Goods And Services Tax
GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July 2017; Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST will be completing three complete years on 1st July 2020.
In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India.
GST is one indirect tax for the entire country.
So, before Goods and Service Tax, the pattern of tax levy was as follows:
Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. Inter-state sales are chargeable to Integrated GST.
Now let us try to understand the definition of Goods and Service Tax – “GST is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.”
Multi-stage
There are multiple change-of-hands an item goes through along its supply chain: from manufacture to final sale to the consumer.
Let us consider the following case:
-
-
- Purchase of raw materials
- Production or manufacture
- Warehousing of finished goods
- Sale to wholesaler
- Sale of the product to the retailer
- Sale to the end consumer
-
Value Addition
The manufacturer who makes biscuits buys flour, sugar and other material. The value of the inputs increases when the sugar and flour are mixed and baked into biscuits.
The manufacturer then sells the biscuits to the warehousing agent who packs large quantities of biscuits and labels it. That is another addition of value after which the warehouse sells it to the retailer.
The retailer packages the biscuits in smaller quantities and invests in the marketing of the biscuits thus increasing its value.
GST is levied on these value additions i.e. the monetary value added at each stage to achieve the final sale to the end customer.
Destination-Based
Consider goods manufactured in Maharashtra and are sold to the final consumer in Karnataka. Since Goods & Service Tax is levied at the point of consumption. So, the entire tax revenue will go to Karnataka and not Maharashtra.
GST Services Offered by CA N. R. Gugale
- GST Registration: GST registration process under the new GST rules is done through an online portal that is maintained by the Central Government of India. Our experts can get your GST registration done in a short span of time.
- GST Returns: GST Act mandates every registered entity to furnish details of its sales and purchases including tax paid and collected thereon by filing GST returns Taxpayers must provide correct information to department as the system is designed so that all transactions are in synchronized with each other and no transaction is left unnoticed between buyers and sellers. GST team of AJSH let you focus on your business, by filing your tax returns in compliance with GST regime.
- GST Amendments: Once you are registered as goods and services taxpayer and want to make any alteration in your details of core or non-core fields like change in address, addition of place of business etc., you may reach our GST experts for any assistance.
- GST Audits: Our team of professionals with rich knowledge on GST, perform audits and prepares required audit reports for its clients.
- GST Assessment: We can help you with your self-assessment of GST. Our team will assist you in whole process of assessment carried out by tax authorities.
- GST Compliances: We will keep you updated with any new compliances announced by GST Council.
FAQ’s
Which of the existing taxes are proposed to be subsumed under GST?
The GST would replace the following taxes:
(i) taxes currently levied and collected by the Centre:
a. Central Excise duty
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)
f. Special Additional Duty of Customs (SAD)
g. Service Tax
h. Central Surcharges and Cesses so far as they relate to supply of goods
and services
(ii) State taxes that would be subsumed under the GST are:
a. State VAT
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax (all forms)
e. Entertainment and Amusement Tax (except when levied by the local
bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State Surcharges and Cesses so far as they relate to supply of goods and
services
The GST Council shall make recommendations to the Union and States on the
taxes, cesses and surcharges levied by the Centre, the States and the local bodies
which may be subsumed in the GST.
How will I pay GST?
GST will be managed through the GST Network, GSTN – http://gstn.org/. All taxes will be paid online and there will be no manual filing of returns. Post generation of challan online, you
can pay GST by one of the following modes – Axis Debit/credit card, Axis Internet Banking or cash/cheque at any Axis Bank branch
Is GST charged on exported goods and services?
No, GST is a consumption based tax. Because the place of consumption is outside India there is no GST on exported goods and services
Will there be a Central and State GST levied on all transactions in India?
Yes, every transaction of supply in India will either be subject to:
CGST and SGST
OR
CGST and IGST
Unless the good or service is exempt.
What goods and services are exempt?
A. The list of exempt goods and services includes (but is not limited to) petroleum products, entertainment and amusement, alcohol/liquor for human consumption, stamp duty, customs duty, and electricity.
When does ‘supply’ occur?
For goods it’s the earliest of the following
Date of removal of goods
Date goods are made available to the recipient
Date the invoice is issued
Date payment is received
Date recipient reflects the goods on his/her books of accounts
For services it’s the earliest of the following:
Date the invoice is issued
Date payment is received
Date services are completed (where invoice is not issued within a prescribed time)
Date recipient reflects the goods on his/her books of accounts
How can payment be done?
Payment can be done by the following methods:
(i) Through debit of Credit Ledger of the taxpayer maintained on the Common Portal- ONLY Tax can be paid. Interest, Penalty and Fees cannot be paid by debit in the credit ledger.
Tax payers shall be allowed to take credit of taxes paid on inputs (input tax credit) and utilize the same for payment of output tax. However, no input tax credit on account of CGST shall be utilized towards payment of SGST and vice versa. The credit of IGST would be permitted to be utilized for payment of IGST, CGST and SGST in that order.
(ii) In cash by debit in the Cash Ledger of the taxpayer maintained on the Common Portal. Money can be deposited in the Cash Ledger by different modes, namely, E-Payment (Internet Banking, Credit Card, Debit Card); Real Time Gross Settlement (RTGS)/ National Electronic Fund Transfer (NEFT); Over the Counter Payment in branches of Banks Authorized to accept deposit of GST