GST is a multi-stage, all-inclusive tax system that is used to tax the sale of services as well as goods. This taxation scheme, which is used across India, is primarily intended to reduce the cascading impact of additional indirect taxes.
GST is commonly known as Goods and Services Tax. India charges a tax known as GST on the supply of some goods and services.
How Does GST Operate?
- Manufacturer: The manufacturer is responsible for paying GST on both the raw materials used for manufacturing the product as well as the value-added during production.
- Service Provider: In this scenario, both the cost of purchasing the item and the value added to it are subject to GST that must be paid by the provider of services. The overall amount of GST that is required to be paid, meanwhile, may be reduced by a manufacturer’s payment of taxes.
- Retailer: The retailer is responsible for paying the tax on both the merchandise they purchased from the distributor and the profit margins they applied. Although the total sum of GST that is required to be paid may be reduced by the retailer’s payment of taxes,
- Consumers: GST needs to be paid on the product you bought.
Different GSTs
The GST is divided into four parts: CGST, SGST, IGST, and UTGST.
CGST: The intrastate supply of commodities and services is subject to the Central Goods and Services Tax.
SGST: State Goods and Services Tax is levied on the sales of goods and services within a state, similar to CGST.
IGST: Interstate sales of goods and services are subject to the IGST, or Integrated Goods and Services Tax.
UTGST: The provision of goods and services in any of the nation’s union territories, including Chandigarh, is subject to the UTGST.
The purpose of GST
The main goals of the Goods and Services Tax are as follows:
- To cut back on expenses
- To increase effectiveness and productivity
- To simplify taxation by getting rid of several tax systems.
- Improves firms’ compliance with regulations
- To increase national income
GST’s History
The Goods and Services Tax went into operation in India on July 1st, 2017. But the effort to put in place the new tax system started a long time ago. A committee was formed in 2000 by Atal Bihari Vajpayee, who was India’s prime minister at the time, to write the GST law. A task force determined in 2004 that a fresh tax framework should be implemented in order to improve the current tax system.
The Finance Minister recommended the implementation of the GST on April 1, 2010, and a Constitutional Amendment Bill was enacted in 2011 to make this possible. The Standing Committee began debating GST in 2012 and presented its report on GST just over a year later.
Arun Jaitley, the country’s then Finance Minister, presented the GST bill in 2014, and the Lok Sabha approved it in 2015. However, because the bill was not approved by the Rajya Sabha, its enactment was postponed.
In 2016, the GST was implemented, and both houses of Congress approved the revised model GST statute. In addition, the Indian President approved Four more GST bills that were passed by the Lok Sabha in 2017 and were subsequently approved by the Cabinet. Following the passage of four more GST Bills by the Rajya Sabha, the new tax system went into effect on July 1st, 2017.
Tax Laws Prior to the Introduction of the GST
- The tax used to be collected separately by the centre and the state. The tax laws varied according to the state.
- Despite the fact that an import tax was imposed on one person, another person bore the hardship.
- In direct tax instances, the taxpayer is responsible for paying the tax.
- Both direct and indirect taxation existed in India prior to the implementation of the GST.
Who should register for a GST?
The following organizations and individuals are required to register for the Goods and Services Tax:
- Online store aggregation
- Individuals that participate in e-commerce platforms as suppliers
- People who use the reverse change technique to pay their taxes
- Agents for input service providers and distributors
- People who are not residents but pay taxes
- Businesses with annual revenues that exceed the threshold
- People who enlisted prior to the GST law being implemented
GST registration
Any business that is eligible for the GST needs to register on the GST site launched by the Indian government. A special registration number known as the GSTIN will be given to each registered entity.
Registration is required for all providers of services, purchasers, and vendors. A company must register for GST if it earns Rs. 20 lakhs or more in total revenue within a fiscal year. Processing usually takes 2–6 days to complete.
How to find the GST Identification Number
Every taxpayer receives a GSTIN, which is a 15-digit unique code. Your state of residence and PAN will be used to determine your GSTIN.
- With the support of this number, financial assistance in the form of loans can be obtained.
- Refunds may be requested.
- It is simple to verify the information.
- One can make corrections.
GST Registration Certificate
A firm that has applied for the Goods and Services Tax (GST) system will get a GST certificate from the relevant government agencies. Firms with an annual income of a minimum of Rs. 20 lakhs and a few unique firms are required to register under this scheme. The GST certification of registration is issued using Form GST REG-06. In case you are an authorized taxpayer based on this regime, you may get the GST certification from the governmental GST website.
GST Returns
A GST Return is a form that individuals who pay taxes must submit to the government, containing details about their income. The taxpayer’s tax debt is determined using this data. Enrolled dealers are required by the Goods and Services Tax to submit their GST returns with information on the goods they purchased, sales, input tax credits, and output GST. Businesses must submit two monthly returns in addition to their annual return.
GST Charges
The GST Council, meanwhile, has given separate goods and services varying GST rates. While certain goods are available for purchase at no GST, other goods have GST rates of 5%, 12%, 18%, as well as 28%.
| Item Name | Applicable GST Rate |
| Gold Jewellery | 3% |
| Mobile Phone | 18% |
| Car | 28% |
| Two – Wheeler | 28% |
| Sanitizer | 18% |
How will you figure out the GST?
When submitting your taxes, figuring out how much GST must be paid can be time-consuming. Reverse charges, exempted supplies, ITC, and other features and concerns must all be taken into account. Ensure you pay the correct amount towards GST since failing to do so might result in you being charged an 18% interest penalty on the deficit.
The GST Calculator aims to make it easy for taxpayers to determine how much GST must be paid.
You must enter all necessary information, including the month within which you are figuring out GST, the actual day that your returns were filed, the amount of tax owed for the month as a whole, the goods you bought that are subject to the Reversible Charge Mechanism, the starting balance of both your cash accounting record and your credit ledger, and the eligible ITC.
Payment of GST
The GST is currently required to be paid each month. You must file GSTR-1 or GSTR-3B. The appropriate forms are additionally required in the case of returns. Online as well as offline methods are also available for paying GST. A challan has to be generated when the money has been received.
e-Way GST Bill
The e-Way bill is a digital document created for the verification of the transportation of goods. From the GST portal, you may create the bill.
Benefits of GST
The benefits of the goods and services tax in India are as follows:
- Governing the unorganized sector
- E-commerce businesses are no longer treated differently.
- Fewer difficulties
- Compositional plan
- Registration procedures and return filing are straightforward.
- Increased threshold
- Reduction of the effect of cascading taxes
GST Council
The GST Council is responsible for making any suggestions on GST-related matters to the state as well as union governments. The country’s Finance Minister serves as the GST Council’s chairperson. The union state ministers of revenues or finances from each state are among the other attendees at the GST Council.
Attributes of GSTN
The following is a list of the GST Network’s key features:
- Preserving the safety and security of all taxpayers’ personal information
- Protecting the privacy of the data of the taxpayers.
- Trusted National Information Utility (NIU)—that’s what it is.
Features of GSTN
Following is a summary of the GST Network’s (or GSTN’s) primary responsibilities:
- It’s accountable for managing the bills.
- It has been assigned the task of managing registrations.
- It is in charge of managing payments as well as refunds.
- It is in charge of managing various types of returns.
GST Help Desk
Through the GST Helpline, taxpayers can contact the relevant authorities if they have any questions or concerns about their GST filing. Previously, taxpayers could contact the support desk via email at helpdesk@gst.gov.in. It needs to be noted that this mailing address has now been deactivated.
GST Helpline Details
| Toll-Free Contact Number | 1800-1200- 232, 1800-103-4876 |
| Self Help Portal | https://selfservice.gstsystem.in/ |
GST Mobile Application
A few GST applications have been specially developed for mobile devices. Beyond all the applications, there is one that the government has come up with, and is known as the CBEC GST. For the Android version of your phone, it may be installed via the Google Play Store.
There is also a tonne of third-party programmes in addition to those. These programmes’ major goal is to assist taxpayers in becoming comfortable with the GST concept so that they can adapt to the new taxing system without any difficulties.
Who is responsible for paying GST?
The following people are on the list of those who must pay GST:
- Operators of online stores that are GST-registered
- Persons who have registered for GST must use the reverse charge system to pay their taxes.
- People who must withhold tax at source (TDS) who are also GST-registered
- E-commerce businesses that are both GST-registered and required to collect tax at source
- Businesses that are GST-registered and provide taxable supplies
- For delivering goods and doing activities on behalf of manufacturers or suppliers, individuals must pay GST.
What products are exempt from the GST?
| Tools or Instruments | Supplies for people with disabilities, agricultural machinery, etc. |
| Raw Materials | Raw jute fiber, raw silk, unprocessed wool, cotton fabric for khadi yarn, and handloom items of clothing are a few examples. |
| Food Items | Fruits and veggies, fish and meat, as well as grains, etc. |
| Miscellaneous | Books, journals, newspapers, vaccinations, maps, non-judicial stamps, etc. |
Goods and Services Tax is how GST is formally referred to.
The government of India set up the Rs. 20 lakh and Rs. 40 lakh limitation thresholds for GST registration for commodity suppliers.
Typically, the supplier of the commodity or service is responsible for paying GST. However, the recipient of the goods could be responsible under the reverse charge procedure in some situations, such as importation as well as additional registered supplies.
After being approved by Parliament, the Goods and Service Tax Act went into force at midnight on July 1, 2017.
Integrated Goods and Services Tax, or IGST
State Goods and Services Tax, or SGST
Central Goods and Services Tax, or CGST
Union Territory Goods and Services Tax (UTGST)
are the four main variations of GST in India.
A single tax, known as GST, was levied on supplies of services and products made by manufacturers to consumers. GST is basically a tax that applies only to value addition at every step.
Every dealer whose annual revenue exceeds Rs. 20 lakh is required to register for the Goods and Services Tax.
The official GST website of the Indian government is www.gst.gov.in.
GST’s primary goal is to make the tax procedure simpler.
In India, the GST, an indirect tax, has mostly overtaken other indirect taxes.
GST streamlines the nation’s tax structure, making it simpler for customers to pay a single tax and maintaining affordable prices for products and services.
Yes, whether or not the transaction within a given time is less or nil, it is still required to file a GST return. It is crucial to file a GST return since doing so prevents future filings from suffering pointless fines.