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Know the updated GST Tax regime
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Fresh functionalities are deployed for each module on the GST portal
GST compliance date extension for taxpayers
GST, or Goods and Services Tax, is an indirect tax imposed on the supply of goods and services. It is a multi-stage, destination-oriented tax imposed on every value addition, which managed to replace multiple indirect taxes, including VAT, excise duty, service taxes, etc. Goods and services are included under a single domestic indirect taxation law for the whole of India. In this regime, tax is charged at each point of sale.
Table of Content:
1. History of GST (Goods and Service Tax)
2. GST Meaning and Objective
3. Advantages of GST
4. Types of GST
5. GST Registration
5.1 GST Registration Procedure
5.2 Documents Required for GST Registration
5.3 GST Registration Fees
6. GST Login for Existing Users
7. GST Rates Slabs
7.1 GST Rates in India
8. Calculating GST
8.1 How to Calculate GST
8.2 GST Calculation Formula
9. GST Return Filing
10. New Compliances under GST
GST was first implemented as a tax regime in 1954 in France and subsequently adopted by several countries, including Australia, Canada, the United Kingdom, Spain, South Korea, Vietnam, Monaco, etc.
In India, the Goods and Service Tax came into force in 2000 after a committee was set up by the then Prime Minister Atal Bihari Vajpayee. A task force. headed by the Finance Ministry’s advisor, Vijay L. Kelkar, concluded that GST could help improve the tax structure in India.
In 2006, the Union Ministry of Finance proposed GST introduction from 1st April 2010. But, the Constitution Amendment Bill to facilitate the introduction of GST law was finally introduced in 2011. However, four supplementary GST bills were passed in Lok Sabha and approved by the Cabinet. Subsequently, GST came into force on 1st July 2017.
Upon implantation, the GST replaced the following central taxes:
GST services also subsumed the following state taxes:
Note that taxpayers who have an annual turnover of up to Rs.20 lakh are exempted from the Goods and Services Tax. This cut off is set at Rs.10 lakh for special category states. The GST law also extended the option of choosing a compounding scheme and threshold exemption.
GST definition states that it is a tax that has replaced multiple indirect taxes, like – VAT, service taxes, excise, etc., in India. Notably, gaining an insight into the objectives of this tax regime helps to understand GST meaning better.
For instance, the primary objectives of the GST service tax include –
Additional Read: Taxes Replaced by GST
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The introduction of GST is touted as one of the biggest tax reforms in India. To gain a clear picture of the impact of GST, it is imperative to learn more about GST advantages and disadvantages.
In this regard, the most prominent advantages of GST include:
There are 4 different types of GST which are as follows –
|Transaction||Old Regime||New Regime||Revenue Distribution|
|Sale within a particular state (Eg. Sale within Maharashtra)||VAT+Excise/Service Tax+Central Excise||Central GST & State GST||Shared between the State and Centre|
|Sale between states or more (Eg. Sales from Delhi to Maharashtra)||Excise/Service Tax+Central Sales Tax||Integrated GST||Centre shares the revenue as per the goods’ destination|
As per the GST regime, all businesses liable to pay service tax, VAT, or central excise have to register under goods and service taxes by following the process of GST registration online.
An applicant can initiate the GST registration process on the GST portal. Once the application is submitted, the online portal will generate ARN status instantly.
With the help of the ARN, an applicant can check his/her application status. Applicants can also post queries if needed. Usually, taxpayers are likely to receive their GST Registration Certificate and GSTIN within a week of their ARN generation.
ARN stands for Application Reference Number and is used to track GST registration application status. On the other hand, GSTIN is a 15-digit code allotted to every taxpayer registered with GST. Note that GSTIN is mandatory for businesses with an annual turnover of more than Rs.20 lakh.
Submit these GST registration documents to complete the process –
A. Documents required to complete registration of GST online: Sole proprietor or individual
B. Documents required to complete registration of GST tax: Partnership firms inclusive of LLP
C. Documents required to complete registration of services GST: HUF
D. Documents required to complete registration of goods and services tax: Company (both Indian and foreign, public and private)
It is important to note that the government does not levy GST registration fees if an individual decides to register through the online GST service tax portal. However, if an individual wishes to seek professional help from an authorised chartered accountant or GST practitioner for GST services, he/she will have to pay a fee to avail of the professional service.
Existing users can access GST services details by simply logging into the GST portal. Notably, the GST bill and its online portal have simplified the GST registration and payment process. The portal has also made it easier to access details such as allotted GSTIN, orders, and notices. It must be noted that you will require the credentials for GST login, such as username and password, and follow a few steps to access such details from the GST portal.
The below steps explain the GST portal login process.
Step 1: Visit the official Goods and Service Tax portal
Step 2: Navigate to the right-hand corner of the homepage
Step 3: Click on the ‘Login’ button
Step 4: Enter your username, password, and CAPTCHA code and click on the ‘Login’ button
Step 5: After the completion of GST login, you will be redirected to the dashboard, where you will find the summary of GST credit, ‘Pay Tax’ tab, ‘File Returns’ tab, Annual Aggregate Turnover or AATO, saved forms, notices received, etc.
In case you don’t have your credentials, you can easily retrieve them through the GST services portal. All you need to do is click on the ‘Forgot Password’ button on the login page and follow the subsequent steps.
In a broader sense, there are 4 GST tax slabs in India. GST rates have been structured to ensure that food items and essential services are kept in the lower tax brackets, while luxury items and services are kept in higher brackets.
More than 1,300 goods and nearly 500 services are categorised under 4 different goods and service tax slabs – 5%, 12%, 18%, and 28% – based on their type. Note that the GST on gold does not belong to these categories and is kept at a slab of 3%. Similarly, semi-precious and rough precious stones come under the special GST services slab of 0.25%.
The GST rates in India can be summarised as follows –
Goods - The goods under this slab include apparels up to Rs.1000, agarbatti, Braille items (watches, paper, typewriters), coir mat, cashew nuts, domestic LPG, edible oils, floor covering, fish fillet, fertilisers, first day covers, frozen vegetables, footwear up to Rs.500, hearing aids, Insulin, milk food for babies, medicines, matting, packed paneer, packaged food items, pizza bread, postage stamos, roasted coffee beans, revenue stamps, rusk, sugar, stent, subudana, stamp-post marks, skimmed milk and tea.
Services - The services under this slab include road transport by motor cabs and radio taxis, supply of tour operators’ services, restaurants with a turnover of up to Rs.50 lakh, air travel by economy class, sale of advertisement space, transport services such as railways and airways.
Goods - The goods included under this slab encompass ayurvedic medicines, almonds, apparel above Rs.1000, animal fat sausage, butter, bhujia, chutney, chess board, carom board, cake server, reagents and diagnostic kits, exercise books, fruits, frozen meat products, fish knives, forks, fruit juice, glasses for corrective spectacles, ghee, jam, jelly, mobile phones, namkeen, notebooks, non-AC restaurants, pickle, packed coconut water, sewing machine, tongs, tooth powder, work contracts.
Services - Services under this section include hotels, guest houses, inns with a tariff between Rs.1000 and Rs.2500 each night. This slab also includes air tickets purchased for the business class.
Goods - Some of the goods covered under the purview of this slab include aluminium foil furniture, biscuits, bamboo, branded clothing, CCTV, camera, cakes, corn, curry paste, envelopes, footwear priced above Rs.500, hair oil, instant food mixes, ice cream, mineral water, mayonnaise, monitors, padding pools, pasta, printers, preserved vegetables, soups, soaps, salad, dressing, steel products, tissues, tampons, toothpaste, weighing machines (both electronic and non-electronic variants), etc.
Services - Services under the 18% GST slab include – telecom services, AC hotels that serve alcohol to patrons, IT services, and hotels with room tariffs that range between Rs.2500 and Rs.5000 each night.
Goods - Aerated water, personal use aircrafts, after shave, automobile motorcycles, ceramic tiles, chocolates without cocoa, dishwasher, deodrants, dye, hair shampoo, paan masala, paint, shaving cream, shavers, vacuum cleaners, water heater, washing machine, etc,, are included in this slab.
Services - Services attracting 28% GST include 5-star hotels, gambling and betting in race clubs, hotels with a nightly room tariff of Rs.5000 and above, cinema and entertainment.
GST (Goods and Service Tax) in India is calculated as a sum total of GST payable on reverse charge, inward supplies, and output supplies. This total is derived individually for every month and you will have to pay the amount calculated while filing GST returns on a monthly basis.
As a taxpayer, you will have to consider all aspects and charges such as reverse charge, exempted supplies, inter-state sales along with eligible and non-eligible ITC while calculating GST. Calculating the right GST amount will help you evade the 18% interest that will be levied in case your payment falls short of your actual obligation.
You can also use the GST calculator available with government of India’s GST portal to find out your total tax liability by filling in all the necessary amounts under the mentioned heads such as return filing month, current ledger balance, tax liability under RCM, etc.
GST Amount = (Original Price x GST Rate) / 100
Net Price = Original Price + GST Amount
Example: Say you are selling a commodity from Mumbai and sending it to Kolkata for Rs.10,000, and the rate of GST applied on it is 12%.
The GST amount applicable for it will be (10,000 x 12) / 100 = Rs.1,200; and the net price will be Rs.10,000 + Rs.1,200 = Rs.11,200.
Fundamentally, GST return or GSTR is a document that has to be filed by taxpayers with the concerned tax administrative authority. This document comprises details of income/sales or/and purchase/expense and hence, proves useful in computing an entity’s tax liability.
Under the GST tax regime, registered dealers have to file GSTR, which includes:
As per goods and service tax norms, regular businesses that have an annual aggregate turnover of more than Rs.5 crore must file one annual return and two monthly returns, i.e., a total of 25 returns in one year at the online GST platform.
However, under the QRMP scheme, the number of goods and services tax returns varies for those who file quarterly GSTR-1 filers. In that case, they have to complete a total of nine GST service tax returns in a year, inclusive of the annual return and GSTR-3B. Likewise, the number varies for special cases such as composite dealers, who have to file GSTR five times a year.
|Return Form||Frequency||Due Date|
|GSTR 1||Monthly||11th* of the next month with effect from October 2018|
|GSTR-3B||Monthly||20th of the next month|
|GSTR-4||Quarterly||18th of the month subsequent quarter|
|GSTR-5||Monthly||20th of the next month|
|GSTR-6||Monthly||13th of the next month|
|GSTR-7||Monthly||10th of the next month|
|GSTR-8||Monthly||10th of the next month|
|GSTR-9||Annually||31st December of next financial year|
In addition to filing goods and service tax returns online, the tax regime has also introduced multiple new systems.
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