Goods & service tax (GST) is an indirect tax that has subsumed many previously existed indirect taxes except few state taxes. GST is a destination-based tax and therefore is added on every value addition. So basically, it's levied on the supply of goods and services.
It was introduced on the 1st of July 2017 with a concept of ‘One tax-One Nation.
Why GST Registration
As per the notification released on 01/04/19, the threshold limit is mentioned below:
– A supplier of goods – Rs. 40 lakhs (Rs. 20 lakhs for NE and hill states)
– A supplier of services – Rs. 20 lakhs (Rs. 10 lakhs for NE and hill states)
– Business whose turnover is less than 40 lakhs and 20 lakhs can also get registered under GST though it is not mandatory. If a company is done in different states, then GST registration is required for each business unit separately, and GST rules should comply.
– Once registered, a user gets a GST identification number that is a 15 digit unique number. This GSTIN number is used for filing of GST return.
Key Advantages
Simple compliance – A host of facilities are made available online for the taxpayers who make its compliance easy and transparent.
Eliminating cascading – GST brings all the indirect taxes under one head, which reduces the cascading effect of the charge.
Uniform tax rates and structure – GST tax rates and structure are uniformed throughout the country, which provides ease of doing business at any place.
Salient Features
Under GST below, taxes are levied based on place of supply and type of quantity
Central GST (CGST)
It’s applied to Intra-state supplies of goods or services and collected by the Central government.
State GST (SGST)
It’s applied to Intra-state supplies of goods or services and levied by the State government.
Integrated GST (IGST)
It’s applied to Inter-state supplies of goods or services and levied by the Central government. The Central and State government divides the tax amount.
Union Territory GST (UTGST)
It’s applied to Intra-state supplies of goods or services and levied by Union territory government.
Taxes subsumed under GST are as Follow
Central taxes
– Central excise duty
– Countervailing duty (CVD) of customs
– Special additional duty of customs
– Service tax
– Additional excise duty
– Cess and surcharge
State taxes
– State VAT
– Central sales tax
– Luxury tax
– State cess and surcharges
– Purchase tax
– Entry tax
– Entertainment tax
– Taxes on lotteries, Betting, and Gambling
Documents required
- Provisional ID and passwords are provided by the concerned state authorities whom every business entity should have.
- Use your valid email address
- Use a valid mobile number
- Bank account number
- Its respective IFSC code.
- Ensure all these documents are available in the digital format.
Compliance
- GST migration
- Technology infrastructure
- Invoice preparation utility
- Accounting ERD.
- Service provider.
- Selecting an application service provider
Frequently Asked Questions
What is the GST return?
GST return is a document that contains the details about the business activities done under a fixed duration by a taxable person.
2) As an unregistered dealer, can I supply goods to other states if my turnover is below INR 20 lakhs?
Irrespective of turnover, every supplier is liable to obtain registration in case of inter-State supplies.
3) Does the PAN of a proprietorship works if it changes it to a partnership firm?
New registration is required as a partnership firm would have a new PAN.
4) What happens if I don't file GST returns?
The E-Way Generation facility is stopped after two months, and the GST registration may get canceled if it’s not paid for the last six months. Additionally, penalty and interest charges may also incur.
5) What is the main idea of GST returns?
Compliance verification
Tax administration
Calculating tax liabilities
6) What is the due date to file an Annual Return?
It should be done on or before 31st December following the closure of the related financial year.
7) Where to submit GST Annual Return?
You can upload on the web portal – www.gst.gov.in or at the facilitation center authorized by the Commissioner.
8) What is GST Software?
It’s the system that allows managing and following the GST compliance. The algorithms of the software are based on the principle prepared by GSTN.
9) Is FAQ's related to GST available in regional languages?
Yes, visit the portal – http://www.cbic.gov.in/
10) Who decides the rates of GST?
The state and central government together decide the rates that are to be levied on CGST and SGST.
