IGST Act, 2017 provides clarity on the place of
supply of imported goods and the levy and payment of IGST on such goods. It
is important for importers to understand the provisions of this section in order to
comply with the GST regulations in India.

SEC 12:

GST stands for Integrated Goods and Services Tax, which is a type of tax that is
applicable on the supply of goods and services between states or union
territories in India. Section 12 of the IGST Act, 2017 deals with the place of
supply of goods other than supply of goods imported into or exported from
India.
Here are some key explanations of Section 12 of the IGST Act, 2017:

Place of supply: The place of supply of goods is a crucial aspect for the
determination of the taxability of a supply under GST. Section 12 specifies the
provisions for determining the place of supply of goods.

Location of the supplier and recipient: The place of supply of goods is

determined based on the location of the supplier and the recipient of the
goods. If both the supplier and recipient are located within the same state or
union territory,
Chapter-4

RESEARCH METHODOLOGY

4.1 DATA COLLECTION MEASURES

Secondary Data Collection Measure has been used.

SECONDARY DATA :-

Secondary data refers to data that is collected by someone other than the primary
user. Common sources of secondary data for social science include censuses,
information collected by governments departments, organizational records and data
that was originally collected for other research purposes. Primary data, by contrast,
are collected by the investigator conducting the research.

Secondary data analysis can save time that would otherwise be spent collecting data
and particularly in the case of quantitative data, can provide larger and higher-quality
databases that would be unfeasible for any individual researcher to collect on their
own. In addition, analysts of social and economic change consider secondary data
essential, since it isi impossible to conduct a new survey that can adequately capture
past change and/or developments. However, secondary data analysis can be less
useful in marketing research, as data may be outdated or inaccurate.

SOURCES OF SECONDARY DATA :-

Secondary data can be obtained from different sources:

• Information collected through censuses or government departments

like housing, social security, electoral statistics, tax records
• Internet searches or libraries
• GPS, remote sensing
• Journal paper and magazines

4.2 TYPES OF RESEARCH DESIGN

This research design is DESCRIPTIVE and ANALYTICAL in nature.

DESCRIPTIVE RESEARCH: -
Descriptive research is defined as a research method that describes the
characteristics of the population or phenomenon studied. This methodology focuses
more on the “what” of the research subject than the “why” of the research subject.

The descriptive research method primarily focuses on describing the nature of a

demographic segment, without focusing on “why” a particular phenomenon occurs.
In other words, it “describes“ the subject of the research, without covering “why” it
happens.

ANALYTICAL RESEARCH: -

Analytical research is a specific type of research that involves critical thinking skills
and the evaluation of facts and information relative to the research being conducted.
A variety of people including students, doctors and psychologists use analytical
research during studies to find the most relevant information. From analytical
research, a person finds out critical details to add new ideas to the material being
produced.

Some researchers conduct analytical research to find supporting evidence to current

research being done in order to make the work more reliable. Other researchers
conduct analytical research to form new ideas about the topic being studied.
Analytical research is conducted in a variety of ways including literary research,
public opinion, scientific trials and Meta-analysis.

4.3 OBJECTIVE OF THE STUDY

Objective of studying the topic taxation system and policy is

that it helped to understand and bringing improvement to the
following points :-
1. Economic Development

2. Full Employment

3. Price Stability

4. Control of Cyclical Fluctuations

5. Reduction of BOP Difficulties

4.4 LIMITATIONS OF THE STUDY

1. Lack of agricultural income tax

In spite of agriculture being the foremost sector of the Indian economy there is no tax
on agricultural income. Agriculture tax falls under the purview of the state and not the
central government, which has made it nearly impossible to table any agricultural tax
system. Another factor to contend with is taxpayers who falsely claim exemption
under the head of agricultural income. Farmers constitute a valuable vote bank for
political parties so no one wants to upset the status quo.

2. A parallel black money economy

Tax evasion is one of the major challenges for the taxation system in India. The
amount of money evaded generates an illegal hoard which is called black money.
Assessees submit false claims stating lesser profits or turnover. Expenses, receipts,
sales figures and books are manipulated. Tax refunds are claimed by making false
representations before tax authorities. All this is very hard to track. But it is equally
true that the prevention and control of black money is a priority for transitioning
towards a fair and transparent economy.

3. Tax burden skewed more towards corporate sector

It is the corporate sector that is bearing the brunt of taxation both the direct and
indirect taxes. When this happens, corporations then tend to shift this tax burden
onto shareholders and customers who actually can constitute a very small group.
This does not bode well for a fair economy. Also with corporations, there are
chances of large scale tax evasions happening which could result in loss of tax
revenue.

4. Excessive dependence on indirect taxes

Indirect taxes collection has seen a spike. However this implies that the government
kitty has taken a hit in terms of revenue as direct tax is the main source of enhancing
revenue flow to the government coffers.

5. Low percentage of people outside agriculture registered for IT

A finance ministry report pegged the total number of taxpayers for AY 2020-21 to be
8,22,83,407. Compare this to the projected population of the country as on March 1,
2021 was 136.30 crore and the yawning gap comes to the fore. The challenge here
is to bring in more non-filers into the tax ambit by devising region-specific or industry
and sector specific tax strategies.
Chapter-5
DATA ANALYSIS
GST Annual Return Analysis of CCL
Table 1: Supplies Made to Unregistered People(B2C)

The aggregate value of supplies made to consumers and unregistered persons on

which tax has been paid shall be declared here. The above table and graph
represent percentage difference of 2021 to 2022 of supplies made to unregistered
persons (B2C). The taxable value has been increased by 0.86%. There has been
decrease of -2.15% in Central Tax and State Tax value, whereas Integrated Tax has
been increased by 0.95%. It can also be seen that, the CESS tax value has been
decreased by -0.34% approx.
 TABLE 2: Supplies Made to Registered Persons (B2B)

The aggregate value of supplies made to registered persons (including supplies

made to UINs) on which tax has been paid shall be declared here. The above table
and graph represent percentage difference of 2021 to 2022 of supplies made to
registered persons (B2C). There has been significance increase in all the tax values.
The taxable value increased by 16.03%, central tax and state tax increased by
12.48%, integrated tax increased by 18.58% and CESS tax increased by 9.644%.
 TABLE 3: INPUT TAX CREDIT AS PER GSTR - 2A

The above table and graph represent percentage difference of 2021 to

2022 of Input Tax Credit as per GSTR - 2A. There is significance
increase in ITC from 2021 to 2022 in all the taxes i.e., Central Tax, State
Tax, Integrated Tax and CESS Tax.
TABLE 4: SUPPLIES / TAX DECLARED THROUGH AMENDMENTS
(+) (NET OF DEBIT NOTES)

The above table and graph comprise the percentage differences of supplies / tax
declared through amendments (+) (net of debit notes) for the year 2021 and 2022.
Details of amendments made to B2B supplies, exports, supplies made to an SEZ
and deemed exports, credit notes, debit notes and refund vouchers shall be declared
here. The aggregate value of debit notes issued in respect of B2B supplies, exports,
supplies made to an SEZ and deemed exports shall be declared here.
TABLE 5: SUPPLIES /TAX REDUCED THROUGH AMENDMENTS (-)
(NET OF CREDIT NOTES)

The above table and graph comprise the percentage differences of

supplies / tax declared through amendments (-) (net of credit notes) for
the year 2021 and 2022. Details of amendments made to B2B supplies,
exports, supplies made to an SEZ and deemed exports, credit notes,
debit notes and refund vouchers shall be declared here. The aggregate
value of credit notes issued in respect of B2B supplies, exports, supplies
made to an SEZ and deemed exports shall be declared here.
 CONCLUSION

Central Coalfields Limited. (CCL), is one of the biggest coal producers of India. The
Mission of Central Coalfields Limited (CCL) is to produce and market the planned
quantity of Coal and Coal products efficiently and economically in Eco-Friendly
manner, with due regard to Safety, Conservation and Quality.

Coal is the cheapest fossil fuel, not only in India but around the world. It is the
primary input in the manufacturing of many other materials like steel, cement and
electricity generation. The coal industry is very crucial to the performance of the
Indian economy. GST rate on coal has been announced by the GST council after a
meeting between finance minister of India and all states. The Indian government has
reduced the tax burden on coal producers by placing coal under the 5% tax bracket
under the GST law. The reduction in the tax rate of coal is likely to be beneficial to
the Indian economy. Coal is an important input in many different types of industries.

Thus, it will be beneficial to the construction, iron, and power generating industries.
In addition, Taxation refers to the outcome or result of the tax system. Taxation plays
an important role in the economy and society, and its conclusion can have a
significant impact on individuals, businesses, and government.
Despite of taxation can be used to generate revenue for the government to fund
public goods and services, such as infrastructure, education, and healthcare, it can
also be used to redistribute wealth and income, for example by implementing
progressive taxation where higher earners pay a higher percentage of their income
in taxes.

The Government of India also recently passed a bill that will utilize the Clean
Environment Cess (India’s version of a carbon tax) collected on coal to finance the
Goods and Services Tax (GST) Compensation Fund, a non-lapsable fund that will
form part of the public account of India.
Taxation can also have an impact on the economy by affecting incentives for
individuals and businesses. For example, high taxes on Labour can discourage work
and investment, while taxes on consumption can discourage spending.
Overall, taxation can also have an impact on social welfare and inequality. Taxes
can be used to reduce poverty and income inequality, but they can also contribute to
further inequality if they are not designed or implemented fairly.
 BIBLIOGRAPHY

❖ https://www.centralcoalfields.in/cmpny/cprfl.php

❖ https://www.centralcoalfields.in/prfnc/anulrpt.php

❖ https://www.centralcoalfields.in/prfnc/pdf/final_annual_rep
ort_2020_21.pdf

❖ https://en.wikipedia.org/wiki/Tax#Trends

❖ https://cbic-gst.gov.in/pdf/CGST-Act-Updated-30092020

Sources:

❖ CCL CGST Act Updated as on 31.08.2021.pdf: Provided

by “ABHIJEET SAGAR GAUTAM”

❖ CCL GST_CCL.pptx: Provided by “ABHIJEET SAGAR

GAUTAM”