Do you want to have everything documented? The one way to get that done is through taxes. Paying off your taxes, whether it is salary, homes, jewelry, or anything for that matter. So, wouldn’t you also want to know about GST and also about GST rules and regulations? GST applies almost everywhere you go, and it is only fair to move forward when you know everything about it – so why not get started right here?
First Things First – What is GST?
The Products and Services Tax (GST) is an indirect tax levied on goods and services sold inside India. It is a multi-stage, destination-based tax that is extensive:
With the exception of a few state taxes, it is comprehensive; multi-stage since the GST is assessed at several phases of the manufacturing process but is to be reimbursed to all parties at different points of production rather than the final consumer because it is a destination-based charge; The tax had come into effect on July 1, 2017, with the passage of the 101st amendment to the Indian Constitution by the Government of India. GST eliminated the different taxes levied by the federal and state governments.
An Overview of GST
GST is expected to replace a slew of indirect taxes, including customs duty, VAT, CST, Service Tax, Excise, and Entertainment Tax, with a single tax known as the Goods and Services Tax.
- In general, there will be two types of GST in India.
- At both the intra-state and inter-state levels (when goods transit within a state) (when goods travel between states).
- Two forms of GST will be levied at the intra-state level. CGST and SGST.
- IGST will be levied at the interstate level.
- Imports are treated as interstate supply.
- Exports will be taxed at zero percent.
- SEZ supplies will be zero-rated.
Rules of GST
For starters, the GST Rules and regulations are where we need to get started:
1) Application
GST applies in the following cases:
- To anyone who supplies goods and/or services worth more than Rs 20 lakh in a fiscal year. (Some special category states have a limit of Rs 10 lakh.) Registration is required for these. Furthermore, when the turnover surpasses Rs 20 lakh, GST must be paid (Rs. 10 lakh for special category states).
- Any individual who makes an interstate taxable supply of goods or services
- Every e-commerce business.
- A person who gives online database access or retrieval services to a person in India and who is not a registered taxable person.
- Reverse Charge requires a person to pay tax.
- A person who supplies products on behalf of another taxable person (e.g., Agent)
- Every person sells goods and/or services through an e-commerce operator, excluding branded services.
- Aggregators who provide services under their own brand.
- Casual Taxable Individual
- Non-Resident Taxable Individual
- Individual who is required to deduct/collect tax (TDS/TCS).
- Input Service Provider.
- Agriculturists are exempt from GST.
- GST does not apply to anyone who is solely involved in the business of supplying products and/or services that are not taxable or are completely exempt from tax under this Act.
2) Kinds
The different types of GST and applications are:
- State Goods and Services Tax (SGST): Similar to CGST, SGST is levied on the sale of goods or services within the state.
- Central Goods and Services Tax is levied on intra-state supplies of goods and services.
- The Integrated Goods and Services Tax is levied on interstate sales of goods and services.
- Union Territory Goods and Services Tax: It is levied on supply of services and goods in any of the country’s Union Territories, including the Andaman and Nicobar, Lakshadweep, Dadra and Chandigarh, Nagar Haveli, Daman, and Diu. UTGST is levied in addition to CGST.
3) Law
The laws that surround GST are:
- Previously – the Centre and the States had collected tax separately. The tax regimes varied depending on the state.
- Even when an import tax was levied on one person, the burden was placed on another. In the event of direct taxation, the taxpayer is required to pay the tax.
- Prior to the implementation of this tax system, India had both direct and indirect taxes.
4) Registrations
Any company that qualifies for GST needs to register with the Government of India’s Goods and services website. The registered entities would be assigned a unique number known as the GSTIN. Registration is required for all service providers, purchasers, and sellers. A business that has a total income of Rs. 20 lakhs or more than that in a fiscal year must register for GST. Processing time is 2-6 working days.
5) GST Certificate
A GST Certificate is a legal document that will be issued by the appropriate authorities to a business that has registered for the GST system. This system requires organizations with a yearly revenue of at least Rs. 20 lakh, as well as some unique businesses, to register. The GST registration certificate is issued using Form GST REG-06. If you are a registered taxpayer under the system, you can download the GST Certificate from the official GST Portal.
The certificate is not physically distributed. It is only available in digital form. The GST Certificate contains the GSTIN, Legal Name, Business Constitution, Address, Date of Liability, Validity Period, Types of Registration, Particulars of Approving Authority, Signature, Specifications of the Approving GST Officer, and Date.
6) GST Rates
The GST Council has given different GST rates to various commodities and services. While certain products are exempt from GST, others are subject to 5%, 12%, 18%, or 28% GST. Since the new tax regime was adopted in July 2017, the GST rates for products and services have been altered several times.
7) GST Returns
A GST Returns a document that contains information about a taxpayer’s income that must be filed with the authorities. This data is used to calculate the taxpayer’s tax liability. Registered dealers need to file GST returns detailing their purchases, sales, input tax credit, and output GST under the Goods and Services Tax. Businesses must file two monthly filings as well as one annual return.
Conclusion
GST holds a high place when it comes to the platter of taxes – that is why it is quite crucial to understand every bit of it and move forward with it. Now that you started off with this article to know the rules of regulations GST, the learning journey is just getting started.