Goods and Services Tax (GST) is a comprehensive indirect tax levied at the prescribed rate on every supply, i.e., sale of goods and/or services except on. petroleum and alcohol for human consumption. Supply of goods means sale of goods whereas supply of services means rendering of services.
GST IN HINDI
गुड्स एंड सर्विसेज टैक्स (जीएसटी) एक व्यापक अप्रत्यक्ष कर है जो प्रत्येक आपूर्ति पर निर्धारित दर पर लगाया जाता है, अर्थात, वस्तुओं की बिक्री और / या सेवाओं को छोड़कर। मानव उपभोग के लिए पेट्रोलियम और शराब। माल की आपूर्ति का अर्थ है माल की बिक्री जबकि सेवाओं की आपूर्ति का अर्थ है सेवाओं का प्रतिपादन।
CLASSIFICATION OF GOODS AND SERVICES TAX (GST).
GST is levied under following three categories:
1. Central GST (CGST)
CGST is levied on intra-state supply of goods and services or both along with SGST . In case of intra-state supply both CGST And SGST is levied at half of the prescribed rate of tax. For example if the rate of GST is 18% , 9% will be levied as CGST and 9% as SGST.
2. State GST or Union Territory GST
SGST is also levied on intra-state supply of goods and services or both along with CGST. In case of intra-state supply both SGST and CGST is levied at half of the prescribed rate of tax. For example if rate of GST is 18% , 9%will be levied as CGST and 9% as SGST.
3. Integrated GST (IGST)
IGST is levied on intra-state supply of goods and/ or services, import of good and /or services into India and export of goods and services from India.
Which GST to be Levied on the Supply?
Having discussed that GST are of three types, i.e., Central GST (CGST), State and Integrated GST (IGST), we need to know which type of GST will supply of goods and/or services. It is discussed below:
- CGST and SGST is levied on intra-state (within the state) supply of Goods and/or Whether a supply (sale) of goods and/or services is intra-state depends on prom where the supply is made and the place to which supply is made. For example if both seller and purchaser of goods and/or services are located within the (say Tamil Nadu), both CGST and SGST will be levied.
- IGST is levied on inter-state supply (sale) of Goods and/or Services. Whether (sale) is inter-state also depends on the place from where the supply and the place to which supply is made. For example, if the seller is 1 Delhi and the purchaser is located in Kolkata, IGST will be levied.
REVERSE CHARGE
Reverse Charge means that GST is not Charged by the person sell, the goals and services or both but is paid by the person purchasing the goods and/or services Or Certain purchases of goods and services are placed under Reverse Charge. Thus, the seller of goods and/or services placed under reverse charge will not charge; GST but instead the purchaser of goods and/or services will deposit GST in Government Account and claim it as Input GST, Goods and/or services falling under Reverse Charge Mechanism are: Payment of fee to Lawyers; Payment for Use of Copyright; Purchase of Goods and/or Services by Registered Person fro Unregistered Person; Transport of Goods; Insurance Commission; and Sponsorship.
Gst registration process
In simple words, now almost all the goods and services will have a new tax and it will be -GST Also, whatever tax used before, they will no longer be used. Now the question arises that when tax is to be given in both situations then what is new in it and what will the people of this country benefit from? The advantage will be because since passing the GST bill, now the country will be taxed at the same rate and since it will look at the whole country, there will be no other tax besides this.
GST [Ammendment] Bill, which is officially known as [Officially] The Constitution [122nd Amendment] GST Bill, 2014. This is the biggest improvement in the tax structure of the country after independence, which will benefit the common man. This bill was passed by the Rajya Sabha on August 3, 2016, which was passed by the Lok Sabha in May, 2015. Read more about the Rajya Sabha elections here.
Under the GST Bill, the proposal to impose National Value Added Tax has been passed from June 2016. The GST bill is a kind of indirect tax, which can be used by manufacturers, traders and commodities of the entire country and Consumers will look at services. This tax will be removed by other taxes, which have been imposed by the Central and State Governments. Purchase of goods and services - In this tax that takes place at every step of the sale, the 'Input Tax Credit Method' will be found. Under this method, businesses registered under the goods and services tax (GST Bill) will be able to make a tax credit claim, who paid this tax during their normal business activities. Taxable goods and services have not been defined separately from each other and at the same time the rate of tax has been kept the same, which will be seen on full supply chain through which the item or service will reach the final consumer. The same authority will be responsible for imposing taxes on both goods and services. With the zero rate [zero rated] on the export [import], the tax on goods will be taxed on domestic taxes. Material and service tax (GST Bill) is a major step towards change in indirect taxes in India. . Combining or eliminating various central taxes and state taxes, and replacing them with a new tax, double taxation and Cascading effect will end and the benefit of the national market will be realized. If seen from the perspective of a common man, then the amount of all taxes paid by him will decrease, whose burden he carries today about 25% - 30%.
Salient features of Goods & Service Tax Bill
When the GST bill is implemented in India, it will be levied with zero rates or at very low prices for some time. In the initial stages, the revenue of the states will be kept away from the effect of GST, but the rates of GST will be applied on petroleum and petroleum products. According to Minister Shri Jayant Sinha: In this situation, the damage to the states for 5 years [or less than 5 years], in respect of their income, will be reimbursed by the Center to the states.
Under this bill, there will be two parts of the GST Bill, whose names and brief description are as follows: -
Central GST - State-imposed
Tax Rates of both GSTs What will happen, it will be determined, which will be decided by keeping their income [acceptance] and acceptance [Acceptability] in mind. This dual model [Dual GST Model] will be implemented in different states.
As well as the imposition of rule (Tax provisional) , taxable income, taxable person (Assessment) and Definitions [Definition of Tax] in all provinces of the same will be. Central GST and state GST will be levied on all services and goods. But it will not include only those goods and services under which GST Bill was excluded from the area or who are classified as tax-free [Exempt] The GST Bill, or if at practice [Transaction] to determine the extent [Threshold Limit] if the price, they will not be included in the GST bill. Central GST and State GST payment center will be different - different in the state of accounts [Accounts]. Here it must be decided that these accounts be aware of handling major [Heads] will in which income, which account. Since both will pay the same taxes separately so can be use as Central GST input tax filled billed as tax credits, but its use will be only the payment of Central GST. Input is not it possible to use the mutual payment of central and provincial GST tax credit. But under IGST model Antrprantiy [Inter - state transaction] practice be possible to do so. Center and repayment of the credit collected by the province [Refund] shall be Avoid [Avoid], but if the behavior is that the purchase of exports [exports] are related, capital goods, input tax rate, output tax over rate be, etc. will be repaid in situations, which should be completed within the stipulated time are required. Way to the central and provincial GST and the process will be the same and the details of this process will be under the central and provincial GST. Since VAT think every state different rates, so it will be finished and will be charged storage rates in all states. If this loss of income states offset will be central. As well as double taxation [Double Taxation] and small merchants and was made into a threshold limit for the industries in which service and object have been earmarked for both. GST its ceiling in terms of gross annual turnover Kmpunding [compounding] under the bill [Upper Ceiling] and floor tax rate will be taken into account. Gross 50 lakh of annual turnover and will be cut-off at 0.5% floor tax rate. Under this scheme are given the facility to be registered in the GST to dealers with turnover of less than Kmpunding [compounding] cut off. All under the Central GST and State GST taxpayers will fill occasional [Periodical] returns, these returns the format will be the same. Each donor PAN linked taxpayer identification number of the Jaga, which will be 13/15 Digit. It will be connected as per the Income Tax [Income tax], so that the exchange of information between the two departments - service and abide by the rules [Compliance]. Assessment taking into account the convenience of taxpayers [Tax assessment) scrutiny and adults etc. Will have the same authority ,that the tax will collected.
CHARACTERISTICS OF GOODS AND SERVICES TAX (GST)
1. GST is a Comprehensive Indirect Tax: GST is a comprehensive indirect tax which replaced all indirect taxes that were earlier levied except Custom Duty, taxes on alcohol for human consumption, taxes on petroleum and taxes levied by Local Bodies.
2. GST is a Value Added Tax: GST is a Value Added Tax because GST Paid (termed as Input GST) is set off against GST Collected (termed as Output GST). As a result, GST is levied on the incremental value of goods and/or services supplied (sold). For example, goods purchased for 10,000 paying IGST @ 18%, i.e, 1,800 are sold for 15,000 charging IGST @ 18%, i.e, 2,700. 1,800 paid at the time of purchase is set off against 2,700 charged at the time of sale and balance Z 900 is payable in the Government Account. In effect, GST is levied on differential amount of sale and purchase, i.e, 5,000.
3. GST Paid is not Cost: GST Paid (Input GST) on purchases of goods and/or services is not a cost for the purchaser (except in some cases discussed later) but is an asset since it can be set off against GST Collected on sale of goods and/or services. Similarly, GST Collected (Output GST) on sale of goods and/or services is not an income of the seller but is a liability and is payable in the Government account after adjusting Input GST in the prescribed order.
4. Uniform GST Rate on Goods and Services Across all States: Every state and Union Territories have their own Goods and Services Tax Acts. However, GST is levied on goods and/or services supplied (sold) under each classification at the same rate,
Benefits GST Bill Goods And Service Tax
- Tax evasion will be reduced due to the introduction of GST.
- Given below the GST, the states will get more revenue.
- Small businesses will also get support from the GST and the regional Bias will also end.
All taxpayers will now have their nomination under the GST database within this month. Therefore, all taxpayers have to enroll in it.
A tax payer can be registered from any of the following:
- Central Excise
- Service Taxes
- Taxes Sales Tax or VAT Entry Taxation
- Taxation TAX General TAXGST
- How to enroll (GST registration process)
- All the necessary steps are being discussed below, with the help of GST Your enrollment can be made under this.
- It is an online procedure, so no need for hard copy of any document Will. All work will be done on the formal web portal created by the government. Its formal web portal is https://www.gst.gov.in/. First of all, you have to create your User ID by going to this web portal, which allows the taxpayer to enter the web site.
- To create a user ID, the tax payer has to choose his provincial ID and password. This provincial ID is given by the government on behalf of the tax institutions. Therefore, it is very necessary to talk to your ward officer in this matter.
- This requires some very important documents, which are being described below.
- Provisional ID and password received from the ward officer.
- The tax payer's own email ID
- Mobile Number
- Bank Account Number
- Constitutional Evidence of IFCs Code Trading.
- When Partnership is trading, Maximum 1 MB of Partnership Deed The PDF and JPEG .
- the first page of the passbook of bank JPEG up to 100 KB of partners including the account number, the branch, the account holder's name and address, certain transactions related details etc.
- PDF or JPEG image format. (Maximum size of 1 MB) After all these deposits are deposited, the applicant receives a 'one-digit number'. The customer has to handle it for further formalities.
OBJECTIVES OF GOODS AND SERVICES TAX (GST)
- Developing Common National Market: GST is levied at same rate on similar goods and services in all the states and Union Territories. For example Mobile phone sold across India are levied GST @18%. It sets a ground for developing common national market.
- Ease of Doing Business: In the pre-GST period, there were many indirect taxes administered by different authorities. As a result, a business had to register itself separately under each such Act and also had to comply with each such indirect tax. For example, Excise Duty, Sales Tax and Service Tax etc. were separately administered. The introduction of GST has eased the going of business as it will be registered and administered only under one indirect tax, i.e, GST. Hence, ease of doing business.
- No Cascading Effect of GST: GST Paid (Input GST) on purchases of goods and/or services is set off against GST Collected on Sale of goods and/or services. As a result, GST is levied on the difference between sale value and purchase value. In effect, GST does not have cascading effect.
- To Simplify Indirect Tax Regime by having one Tax and Fewer Rates of Taxes: GST has replaced many indirect taxes (Excise Duty, Sales Tax, Service Tax etc.). The earlier indirect tax regime had been complex both for the Government and business. Since, GST has replaced almost all indirect taxes, it simplifies the application and administration of indirect taxes.
- Better Tax Management: GST, being administered through computer system besides it being a single indirect tax, has resulted in better tax management as tax evasion is controlled besides timely collection of tax. For example, credit for Input GST is granted if the tax payer collecting GST has paid the tax in Government Account.
- Goods becoming cheaper: Since GST Paid (Input GST) is set off against GST Collected (Output GST), GST does not have cascading effect as against earlier years when there was no set off of indirect taxes (e.g. Excise Duty) paid against indirect taxes collected. As a result, goods and services shall become cheaper.
- Attracting Foreign Investors: Investments from outside India were not high because of multiple indirect taxes. Introduction of GST and removal of multiple indirect taxes shall increase Foreign Direct Investment (FDI) in India.
- Uplifting GDP: The structure of GST is such that it is levied at every stage of sale of goods and/or services. It means businesses will be largely through recorded transactions resulting in increase in tax collection by the Government due to recorded sales resulting in uplifting GDP. Every state Union Territory has its own Central GST Act and State GST Act. For Li will have its own Central GST (CGST) Act and Delhi GST (DGST) Act. mil Nadu will have Central GST (CGST) Act and Tamil Nadu GST Central Government has Integrated GST Act (IGST) but for the purpose dear understanding, GST is discussed as CGST, SGST and IGST instead GST for each state separately.
CATEGORISING GST FOR ACCOUNTING PURPOSE
GST Paid (Input GST) individually (Input CGST, SGST and IGST) is set off against GST Collected (Output GST) individually (Output COST, SGST and IGST) m the prescribed order. Therefore, it is necessary that separate accounts for Input GST and Output GST for each category of GST, i.e., CGST, SGST and IGST be, maintained. It will enable the taxpayer to follow prescribed order of setting off , the each category of GST. The GST Accounts maintained are:
- Input COST: Input CGST is the CGST Paid on intra-stat( purchase (supply) of Goods and/or Services or both. Input CGST can be set off against COST Collected, i.e., Output CGST and MOT Collected (i.e., Output IGST) in that order. Besides the above, taxpayer may pay CGST in Government Account. It is also termed as Input CGST.
- Input SGST: Input SGST is the SGST Paid on intra-state purchase (supply/ of Goods and/or Services or both. Input SGST can be set off against GST Collected (i.e., Output SGST) and IGST Collected (i.e., Output IGST) in that order. Besides the above, taxpayer may pay SGST in Government Account. It is also termed as Input SGST.
REMEMBER
On intra-state supply of goods and/or services or both, both CGST and SGST are levied at 50% of the specified rate. For example, if specified rate is 18%, both CGST and SGST will be levied @ 9% each.
- Input IGST: Input IGST is the IGST Paid on inter-state purchase (supply) of Goods and/or Services or both and it can be set off against MOT Collected Output IGST), CGST Collected (i.e., Output COST) and SOOT Collected (i.e., Output SGST) in that order. IGST is also levied on goods and/or services imported from outside the count,. Besides the above, taxpayer may pay IGST IN Government Account. It is also termed as Input IGST.
- output CGS, Output COST is the CGST Collected on antra-state sale (supply) of Goods and/or Services or both along with SGST
- Output SGST: Output SGST is the SGST Collected on antra-state sale (supply) of Goods and/or Services or both along with CGST.
- Output IGST: Output IGST is the IGST Collected on inter-state sale (supply) of Goods and/or Services or both. In the case of inter-state sale, only IGST is levied.
ACCOUNTING OFGST :
- GST Paid (Input GST): GST Paid on purchase of goods and/or services or both is set of against GST Collected (i.e., Output GST) hence, till it is set off it is an asset. In cases. where GST Paid (Input GS, is not allowed to be set off against Output GST it is accounted as cost for the reason that credit for Input GST cannot be claimed. GST Paid (input GS, is accordingly debited to Input GST. i.e. Input CGST Account. Input SGST Account or Input 1GST Account.
- GST Collected (Output GST); GST Collected on sale of goods and/or services or both is payable to Government after setting it off against GST Paid (Input GST). Hence. it is a liability and is accordingly credited to Output GST, Output CGST Account. Output SGST Account or Output IGST Account.
