The Goods & Services Tax (GST), launched on 1st July 2017, applies to all Service providers, traders, and manufacturers. This tax absorbed various Central taxes like Service Tax, Excise Duty, CST, and state taxes like Entertainment Tax, Luxury Tax, Octroi, VAT. Collection of GST happens at every step of the supply chain, and it offers full set-off benefits. GST procedure is online with no manual intervention.
Product stages in the supply chain include purchasing raw materials, manufacturing, sale to the wholesaler, selling to the retailer, and then the final sale to the consumer. Levy of GST occurs in all three dealings. The revenue from GST goes to the consuming state. Taxpayers with a turnover of less than Rs.1.5 crore can choose a composition scheme and pay GST at a fixed rate turnover, therefore avoiding GST formalities.
The components of GST
GST has three tax components, which include:
The input tax credit, a GST concept, reduces tax already paid on inputs with the remaining amount being paid at the time of paying tax.
GST Registration
Every business involved in the buying and selling of goods or services has to register for GST. Registration of GST is mandatory for companies with a turnover of more than Rs. Twenty lakhs (Supply of Services) and Rs. Forty lakhs (Supply of Goods) yearly. Also, businesses, including agents and brokers, doing interstate outward supplies of goods have to register for a GST.
The GST tax rates
Items of necessities are not taxed and are on the exempt list. Taxes on Household necessary items and life-saving drugs are 5%. Computers and processed food taxes are 12%. Tax on capital goods, industrial intermediaries, hair oil, toothpaste, soaps, and services is 18%. Tax on luxury items is 28%.
A GST Return contains details of income required to be filed as per the law with the tax authorities. One has to submit two returns monthly basis and one return annually online. There is no provision for revising the returns and all unreported invoices for the previous tax period should be included in the current month.
Under GST, a registered dealer has to file GST returns comprising of Purchases, Sales, Output, GST (On sales), and Input tax credit (GST paid on purchases).
Each taxpayer has GSTIN as a unique identification number.
The Goods and Service Tax Network (GSTN) is a non-profit, non-government, private limited company with a one-stop solution for all indirect tax requirements. GSTN manages the GST platform to prepare, file, rectify returns and make payments of indirect tax liabilities.
Online GST registration
GST registration documents required for various business
Once all the documents are submitted, the application is processed and the ARN number is issued.
Post verification of GST application and other mandatory documents by the GST officer, GSTIN, and the GST registration certificate will be issued, which can be downloaded from the GST Portal.
There is a penalty for taxable persons failing to register for GST, under Section 122 of the CGST Act.
Any business with a turnover of less than Twenty lakh can register for GST though; it is not compulsory by law. Voluntary GST registration has the advantages of input credit, doing inter-state selling with no restrictions, and have a competitive advantage compared to other businesses.
A GST Return filing document contains the income details of the taxpayer and is submitted to the GST administrative authority. The document is used to assess the tax liability of a GST taxpayer. A GST Return Filing form has to include Output GST (On sales), Sales Input tax credit (GST paid on purchases), and Purchases. GST compliant sales and purchase invoices are to be attached for filing a GST return.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.
