Rajat Negi

A Quick Overview of Goods and Services Tax

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GST stands for Goods and Services Tax, and it is the country’s most significant indirect tax reform. It is comprehensive since it applies across India to the manufacturing, sale, and consumption of goods and services. It’s also a multi-stage tax imposed on a product or service. It’s also a destination-based tax since half of the revenue is split between the state and the central government.

Why it is an Indirect Tax?

Yesterday, I ate a delicious pizza from Dominos. if you have noticed the invoice of Dominos they charge 5% GST which they collect from consumers. that 5% charge will be given government. 

Actually consumer like you and me has paid the tax INDIRECTLY to the government through dominos, therefore it is called as Indirect Tax.

Important Terminologies related to GST

  • HSN Code:  Harmonised System of Nomenclature(Classifying physical goods).
  • SAC: Service accounting code(Classifying services).
  • Input Tax Credit: tax paid by the business on purchases.
  • CGST: Revenue for central government.
  • SGST: Revenue for state government. 
  • IGST: Integrated GST(Applies to all interstate transactions, revenue is split between central and destination state).

GSTIN

GST Identification Number

A GSTIN is a unique number granted to every taxpayer registered under the GST regime, much as the PAN is a proof of identification from the perspective of Income Tax. The GSTIN will be a 15-digit PAN-based unique number assigned to each taxpayer by state. 

Council of GST

Overrates and measures were regulated by the government agency that oversaw the administration of the goods and services tax in the country. The GST Council is in charge of creating GST laws about registration, payment, valuation, due dates, input tax credit, and other relevant issues.

  • GSTN: It is a non-profit, non-government organization that oversees the GST portal’s IT system.
  • GST Portal: The official GST gateway of the Indian government. It’s a one-stop portal for all things GST-related, including filing and other possibilities.
  • CBIT: CBDT is the acronym for the Central Board of Indirect Taxation. It is the top policy-making authority in the field of indirect taxes. It also aids the government in developing gst policies.

Who needs to register under the GST regime?

  • Any person/entity that offers services with an annual aggregate turnover of more than Rs. 20 lakhs in the case of service providers.
  • Any individual whose annual gross revenue exceeds Rs.40 lakhs and is engaged in the exclusive provision of commodities (Rs.20 Lakhs for special category states).

Implementation of GST

  • India’s indirect tax structure should be simplified.
  • Indirect taxes should be replaced with a more efficient and transparent system.
  • The Goods and Services Tax (GST) went into force on July 1, 2017.
  • There were five tax brackets, and the newly implemented GST rates were also higher.
  • The GST rates for a small number of products and services have risen over time.
  • The indirect tax structure has been considerably more streamlined and consistent, transforming India into a single market.

Advantages of GST

  • Because GST is now only one common tax on which input tax credit may be claimed, the cascading impact of tax has been abolished.
  • With the establishment of the GST, consistent indirect taxation legislation exists across the country and across different industries.
  • Since the introduction of GST, the likelihood of tax evasion has decreased.

Disadvantages of GST

  • GST is known as the “disability tax” since it applies to items such as wheelchairs, hearing aids, and other medical devices.
  • Petroleum products remain exempt from the GST, requiring governments to collect their own taxes in this area.
  • Businesses are required to register under the GST law in all states where they operate, which adds to the compliance burden.
  • Businesses’ operating costs have soared.
  • For many returns, hire a specialist.

Final Words

from my point of view, GST is beneficial for the country but as the coins have two faces one is good and one is bad, similarly, GST has its own advantages and disadvantages. Do let me know in the comment section what do you think?

I hope, I gave you some insights about the overview of GST for your business and startup and delivered them in the best possible way. 

If you have any queries related to the same then do leave a comment, and I will respond to it. 

DO SHARE THIS ARTICLE with your friends or family who think GST is a difficult domain to learn.  You can tweet out your thoughts by tagging me @rajatinr on Twitter.

To your Success

-Rajat Negi, Logging Out 🤗

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Rajat Negi

Compound Investor (Who loves to talk to stock)
Digital Marketer (Who loves to make brands)

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