GST SERVICES IN INDIA

GST SERVICES IN INDIA- A New Tax System

Concept of GST

The concept of Goods and Services Tax (GST) was first implemented on 1st July 2017. "GST Services in India” is considered as one of the most praise worthy changes in the Indian taxation system. On 29th March 2017, the GST Act was passed in the Lok Sabha and it has been termed as a ‘Good and Simple Tax’. This indirect tax has replaced VAT, Service tax, Excise, Entry tax, Entertainment Tax and so on. Goods and Service Tax is imposed on the distribution of goods and services. In India, Goods & Services Tax is a widespread tax reform levied on every value addition. As a result, the tax will be levied at every end of sale. GST in India is applicable in three ways:

1. CGST - the Good or Service Tax collected by Central Government for an intra-state transaction.
2. SGST – the Good or Service Tax collected by State Government.
3. IGST - the Good or Service Tax collected by Central Government for an interstate.

What is the rate of GST?

The government fixed multiple rates through which Goods and Services Tax (GST) will be levied. These GST rates range from 0 percent to 28 percent. Furthermore, the GST Council had fixed a GST tax structure namely - 5%, 12%, 18% and 28%. This structure will impose lower rates for indispensable items. However, in the case of luxurious commodities, the high tax will be imposed along with an additional tax. In the case of Service Tax, the rate may start from 15% and increase up to 18%. The services taxed on train tickets will fall in the lower block. Essential items including food are taxed at zero rates as it will contribute to control inflation. Particularly luxurious, demerit and goods like tobacco and aerated drink will have to bear an extra tax for a duration five years in addition to 28 per cent Goods and Service Tax. This accumulated money from the extra tax creates an income pool for reimbursement of states if under any circumstances there is a loss of profits during the first five years of implementation of GST. However, this levy would be given up after five years as per as the Finance Minister Mr. Arun Jaitley.

Benefits of GST

1. No more Cascading Effect – Earlier tax was levied on every purchase and the final consumer. But now, this system of tax or the Cascading Effect of Taxes will be replaced by Goods and Services Tax. Thus, businesses won’t be charged with multiple taxes.
2. One Tax Return – GST does not demand multiple tax returns. As a result, a person engaged in more than one business is not required to file a separate return; rather a single GST return will successfully serve all the purposes.
3. More rapid transportation of goods – With no more implementation of entry tax, goods carrier do not need to wait at state borders for clearance. For all intents and purposes, goods will now be transported faster.
4. Digital acquiescence - GST regime aims for guaranteed digital support and minimum to no bureaucracy.

What do we mean by GST Registration?

Any taxable supply of goods or services by a business demands GST Registration, when its turnover exceeds the limit of Rs. 10 Lakh or Rs 20 Lakh. Thereafter, in such cases, businessmen and traders are liable to pay GST. Rs 10 lakh is levied as GST in the case of states under the special category or for states situated in north-eastern India. GST registration facilitates traders to achieve various benefits that are available under the GST establishment. Among them is input tax credit. In order to make sure that at each stage of the supply chain, the tax is imposed only on the value addition, the GST Act grants credit for the taxes rewarded at the previous stage. Moreover, with GST registration, multiple taxes are integrated under GST Act. More importantly, in order to avoid crossing point with tax authorities, timely registration of GST is the only wise decision.

Who are liable to register for GST?

Casual Registration : Casual registration is made by an individual who supplies goods or provides services on a temporary basis in a province where GST bill is applicable. However, the person does not have a fixed site to operate his business.

Composition Dealer : Small businesses or taxpayers with revenue that is less than Rs. 75 lakhs can resort to this registration. Here, manufacturers will be charged a tax at a minimal rate of 1% or 2.50% in the form of CGST and SGST. While a small business can choose Composition tax payment, whereas operators, interstate sellers, e-commerce traders are not allowed to register for this system.

Why is GSTIN important?

Goods and Services Tax Identification Number or GSTIN is required by every dealer registered under GST Act, as it is known as a unique tax identification number. Under GST Act, all taxpayers who are registered will be unified and henceforth will be administered and assigned registration under one authority. As a result, all businesses will be assigned a unique a GSTIN to register for GST. A state-wise PAN-based 15-digit Goods and Services Taxpayer Identification Number will be allotted to every taxpayer in the country. GSTIN is an integral component in GST Registration process. On receiving approval from the GST officer, a unique GSTIN is specified to the trader. There are two ways to register for GST registration can either be done via GST Online Portal or through GST Seva Kendra established by the Government of India.

Documents required for GST Registration

1. The PAN Card of the applicant is necessary to obtain GST certificate.
2. Identity and Address Proof of Promoters such as PAN, Passport Aadhar card or Voters ID etc must be submitted.
3. Incorporation certificate or partnership deed or registration certificate must be submitted to validate business registration.
4. Documents such as rental agreement as well as copies of electricity bill or latest property tax receipt along with other documents mentioned on the GST website need to be submitted by the applicant.
5. The first page of bank passbook needs to be scanned and a copy has to be submitted to provide transaction history of the applicant. Moreover, the address of the business must be submitted to the bank account mentioned in the application.
6. Digital Signature is mandatory while submission of GST application. Whereas, there is no requirement for digital signature in case of proprietorship.

Thus, it is important to have a clear picture about “GST Services in India” as an individual when fails to pay tax or makes inadequate payments, is liable to pay 10% of the tax amount. Moreover, this interest can reach up to 100% of the tax amount, when there is an instance of violation of tax rules. Accordingly, it is contemplative of every citizen to pay their taxes on time and in a proper manner.