WHAT IS GST

INTRODUCTION

  • The full form of “GST” is Goods & Service Tax & Its also known as “One Nation One Tax”.
  • This Tax comes Into force on 1st July 2017 by 101 amendment in the Constitution of India by the Central government.
  • GST replaced existing VAT, Service & other Tax of Central & State government.
  • It is Destination Based tax levied on goods & services or Tax levied based on place of Supply of Goods & Services.
  • In GST Act, The Cascading (Tax on Tax) effect of Tax paid by the different person (i.e. Manufacturer, Wholesaler & Retailer etc.) involved in Transaction of the Goods & Service is removed and provide relief to the taxpayer at a different level.
  • All the E-commerce operator needs to collect TCS (Tax collected at source) upfront at the rated maximum 1% of the Taxable Value of Goods & Services.
  • The GST helps the Registered Taxpayer to do a self-assessment of Tax & pay according to that Assessment.
  • Now the person required to have a GST registration & no need to register their business in different Central & State tax act.
  • The GST rate levied by government are 0% to 28% Slabs based on the nature of goods & services.
  • The GST divided into parts are:-
  1. CGST (Central Goods & Services Tax).
  2. SGST (State Goods & Services Tax).
  3. IGST (Integrated Goods & Services Tax).
  4. UTGST (Union Territory Goods & Services Tax).
  • All the amendment, rate, notification, slab, rules & regulation are covered under the GST council (Include Central & State Finance Ministers).

CGST (Central Goods & Service Tax)

  • The CGST (Central Goods & Service Tax) in the GST Act is applicable in the case of Intra State (Eg. Gurgaon to Rohtak) supplies of Goods & Services.
  • The CGST is levied & Governed by the Central Government under the GST Act.
  • The maximum 14% tax rate is charged on Value of Taxable Supplies of Goods & Services by Central Government under CGST.
  • When Intra State supplies made both CGST (Central Goods & Service Tax) & SGST (State Goods & Service Tax) is Applicable.
  • The CGST & SGST tax is Collected, Levied & Governed by the both Central Government & State Government.
  • The CGST is deposited with Central Government & SGST with State Government.

Let’s take an Example. Product A Value Rs. 10000 supply from Mumbai to Navi Mumbai & GST (CGST-6% & SGST-6%).

  1. The Taxable Value of Supply or Total GST amount = Rs. 10000*12%= Rs.1200/-.
  2. Tax Collected by CGST = Rs.10000*6%= Rs.600/-.(Collected by Central Government).
  3. Tax Collected by SGST = Rs.10000*6%= Rs.600/-. (Collected by State Government).

SGST (State Goods & Service Tax)

  • As discussed above (i.e. CGST) on the Intra State supplies CGST & SGST is Levied.
  • The SGST (State Goods & Service Tax) in the GST Act applies in the case of Intra State (Eg. Jaipur to Ajmer) supplies of Goods & Services.
  • The SGST is levied & Governed by the State Government under the GST Act.
  • The maximum 14% tax rate is charged on Value of Taxable Supplies of Goods & Services by State Government under SGST.
  • When Intra State supplies made both CGST (Central Goods & Service Tax) & SGST (State Goods & Service Tax) is Applicable.
  • Any liability related to taxable goods & Service supplies is set off against the only SGST & IGST Input Tax credit only OR SGST tax Liability set off only for SGST & IGST Input Tax credit only.
  • SGST tax liability cannot set off against CGST Input Tax Credit.
  • The CGST & SGST tax is Collected, Levied & Governed by the both Central Government & State Government.
  • The CGST is deposited with Central Government & SGST with State Government.

Let’s take an Example. Product A Value Rs. 10000 supply from Mumbai to Pune & GST (CGST-9% & SGST-9%).

  1. The Taxable Value of Supply or Total GST amount = Rs. 10000*18%= Rs.1800/-.
  2. Tax Collected by CGST = Rs.10000*9%= Rs.900/-.(Collected by Central Government).
  3. Tax Collected by SGST = Rs.10000*9%= Rs.900/-. (Collected by State Government).

IGST (Integrated Goods & Service Tax)

  • The IGST (Integrated Goods & Service Tax) in the GST Act applies in the case of Inter-State (Eg. Maharashtra to Rajasthan) supplies of Goods & Services.
  • The IGST (Integrated Goods & Service Tax) is also applicable to Import in India & Export from India.
  • If Export is taxable rate is 0% then tax is shared equally with the Central Government & State Government.
  • The IGST is levied & Governed by the Central Government under the GST Act.
  • IGST is deposited with the Central Government except in case of zero-rated Export.

Let’s take an Example. Product A Value Rs. 10000 supply from Maharashtra to Rajasthan & IGST 18%.

  1. The Taxable Value of Supply or Total GST amount = Rs. 10000*18%= Rs.1800/-.
  2. Tax Collected by IGST = Rs.10000*18%= Rs.1800/-.(Collected by Central Government).

WHO NEED GST REGISTRATION?

GST registration is mandatory for the following categories of person are:-

  • Registered Tax Payer In Previous Law

The person already registered in previous Vat, Service Tax, Excise & Octroi Tax required to have GST registration.

  • Turnover Limit

The person whose Goods Turnover exceed the limit of Rs. 40 lakh required to get GST registration and not selling Ice Cream, Pan Masala & Tobacco but for North Eastern Region Turnover Limit is 10 Lakh.

The person whose Service Turnover exceeds the Limit of Rs. 20 Lakh then he required to have GST registration.

TURNOVER* Addition of Taxable, Exempt, Exports, Inter-State Supplies (-) Subtraction of Taxes paid, Value of Inward, Taxable under Reverse Charge, Value of Non-Taxable Supplies.

  • Casual Taxpayer

The Person who doesn’t have a permanent place of Business or doing event or exhibitions needs to have GST registration & GST has a validity of maximum 90 days.

  • Reverse Charge

The person falls under the category of Reverse charge in which tax paid by service provider instead of Service receiver.

  • Sell on E-Commerce

The person sells goods & Services on E-commerce (eg. Flipkart, Amazon etc.) or Online Platform then he required to have GST registration.

  • Own Online or E-Commerce Platform

The person register his E-commerce Company and start his own Online Business by selling goods & services (eg. Products, AC services & etc.) then he required to have GST registration.

  • Online platform Outside India for Indian.

The person provides the Goods & services outside India through Online platform to Indian Visitor (eg. Software Company or Matrimonial Sites) then he mandatory required GST registration.

  • Non-Resident Indian (NRI).

The person Runs or Handle or Maintain the business of NRI in India or Person is NRI in this case you need to have GST registration.NRI* Means the person not living in India for more than 182 days in previous Calendar Year.

  • Input Tax Distributor or Suppliers Agent.

The person carries forward the benefits of Input Tax credit but Input Tax distributor are required to register under the GST Act.PERSON* means Natural (eg. Ram, Shyam & Rohan etc.) & Artificial Person (eg. Company, HUF & body corporate etc.)

 

TYPES OF GST REGISTRATION

COMPOSITION SCHEME

The person who avail the Composition Scheme having maximum Turnover of Rs. 1.5 Cr. for Goods & Rs. 50 Lakh for Service Provider In Financial Year Subject to Satisfaction of the following Conditions are:-

  1. No Claim of Input Tax Credit;
  2. Prohibition on Supply of Exempted Goods;
  3. Paid tax on Reverse Charge Basis;
  4. A person Need to Display “Composition Dealer” on Bill or Invoice or Sign Board & Place of Business etc.

WHO NOT OPT COMPOSITION SCHEME

The following person can not opt for the Composition Scheme are:-

  1. Person Manufacture of Ice Cream, Pan Masala & Tobacco products.
  2. The person Involved in Making Inter-State Supplies (Maharashtra to Delhi etc).
  3. Casual Taxpayer (Event or Exhibitions etc).
  4. Non-Resident Indian (NRI) Taxpayer.
  5. Selling of Goods & Services through E-Commerce or Online Platform.
  6. The Restaurant Who Serve Alcohol.

REGULAR DEALER OR CASUAL TAXPAYER

The following person go for the GST registration under Regular Dealer are:-

  1. A Person falls in Criteria for GST Registration.
  2. Not Opt for Composition Scheme.
  3. The person whose Turnover Exceed the Rs. 1.5 cr Threshold Limit.
  4. Person Manufacture of Ice Cream, Pan Masala & Tobacco products.
  5. The person Involved in Making Inter-State Supplies (Maharashtra to Delhi etc).
  6. Casual Taxpayer (Event or Exhibitions etc).
  7. Non-Resident Indian (NRI) Taxpayer.
  8. Selling of Goods & Services through E-Commerce or Online Platform.

BENEFITS OF GST REGISTRATION

  • Legally Register Business.

The Person register under the GST Act means the Business is registered with Government of India and help the person to expand his Business.

 

  • Brand Value.

The Brand Value of the Business Increased Because the person raised Invoice bill after charging applicable GST tax rate and provide a unique value from other vendors in the market.

 

  • Expansion of Business.

The person after GST registration free to do business without any government hassle and expand the business to a National or International (Export/Import) level.

 

  • Competitor Advantage.

The person can do Business In many categories of Goods & services to get a competitive advantage on their revivals in the Market.In the GST Act, many categories of goods & services (Eg. Tobacco & Pan Masala etc.) are not provided without GST registration.

 

  • Claim Input Tax Credit.

The person who supplies Goods & services to Manufacture or any dealer and person is eligible to claim Input Tax credit then he required to have GST registration to do so.GST registration is mandatory to claim Input Tax Credit.

 

  • Avoid Penalty.

The person needs to have GST registration for his Business after crossing the criteria of Turnover or other conditions.Otherwise, GST department levied heavy penalty (100% of Value of Goods & Services) for not having GST registration for their business.

 

  • Benefits of Government Scheme.

The Government of India is a plan to provide an Insurance policy for the GST registered taxpayer and also develop various schemes related to Textile Sector & other sectors.

 

  • Easy Loan Availability.

The Government of India launched an online loan approved portal for GST registered taxpayer to provide Loan within 59 Minutes.All the Information collected by the Bank from GST Online portal to provide loan Assistance on basis of Turnover & other criteria.

 

  • Apply for Tender in various Organisation.

As on date it compulsory for the Tender applicant to have GST registration certificate.The various organisation have pre-qualified criteria to provide tender is to having GST registration of Tender applicant.

 

  • Sell Goods & Services In India Without Restriction.

Every person wants to sell goods & services in whole India to expand his business & profit but without GST registration can’t sell in whole India because he needs to raised E-way bill.The Supplier transport (any means) Goods exceed the value of Rs. 50000 then he needs to raised E-way bill.

 

  • Sells Goods & Services through E-commerce or Online Platform.

Everyone wants an online presence in today world wants to sell Goods & services through E-commerce platform (eg. Amazon) or Register their E-commerce company and do GST registration to sell his products or services on his company website & Increased the Customer Base.

 

DOCUMENTS REQUIRED FOR GST REGISTRATION

  • DOCUMENTS FOR INDIVIDUAL/SOLE PROPRIETORSHIP
  1. Name of Sole Proprietorship Firm/Individual.
  2. Pan Card of Individual.
  3. Identity Proof (Driving License or Passport or Voter ID).
  4. Address Proof (Mobile Bill or Electricity bill or Bank Statement) & Not Older than 2 Months.
  5. Registered Office.
  6. Property Owned (Sale Deed or Electricity Bill) OR Property Rented ( Rent Agreement).
  7. Area Of Business.
  8. Bank Accounts Details.
  • DOCUMENTS FOR COMPANY/LLP/SOCIETY/BODY CORPORATE/FIRM
  1. Name of the Company/LLP/Society/Body Corporate/Firm.
  2. Passport Size Photo of all Promoter/Members/Directors/Partners.
  3. Identity Proof (Driving License or Passport or Voter ID) of all Promoter/Members/Directors/Partners.
  4. Address Proof (Mobile Bill or Electricity bill or Bank Statement) of all Promoter/Members/Directors/Partners & Not Older than 2 Months.
  5. PAN Card (Mandatory).
  6. Passport is mandatory for Foreign National or Non-Resident India (NRI).
  7. Area Of Business.
  8. Registered Office proof.
  9. Property Owned (Sale Deed or Electricity Bill) OR Property Rented ( Rent Agreement).
  10. Bank Accounts Details.
  11. DSC of Authorised Person.

PROCESS OF GST REGISTRATION

  • DOCUMENTS COLLECTION
  1. Professional provide Documents Checklist.
  2. Preparation of Digital Signature.
  3. Attestation & Notarization of Documents Provided.
  4. Professional Check documents & follow up with You.
  • PREPARATION GST REGISTRATION APPLICATION
  1. Preparation of GST-1 for GST registration.
  2. Fill the Details of Business & other Information.
  3. Pre-security of all Documents.
  • FILING OF DOCUMENTS
  1. Attached the DSC of Directors/Promoters/Individual/ Members/Partners.
  2. File with GST authority
  3. Follow up with Relevant Authority
  • GST REGISTRATION
  1. Get GST registration with 2 Working Days.
  2. GST registration Certificate in GST-6.

PENALTY NON COMPLIANCE OF GST REGISTRATION

  • NO GST REGISTRATION

100% of Tax payable or Rs. 10000 (Higher of two).

  • NOT ISSUING GST BILL/INVOICE

100% of Tax payable or Rs. 10000 (Higher of two).

  • DEFAULT IN INVOICING

Rs. 25000.

  • DEFAULT IN GST RETURN

Nil Return:- Rs. 20 per Day per Return.Tax Liability Return:- Rs. 50 per Day per Return.

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