Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July 2017, GST is one indirect tax for the entire country.
What are the indirect taxes that GST has replace?
GST will be a single uniform of the indirect taxes,
1 Taxes levied and collected by the Centre
- Central Excise duty
- Additional Duties of Customs (commonly known as CVD)
- Special Additional Duty of Customs (SAD)
- Service Tax AND
2 Taxes levied and collected by the State:
- State VAT
- Central Sales Tax
- Entertainment and Amusement Tax (except when levied by the local bodies)
- Taxes on lotteries, betting and gambling
JOURNEY OF GST IN INDIA
The idea GST was developed 17 years ago by ATAL BIHARI VAJPAYEE started the discussion in the year 2000, The first committee was headed by ASIM DASGUPTTA . It took 17 years from then for the Law to come in act in 2017 the GST act passed from Lok Sabha and Rajya Sabha. On 1st July 2017 the GST Law act came into force.
THERE ARE 4 TYPES OF GST IN INDIA
- Central Goods and Services Tax (CGST)
- State Goods and Services Tax (SGST)
- Integrated Goods and Services Tax (IGST)
- Union Territory Goods and Services Tax (UTGST)
1. Central Goods and Services Tax (CGST) Under GST, CGST is a tax levied on Intra State supplies of both goods and services by the Central Government and will be governed by the CGST Act. SGST will also be levied on the same Intra State supply but will be governed by the State Government.
2. State Goods and Services Tax (SGST) Under GST, SGST is a tax levied on Intra State supplies of both goods and services by the State Government and will be governed by the SGST Act. As explained above, CGST will also be levied on the same Intra State supply but will be governed by the Central Government.
3. Integrated Goods and Services Tax (IGST) Under GST, IGST is a tax levied on all Inter-State supplies of goods and/or services and will be governed by the IGST Act. IGST will be applicable on any supply of goods and/or services in both cases of import into India and export from India.
4. Union Territory Goods and Services Tax, is nothing but the GST applicable on the goods and services supply that takes place in any of the five territories of India, including Andaman and Nicobar Islands, Dadra and Nagar Haveli, Chandigarh, Lakshadweep and Daman and Diu called as Union …
Who needs to register for GST in India?
In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration. For certain businesses, registration under GST is mandatory.
Advantages of GST
- GST eliminates the cascading effect of tax. …
- Simple and easy online procedure. …
- Higher threshold for registration. …
- Composition scheme for small businesses. …
- The number of compliances is lesser. …
- Improved efficiency of logistics. …
- Defined treatment for E-commerce operators. …
- Unorganized sector is regulated under GST
Disadvantages of GST
- Increased costs due to software purchase.
- SMEs will have a higher tax burden.
- GST will mean an increase in operational costs.
- Being GST-compliant.
- GST is an online taxation system.
- GST came into effect in the middle of the financial year.
What is GST return? How many returns are there in GST?
GST return is the detail of all the sales and purchases made along with tax collected or paid. GST return filing is generally done either on quarterly or an annual basis. … Authorities calculate tax liability based on the filed returns, There are 37 returns annually, the taxpayer is required to furnish three returns on a monthly basics and one on a annually, which will be 37 annually as per a taxpayer is required to furnish three returns on a monthly basis and one on annually which takes it to a total of 37 returns annually, as per GST rules.
Table Shows Types of GST Returns
|1||GSTR – 1: Return for Outward Supplies|
|2||GSTR – 2: Return for Inward Supplies|
|3||GSTR – 2A: Read Only Document|
|4||GSTR – 3B: Summary of Inward and Outward Supplies|
|5||GSTR – 4: Return For Composition Dealers|
|6||GSTR – 5: Return For Non-Resident Taxable Persons|
|7||GSTR – 6: Return For Input Service Distributors|
|8||GSTR – 7: Return For Taxpayers Deducting TDS|
|9||GSTR – 8: Return For E-Commerce Operators Collecting TCS|
|10||GSTR – 9: Annual Return For Normal Registered Taxpayer Under GST|
|11||GSTR – 9A: Annual Return For Composition Dealers|
|12||GSTR – 9B: Annual Return For E-Commerce Operators Collecting TCS|
|13||GSTR – 9C: Return For Registered Persons Getting Accounts Audited From CA|
|14||GSTR – 10: Return For Registered Person Whose GST Registration Gets Cancelled|
|15||GSTR – 11: Return For UIN (Unique Identification Number) Holders|
GST Invoice Rules and Guidelines
- Issue a Bill of Supply in case you are registered under Composition Scheme
- Make sure you number all your invoices in sequential series
- Issue a Tax Invoice for all taxable goods and services, if you registered under GST
- Same state sales: CGST and SGST are equally charged. Example: If the corresponding GST rate is 12%, CGST is 6% and SGST is 6%
- Makes sure your GST invoices contain your name, address, place of supply, GSTIN
- Interstate sales: For any sale outside the state of your business, IGST has to be charged Example: If you supply services with 18% GST from Tamil Nadu to Maharashtra, or any other state, you have to charge IGST at 18%
|Issue tax invoices on sale of taxable goods and services||In case your invoice has already been issued and paid for, don’t cancel it. Issue a credit note instead|
|Take tax invoices on all purchases of goods and services. Make sure they mention advance payments, if any.||Don’t ship products without the original invoice|
|Maintain records of every document you create and receive, ensuring they have the correct details on them||Don’t buy from unregistered dealers if you wish to get input tax credit on GST.|
|Make sure you are charging GST correctly – CGST and SGST for same state, IGST for different state sales||Don’t forget to add a different serial number for every invoice|
|Ensure all documents have your GSTIN and the client’s or supplier’s GSTIN where applicable||Don’t charge tax as GST, make sure you split it correctly in between CGST and SGST or IGST.|
|Do submit GST reports on time|
What is a GSTIN?
Every taxpayer will be allotted a state-wise, PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN). GSTIN refers to the unique GST identification number that every business will be allotted. having PAN is mandatory for register under GST. source @Phoenixauditing