GST stands for Goods and Services Tax that is levied by the Government of India. Since its inception, it has been surrounded by a lot of buzz. If you are also curious to know about it then here are a few FAQs that may help you get all the answers you need.
GST is an indirect tax that is levied uniformly across the whole nation. It aims to help India perceived as a unified common market. It is levied on the supply of services and goods. When the GST is levied on one stage of the supply chain, its credit is available in the next stage of value addition. This means GST is a tax only on value addition done at each stage. As a final consumer, you need to pay only the GST levied by the last dealer in the supply chain.
GST is beneficial for everyone, be it the consumer, the businesses, the industry, and the central and state governments. To know the key benefits and features of this tax, simply click here.
At the central level, service tax, central excise duty, additional excise duty, the special additional duty of customs and additional customs duty are subsumed.
At the State level, state value added tax or sales tax, octroi & entry tax, entertainment tax, central sales tax, luxury tax, purchase tax and taxes on lottery, betting and gambling are subsumed.
The federal structure of the country demands that there should be two components or GST in India, State GST, and Central GST. The state collects the SGST and centre collects CGST. The input credit of CGST is available for discharging the CGST liability on output at every stage. The credit of SGST paid on inputs is allowed for paying SGST on output. Cross-utilization of credit is not permitted.
Yes, CGST and SGST are levied simultaneously on the supply of all goods and services (barring exempted goods and services or transactions that fall below the prescribed threshold limits). Both are levied on the same value or price.
Cross-utilization of CGST credit between goods and services is allowed. Cross-utilization of credit is also allowed in case of SGST. But cross-utilization of SGST and CGST is not allowed unless it is a case of inter-state supply of goods and services.
GST implementation is planned in such a manner that in cases of inter-state transactions of services and goods, the centre would collect IGST which stands for Integrated Goods and Services Tax. The amount of IGST roughly equals to CGST and SGST combined. An inter-state seller needs to pay IGST on the sale of goods to the central government. The seller also has the responsibility of adjusting credit of IGST, CGST and SGST, in this order only. The exporting state transfers the credit of SGST to the centre. The dealer who is importing the goods or services claims credit of IGST and discharges the output tax liability that includes SGST and CGST in his or her state. The centre transfers the credit of IGST to the importing state. All SGST on the final product is accrued to the consuming State.
To ensure smooth implementation of GST in India, the central and state governments have registered GSTN that stands for Goods and Services Tax Network. It is a not-for-profit and a non-government company that is responsible for providing shared IT services and infrastructure to state governments and central government, taxpayers as well as other stakeholders. The key goal of GSTN is to ensure that taxpayers get access to a standard and uniform interface while the Central, UT and State governments get shared services and IT infrastructure.
GSTN is also developing an IT infrastructure that includes a common GST portal to offer ease of registration, returns, and payments to all taxpayers. It also aims to offer backend IT modules for several states that will include registrations, processing or returns, assessments, audits, appeals, etc. The RBI, banks, accounting authorities and the states are also updating their IT infrastructure to ensure smooth administration of GST. When that happens, there would be no need to file the returns manually, taxes will be paid online, mis-matched returns would be generated automatically, and the need for manual interventions will also reduce. Almost all returns will be self-assessed.
IGST is levied on all imports coming into Indian territory. It is collected along with the Customs tax. GST compensation cess is levied on demerit and luxury goods as per Goods and Services Tax (Compensation to States) Cess Act, 2017.
The registration process and GST rules are quite easy to follow once you know what to do. To know the registration procedures under GST, simply click here.
The process of filing a return under GST is as simple as the registration process. To know how it’s done, simply click here.
The key features are mentioned right here.
- Electronic Payment Process- Paper is not generated at any stage.
- Easy Payment Process – Payments can be made through Credit/Debit Card, Online Banking, RTGS/NEFT and even cash or cheque at the bank.
- One-point interface for registration of Challan- GSTN.
- Using single payment instrument and single challan
- Common challan form that has auto-population features
- Common accounting codes and set of authorized banks
When wishing to know what is goods and sales tax, you must know the GST slabs list and GST rates. To get an idea of these rates, simply click here.