The compliances for Goods and Services Tax (GST) are filled with GST abbreviations and terms that make up for its nomenclature. Usually these terms are used without their explanations. Thus, to completely comply with GST, it becomes important to have adequate knowledge of GST nomenclature.
The most commonly used abbreviation for GST are given below with their full forms:
• GSTN: Goods and Services Tax Network
• GSTR: Goods and Services Tax Return
• GST REG: GST Registration
• GSTIN: Goods and Services Tax Identification Number
• EBN: E-Way Bill Number
• CGST: Central Goods and Services Tax
• SGST: State Goods and Services Tax
• UTGST: Union Territory Goods and Services Tax
• IGST: Integrated Goods and Services Tax
• GSP: GST Suvidha Provider
• ASP: Application Service Provider
• TDS: Tax Deducted at Source
• TCS: Tax Collected at Source
• ITC: Input tax Credit
• ITC Ledger: Input Tax Credit Ledger
• ISD: Input Service Distributor
• UIN: Unique Identification Number
• CIN: Challan Identification Number
• CPIN: Common Port Identification Number
• RCM: Reverse Charge Mechanism
• NIU: National Information Utility
• HSN Code: Harmonized System of Nomenclature Code
• DSC: Digital Signature Code
• ARN: Application Reference Number
• B2B: Business to Business
• B2C: Business to Customer
• B2G: Business to Government
• CBT: Computer Based Training
• CBS: Core Banking System
• CENVAT: Central Value Added Tax
• E-FPB Full Form: Electronic Focal Point Branch
• Form RFP: Refund Form
• FC: Facility Centre
There are certain abbreviations which mean more than their full-forms. It becomes important to have a beginner’s knowledge of these terms. Most common ones are given below with GST RC meaning:
Reverse Charge is a mechanism in which, instead of the supplier, the recipient is the one liable to pay the tax on supply of taxable goods and services.
Under CGST/SGST Act Section 2(61), an ISD is an office which receives tax invoices after receipt of input services. It then proportionately distributes the credit to the supplier units under the same PAN.
Under IGST Act, IGST is a tax which is levied on supply of goods and services across state borders. It is only liable for interstate supply of goods and services taxable under GST.
ITC Ledger is an online statement which reflects the ITC as self-assessed in monthly returns. This credit can only be used for adjustment of tax liability, excluding penalty, interest, fee, etc.
CPIN is a 14-digit unique identification number given at the time of Challan generation. It remains valid for 15 days after the challan is generated.
E-FPB is a branch of a bank authorized to collect GST. Every such bank will appoint one of its branches as an E-FPB for transactions across India. This E-FPB will then open accounts under every major head for all state governments. A total of 38 accounts – with one each for CGST, IGST, and SGST of every state – will be required to be opened.Any amount relating to GST which is received by such E-FPB will be credited to respective account held by it. RBI acts as the E-FPB for transactions related to NEFT/RTGS.
Under Section 51, if the value of supply under any contractual payments, made by Government authorities (or other notified entities) to suppliers, exceeds Rs. 2.5 lakhs, the concerned authority will enjoy the provision of deducting 2% of the payment made and remitting it to the appropriate GST account. These contracts will allow the authority to deduct 1% of total payment under CGST and SGST each, and 2% under IGST.
ITC includes all taxes charged on supply of goods and services to a registered person. These taxes include CGST, SGST/UTGST, IGST, the taxes paid under RCM, andthe integrated tax on import of goods. It excludes taxes paid under composition levy.
TCS is only applicable for E-Commerce Business Operators under CGST/SGST Act Section 52. An E-Commerce operator is liable to pay the tax and hence is allowed the provision to collect it from its customers at a rate not 1% more than the net value of taxable supplies. The operator is required to deposit this amount to the appropriate GST account which will be reflected as TCS in supplier’s electronic cash ledger.
Taxpayers are provided access to the GST portal through which they can successfully comply with the law. But, the difference is provision for different kinds of enterprises creates confusion among taxpayers and makes compliance a hectic task. Large enterprises may require automated systems to handle their tasks of return filing, sales recording, tax reconciliation, etc. in ways compliant with GST. This is what a GSP does. A GST Suvidha Provider (GSP) is a licensed firm which helps taxpayers in filing their returns easily and on-time without any hassle. It makes GST Compliance easier by doing the filing for people at proper rates. Businesses or individual taxpayers can select their GSPs which will do their work electronically, eliminating chances of any confusion.
GSTN is a non-profit and non-governmental company promoted by the central and state governments which provides IT infrastructure services to the government, stakeholders, and taxpayers. GSTN provides the common GST Portal to taxpayers with services like registration, filing returns, making payments, etc. It acts as an interface which bridges the gap between the government and its taxpayers.
There are certain common terms whose meaning is important to know so as to comply with GST norms. The most commonly used terms with their meanings are:
• Inter-state Supplies: Under IGST Act Section 7, a supply of goods or services which requires transportation beyond a state’s boundaries is known as interstate supply. This occurs when the origin and destination of the supply are in two different states. It also applies to imports and exports, or any supply which does not take place within the state (intrastate supply).
• E-Ledger: E-Ledgers are electronic ledgers which show statements of input tax credit and cash with respect to every registered taxpayer. Every taxpayer is also given an electronic tax liability ledger. Both E-Ledgers (cash and ITC) and an electronic tax liability ledger will automatically be opened and displayed on the taxpayer’s dashboard once they are registered on GSTN portal.
• Cash Ledger: A cash ledger reflects all cash deposits, TDS, and TCS made in a taxpayer’s account, in real time.Any payment related to GST can be made using the cash ledger.
• E-Commerce: E-Commerce or electronic commerce is the supply of goods and services (digital or physical) over an electronic or digitals platform.
• E-Commerce Operator: An e-commerce operator is the person who does the tasks of owning, managing, and operating digital or electronic facilities for purposes of e-commerce.
• Job Work: When a person (job worker) undertakes any treatment or process on goods which belong to another registered taxpayer (principal), it is called job work.It has been defined in this manner to ensure that the job work activity amounts to that of manufacture. Thus, GST regime proposed a new scheme for taxation related to job work.
• Inspection: CGST/SGST Act revealed a new provision to enable officers to inspect any business place or conveyance of taxpayers and suppliers, which extends to the owners and operators of warehouses. This provision is known as inspection, which allows officers to ensure that all businesses comply with GST, even when in transit.
• Refund: Under CGST/SGST Act Section 54, Refund is the return of funds under certain conditions, which include:
(i) Zero-rated supplies made without tax payment, or
(ii) Credit accumulation due to input tax rates being higher than output tax rates on supplies other than zero-rated or fully exempted supplies.
• Advance Ruling: Under CGST/SGST Act Section 95 and UTGST Act Section 12, and Advance Ruling is a decisiongiven by authorities or the Appellate Authority for any applicant regarding the specified questions under CGST/SGST Act Section 97(2) or 100(1) related to goods/services supply undertaken by an applicant or proposed to be so.
• Search: A Search made by the government is an action in which officers look foror examine any area, person, thing, etc. to bring out any concealed information, or find crime evidence. Making a search of anything requires proper permit from a valid authority of law.
• Reason to Believe: Reason to believe is an objective and contemplated determination built intelligentlyon a subject matter through proper knowledge of facts and reasoning which helps to arrive at a justified conclusion. It opposes a subjective consideration and has to be made by a reasonable and honest person through evaluation of relevant information and circumstances. Under Section 26 of IPC Act, 1860, “A person is said to have ‘reason to believe’ a thing if he has sufficient cause to believe that thing, but not otherwise”.
• Search Warrant: A search warrant is a written authority to search a place, person, thing, etc. It should clearly state a justified reason to conduct a search, and must be issued by an officer not below the rank of a Joint Commissioner. A search warrant contains these details:
• Seizure: When an officer takes possession of a property through a legal process, it is known as Seizure. It implies forced possession where the owner is unwilling to give away the property. Seizure usually happens when the owner has not complied with the law.
The terminology of GST Compliances mainly includes these terms and abbreviations. Knowledge of the nomenclature will help in understanding the GST law better and appropriately complying with it.