GST is a multi-stage tax system which is comprehensive in nature and applied on the sale of goods and services. 

The main
aim of this taxation system is to curb the cascading effect of other Indirect
taxes 

and it is applicable throughout India.

What is GST & How it Works?

GST is referred as Goods and Services Tax. It is an indirect tax that was implemented to replace a variety 

of previous indirect taxes, including the value-added tax, service tax, purchase tax, excise duty, and others.  

GST is a tax that India imposes on the supply of specific products and services. There is only one tax that is imposed in India. 

 

How GST Works in India?

Manufacturer: The manufacturer will have to pay GST on the raw material that is purchased and the value that has been added

 to make the product..

Service Provider: In this case, the service provider will be responsible for paying GST on both the 

product’s purchase price and the value added to it. However, the manufacturer’s tax payment may

be deducted from the total GST that must be paid.

Retailer: It must be paid by the retailer on both the product they bought from the distributor and the margin they added. 

However, the retailer’s tax payment may be deducted from the total amount of GST that must be paid.

Consumer: GST must be paid on the product that has been purchased.

 

Types of GST in India 

The four different types of GST are given below:

Central Goods and Services Tax : CGST is charged on the intra state supply of products and services.

State Goods and Services Tax : SGST, like CGST, is charged on the sale of products or services within a state.

Integrated Goods and Services Tax : IGST is charged on inter-state transactions of products and services.

 Union Territory Goods and Services Tax : UTGST is levied on the supply of products and services in any of the Union 

Territories in the country, viz. Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep, and 

Chandigarh. UTGST is levied along with CGST.

 

• History Of GST

On July 1st 2017, the Goods and Services Tax implemented in India. But, the process of implementing the new tax regime 

commenced a long time ago. In 2000, Atal Bihari Vajpayee, then Prime Minister of India, set up a committee to draft the GST law. 

In 2004, a task force concluded that the new tax structure should put in place to enhance the tax regime at the time.

n 2006, Finance Minister proposed the introduction of GST from 1st April 2010 and in 2011 the Constitution Amendment Bill passed to enable the introduction of the GST law. In 2012, the Standing Committee started discussions about GST, and tabled its 

report on GST a year later. In 2014, the new Finance Minister at the time, Arun Jaitley, reintroduced the GST bill in Parliament and                          

passed the bill in Lok Sabha in 2015. Yet, the implementation of the law delayed as it was not passed in Rajya Sabha.

 GST went live in 2016, and the amended model GST law passed in both the house. The President of India also gave assent. In 2017 the passing of 4 supplementary GST Bills in Lok Sabha as well as the approval of the same by the Cabinet. Rajya Sabha then passed 4 supplementary GST Bills and the new tax regime implemented on 1st July 2017.

Tax Laws Before the Implementation of GST

The Centre and the State used to collect tax separately. Depending on the state, the tax regimes were different.

Even though import tax was 

levied on one individual, the burden was levied on another individual. In the cases of direct tax, the taxpayer must pay the tax.

Prior to the introduction of GST, direct and indirect taxes were present in India.

Who Should Register for GST?

The below mentioned entities and individuals must register for Goods And Services Tax:

 

• E-commerce aggregators

Individuals who supply through e-commerce aggregators

Individuals who pay tax as per the reverse change mechanism

Agents of input service distributors and suppliers

Non-Resident individuals who pay tax

Businesses that have a turnover that is more than the threshold limit

Individuals who have registered before the GST law was introduced

Registration of GSTAny company that is eligible under GST must register itself in the GST portal created by the Government of India. The registered entities will get a unique registration number called GSTIN.

It is mandatory for all Service providers, buyers, and sellers to register. A business that makes a total income of Rs.20 lakhs and 

more in a financial year must be required to do GST registration. It takes 2-6 working days to process.

Know the GSTIN – GST Identification Number A 15-digitistincti

ve code that is provided to every taxpayer is the GSTIN. The GSTIN will be provided based on the state you live at and the PAN. Some of the main uses of GSTIN are mentioned below:

Loans can be availed with the help of the number.

Refunds can be claimed with the GSTIN.

The verification process is easy with the help of the GSTIN.

Corrections can be made.

Verify GST Number Online by visiting https://services.gst.gov.in/services/searchtp. Enter the GSTIN mentioned on the invoice in the search box and followed by captcha, Final click “enter” to view the details.

 

• GST Certificate

A GST Certificate is a legal document that the relevant authorities issue to a company that has registered for the GST system. 

Under this system, enterprises having a yearly revenue of at least Rs. 20 lakh and some special businesses must register. Form GST REG-06 is used to issue the GST registration certificate. From the official GST Portal, you can download the GST Certificate if you are a registered taxpayer under this system.

The certificate is not physically handed out. It is only accessible digitally. GSTIN, Legal Name, Trade Name, Business Constitution, 

Address, Date of Liability, Validity Period, Types of Registration, Particulars of Approving Authority, Signature, Specifications of the 

Approving GST Officer, and Date are all included on the GST Certificate.

 

• GST Returns

A GST Returns is a document that contains information about the income that a taxpayer must file with the authorities. This 

information used to compute the taxpayer’s tax liability. Under the Goods and Services Tax, registered dealers must file their GST 

returns with details regarding their purchases, sales, input tax credit, and output GST. Businesses are expected to file 2 monthly 

returns as well as an annual return.

 

• GST Rates

The GST Council has assigned GST rates to different goods and services. While some products can be purchased without any GST, 

there are others that come at 5% GST, 12% GST, 18% GST, and 28% GST. GST rates for goods and services have been changed a 

few time since the new tax regime was implemented in July 2017.

 

• How do I Calculate GST?

Calculating the amount that needs to be paid as GST when filing your returns can be quite tedious. Several aspects and factors must be taken into consideration, such as ITC, exempted supplies, reverse charge, etc. Failure to pay the entire GST amount can see you slapped with an 18% interest on the shortfall, thereby making it necessary to ensure that you pay the right amount towards GST.

The GST Calculator makes it simple for taxpayers to calculate the amount that needs to paid as GST. You will have to enter all the required details such as the month for which you are calculating GST, the due date for filing returns for the particular month, the actual date on which the returns are filed, the tax liability for the month, the purchases that attract Reverse Charge Mechanism, the opening balance of your cash ledger as well as your credit ledger and the eligible ITC.

Here is an example  showing how you can calculate your GST liability.

 

• GST Payments

Currently, the GST must be paid every month. The GSTR-1 and GSTR-3B must be filed. In the case of refunds, the relevant forms

must be submitted as well. GST payments can be made both online and offline. Once the payment has made, a challan must

be generated.

 

• GST E-Way Bill

An electronic document that is generated to show proof of goods movement is the E-Way bill. You can generate the bill from the

GST portal.

 

• Advantages of GST

The following are the advantages of goods and services tax in India

Regulation of the unorganized sector

E-commerce operators no longer suffer from differential treatment

Fewer complications Composition scheme

Registration process and filing of returns are simple

Higher threshold Elimination of the cascading tax effect

 

• GST Council

Any recommendations that are made to the State and Union Government regarding any issues that are related to GST is done by the GST Council. The chairman of gst council is Union Finance Minister of India. The other members of the GST Council are the Union

State Minister of Revenue or Finance of all the states. GSTN – Goods and Service Tax Network The GSTN is the Goods and Services 

Tax Network which is responsible for managing the IT system concerning the GST Portal. It is a non-profit, non-government organization and

is the database for the official GST Portal.The current structure of the GST Network can be summed up as follows:

Central Government – 24.5%

State Governments and EC – 24.5%

LIC Housing Finance Ltd. – 11%

01ICICI Bank, HDFC, NSE Strategic Investment Co., and HDFC Bank – 10% each.

Features of GSTN The salient features of the GST Network can be listed as follows:

Keeping the information of all the taxpayers safe and secure.

Maintaining confidentiality of the taxpayers’ information.

It is a trusted National Information Utility (NIU).

 

• Functions of GSTN

The main functions of the GST Network or GSTN can be summed up as follows:

It is responsible for handling the invoices

It is responsible for handling the registrations

It is responsible for handling the payments and refunds (if any)

It is responsible for handling different types of returns.

 

• GST Helpline

Taxpayers who have any confusions or doubts in regard to their GST filing can get in touch with the concerned authority 

through the GST Helpline. Earlier, taxpayers could get in touch through the helpdesk email ID – helpdesk@gst.gov.in. However, it

should be noted that this email ID has been discontinued.GST Changes According to Union Budget 2023-2024

The following are the changes in Goods and Services Tax (GST), as per the Union Budget 2023-2024 announced by honorable 

finance minister, Nirmala Sitharaman:

Section 10 amended: Composition scheme can be opted if taxpayer supplying goods through e-commerce operators

Section 16 amended: Failing to pay the supplier invoice value along with GST within 180 days from invoice issuance, 

then recipient taxpayer must pay the value with interest compounded under Section 50.

Sections 37, 39, 44, and 52: Restricts taxpayers from filling GSTR-1, GSTR-3B, GSTR-9, and GSTR-8 after expiry of three years 

from due date during the tax period.

 

• E-commerce operator will be charged Rs.10,000 or equivalent tax amount, whichever higher in the following cases:

(i) If unregistered person is allowed to sell goods, services, or both through these operators except those cases where

they are exempted from GST

(ii) Allowing inter-state supply of goods or services by registered person where they are ineligible for it

(iii) If a person exempted from GST registration do not provide accurate details in the GSTR-8 of goods sold by these people

Decriminalization of following offences:

(i) Under the CGST Act, an officer is prevented from discharge of duties by a person

(ii) Material evidence or documents are tempered by the person

(iii) Either a person fails to provide supply information or provided false information under CGST Act or Rules 

 

• Limits changed to 25% to 100% of the tax involved regarding the compounding offences.

• To allow businesses to share GST data with digital consent, Section 158A has been inserted in CGST. This section prescribes 

         the registered person in the portal the manner and condition of sharing information as declared in:

(i)  Outward supplies statement, or

(ii) Application of registration, or

(iii) Returns filled under GSTR-1, 3B, or 9, or

(iv) Generation of e-bill or e-invoice, or any other details

 

• GST App

There are a handful of GST applications which have been designed to run on smartphones. Out of all the apps, there is a 

Government-issued application as well which is called the CBEC GST. It can be downloaded from the Google Play Store for your 

Android smartphone.

In addition to that, there are a host of third-party applications as well. The main aim of these applications is to help taxpayers 

familiarise themselves with the idea of GST and in turn, ensure that they smoothly transit to the new taxation system.