GST OVERVIEW
A tax is levied on goods and services at all stages of the business. In short, there is a lump-sum tax on the three increments that occur at any stage. The tax burden will be borne by the final consumer.
(i) Taxes levied that are by the Govt.
- Central excise duty
- Central excise duty ( medical and toilet preparations)
- Additional Excise Duty (Goods of special importance)
- Additional Excise Duty (for textiles)
- Additional Duty of Customs (CVD)
- Service tax
- Special Additional Duty (SAD)
- Central surcharge and sites that are related to the supply of products and services.
(ii) State taxes that will be levied on goods and services tax.
- State VAT
- Government sales tax
- Luxury Tax
- All kinds of entry tax
- Tourist tax (excluding those charged by the State Government)
- Advertisement tax
- Purchase tax
- Tax levied on lottery and other gambling’s.
Central government, CGST and IGST impose and administer GST.
CGST and SGST impose the tax that are decided by the government and states. As per the recommendation of the GST Council, the rates are then being revealed.
GST will be imposed on tobacco. The central government can impose central excise duty on these items.
In GST goods are classified with a code HSN (Harmonized System of Nomenclature). The taxpayers who have their turnover more than 1.5crore and less than 5 crores have a two digit code and taxpayers who have their turnover more than 5 crores have a 4 digit code. While the taxpayers who have less than 1.5 crores don’t have to show their HSN code in the invoice. Services should be classified according to SAC (Service Accounting code).
Composition scheme is not mandatory, it is optional.
Commonly, the supplier of goods or services is responsible to pay GST. Reverse Charge means the responsibility to pay tax is on the receiver of supply of goods or services instead of the supplier of such goods or services in terms of notified categories of supply.
It is an easy and simple scheme under GST for taxpayers. Small taxpayers can pay GST at a fixed rate of turnover and can be free from heavy GST formalities. Any person whose turnover is less than Rs. 1.5 crore can opt this scheme.
No, a taxpayer who pays tax according to the composition scheme cannot go for input credit.
REGISTRATION
By registering as a GST legal entity, the business has the following features:
- Recognized by law as supplier of Goods and services.
- Many of the other benefits provided under the GST Act and the True Cells are compatible with each other.
- Removes the cascading effect of tax.
- The person is legally sanctioned to collect tax from his customers and pass on the credit of the taxes paid on the goods or services delivered to the receivers.
No, in the absence of GST registration, the tax cannot not be deducted from the customer’s tax return or from the input tax that they have paid.
Yes, if the certificate is not withdrawn, barred, surrendered or suspended the registration is permanent.
Yes, as per the CGST / SGST Act, Section 25 (10), after checking the registration form they can reject it.
Yes, a person can register separately if they have more than one business in the same state as per the terms and conditions. (as per section 25)
SUPPLY
The tax-free transaction will be based on the purchase of goods or services for the benefit of the business. Sales, Manufacturing and services under the current indirect tax laws will be subject to this Supply transaction.
The term Supply is widely used to describe the sale / purchase of goods for sale which includes sale, transfer, exchange, barter, license, rental, lease and disposal. If a person handles any of these transactions along the course or promotion of business for consideration, it will be included under the meaning of Supply under GST.
- Composite Supply under GST.
- Principal Supply under GST.
- Mixed Supply under GST.
- Mixed Supply v. Composite Supply.
- Exempt Supply & Non-Taxable Supply.
- Scope of Non-Taxable Supply and many more.
A mixed supply is two or more independent products or services which are offered together as a bundle but can also be sold separately.
GOODS AND SERVICES TAX VALUATION
It is the price usually paid (or payable) for the supply of goods or services between unrelated parties (i.e., price is the sole consideration). The value of supply under GST consist of: Any taxes, duties, fees, and charges levied under any act, except GST.
No, section 15 is the equivalent of all three taxes. In addition, it has to do with the overall determination of goods and services.
No, as per section 15(1) this law can be imposed only on cases where valuation is not possible.
TAX PAYMENT
While supplying the goods as per Section 12 and while providing the service as per Section 13 one must pay the tax.
Date of receiving the credit in Government account.
CPIN is a Common Portal Identification Number. This is a 14 digit number which is given at the time of generating online tax challan.
No. by logging into GSTN, the information about your payments must be filled. You can save the challan to complete it later but once it’s completely filled no corrections could be made.
Input Tax Credit as self-assessed in monthly returns will be reflected in this ledger. The credit of this ledger cannot be used for payment of interest, fines, fees etc. and only be used for payment of TAX ONLY.
It is an account of the taxpayer that is handled by the GST system that reflects the cash deposits in reputable banks and payments of taxes and other dues made by the taxpayer.
INPUT TAX CREDIT
It is the central tax (CGST), State tax (SGST), integrated tax (IGST) or Union territory tax (UTGST) charged on supply of goods or services or both made to a registered person.
Yes, the reverse charge tax on the goods be considered input tax credit
No, excess credit can only be returned by the receiver and not the distributor.
Yes, the tax paid on input goods, input services, and capital goods be considered as input tax.
THE CONCEPT OF ISD IN GST
This is an office of the supplier of goods or services or both which receives tax invoices towards receipt of input services and distributes an arranged document for the functions of distributing the credit of central tax (CGST), State tax (SGST)/ Union territory tax (UTGST) or integrated tax (IGST) paid on the services to a supplier of taxable services or goods or both having same PAN as that of the ISD.
No. Registered people who have integrated input services for the upliftment of the business can only receive the Input Tax Credit for that service.
Distribution that is against the law is accepted and withdrawn along with interest from the person.
Yes, an ISD can distribute SGST / UTGST and IGST as SGST / UTGST to the units of that state.
Yes, SGST / UTGST credit can be delivered as IGST credit to units of different states.
The credit that has been distributed excess or wrongly should be returned along with interest from the receiver as per Section 73 or 74.
Yes, when it comes to marketing, security or others each of the divisions can take separate ISD registration.
Yes, the return of each month must be filed on the 13th of the next month.
In the ISD’s turnover, as per the constitution Schedule 7 there will be no taxation on list II Entry 51, 54 List I Entry 84.
REFUNDS
Refund under GST connects to any amount returned by the government that was: paid by the registered taxpayer either in excess or was not liable to be taxed.
There is no provision in the GST to refund the unused input tax credit for the financial year. This can be taken for next term.
Refunds less than Rs.1000 / – are not allowed under Section 54 (14) of the CGST / SGST Act.
The individual can request for the refund within two years from the “relevant date” in Section 54 of the CGST / SGST Act.
ADVANCE RULING
Any person who is registered or is desirous of obtaining an advance ruling on the matters prescribed under the GST act with the prescribed fee can make an application for Advance Ruling.
One of the Authority of Advance Ruling (AAR) will be for CGST and one for SGST / UTGST. It will be appointed by the central or state government.
Each state can form separate AAR and AAAR.
As per Section 98 (6) of the CGST / SGST Act, written ruling should be submitted within 90 days of receipt of the AAR.
No, A person who is registered under the GST Act, or a person who is a registered taxpayer, can be an applicant. [Section 95 (b)].
ECOMMERCE
Distributing goods, digital products, services or any other products through an electronic network is called ecommerce.
It is the tax payable by a seller which he collects from the buyer at the time of sale. As per the Income-tax act, Section 206C governs the goods on which the seller has to collect tax from the buyers.
Yes, it is compulsory for an ecommerce operator to have registration from the very beginning.
A person who utilizes an electronic network to distribute goods or services is an ecommerce operator.
Other than officers under deputy commissioner, notice can be given regarding the information to any electronic operators.