GST or Goods and Services Tax is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act or GST Act came in to effect from July 01, 2017, Just six months after demonetization. In short, GST is a comprehensive, multi-stage, destination-based tax indirect tax levied on the supply of goods and services on every value addition. GST is a single domestic indirect tax law for the entire country.
WHAT IS GST/CONCEPT OF GST
GST stands for “GOODS & SERVICE TAX”. GST is an indirect tax that is levied on the supply of goods and supply of services. GST is a destination-based tax.
GST is introduced by the government to replace other indirect taxes such as-
- Service Tax
- Excise Duty
- Value Added Tax
- Purchase Tax
GST Act is applicable all over India with effect from 01st July 2017. GST is a single indirect tax law for the whole country. GST is a tax that is levied at each point of sale.
BENEFITS OF GST
The benefits of GST are as follows-
- It enhances investment and employment.
- It boosts to “Make in India” initiative.
- It creates a unified national market.
- Certainty in tax administration
- Ease of doing business.
- Reduction in compliance cost.
- Automated procedures with the use of IT.
- Beneficial to industries.
- Beneficial to small businesses.
GST COMMON PORTAL
Before the introduction of GST, there are different- different laws, regulations, procedures, and formats for the central & state tax. But in the case of GST, there is a common portal, which is known as “GST COMMON PORTAL”.
“GST COMMON PORTAL”- www.gst.gov.in- is a website which is managed by the Goods & Services Network (GSTIN) and it is set up by the Government of India to maintain a proper and uniform interface for the taxpayer and shared and common IT infrastructure between Central Government & State government.
GST portal is a single portal for all the GST- related services and it can be accessed from anywhere over the internet.
TAXES SUBSUMED UNDER GST
Before the introduction of GST, there are many indirect taxes which are levied by the central & state.
There is a list of central & state taxes which are subsumed under GST-
- Central Excise Duty & Additional Excise Duty
- Central Sales Tax
- Service Tax
- CVD & Special CVD
- Excise Duty under Medicinal & Toilet Preparation Act
- Central Surcharges & Cesses
- VAT/ Sales Tax
- Luxury Tax
- Taxes on Advertisements
- Entry Tax
- Purchase Tax
- Entertainment Tax
- State Surcharges and Cesses.
The provision of GST Council came into force on the 12th day of September 2016 and it is constituted on the 15th day of September 2016.
The Union Finance Minister is the chairman of the GST Council and the minister in charge of finance and minister in charge of taxation or any other minister who is nominated by each of state & UTs with its legislature are knows as the member of such GST Council. Besides the minister of state in charge of Revenue or minister in charge of Finance is also considered a member of such GST Council.
GST council makes the recommendations to the union and states on the important issues just like- tax rates, tax exemptions, threshold limits, dispute resolution, etc. It also recommends the date from which the GST will be charged on Alcoholic liquor for human consumption, Petroleum crude, diesel, petrol, ATF and natural gas, Tobacco, Opium, Indian hemp, and other narcotic drugs, and narcotics.
GST registration is applicable to all individuals and all the entities which supplying goods and services in India. The process of GST registration is online and it must be carried out on the website of government (gst.gov.in).
ELIGIBILITY FOR GST
The Provision of GST will be applicable on the following persons-
- The person whose amount of turnover is more than the threshold limit.
- Non- Resident Taxable Person.
- ISD- Input Service Distributors.
- E-Commerce Operators.
- Casual taxable person.
- TDS Deductor
- Individuals who are paying the tax under the reserve charge mechanism
The GST Registration is mandatory for –
- All the dealers whose annual amount of turnover is more than 20 lakhs when there is the supply of services and 40 lakhs if there is the supply of services.
- Inter-state supplier- Person making inter-state outward supply of goods.
- The person who is receiving supplies on which the tax is required to be payable by the receipt of supply on the basis of reverse charges.
- Casual taxable person.
- Non- resident taxable person.
- The person who supplies on the behalf of another person (means an agent ).
- E-commerce operator.
- TDS deductor.
- ISD (Input service distributor).
- The person who is supplying online information and database access or retrieval services to a person who is non-resident in India from outside India.
Voluntary Registration- If any entity wants to be registered under GST, it can take voluntary registration.
LIST OF THE DOCUMENTS WHICH ARE REQUIRED FOR REGISTRATION UNDER GST
The following documents are required for obtaining the registration under GST:
- Proof of Business Constitution- Certificate of business incorporation or Business registration
- Photo of the applicant (Authorized Person/ Promoter/ Partner).
- Identity of Promoter/Authorized person.
- Proof of address of Promoter/ Authorized person.
- Proof of appointment of such authorized person.
- Address proof of Business.
- Proof of Bank account
- Digital Signature
GST REGISTRATION PROCESS
GST registration is an online process. The applicant can register through the GST portal. When the applicant submits the application for the registration on the GST Portal, the GST portal generates a GST ARN, and by the use of such GST ARN, the applicant can check the status of the GST application. Within the period of 7 days (from the date of GST ARN generation), the applicant will receive the GST registration certificate and GSTIN.
Now we will discuss the process of GST registration step by step-
Steps to fill Part-A of GST Registration Application-
Step No-1 –
(i) Access GST Portal
(ii) Click on Services
(iii) Click on Registration
(iv) Click on New Registration
Step No- 2- First the applicant will select the New Registration and then fill the following information in Part A in the following manner-
- The applicant will select the type of Taxpayer from the given options.
- The applicant will select the State and district.
- The applicant will enter the legal name of the entity or business (as per PAN of entity).
- The applicant will provide the email address and mobile number of the authorized person for verification.
- Click on Proceed button.
Step No.-3- OTP Verification – After the submission of all the above information, the OTP verification page will display and the applicant will enter two OTPs which are received on the mobile number and email. These OTPs are valid only for 10 minutes. After enter these OTPs the applicant will click on Continue.
Step No.-4 – TRN Generated- After completing OTP verification, a TRN will be generated and it will be 15 digits number. This TRN will be used by the applicant to complete and submit the GST registration application.
Step No.5- Log In GST Portal with generated TRN – After receiving the TRN, the applicant will start the process of GST registration. The applicant will enter the TRN in the Temporary Reference Number field and enter the captcha test and click on the proceed button.
Step No.- 6- After clicking the proceed button you will receive an OTP on your registered email and registered mobile number. The applicant will enter the OTP and click the proceed button.
Step No.-7- After the OTP verification, the applicant can see the status of its application in the following format-
Steps to fill Part-B of GST Registration Application- Part B of GST Registration Application have 10 sections. One by one the applicant will fill in all the required information to complete the application. Now we will discuss all these steps.
Step No.-8- Provide Business Information- The applicant will provide the following business information-
- Enter the Trade name of the business in the field of Trade name.
- Select the Appropriate Constitution of Business.
- Enter the name of State, District, State Jurisdiction, and Sector/Circle/ Ward/Charge/Unit.
- Select the Commissionerate Code, Division Code, and Rang Code.
- Enter the date of Business commencement.
- Enter the reason to obtain the GST Registration.
- Enter the date on which liability to registration arise means the date on which the business crossed the aggregate threshold limit for the GST registration.
Step No.-9- Provide Promoter Information- In this step the applicant will provide the following personal details of the Promoters or Partners-
- Name of the Promoters or Partners.
- Address of the Promoters or Partners.
- Mobile Number of the Promoters or Partners.
- Date of Birth of the Promoters or Partners.
- Email ID of the Promoters or Partners.
- Gender of the Promoters or Partners.
- Identity of the Promoters or Partners.
- Designation of the Promoters or Partners.
- DIN of the Promoter, for the following type of applicant-
- Private Limited Company.
- Public Limited Company.
- Unlisted Company.
- Public Sector Company.
- Foreign Company
- PAN and Aadhaar number of the Promoters or Partners.
- Citizenship of the Promoters or Partners.
- Photograph of Stakeholders. The applicant will upload the photograph of the stakeholders in PDF or JPEG with the maximum file size of upload will be 1 MB.
After providing all these information, the applicant will click on Save & Continue Button.
Step No.-10- Provide Authorized Signatory Detail- The authorized Signatory is a person who is nominated by the promoters of the company. Such nominated person has the responsibility for filing the GST returns and such person will also maintain the relevant compliances of the company.
The applicant will enter all the details of such authorized person/ signatory similar to the details which are entered for the promoters/partners in the above step.
Step No.-11- Enter Details of Principal Place of Business- The applicant will provide the information and details of Principal Place of Business. The Principal Place of Business is the primary location within the state in which the person operates the business. Normally the Principal Place of Business is a place where the books of accounts and documents of the company are stored.
In the respect of Principal Place of Business, the applicant will provide the following information-
- Address of such Place.
- Telephone no., mobile no., fax number, email address.
- Nature of Business & Profession.
If the applicant works as SEZ developer or Principal Place of Business is located in SEZ, the necessary documents which are issued by the government are required to be uploaded by such applicant by selecting ‘Other’ value in the profession of premises.
The applicant will upload these relevant documents as proof of ownership or occupancy of the property –
- In the case of Own Property- Latest Property Tax Receipts or Municipal Khata Copy or Electricity Bill Copy.
- In the care of Leased or Rented Property- Copy of Rent agreement or Lease agreement.
- Property not covered in point (i) or (ii)- Copy of Consent letter with supporting of ownership property document.
Step No.- 12- Detail of Additional Place of Business- After providing the information of Principal Place of Business the applicant will provide the information of Additional Place of Business. He will fill in the detail of such property in this step.
Step No.-13- Details of Goods & Services- In this step, the applicant will provide the details of 5 top goods & services which are supplied by the applicant. In the respect of goods will provide HSN code and in the respect of services will provide SAC codes.
Step No.-14- Bank Details- The applicant will provide the bank account detail which is held by such an applicant. The applicant will provide-
- Bank Account Number
- IFSC Code
- Type of Account and
- Upload a copy of the bank statement or passbook.
Step No.-15- State Specific Information – In this step the applicant will provide the state-specific information, will enter
- Professional tax employee code no.,
- Professional tax registration certificate number,
- State excise license number with the name of holding.
After providing all these information the applicant will click Save & Continue button.
Step No.-16- Aadhaar Authentication- In this step, the applicant will do Aadhaar Authentication.
Step No.-17- Verification of Application- When all the relevant details are filled in by the applicant then there is the requirement of verification. On the verification page, the applicant will tick on the declaration and submit the application by using any of the given ways-
- In the case of Companies & LLP, the application must be submitted by using DSC.
- By using e- Sign-in this way, the OPT will be sent to the Aadhaar registered mobile number.
- By Using EVC- in this way, the OTP will be sent to the registered mobile number.
Step No.-18- After successful submission of the application, an ARN (Application Reference Number) will be sent to the registered email and registered mobile number.
COMPONENT OF GST
Under the GST law, there are 4 taxes-
- CGST- Central Goods & Service Tax
- SGST- State Goods & Service Tax
- IGST- Integrated Goods & Service Tax
- UTGST- Union Territory Goods & Service Tax
- CGST- Central Goods & Service Tax– As per the GST law when there is any intra-state (Sale within State) supply of goods or services or both, CGST will be charged on such supply.
- SGST- State Goods & Service Tax– As per the GST law when there is any intra-state (Sale within State) supply of goods or services or both, SGST will be charged on such supply.
This means in the case of intra-state supply CGST and SGST will be charged.
- IGST- Integrated Goods & Service Tax– When there is any inter-state (Sale to another State) supply of goods or services or both, IGST will be charged on such supply.
- UTGST- Union Territory Goods & Service Tax- When there is any supply of goods or services or both in any of the union territories viz. Daman and Dui, Dadra and Nagar Haveli, Andaman and Nicobar Islands, Lakshadweep and Chandigarh. UTGST will be charged along with CGST.
Example- Supply from Agra to Noida- CGST+ SGST
Supply from Agra to Delhi- IGST
Supply from Delhi to Chandigarh- CGST+UTGST
COMPOSITION SCHEME UNDER GST
Under the GST law, for providing relief to the small businesses, suppliers of food articles, manufacturers, traders, etc. who are making intra-state supply, will pay tax under a simpler method of paying taxes which is known as composition Levy. The composition levy has been now extended to small service providers also.
For providing relief to small businesses, the GST law also contains provisions for providing exemptions from the payment of tax on the supply of essential goods & services.
GST is applicable on the supply of all goods and services except
- Alcoholic liquor for human consumption
- Petroleum crude, diesel, petrol, ATF, and natural gas
- Opium, Indian hemp, and other narcotic drugs and narcotics
GST RATES PRESCRIBED FOR THE VARIOUS GOODS
Normally six rates of CGST are notified for goods-
SGST/ UTGST at the same rate is also applicable/ levied.
Six IGST rates are notified for the goods-
There are certain goods that are exempted from tax.
GST RATES PRESCRIBED FOR THE VARIOUS SERVICES
In the respect of services, 4 rates of CGST are notified –
SGST/ UTGST at the same rate is also applicable/ levied.
4 IGST rates are notified for the services-
Certain specified services are taxable at a nil rate of tax.
The GST return is a statement that contains the information and facts which are furnished by the taxpayer to the authorities. This statement is used to calculate the tax liability of the taxpayer. The information in the return comprises-
- Nature of Business
- Operation of Business
- Sales Price
- Amount of Tax Liability
- Discharge of liability
Under the GST the registered dealer must file GST returns with the information of sales, purchase, input tax credit, output GST, etc.
Under the GST there are a certain types of GST returns-
- GSTR-1- GSTR-1 is a monthly return that contains the details of the outward supplies which are made by the registered taxpayer under the GST. GSTR-1 contains the details of invoices, debit notes & credit notes, which are raised for the particular month. If the aggregate amount of turnover is more than 5crores or has not opted into the QRMP scheme, the GSRT-1 is required to be filed monthly by the 11th day of every month. If the business opted QRMP scheme, the GSRT-1 is required to be filed monthly by the 13th day of the month of the following quarter.
- GSTR-2A- It is a read-only return and the data of GSTR-2A is auto-populated and based on the data which is filed by the supplier in his GSTR-1.
- GSTR-2B- GSTR-2B is a return that contains ITC data and it is monthly available.
- GSTR-2- It is a monthly return that contains the details of the inward supply of goods & services which is agreed by the recipient. It will contain the detail of the purchase which is made by the recipient. The details in GSTR-2 are auto-populated from the details of GSTR-2A.
- GSTR-3- It is a monthly return. GSTR – 3 is a summary return of the inward supplies and the outward supplies which are made by the taxpayer. It will also contain the detail of the tax liability of such taxpayers for such particular month.
- GSTR-3B- It is a monthly declaration and it is required to be filed. It contains the details of outward supplies, inward supplies, ITC claimed, and the tax liability and tax paid.
- GSTR-4- It is a quarterly return, which is filed by the composite scheme dealer. The due date of GSTR-4 is the 18th of every month following the quarter.
- GSTR-5- This is a monthly return, which is filed by the non-resident foreign taxpayers, who are registered under GST. Such a return is required to be filed every month by the 20th day of each month. GSTR-5 will contain the following details-
- Inward supplies
- Outward supplies
- Tax payable and tax paid
- Interest & penalty (if any)
- Any other amount payable under GST.
- GSTR-5A- This is a summary return that will provide the details of outward supplies and tax which is payable by the online information and database access or retrieval services provider.
- GSTR-6- It is a monthly return that is filed by the input service distributor (ISD). GSTR-6 will contain the details of ITC received and distributed by the ISD. It is required to be filed till the 13th day of every month.
- GSTR-7- It is a monthly return and filed by the person who is required to deduct TDS under GST. The due date of GSTR-7 is the 10th day of every month.
- GSTR-8- It is a monthly return and filed by the e-commerce operator, who is required to collect TCS under GST. It is required to be filed by the 10th day of every month.
- GSTR-9- It is an annual return and it will contain all the details of inward supplies, outward supplies which are made by the taxpayer during the financial year. It is consolidated of all monthly or quarterly returns. The due date of GSTR-9 is 31st December of the year following the relevant financial year.
- GSTR-9A- This return is the composition of all the quarterly returns which are filed by the composite scheme dealer.
- GSTR-9C- It is a reconciliation statement that is required to be filed by all the person who are registered under GST and whose amount of turnover is more than 2crore in a financial year.
- GSTR-10- It is required to be filed by a taxpayer whose registration has been canceled or surrendered under GST. It is also known as a final return and is required to be filed within 3 months from the date of cancellation or cancellation order, whichever is earlier.
- GSTR-11- This return is required to be filed by the person who has been issued a UIN (Unique Identity Number) to get a refund under GST.
PAYMENT OF GST
The payment of the GST is made every month. The payment of GST can be made online as well as offline. When the payment of GST has been made, a challan of GST must be generated.
INTEREST ON DELAYED PAYMENT OF TAX
When there is any delay in the payment of tax, the interest is required to be paid by the taxpayer. The rate of the interest will be determined or notified by the Government but it should not be more than 18%.
The interest is paid for the period from the date following the due date of payment to the actual date of payment.
E WAY BILL
The E Way Bill is a document which is issued by a carrier for giving the details relating to the shipment of a consignment of goods and it also includes the name of the consignor, name of consignee, destination, point of origin, and route. It is an electronic document that is generated on the GST portal before the commencement of the movement of goods.