What is GST - Goods and Services Tax - India

Goods and Services Tax was introduced in India withy effect from 1st July, 2017. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. Full form of GST is Goods and Services Tax. GST has been introduced to replace multiple indirect taxes levied by State and Central Governments in order to simplify the indirect tax system. It was introduced as One Nation, One Tax System.

We have explained all the basic concepts in GST in this article.

What is GST?

Meaning of GST is Goods and Services Tax. The goods and services tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods and services.

What are advantages of GST?

GST basically aimed to remove cascading effect of the Tax.

Under GST, there is Composition scheme for small businesses.

There is higher Threshold for GST Registration.

Which previous Acts were replaced by GST?

Central Excise Duty

Duties of Excise

Additional Duties of Excise

Additional Duties of Customs

Special Additional Duty of Customs

Cess

State VAT

Central Sales Tax

Purchase Tax

Luxury Tax

Entertainment Tax

Enrty Tax

Tax on Advertisements

Taxes on lotteries, betting and gamnbling

What are Components of GST?

CGST

SGST

IGST

What is GST Council and what are its roles?

GST Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax. The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States.

The GST Council is a joint forum of the Centre and the States, shall consist of the following members: -

the Union Finance Minister................................................................ Chairperson;

the Union Minister of State in charge of Revenue or Finance................. Member;

the Minister in charge of Finance or Taxation or any other

Minister nominated by each State Government...................................... Members.

Which Governments official website for GST

www.gst.gov.in

It facilitates numerous services for taxpayers ranging from obtaining GST registration, GST returns filing, application for refunds, the cancellation of the GST registration.

There are facilities to download offline tools, there are GST Statistics, one can search taxpayers, there are help and other taxpayers facilities.

What are GST Returns

GST returns try to obtain details of purchases, sales, output GST, Input Tax Credit. Following are different types of returns under GST

GSTR-1

Tax return for outward supplies made (contains the details of interstate as well as intrastate B2B and B2C sales including purchases under reverse charge and inter state stock transfers made during the tax period).

GSTR-1A

An amendment form that is used to correct the GSTR-1 document including any mismatches between the GSTR-1 of a taxpayer and the GSTR-2 of his/her customers. This can be filed between 15th and 17th of the following month.

GSTR-2

Monthly return for inward supplies received (contains tax payer info, period of return and final invoice-level purchase information related to the tax period, listed separately for goods and services).

GSTR-2A

An auto drafted tax return for purchases and inward supplies made by a taxpayer that is automatically compiled by the GSTN based on the information present within the GSTR-1 of his/her suppliers.

GSTR-2B

GSTR 2B is an auto-drafted document that will act as an Input Tax Credit (ITC) statement for taxpayers. The GST Council states that GSTR 2B will help in cutting down the time taken to file returns, minimise errors, ease reconciliation and simplify compliance.

GSTR-3

Consolidated monthly tax return (contains The taxpayer’s basic information (name, GSTIN, etc), period to which the return pertains, turnover details, final aggregate-level inward and outward supply details, tax liability under CGST, SGST, IGST, and additional tax (+1% tax), details about your ITC, cash, and liability ledgers, details of other payments such as interests, penalties, and fees).

GSTR-3B

Temporary consolidated summary return of inward and outward supplies that the Government of India has introduced as a relaxation for businesses that have recently transitioned to GST. Hence, in the months of July and August 2017, the tax payments will be based on a simple return called the GSTR-3B instead.

CMP-08

GSTR-4

Quarterly return for compounding vendors (It contains the total value of supply made during the period covered by the return, along with the details of the tax paid at the compounding rate (not more than 1% of aggregate turnover) for the period along with invoice-wise details for inward supplies if they are either imports or purchased from normal taxpayers).

GSTR-4A

Quarterly purchase-related tax return for composition dealers. It’s automatically generated by the GSTN portal based on the information furnished in the GSTR-1, GSTR-5, and GSTR-7 of your suppliers.

GSTR-5

Variable return for Non-resident foreign taxpayers (It contains the details of the taxpayer, period of return and invoice details of all goods and services sold and purchased (this also includes imports) by the tax payer on Indian soil for the registered period/month).

GSTR-6

Monthly return for ISDs (This return contains the details of the taxpayer’s basic information (name, GSTIN, etc), period to which the return pertains, invoice-level supply details from the GSTR-1 of counter-parties, invoice details, including the GSTIN of the taxpayer receiving the credit, separate ISD ledger containing the opening ITC balance for the period, credit for ITC services received, debit for ITC reversed or distributed, and closing balance).

GSTR-7

Monthly return for TDS transactions (This return contains the taxpayer’s basic information (name, GSTIN, etc), period to which the return pertains, supplier’s GSTIN, invoices against which the tax has been deducted (categorized under the major tax heads - SGST, CGST, and IGST), and details of any other payments such as interests and penalties).

GSTR-8

Monthly return for ecommerce operators (It contains the taxpayer’s basic information (name, GSTIN, etc), the period to which the return pertains, details of supplies made to customers through the e-commerce portal by both registered taxable persons and unregistered persons, customers’ basic information (whether or not they are registered taxpayers), the amount of tax collected at source, tax payable, and tax paid).

GSTR-9

Annual consolidated tax return (It contains the taxpayer’s income and expenditure in detail. These are then regrouped according to the monthly returns filed by the tax payer).

GSTR-9A - now suspended

Annual composition return form that has to be filed by every taxpayer who is enrolled in the composition scheme.

GSTR-9C

Audit form that needs to be filed by every taxpayer who is liable to get their annual reports audited when their aggregate turnover exceeds Rs. 2 crores in a financial year.

GSTR-10

Final GST return before cancelling GST registration (This final return is to be filed when terminating business activities permanently/cancelling GST registration. It will contain the details of all supplies, liabilities, tax collected, tax payable, etc).

GSTR-11

Variable tax return for taxpayers with UIN (It contains the details of purchases made by foreign embassies and diplomatic missions for self consumption during a particular month).