Introduction :
Goods and Services Tax (GST) is a comprehensive tax levied on the supply of goods and services in India. The GST council has finalized the GST rates which will be effective from 1st July, 2017. This new tax will replace all the indirect taxes that are currently levied in India such as Central Excise Duty, Service Tax, Value Added Tax (VAT) etc.
There are a lot of questions about how GST will affect taxpayers. In this article, we will try to answer some of the most common questions about GST Registration.
GST is a comprehensive tax levied on the supply of goods and services in India. The GST council has finalized the GST rates which will be effective from 1st July, 2017.
Know More About How To GST Apply
1. GST CHANGES IN 2016 DEL HIRA
If you haven’t registered and paid GST before the deadline, you will have to become registered as GST is scheduled to be implemented from 1st July, 2017.
To avoid this you have a plenty of dates to avoid the stringent deadline.
If you will partially supply your goods or services in 2016, you have to pay GST by 17th December, 2016 in lieu of notifying your invoice to tax department till 30th June 2017.
All the buyers are expected to pay GST in the form of input tax credit to the remitting firms by end of December, 2017 i.e 3 months more or else the traders will have to show black money in their annual return.
If you procure goods or services below [12.5% GST] and above that your taxes will be paid on input credit basis until 18th May 2019.
GST will be charged when the total value of the bought goods is more than Rs. 5 lakhs and the total value of periodic supplies of goods & services is more than Rs. 25.0 Lakhs or Rs. 50 lakhs for manufactured items.
Above is the overview of GST including its background & impact If you are a supplier of goods or services to manufacturers, wholesale dealers, traders or vendors, then you will have to register with a GSTN registered entity, which are given at [STNPOWERPAYMENTS] franchises.
2. What is GST?
The changed tax will replace all the indirect taxes that are currently levied in India such as Central Excise, Service Tax, Value Added Tax (VAT), Cess.
This will be a vertical tax which will replace all of these taxes.
What this means is that this one tax will replace all of the taxes currently levied in India. No more buying gold jewellery increased than if it were to be added to the GST payment at the time of the purchase.
Why is this good? This will bring stability and reduce corruption, which is good for the country as a whole.
Creating a new tax like this is always difficult as you have to get large number of people agreeing with it so that they don’t get upset at you punishing them.
This method is one of the fastest ways to replace existing taxes without any hassle as there is no time for your citizens to raise questions. (Unless for too complex changes).
This brings big-time relief to all the industries that were trading illegally in these taxes in the absence of GST.
Finally this one tax replaces complex taxes such as VAT or Cess which has made the industry feel safer for starting off businesses.
3. GST REGISTRATION FOR COMPANIES
GST (Goods and Services Tax) is a comprehensive tax levied on the supply of goods and services in India.
Considering the taxes that are currently applicable in India, the move to Goods and Service Tax is still somewhat confusing to many including assesses and traders.
Although they are a bit afraid of filing GST returns and complying with GST rules, they will also see this tax as a much-needed incentive to be part of GST to bring about a level standard between all sectors.
GST is a complete amalgamation of taxes being levied today and will subsume sales tax, buying tax, central excise tax, value-added tax and service tax just to name a few of the rates.
Like all the other areas of taxation, the GST will be applicable only to the manufacturing units and the wholesalers and the consumers will remain exempt from paying the GST.
The GST is levied at a flat rate of 28% as of 2018, which is the same as taxes currently levied on the sales of goods and services.
[Import]: Another thing to know about GST is its import tax. This will replace the current 15% value added tax, and is a tax that needs to be paid by importers (manufacturers living outside India).
4. GST DUE & PAYMENT
The National Council for Applied Economic Research (NCAER) has published official guidance on the process of booking turnover and calculating the base that will determine the GST rate applicable to traders. “Due Process” is recommended to meet borrowers and traders (to book initial turnover and calculate new turnover), 10 days for the restructured slab structure, 10 days for specific debts only.
5. GST TAX DEDUCTION FOR THE SMALL BUSINESSES
As per the GST Act, the GST credit has been fixed at 28% for the casual, unregistered and informal sectors against the present slab of 15% in the existing tax regime for intrastate supplies. When the provisions of GST in respect of supplies are extended to remain effective from 01st July, 2017, businesses belonging to the above three categories with taxable turnover up to four million rupees a year will not need to prepare invoices to certify the existence of GST credit in the name of their service/ procurement component. The GST rules for invoice prepared for documentation from 1st July, 2017 will remain the same as the current rules for the invoices for the supplies after 1st April, 2017. The quality of the invoice is not of any importance under GST and format will not matter. However, the GST Tax credit will be treated as continuous and accruals/abatement will cease to be available only after the validity of the credit has been exhausted. Form 42 GG will continue to be mandatory for preparing certificates of existence of GST credit.
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The effective GST rate in the existing regime is 18%. However, the monthly GST credit under GST has been fixed at the centre level at 28% for the casual, unregistered and informal sectors against the present slab of 15% in the existing tax regime for intrastate supplies.
6. GST BEHAVIOUR AND GUIDELINES
If you use a service that obviously attracts GST you need to declare it to your Gujarat State GST Council at the time of supply. This will also save you from any surprise visits by tax inspectors.
Other than declaring it, there are certain things that would attract GST. It would include items that essentially falls into
- Cateserisation
- Personal cosmetic items
- Salads
and services that is categorized as miscellaneous services.
You can check out information on the GST from the link provided here.
Procedure for calculation of GST
While calculating the final bill of GST for services, we will apply certain inputs. Please check out the list below.
Complimentary products will be remained uncategorized under zero-rated goods.
- Mobiles
- Phone services
- Sari
- License
- Instructional video
Hotel services will be classified under the Trade Service general class
- Hotel, guest house and restaurant
Tourism services will be classified under the Tourism Reasonable services services
Complimentary services will be included only under Customs purse.
Basic Personal Services will go into detail on how you will have to pay GST for all other services.
Charges levied by tax council for both taxable and non-taxable services are detailed here.
References: Goods and Services Tax (GST)
Schedule-wise summary of GST.
7. GST RATE
GST will replace all the indirect taxes that are currently levied in India such as Central Excise Duty, Service Tax, Value Added Tax and others.
It brings uniform taxation and simplicity. GST will also replace the current hodgepodge of multiple rates.
The tax rates at which products and services are supplied subject to GST is as follows: –
Input Tax Credit = 12%
SGST (service tax) = 0.56%
Education services = 20%
GST = 25%
Fee for inbound shipment = 5.35%
Input tax @ Jan.1, 2016 = Nil
- Input Tax Credit
All input taxes payable under GST shall be credited to the taxpayer on a monthly basis.
This will be irrespective of the input component of the prices of goods and services.
- Better Business :
Effectively eliminated lot of malpractices and corruption as GST will tax both manufacturers and retailers as well as provide a permanent tax base.
GST rates vary on the type of goods and services that are made subject to GST and the respective rates are the following:
Goods subject to Goods and Services Tax:
Services subject to GST:
Please note that the GST rate on 2%. continues to be applicable on services supplied by the Central Government or by any State Government in their respective States
In India, merchants or businesses have to collect taxes for each component of the sale of goods.
The Goods and Services Tax (GST) is a new tax that was introduced in India on 1 July 2017. The GST replaces all the existing indirect taxes that were levied on goods and services by the Central and State governments.
The GST is a comprehensive tax that applies to all goods and services, except a few items like alcohol and petroleum products. The GST is levied at three different rates: 5%, 12%, and 18%.In this article, we will discuss the GST in detail.
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