Levy and Exemptions under GST India

By Registrationwala

7th April 2017


GST is an indirect taxation. GST includes sales tax, excise duty, VAT, service tax. All goods mainly operate on a negative concept. Goods services tax is on the supply of goods or services or both except taxes on the supply of the alcoholic liquor for human consumption. Draft Goods and Service Tax act 2016 was released earlier. The relevant provisions and information related to levy and collection of GST are discussed below.

Levy is an act proposed to levy a tax which may be called as Central GST or State GST on all the intra-State supplies of goods or services or both. The tax rate will be applicable as per the categorization and classification to be prescribed. The Central GST or State GST will be paid by every taxable person in accordance with the manner provided in the law. Further special categories of the people will be notified who are required to pay tax on reverse charge basis.

Compound levy

In the law related to indirect taxation, the system of compound levy was available in only State laws. Compound levy was restricted to a very limited extent in the central indirect tax law and applicable on the limited products say one or two. In this GST law, the compound levy scheme is proposed to be introduced for all the persons in general. The proposed compound levy scheme provides the that all the assessee subject to assessee are liable to pay tax under reverse charge would be having an option to pay tax at such rate as may be prescribed but not less than one percent. Further, It is a scheme available only to the assessee who are not affecting any interstate supply of goods or services.

Another point to note is that if the assessee was having the same PAN no. and having multiple registrations than it had to exercise this compounding option in all the registrations. The assessee was restricted to collect this tax from the recipients on supplies made by it. Assessee would also not be eligible for input credit.

Taxable person is a person who carries on any business at any place in India or in a respective state and who is required to be registered

Following are required to be compulsorily registered under this act:-

  • Persons making inter-state supply, irrespective of any threshold limit
  • Casual taxable persons irrespective of the threshold specified
  • People who are required to pay tax under reverse charge
  • Non-resident taxable people
  • People who are required to deduct tax
  • Input service distributor
  • Agents
  • Supply of goods or services through electronic commerce operator
  • Every electronic commerce operator


Central government in the interest of public can give exemption to supply of goods or services subject to certain conditions s may be notified.

Remission of tax on supplies

Central government may provide rules for the remission of tax on such supplies which are found to be deficient in quantity due to natural causes. After it, any limit in reference to the amount of percentage could also be fixed by the government.


Levy and Exemptions under GST India