Goods and services tax (GST) launched in the year 2017 applies to all Indian businesses, traders, manufacturers, and service providers including freelancers As per the new GST regime, every individual involved in business having an annual turnover of above 20 lakhs is required to have GST registration. In the case of special category, north-eastern states will have to pay GST having an annual turnover of 10 lakhs. In some specific cases like E-Commerce businesses, it is mandatory to register for GST from the beginning without even crossing the annual turnover limit.
All the existing registered companies under central excise, VAT, and service tax are needed to register under GST as all these different types of central and state taxes are combined to make a new single tax. GST is charged in every step of the business starting from the supply chain which includes purchasing raw materials, manufacturing, packaging to selling to the wholesaler to the retailer, and finally to the consumer.
The online process makes it easier for business persons to register under the GST portal by easily using the required documents without visiting any offices or any manual intervention. So that they can focus on the key areas. After registering your business on the GST portal the registration will be done within 2 to 6 working days and then a unique GSTIN number will be generated for your business and allocated to the individual for further communication.
GST combines all forms of direct and indirect taxes into a single tax both at the state and central levels. Hence eliminating the effect of multiple taxes to be applied on the product and services.it effectively solves the drawbacks of the previous taxation system.
There are majorly 4 main components of GST
CGST is levied on the purchase of any goods and services and it is governed by the central Goods & Services Act, 2017.
SGST is levied on interstate supply of goods and services and is levied by section 15 of the state goods and services act.
IGST is levied by the central government for the inter-state supply of goods and services.it is also applicable in the import and export of goods and services.
It is an indirect tax levied on inter-state supply of goods and services and it is governed by UTGST Act,2017.
GSTIN or goods and services identification number will be issued to the applicant after completion of the registration process. The GSTIN is a unique 15-digit identification number issued to every taxpayer.
The 1st two digits of the GSTIN represents the state code of the registered business, the next 10 digits represent the PAN number of the registered person followed by the 13th digit which is the entity number of the same PAN holder in a state, then 14th character is an alphabet set by default and the last digit is a check sum character.
The government has made a 4-tier tax structure for all the goods and services which falls under the following slabs
It is a document containing all details about the income which is required to be filled according to the tax laws. All the GST return is to be filled online. under the law, a taxpayer has to file monthly, quarterly, and annual returns based on their business. under this, you have to file the purchase, sales output, and input tax credit. you can also add the unreported returns from the previous month.