An introduction about GST
Meaning of GST – Goods and Service Tax.
GST is an indirect tax applicable on goods and services consumed by individuals. It replaces all other indirect taxes such as service taxes, excise duty, surcharge and ceases, and so on.
- GST has replaced every other indirect taxes existed, so there will be no different rates charged in different states all will be even.
- Before GST, there were other taxes that were governed by the state and some central government. It is the main objective of GST is to bring one authority to control.
- GST allows to set off any prior taxes paid on the same transactions by providing an input tax credit.
- GST also aims at simplifying the filing of GST returns by reducing various forms for the taxpayers
- GST also provides an online facility by introducing GSTN Goods and Services Network which is an information system.
So these are the objectives of GST
How many types of GST are in India?
The GST can be categorized into 4 types such as,
- Central goods and service tax.
- State goods and services tax.
- Integrated goods and services tax.
Central Goods and Service Tax
This type of tax is charged on transactions that are made intra - states. It comes under the central government of India. Both CGST and SGST are charged for goods and services. It replaces taxes such as central cess and surcharge and central excise duty etc.
State Goods and Services Tax
This type of tax is charged on goods that have intrastate transactions. These are charged by the state government. It also includes CGST. It eliminated state sales tax, VAT, etc.
Integrated Goods and Services Tax
IGST charges on goods and services which are transacted between two states. It is charged under the central government. It is also applicable to the import and export of our goods and services.
So these are the different types of GST explained above.What are the Advantages of GST?
- It made simple by merging all indirect taxes and making it simple for taxpayers as there is no need for overlapping payments on one transaction
- It was introduced to decrease costs on goods and services in the long run.
- It helps small businesses whose turnover is less than 20 lakhs are exempted from paying GST returns.
- The GST introduced a composite scheme where companies whose turnover is less than 75 lakhs can opt for this scheme and pay only 1% on its turnover.
- It made small and medium-sized businesses simple for filing GST returns as multiple forms are erased.
- GST also helps in positive growth in the nation's GDP.
- The tax evasion is completely lessened by GST.
- Purchase of GST filing software can increase the expenses on the users.
- Even though the business who can opt for the composite scheme which is a benefit has a catch and that is they cannot claim the input tax credit.
- There are some of the complexities in GST which affect the customers.
- The cost of insurance premiums has increased due to the effect of GST.
- It also affects real estate negatively and also there is a decrease in demand for real estate.
Every concept has its own advantage and disadvantage, we should understand the needs and implement various concepts to our business.How to Register GST in India?
Registering GST for your company has certain criteria such as the company whose turnover is more than 20 lakhs can apply for GST registration and it is applicable fore – traders.
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Documents for GST registration are given below
- Identity proof of directors such as Aadhar card, identity card, passport or driving license
- Address proof of directors such as voter identity card, telephone bill, or electricity bill.
- Pan card of the owner of the firm.
- Partnership Deed.
- LLP agreement.
- Certificate of commencement.
- Digital signature certificate.
- Memorandum of association [MOA].
- Article of association [AOA].
- Resolution copy signed by Board members.
These are the documents required for registration of GST depending upon the type of your business.What is the Process for GST Registration in India?
The process for GST registration might look simple, it is advisable that you fill the form with the help of CA or CS. Let’s begin with the procedure.
- For registering, you must visit the GST portal. Go to ‘taxpayer’ slab select ‘new registration' and fill up all the basic details such as which state, what type of business, pan card, name of the address, and email id. You will receive an OTP through email and activate it.
- Next, you must enter the OTP sent to your phone number and click on proceed.
- You will be provided a reference number note it down.
- After providing your reference number, the status of your application will be visible and you have the option of editing.
- After editing, you must upload certain Documents such as,
- Bank statement of the business.
- Photographs of the applicant.
- Address proof of the firm.
- Resolution form signed.
- Constitution of the taxpayer.
- Submit these documents along with the application either by electronic verification code method (EVC) which the code will be sent to your registered number or e-sign method or using DSC the company can submit the declaration.
- After you click submit, you will receive the application reference number (ARN) to your phone number and email address and you can check your status by using this code.
- You can download your GST registration certificate online in the office GST portal.
So this is the process for GST registration.Exemptions for GST Registration?
The below-mentioned individuals or companies are exempted from registering GST such as,
- An organization that comes under reverse charge.
- Any action which does not include the sale of goods and services.
- Any business which conducts nontaxable transactions such as electricity, natural gas, petrol, etc.
- A business that makes nil-rated supplies.
- A business that comes under hold limit.
- Agricultural business.
So these are the business that is exempted from GST registration.
What is the penalty for not registering GST?
The penalty for not paying or late registering GST will be 10% on the due amount which might be up to ₹10000. In case the taxpayer deliberately for not pay tax then the government will charge a penalty which will be 100% of the due amount.