GST – Goods and Services Tax

What is GST?

GST is the abbreviation for Goods and Services Tax. It is an indirect tax implemented to replace previously existing indirect taxes like VAT, service tax, purchase tax, excise duty, etc. In India, GST depends on the supply of goods and services.

GST Details: How GST Works in India?

Manufacturer: The manufacturer must pay GST, meaning he must pay for the raw materials acquired and the product value.

Service Provider: A service provider must pay GST on the amount he pays for the product and the value added to it. On the other hand, they can deduct the manufacturer’s tax from the total GST you pay.

Retailer: A retailer must pay the GST on the product purchased from the distributor and the added margin. Or else, you can deduct the retailer’s tax from the total GST you must pay.

Consumer: A consumer must pay GST on the purchased product.

History of GST

Here is all the GST information you need to know.

• 2017: GST was implemented in India from July 1 this year. However, establishing the new tax regime began a while ago.
• 2000: The then-Prime Minister, Atal Bihari Vajpayee, formed a committee for designing the GST law.
• 2004: A task team decided that we should implement a new tax structure to improve the tax regime.
• 2006: The Finance Minister suggested GST implementation on April 1, 2010.
• 2011: The Government passed the Constitution Amendment Bill to facilitate GST law implementation.
• 2012: The Standing Committee began discussing GST.
• 2013:The Government tabled its GST report.
• 2014: The Finance Minister at the time Arun Jaitley, reintroduced the GST bill in Parliament. However, the Government postponed the law’s implementation because they did not pass the same in Rajya Sabha.
• 2016: GST came into effect, and both houses approved the updated model GST statute. The President of India also granted his approval.
• 2017: Passed four extra GST Bills in Lok Sabha. The Cabinet approved it, and the Rajya Sabha enacted the Bills. The new tax regime went into effect on July 1, 2017.

Tax Laws Before the Implementation of GST

Previously, the Centre and the States collected tax separately. The tax regimes vary from state to state. Before the implementation of GST, India had both direct and indirect taxes.

Even when the Government imposed the import tax on one person, they placed the burden on another. However, in direct taxation, the taxpayer must pay the tax.

Types of GST in India

The four types of GST are listed below:

1. The CGST(Central Goods and Services Tax) is the tax on intra-state supplies of goods and services.
2. State Goods and Services Tax (SGST) is similar to CGST but is a tax on selling goods or services within a state.
3. The IGST (Integrated Goods and Services Tax) is the tax on interstate sales of goods and services.
4. UTGST (also called Union Territory Goods and Services Tax) is the tax on goods and services supplied in our country’s Union Territories. The union territories include Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep, and Chandigarh.

Who Should Register for GST?

The following entities and persons must register for Goods and Services Tax:

• Aggregators of e-commerce
• Individuals who sell via e-commerce aggregators
• Individuals that pay taxes following the reverse charge mechanism
• Suppliers’ agents and input service distributors
• Individuals residing outside the United States yet paying taxes
• All businesses having revenue that exceeds the threshold limit
• Individuals who registered before the implementation of the GST law

Registration of GST

Any GST-eligible company must register with the Government of India’s GST portal. The registered entities will be assigned a unique registration number known as GSTIN.

All service providers, purchasers, and vendors must register. A business that earns Rs.20 lakhs or more in a fiscal year must register for GST. It takes 2-6 working days to process.

Know the GSTIN – GST Identification Number

The GSTIN is a 15-digit unique code assigned to each taxpayer. The GSTIN will be supplied based on your state of residence and your PAN. The following are the most common applications for GSTIN:

1. You can use the number to apply for loans.
2. With the GSTIN, you can seek refunds.
3. With the GSTIN, the verification process is simple.
4. Corrections are possible.

Visit ” https://services.gst.gov.in/services/searchtp ” to verify your GST number online. Then, enter the GSTIN from the invoice into the search box, followed by the captcha, and finally, click “enter” to access the data.

GST Certificate

A GST Certificate is an official document issued by the Government for a business that has enlisted in the GST system. This system requires registration of any firm with an annual turnover of Rs.20 lakh or more and certain special businesses. You can use Form GST REG-06 to get a GST registration certificate.

In addition, you can obtain a GST Certificate via the GST Portal if you are a registered taxpayer under this system.

However, the certificate is only available in digital form. GSTIN, Legal Name, Trade Name, Business Constitution, Address, Date of Liability, Period of Validity, Types of Registration, Particulars of Approving Authority, Signature, Details of the Approving GST Officer, and Date are all contained in the GST Certificate.

GST Returns

A GST Return contains information about taxpayers’ income that they must file with the authorities. Then, they can use this data to calculate the taxpayer’s tax liability.

Registered dealers must file GST returns detailing their purchases, sales, input tax credit, and output GST under the Goods and Services Tax. Similarly, businesses must file two monthly filings and one annual return.

How Do I Calculate GST?

Calculating the GST

You must pay while filing your taxes can be time-consuming. In addition, you must consider factors such as ITC, exempted supply, and reverse charge.

Furthermore, failure to pay the whole GST amount may result in an 18% interest penalty on the shortfall, making it critical to deliver the exact amount towards GST.

GST Calculator

The GST Calculator makes it straightforward for taxpayers to determine how much GST they must pay. You must enter the following information:

1. Month for which you calculate GST
2. The due date for filing returns for that month
3. The actual date on which you file the returns
4. The tax liability for the month
5. The purchases that are subject to GST
6. The purchases that are not subject to GST

GST Payments

You must complete the GSTR-1 and GSTR-3B forms. In case of returns, you must also file the appropriate forms. GST payments can be made online or in person. However, you must generate a challan after payment.

GST E-Way Bill

The E-Way bill is an electronic document demonstrating verification of goods movement. You can generate the bill from the GST portal.

Advantages of GST

The following are the GST functions and benefits.

1. Unorganised sector regulation
2. No preferential treatment to e-commerce operators
3. Fewer complications
4. Scheme of composition
5. Straightforward registration and submission of returns
6. A higher cutoff
7. Elimination of the cascading tax effect

GST Council

The GST Council recommends GST-related issues to the State and Union governments. The Union Finance Minister of India chairs the GST Council. In addition, the GST Council includes each state’s Union State Ministers of Revenue or Finance.

GST Helpline

Taxpayers with questions or concerns about their GST filing should contact the relevant authority via the GST Helpline. Previously, taxpayers could contact the helpdesk via email at [email protected]. However, this email address is currently deactivated.

The GST Helpline contact information is as follows:

1. Phone Number (Toll-Free): 1800 1200 232
2. Portal of Self-Help: “https://selfservice.gstsystem.in/ “