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Demystifying the Basics of GST Bill in India

GST (Goods and Service Tax) is an indirect tax introduced in India from first July 2017. It is a consumption-based tax imposed on the production, supply, and utilization of goods and services. On the other hand, GST can be characterized as a destination-based tax where the tax is gathered on where a definitive utilization is done, regardless of the journey of the goods!! At each phase of supply, credit for, the taxes effectively paid on purchases is permitted. What’s more, the last payout happens from the pocket of the customer of goods or services or both. There are differential rates recommended by the Central Board of Indirect Tax and Customs (CBIC). There is additionally a GST council set up to make and actualize the bylaws. Here is a portion of the key changes which GST has brought to the old taxes framework:

i. Abolishing the Cascading effect that is the tax on tax.

ii. Introduction to the supply concept and expelling the difference between goods and services.

iii. TDS and TCS presented in the indirect taxes

iv. Single window system

v. Relaxation from different indirect taxes

vi. Increase in transparency, etc.

In this article we will understand the basics of GST Bill in India such as the framework of GST, indirect taxes subsumed, and so forth:

What is the date from which GST came into existence in India?

The Goods and Services Tax (GST) in India from the 1st of July 2017. In spite of the fact that the same route was laid back in 2004 by the Kelkar Task Force. From that point forward after various conversations, endorsements, and discussions GST effectively implemented in the year 2017 as one of the greatest indirect taxation reforms seen by the Indian economy.  

What is the meaning of “Goods” under GST?

The meaning of goods has been given under section 2(52) of the CGST Act 2017. Goods in GST imply each sort of property that is movable like a pen, vehicle, food, animal, and so on. It likewise incorporates actionable claims and harvesting or growing crops, despite the fact that these things are not ordinarily interpreted as mobile and are appended to earth. The explanation behind the equivalent being, these things can be sold independently or sold under a joined contact with land. Be that as it may, goods in GST does exclude cash and securities. 

What is the meaning of “Services” under GST?

The meaning of administration has been given under section 2(102) of the CGST Act 2017. Services under Goods and Service Tax implies anything which isn’t goods, securities, or cash. Howsoever, it includes money conversions by the money exchanges or authorized dealers. 

What is the structure of GST in India?

In India, we have the federal system of government, which implies we have ministers at both central and state levels. A similar modular has been adopted under GST. The legislature has embraced GST in its Dual model. Because of which both Center and State government will collect GST at the same time. The implemented GST structure is ordered under four heads, to be specific:

(i) IGST or Integrated Goods and Service Tax is a type of tax that is collected by the central government on the inter-state supply. For instance: Sale of Good between Delhi and Madhya Pradesh.

(ii) CGST or Central Goods and Service Tax is a type of tax that is collected by the central government on the intra-state supply. For instance: Sale of good with in the state border of Uttar Pradesh.

(iii) SGST or State Goods and Service Tax is the is a type of tax that is collected by the state government on the intra-state supply. For instance: Sale of good with in the state border of Maharashtra.

(iv) UTGST or Union Territory Goods and Service Tax is a type of tax that is collected by the government of Union Territories on the intra-state supply. For instance: Sale of good with in the state border of Delhi.

A major useful tax change brought by GST is that it stretches out to the entire of India including the State of Jammu and Kashmir, not at all like the Service Tax Act 1994. 

What are the GST Tax Rates in India?

In spite of the fact that GST was out looked as One Nation, One Tax, and One Rate however the latter part couldn’t be effectively executed. Various explanations added to a similar, for example, monetary inconsistencies in India, individuals’ disposition to acknowledge change, and so forth. Subsequently, Goods and Service Tax was presented in India with various tax rates. The GST Tax Rates for goods are-

1%, 5%, 12%, 18% and 28%

Additionally, CESS has likewise been executed for certain classes. 

For Services the recommended GST Tax Rates are-

5%, 12%, 18% and 28%.

The rates have continued changing since the implementation of GST and should develop progressively over time. More harmonization in rates can be seen in the following financial year. 

Who is required to register under GST?

For registration under Goods and Service Tax in India, the government has prescribed an exhaustive list. Which can be better understood in these two parts

Registration on the Turnover basis:

i. Suppliers with an annual aggregate turnover exceeding Rs 40 Lakhs and Rs 20 Lakhs for the other North-Eastern States except J & K. 

Note: Turnover shall be total of all sales whether intrastate, interstate, export, exempted or NIL rated, etc.

ii. Casual Taxable Person dealing in handicrafts shall get registration if the aggregate turnover exceeds 20 lakhs INR.

iii. e-Commerce Operator in case if the turnover exceeds 20 Lakhs INR.

Mandatory Registration

i. The person paying tax based on the reverse charge mechanism (RCM).

ii. Casual Taxable Person (CTP)

iii. NRTP (Non-Resident Taxable Person)

iv. Notified E-commerce operator

v. ISD (Input Service Distributor)

vi. TDS deductor

vii. TCS Collector

viii. A person giving OIDAR (Online Information and Database Access or Retrieval) services from outside India to a non-registered taxable person in India.

ix. A person who was already registered under the old indirect tax regime.