The Goods and Services Tax (GST) has been a significant reform in India's tax system, replacing many indirect taxes and creating a comprehensive value-added tax system. This paper focuses on the levy and collection of GST, examining the two components of GST, Central GST and State GST, and the levying of Integrated GST in inter-state transactions. The paper explores how GST is levied on the taxable value of goods and services, including transaction value, taxes, duties, and other charges.

The paper highlights how the implementation of GST has led to the digitization of the tax system and the creation of a common market in India, but also faces challenges such as complexity and impact on prices. Finally, the paper concludes by emphasizing the potential benefits of GST's efficient and effective implementation for both businesses and the economy as a whole.

Introduction
Goods and Services Tax (GST) is a comprehensive indirect tax system in India that replaced many indirect taxes. It is a value-added tax that is levied on all stages of production, distribution, and consumption. The GST system has two components: Central GST (CGST) and State GST (SGST).

The Central Government levies and collects CGST, while the State Government levies and collects SGST. In the case of inter-state transactions, Integrated GST (IGST) is levied and collected by the Central Government. GST is levied on the taxable value of goods and services, which includes the transaction value, any taxes, duties, and other charges. GST is collected from the customer by the registered supplier and deposited with the government.

The introduction of GST has led to the digitization of the tax system and the creation of a common market in India, making it easier for businesses to operate across different states. However, GST has also faced challenges, such as complexity and impact on prices. Despite these challenges, GST has been a significant reform in India's tax system, and its efficient and effective implementation has the potential to benefit both businesses and the economy as a whole.

Features of GST

GST is a value-added tax, which means that tax is levied on the value added at each stage of the supply chain. It is a multi-stage tax system that is levied on all stages of production, distribution, and consumption. The GST system has two components: Central GST (CGST) and State GST (SGST). The Central Government levies and collects CGST, while the State Government levies and collects SGST.[2]

In the case of inter-state transactions, Integrated GST (IGST) is levied and collected by the Central Government. GST is levied on the taxable value of goods and services, which includes the transaction value, any taxes, duties, and other charges. GST is collected from the customer by the registered supplier and deposited with the government

Benefits of GST

GST has many benefits, both for businesses and for the economy as a whole. One of the key benefits of GST is the reduction in compliance costs for businesses. The previous tax regime had multiple indirect taxes, each with their own rules and regulations, making it difficult and costly for businesses to comply. GST has replaced many of these taxes with a unified tax structure, reducing the compliance burden on businesses.

GST has also reduced the cascading effect of taxes, which was a significant issue under the previous tax regime. Under the previous regime, businesses were required to pay taxes on taxes, leading to a higher tax burden. With the introduction of GST, the tax system has become more streamlined, reducing the cascading effect of taxes.

Challenges of GST

While GST has many benefits, it has also faced several challenges. One of the primary challenges is the complexity of the tax system. While GST aims to create a simplified tax structure, it is still a complex system that requires businesses to comply with multiple rules and regulations. This has led to confusion and difficulties in compliance for many businesses, particularly smaller businesses.

Another challenge of GST is the impact on prices. While GST aims to create a more streamlined tax system, it has also led to some increase in prices for consumers. This is particularly true for goods and services that were previously exempt from taxes or subject to lower taxes. The increase in prices has led to some concerns about the impact on inflation and the overall economy.

1. Levy and Collection of GST Under CGST Act. (Section 9)

   1. Levy of central goods and service tax [Section 9(1)]
      Under CGST Act, central tax called as the central goods and services tax (CGST) shall be levied on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption. It shall be levied on the value determined under section 15 and at such rates, not exceeding 20%, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. [Similar rates have been prescribed under SGST/UTGST]
       
   2. Central tax on petroleum products to be levied from the date to be notified
      [Section 9(2)] The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.
       
   3. Tax payable on reverse charge basis [Section 9(3)]
      The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both. Further, all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
       
   4. Tax payable on reverse charge if the supplies are made to a registered person by unregistered person [Section 9(4)]:
      The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. [Section 9(4) has been deferred till 30.6.2018]
       
   5. Tax payable on intra-State supplies by the electronic commerce operator on notified services [Section 9(5)]
      As per section 2(45) of the CGST Act, 2017, "electronic commerce operator" means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. Further, "electronic commerce" means the supply of goods or services or both, including digital products over digital or electronic network.
      
      Thus, Electronic Commerce Operators (ECO), like flipkart, uber, makemy-trip, display products as well as services which are actually supplied by some other person to the consumer, on their electronic portal. The consumers buy such goods/services through these portals. On placing the order for a particular product/service, the actual supplier supplies the selected product/service to the consumer. The price/consideration for the product/service is collected by the ECO from the consumer and passed on to the actual supplier after the deduction of commission by the ECO.
       

2. Levy and Collection of GST Under IGST Act. (Section 5)

   The provisions under section 5 of the IGST Act are similar to section 9 of CGST Act except:
   
   1. The word CGST has been substituted by IGST under IGST Act.
   2. under IGST Act, tax called integrated tax is to be levied on all inter State supplies and on goods imported into India.
   3. maximum rate under section 5(1) of the IGST Act is 40% (i.e. 20% CGST +20% UTGST)
       

3. Levy and Collection of GST Under UTGST Act. (Section 7)

   The provisions under section 7 of the UTGST Act are similar to section 9 of CGST Act

Except:

1. the word CGST has been substituted by the word UTGST under the UTGST Act.
2. under UTGST Act, tax called UT tax is be levied on all intra-State supplies,
3. maximum rate 7(1) of UTGST Act is 20%.

Conclusion
The levy and collection of GST under the GST regime have brought significant changes to India's tax system. Its effective implementation and continuous improvement are crucial for achieving the government's objectives of simplifying the tax structure, reducing the burden on taxpayers, and promoting economic growth.

The implementation of GST has led to the digitization of the tax system, creating a common market in India and making it easier for businesses to operate across different states. However, the GST system has faced challenges such as complexity and impact on prices. It is important to address these challenges and ensure that the GST system operates efficiently and effectively to maximize its potential benefits for businesses and the economy as a whole. the introduction of GST has been a significant reform in India's tax system, replacing many indirect taxes with a comprehensive value-added tax system.

The levy and collection of GST are done through two components, Central GST and State GST, and Integrated GST in inter-state transactions. GST is levied on the taxable value of goods and services, including transaction value, taxes, duties, and other charges. The tax is collected from customers by registered suppliers and deposited with the government.
Reference:

1. https://taxguru.in/goods-and-service-tax/charging-section-9-levy-collection-gst.html.
2. https://cleartax.in/s/what-is-sgst-cgst-igst