What is GST?
GST is Goods and Services Tax. It is a tax that applies throughout India. It aims to supply certain goods and services in India. The indirect tax has replaced countless other indirect taxes such as value-added tax, service tax, purchase tax, excise tax, etc. Read further to learn more about GST.
How does GST Work?
When a manufacturer buys raw materials, he will have to pay GST for them and the value added to the product. The service providers need to pay GST and the value-added to the product. But the manufacturer’s tax can be deducted from the overall GST to be paid. A retailer pays GST of the product brought from the distributor plus the margin added to it. Like in the case of the manufacturer, tax paid by the retailer can be deducted from the entire GST paid. And when the consumer purchases a good, he will pay GST.
The different types of GST
GST divide into four categories. They are CGST or Central Goods and Services Tax. It is on the intrastate supply of products and services. The next one is SGST or State Goods and Services Tax. Like CGST, SGST is for the sale of products or services within a state. IGST or Integrated Goods and Services Tax is levied on inter-state business transactions of products and services. Finally, UTGST or Union Territory Goods and Services Tax is charged on the distribution of products and services in any of the Union Territories of India, for example, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep and Chandigarh. UTGST is levied with CGST. CGST.
Who will pay GST?
To properly understand GST, the following entities and individuals will have to register for GST and pay the tax. They are as follows: E-commerce aggregators, those who supply through e-commerce aggregators, people who pay tax according to the reverse charge mechanism, the agents of input service distributors and suppliers, NRIs or Non-Resident Individuals who pay tax, and businesses which has a turnover of more than the threshold limit, and people who have registered before the GST law came into being.
How can I register for GST?
Businesses that make a total income of Rs.20 lakhs in a financial year must register for GST. Anyone eligible for GST should register in the GST portal provided by the Government of India. After registering, they will get a unique registration number called GSTIN. The process takes 2-6 working days.
GSTIN – GST Identification Number
The 15-digit code provided to every taxpayer is the GSTIN. The GSTIN will be given based on your state and the PAN. Some of the actual uses of a GSTIN are: To avail a loan with the number, claim refunds, and ease the verification process.
What is a GST Certificate?
The GST certificate is an official document that is issued by the relevant authorities to companies registered in the GST system. Businesses with an annual sale of Rs.200,000 or more and certain companies must register in this system. The GST registration certificate is issued in the format of GSTREG06. If you are a taxpayer registered with this system, you can download the GST certificate from the official GST portal. The certificate is not physically issued. It is only available in digital format. The GST certificate includes GSTIN, name, trade name, company articles of incorporation, address, liability date, validity period, type of registration, approval body details, signature, approval GST officer details, and certificate issuance date.
GST Returns is a document that contains information about the income that taxpayers need to submit to the authorities. This information is used to calculate the taxpayer’s tax obligations. Goods and Services Tax requires registered traders to file a GST return detailing purchases, sales, tax credit entry, and termination of GST. Companies are expected to submit returns twice a month and once a year.
Since the introduction of the new tax system in July 2017, the GST tax rates for goods and services have changed many times. The GST Council assigns GST rates to various products and services. Some products can be purchased without GST, while others are 5% GST, 12% GST, 18% GST and 28% GST.
How do I calculate GST?
Calculating the amount paid as GST when filing a tax return can be very tedious. There are several aspects and factors that need to be considered, like ITC, exemption supplies, reverse charge, etc. If you do not pay the total amount of GST, you may be charged 18% interest on the shortfall, and you will have to pay the correct amount of GST.
The GST Calculator makes it easy for taxpayers to calculate the amount paid as GST. You need to enter all the required details. The month in which the GST is calculated, the due date of the tax return for that month, the actual filing date, the tax obligation for that month, the tightening of purchases using the reverse billing mechanism, the opening balance of cash books, credit books, and so on.
How are GST Payments made?
GST payments can be made both online and offline. Currently, GST has to pay monthly. You need to submit GSTR1 and GSTR3B. For refunds, you must also submit the relevant form. Once the payment is made, you need to generate a challan.
What are the advantages of GST?
GST has many advantages in India. It regulates an unorganised sector; the E-commerce operators will not suffer from different treatments, lesser complications, composition scheme, registration and filing of returns are simple, it has a higher threshold and the elimination of the surging tax effect.
Some Important Facts on GST
Here is some interesting and helpful information on GST:
The GST Council comprises the Union Finance Minister of India, Nirmala Sitharaman, who will be in charge of the State and Union Government’s recommendations concerning any issues related to GST. All the finance ministers of the state and union territories and the Union Finance Minister form the GST Council.
The information given by taxpayers remains safe and secure in the GST portal. It is a trustworthy National Information Utility (NIU).
GSTN is responsible for handling invoices, registrations, payments and refunds and different types of returns.
The Government of India provides a GST Helpline.
GST Applications have been designed for smartphones. The government of India has CBEC GST, which can be downloaded from the Google Play Store.
GST came into effect in India on July 1, 2017, after the Goods and Service Tax Act was passed in Parliament.
The last GST Council was held in January 2022.
Employees will have to pay GST on their full and final salary in case they choose not to serve the notice period while leaving their current job, as per a report issued by the Authority of Advance Ruling (AAR).
According to the government, it is mandatory to complete Aadhaar authentication in the case of a Goods and Service Tax (GST) refund.