About GST

Compendium of Goods And Services Tax

The introduction of GST in India is a revolutionary step that is expected to cure all the ailments the existing complex tax structure is suffering from. It is primarily conceptualized to replace various sorts of taxes levied by the central and state governments with a well-defined tax structure. However, we must acknowledge the fact that there exist several aspects of GST that common taxpayers have yet not comprehended. Herein, in quest of pacifying the qualms of taxpayers across the country, we will discuss all the crucial aspects of GST.

Read on to enlighten yourself with all the relevant GST details!

What is GST?

Goods and Services Tax (GST) is a proposed taxation system aimed at restructuring the overall indirect taxation framework in India. It was introduced as The Constitution (One Hundred and First Amendment) Act 2016 with the prime intention of merging most of the existing taxes, levied by the central and state governments, in India into a well-defined system of taxation.

GST is administered, monitored, and governed by the GST Council, and its Chairman is Mr. Arun Jaitley, Union Finance Minister of India. It is expected that GST would be implemented w.e.f. July 1st, 2017.

Salient Features

  • GST would be applicable only on “supply” of goods/services, which is totally against the present concept of levying tax not only on the manufacture or on sale of goods, but also on provision of services.
  • GST would be wholeheartedly based on the principle of destination-based consumption taxation, and this is totally against the present principle of origin-based taxation system.
  • The proposed GST would be a dual tax that allows both the Centre and States to simultaneously levy it on a common tax base.

The GST to be levied by the Centre only on intra-State supply of goods and/or services would be called the Central GST (CGST) and that to be levied by the States would be called the State GST (SGST).

Similarly Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services. Union territories without legislatures would levy Union Territory GST (UTGST).

  • The standard rates at which CGST, SGST /UTGST& IGST would be levied will be mutually agreed upon by both the parties — the Centre and the States — under the aegis of the Goods and Services Tax Council (GSTC).
  • GST Threshold for exemption: GST threshold for exemption is set at ₹10 lakh for the north-eastern as well as hill-area states, and it is ₹20 lakh for rest of the states in India.

All those who cross the turnover threshold are liable to pay GST.

  • Tax Rates: During the GST Council meet on November 3rd, 2016, it was mutually decided that tax rates would be at 4 slabs of 5%, 12%, 18%, and 28%. Luxury and demerit goods would be taxed at 28% excluding cess, and daily needs would be taxed at 5%.
  • GSTC: Goods and Services Tax Council comprises the Union Finance Minister, the Minister of State (Revenue), and the State Finance Ministers. The prime role of this Council is to recommend on the GST rate; taxes to be subsumed under GST; exemption and thresholds; and a myriad of other features.
  • GSTN: Goods and Services Tax network (GSTN) is a nonprofit organization that was formed to create a common platform for all the concerned parties, i.e., taxpayers, stakeholders, and government, from where they can strategically communicate with each other. The prime role of the GSTN is to take care of multifarious functions associated with re-structuring IT setup of the entire country. It will ensure that all the taxpayers can easily connect with the portal through GST software so as to perform compliance-related activities timely.

All these information on GST are quite crucial, and taxpayers need to pay special attention to all these aspects in order to develop comprehensive understanding of GST Bill Details.

The existing taxes that are proposed to be subsumed under GST are:

Taxes currently levied and collected by the Centre Taxes currently levied and collected by the states
Central Excise duty State VAT
Duties of Excise (Medicinal and Toilet Preparations) Central Sales Tax
Additional Duties of Excise (Goods of Special Importance) Luxury Tax
Additional Duties of Excise (Textiles and Textile Products) Entry Tax (all forms)
Additional Duties of Customs (commonly known as CVD) Entertainment and Amusement Tax (except when levied by the local bodies)
Special Additional Duty of Customs (SAD) Taxes on advertisements
Service Tax Purchase Tax
Central Surcharges and Cesses so far as they relate to supply of goods and services Taxes on lotteries, betting and gambling
State Surcharges and Cesses so far as they relate to supply of goods and services

GST: Through the Lens of an Entrepreneur

The introduction of GST is indisputably a major step towards simplifying the overall indirect taxation policy in India, which is not at all business-friendly. The amalgamation of multiple Central and State taxes into one framework would ensure a wide range of strategic benefits for enterprises operating within the national boundary. Not only would GST pave way for hassle-free taxation procedure for businesses in India, but would also facilitate a common national market that can bequeath equal amount of opportunities for businesses in the country.

GST would enable immaculate execution of all the commercial activities within the national boundary as it empowers enterprises to claim tax credit to the overall value of GST they paid to purchase goods and services. As it is a well-known fact that taxable goods and services in India are not distinguished and are taxed at a single rate in a supply chain (till the goods and services reach the consumer), the need of a central authority that can take care of administrative responsibilities to levy tax on goods and services was felt across the nation. With the implementation of the new act, GST-registered businesses can perform transactions and commercial activities without being much bothered about operational and transportation costs.

Considering all these advantages of GST, it can be inferred that every impact of GST in India is bound to pave way for much more promising future for business firms.

Migration to GST Regime

The existing taxpayers — registered under VAT, Service Tax, and Excise — are required to migrate into GST tax regime as per the specified dates. To ensure successful migration into GST regime, taxpayers are required to furnish their details on the GST common portal

This portal provides a comprehensive range of GST information which are quite helpful for taxpayers to migrate into GST regime in a hassle-free manner.

To smoothen your GST registration process, you can visit www.gstkeeper.com/gst-registration.php.

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