The New Era GST Begins in India on 1st July 2017. GST or Goods and Services Tax is currently the poster boy for the Indian Economy.Internationally, GST was first introduced in France and now more than 160 countries have introduced it. Most countries, depending on their own socio-economic formation, have introduced National level GST or Dual GST. Malaysia is a recent entrant to have introduced GST on April 1, 2015. In India, the GST is expected to come into effect by July 2017.
“Goods and services tax” means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption.
GST – The general principle
The general principle regarding GST is that it is a tax on supply. In other words, the person who is making the “taxable supply” (the vendor) is the person who has to pay the GST. The purchaser pays the GST when the seller’s contract with the purchaser requires the purchaser to pay, or to reimburse the seller, for the GST the seller is required to pay.
Features of GST :
- Single uniform indirect tax to REPLACE Central and State indirect taxes such as State VAT, CST(Central sales tax) , Central Excise Duty, Service Tax, Entry Tax, Luxury Taxes, Octroi etc. and others
- PAN Based Registration
- Registration only if turnover more than Rs. 20 lac (Rs. 10 lacs for
special category States except J&K)
- Option of Voluntary Registration
- Tax structure with tax slabs of 0%, 3%, 5%, 12%, 18%, and 28% for various different categories of products and services.
- Cess over the peak rate of 28% on specified luxury & sin goods such as pan masala, cigarettes and sport utility vehicles to compensate the States for loss of revenue during the initial years.
- Two components of GST –
⇒ Central GST (CGST) & State GST (SGST) –On Transactions within the same state levied on the value of goods and services.
⇒ IGST(Integrated Goods & Service Tax)- In the case of inter-State transactions i.e supply of Goods or Services outside the State. The IGST would be equal to CGST plus SGST.
- Exemption from registration
⇒ to suppliers of services making inter-State supply upto Rs. 20 lacs
⇒ to suppliers providing services through an e-commerce platform provided
their aggregate turnover does not exceed Rs. 20 lacs
- All taxpayers to file monthly GSTR-3B & pay tax on monthly basis
- Taxpayers with turnover upto Rs. 1.5 Cr to file quarterly GSTR – 1 returns
– Monthly for other taxpayers
- Tax payment can be made by internet banking, NEFT / RTGS, Debit / credit card
and over the counter