Shreyansh Singh, an IIT Kanpur alumnus, has eight years of experience in the finance industry. He has spent 5 years at American Express developing mid to long-term strategies for multiple markets including US, Europe and India. Shreyansh currently leads Growth and Strategy initiatives at Pice.
GST is a unified tax system implemented across India on July 1, 2017.
GST registration is mandatory for businesses in inter-state trade, e-commerce, and import-export.
GST includes SGST, CGST, and IGST, catering to intra and inter-state transactions.
The tax credit mechanism ensures GST is applied only on value addition at each supply chain stage.
Compliance with GST registration and filing is crucial to avoid penalties and manage taxes efficiently.
On July 1, 2017, India transitioned to a new tax framework designed to establish a unified market across the country. If you are unfamiliar with GST registration and want to learn how this tax system might impact you and your business, go through this blog.
Here you will get a clear idea of the GST system and its crucial aspects.Â
What Is GST?
The GST is a comprehensive tax imposed on the production, sale, and consumption of goods and services that are provided nationwide. It replaces most of the indirect taxes that were previously applied at both the central and state levels.
This unified tax system features a consistent tax rate applicable to both goods and services throughout India, with payment due at the final stage of consumption. At each level of the sales or purchase process within the supply chain, there is a tax liability on the value added to goods and services utilising a tax credit mechanism.
Who Should Register for GST?
The following outlines who should register for GST:
Casual taxable individuals
Entities making inter-state taxable transactions
Agents representing registered taxpayers
Non-resident casual taxable individuals
E-commerce platforms
Input Service Distributors
Parties responsible for TDS or TCS deductions
Individuals conducting business outside their registered state
Sellers on e-commerce platforms like Flipkart, Amazon, etc.
Individuals managing aggregator platforms
Participants in the import-export trade
Those subject to reverse charge mechanisms
Businesses previously registered under taxes like VAT, excise duty or service tax
Providers of OIDAR (Online Information Database Access and Retrieval) services in India
State Goods & Service Tax (SGST): It is collected by the state for intrastate supplies of goods and services.
Central Goods & Service Tax (CGST): It is collected by the Centre for intrastate supplies of goods and services.
Integrated Goods & Service Tax (IGST): It is collected by the Centre for interstate supplies.
Conclusion
Businesses, especially those engaged in interstate trade or e-commerce, must ensure they are compliant with the GST registration requirements to avoid unnecessary tax liabilities. By understanding the various types of GST returns, businesses can manage their tax responsibilities effectively, ultimately reducing the risk of errors or penalties related to tax compliance.
💡If you want to streamline your payment and make GST payments, consider using the PICE App. Explore the PICE App today and take your business to new heights.Â
FAQ on GST
Who is responsible for paying the tax if the supply is received from an unregistered supplier?
If goods or services are supplied by an unregistered person, the responsibility to pay the tax falls on the registered recipient of the supply, as they are required to discharge the tax liability under the reverse charge mechanism.
What are the different documents you need for GST registration?
The documents required for GST registration include: Recent passport-size photographs Identity proof such as an Aadhaar card, driving licence or passport Address proof of your business premises Bank account details (bank statement or passbook) Partnership deed for partnership firms Certificate of Incorporation for entities like Private Limited Companies, LLPs, or OPCs
What is the intra-state and inter-state supply of goods and services?
When the supplier's location and the place where goods or services are supplied fall within the same state or union territory, it is classified as an intra-state supply. On the other hand, if the supplier's location and the place of supply are in different states, different union territories, or a combination of a state and a union territory, it is considered an inter-state supply.
How long can I delay my GST registration?
You can delay your GST registration for up to 30 days from the date you become liable to register for GST.
Is the value of inward supplies subject to Reverse Charge Mechanism (RCM) included in the aggregate turnover?
No, the aggregate turnover does include the value of inward supplies on which the Reverse Charge Mechanism (RCM) is applicable. You can refer to Section 2(6) of the CGST Act for the same.
What is an electronic credit ledger?
The electronic cash ledger is a record that summarises all deposits or payments made by a taxpayer and is managed through the GST portal.
What is an electronic cash ledger?
The tax rate in India varies depending on the type of goods and services. In India, goods and services are categorised into various GST slabs:Â 0% for essential goods 5% for basic necessities 12% for standard items 18% for most consumer products 28% for luxury and indulgent items
What are the different tax rates applicable to goods and services?
A tax invoice is issued for taxable supplies of goods or services and generally includes details such as the description, quantity and value of the goods or services, the applicable tax amount, and any other required information as specified by regulations.
What information must be included in a tax invoice?
A tax invoice is issued for taxable supplies of goods or services and generally includes details such as the description, quantity and value of the goods or services, the applicable tax amount, and any other required information as specified by regulations.
What is a credit not under GST?
A credit note under GST is a document issued by a registered person in accordance with Section 34(1) of the CGST Act, 2017. It is issued when goods are returned, or when there is a shortfall in the supply, a reduction in taxable value, or a decrease in the GST charged on an invoice. The issuance of a credit note reduces the supplier's tax liability accordingly.
What is the GSTR-1 return form?
A GSTR-1 return is a monthly or quarterly return that every taxpayer needs to file as it summarises all outward taxable supplies.
What is a composite supply?
A composite supply refers to a transaction of two or more supplies that are made together as a single package. One of these supplies is considered the principal supply and the applicable tax liability is determined by the principal supply.
What is the annual return, and when is it due for filing returns?
The annual return is a comprehensive return that must be filed by taxpayers who are required to submit GSTR-1 return to GSTR 3 forms. However, certain individuals are exempt from filing this return, including: Casual taxable persons Non-resident taxable persons Input Service Distributors (ISD) Entities authorised to deduct or collect tax at source The due date for filing the annual return is December 31st of the following financial year.
Shreyansh Singh, an IIT Kanpur alumnus, has eight years of experience in the finance industry. He has spent 5 years at American Express developing mid to long-term strategies for multiple markets including US, Europe and India. Shreyansh currently leads Growth and Strategy initiatives at Pice.
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