GST - Goods and Services Tax

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.

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Latest GST Updates and Announcements

  • Gross GST collection for January 2022 is more than Rs.1.4 lakh crore.
  • GST rates revised in 44th GST Council for crucial Covid-19 relief goods till September 2021
  • Under the exempted category, import of Amphotericin B (medicine for black fungus) has been included.
  • Know More about GST Latest News in Detail

What is GST & how it works?

GST stands for Goods and Services Tax. It is an Indirect tax which introduced to replacing a host of other Indirect taxes such as value added tax, service tax, purchase tax, excise duty, and so on. GST levied on the supply of certain goods and services in India. It is one tax that is applicable all over India.

Given below is how will GST works:

  • 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: Here, the service provider will have to pay GST on the amount that is paid for the product and the value that has been added to it. However, the tax that has been paid by the manufacturer can be reduced from the overall GST that must be paid.
  • Retailer: The retailer will need to pay GST on the product that has been purchased from the distributor as well as the margin that has been added. However, the tax that has been paid by the retailer can be reduced from the overall GST that must be paid.
  • Consumer: GST must be paid on the product that has been purchased.

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.

In 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.

Types of GST

The four different types of GST are given below:

  1. Central Goods and Services Tax : CGST is charged on the intra state supply of products and services.
  2. State Goods and Services Tax : SGST, like CGST, is charged on the sale of products or services within a state.
  3. Integrated Goods and Services Tax : IGST is charged on inter-state transactions of products and services.
  4. 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.

Who is Eligible 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 GST

Any 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-digit distinctive 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 an official document that is issued by the concerned authorities for a business that has been enrolled under the GST system. Any business with an annual turnover of Rs.20 lakh or more and certain special businesses are required to be registered under this system. The GST registration certificate is issued in Form GST REG-06. If you are a registered taxpayer under this system, you can download the GST Certificate from the official GST Portal. The certificate is not issued physically. It is available in digital format only. GST Certificate contains GSTIN, Legal Name, Trade Name, Constitution of Business, Address, Date of liability, Period of Validity, Types of Registration, Particulars of Approving Authority, Signature, Details of the Approving GST officer, and Date of issue of a 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.

Name of Item Applicable GST Rate
Mobile Phone 12%
Sanitizer 18%
Gold Jewellery 3%
Two wheeler 28%
Car 28%

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.

Also check :  GST on Gold

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

Particulars Amount
Overall value of interstate sales Rs.20 lakh
Overall value of intrastate sales Rs.25 lakh
Advance received Rs.8 lakh
SGST Rs.25 lakh x 9% = Rs.2.25 lakh
CGST Rs.25 lakh x 9% = Rs.2.25 lakh
IGST Rs.20 lakh x 18% = Rs.3.6 lakh
Rs.8 lakh x 18% = Rs.1.44 lakh
Total = Rs.5.04 lakh

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

  1. Regulation of the unorganized sector
  2. E-commerce operators no longer suffer from differential treatment
  3. Fewer complications
  4. Composition scheme
  5. Registration process and filing of returns are simple
  6. Higher threshold
  7. 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.

The GST Helpline details are as follows:

Toll Free Phone Number 1800 1200 232
Self Help Portal https://selfservice.gstsystem.in/

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.

FAQs on Goods and Services Tax (GST)

  1. Is it necessary for all traders to register under the GST?
  2. All traders who earn turnovers in excess of Rs.20 lakh in a financial year will have to register under the Goods and Services Tax.

  3. When was GST implemented in India?
  4. The midnight of 01 July 2017 GST came into effect after the Goods and Service Tax Act passed in the Parliament.

  5. What is official website to register GST?
  6. The Indian government's official GST website is www.gst.gov.in

  7. What kind of tax is goods and services tax?
  8. GST is an indirect tax, which has replaced many indirect taxes in India.

  9. What is the main aim of GST?
  10. The main aim of GST is to simplify taxation process.

Latest News on GST 2022

  • Before GST Launch, Maharashtra Passes Bill to Waive Arrears

    The Maharashtra legislature enacted a bill on Monday, March 21, 2022, to provide for the payment of tax, interest, penalty, and late fee arrears that were due under Acts previous to the implementation of the Goods and Services Tax (GST). This will assist the state in generating significant revenue.

    25 Mar 2022

  • Union Budget Update – Highest GST collection in the month of January 2022

    In the Union Budget speech of 2022, the finance minister Nirmala Sitharaman has announced that the gross GST collection for the month of January 2022 has been recorded at Rs.1,40,986 crore.

    Reportedly, this is the highest monthly collection ever after the GST regime has been rolled out in India.

    01 Feb 2022

  • Changes in GST laws to come into effect from 1 January onwards

    There will be a host of changes in laws related to GST from 1 January 2022 onwards. The new law will require e-commerce operators to pay tax on services provided via them through restaurant services or transport availed by passengers.

    The new law will also see correction in inverted duty structure in textile and footwear industries.

    28 December 2021

  • Mismatch in GSTR-1 and GSTR-3B sales can be directly recovered by GST officials

    From 1 January 2022, any mismatch in GSTR-1 and GSTR-3B sales can be directly recovered by GST officials. The move will ensure a reduction in fake billings. Currently, show clause notices are initially issued, post which the recovery process will be initiated. The new changes are being introduced by the government under the Finance Act. A notification regarding the new changes was provided by the Central Board of Indirect Taxes and Customs (CBIC) on 21 December 2021.

    25 December 2021

  • GST Complexities for Swiggy and Zomato from New Year

    E-commerce operators (ECOs) such as Zomato and Swiggy, which will be responsible for paying the 5% goods and service tax on restaurant services provided through them beginning 1 January 2021, face a difficult task of updating their software in less than two weeks, as invoicing responsibility has also shifted from restaurants to them. It was declared in September 2021 that ECOs will be liable for tax on restaurant services delivered through them. Procedures such as invoicing and other compliances, on the other hand, were only defined by a tax department circular issued on 17 December 2021. The invoicing of the above service has been delegated to ECOs, according to this circular.

    22 December 2021

  • GST Council meeting likely to be held in early January 2022

    The GST Council will likely be held in early January 2022. The meeting will likely discuss the pre-budget talks between the state finance minister and the Union Finance Minister. The meeting will also look to rectify the inverted duty structure. On 23 December 2021, the Winter Session of Parliament will end.

    17 December 2021

  • Compliance burden reduced for GST taxpayers by the government

    On 12 December 2021, the Ministry of Finance has announced relaxations for the GST taxpayers. The Ministry of Finance has announced that taxpayers who have an Annual Aggregate Turnover (AATO) of up to Rs.5 crore, will not have to file the Form GSTR-9C reconciliation statement from FY 2020-2021. For taxpayers who make an AATO of more than Rs.5 crore, the Form GSTR-9C reconciliation statement can be self-certified from FY 2020-2021. Taxpayers who make an AATO of up to Rs.2 core will not have to file Annual Returns for FY 2020-2021.

    16 December 2021

  • Employees may have to pay GST for skipping notice period

    Employees may have to pay goods and services tax (GST) on their full and final salary in case they choose not to serve the notice period while leaving their current job as per a report issued by the Authority of Advance Ruling (AAR).

    The AAR report mentioned that GST will be levied on recoveries such as the telephone bill, group insurance, and pay during notice.

    6 December 2021

  • Meghalaya GST revenue increases by 27%

    Meghalaya had seen an increase in its Goods and Services Tax (GST) revenue by 27% in November 2021. The Ministry of Finance had released a statement saying that the GST revenue for Meghalaya in November last year was Rs.120 crore. In November 2021, the GST had increased to Rs.152 crore.

    3 Dec 2021

  • GST collections record the second highest monthly mop up in November 2021

    Since the introduction of the new tax regime, GST collections touched second highest monthly mop up in the month of November. The collections for the month stood at Rs.1,31,576 crore. It was a shade higher than the Rs.1.3 lakh crore deposited in the treasury last month. It was 25 percent higher than the collections recorded a year ago. The previous record monthly collection was witnessed in the month of April where the collections were Rs.1,39,708 crore.

    3 Dec 2021

  • Gujarat registers second highest GST collection

    The Goods and Services Tax (GST) collected in the state of Gujrat is Rs.8,497 crore for the month of October 2021. The revenue collected is 25% higher than the amount collected in the same month last year. A revenue of Rs.7,780 crore was collected in September 2021, which means the state has registered a 9.2% rise in the tax collection on a monthly basis.

    The Principal Secretary of the State Finance Department, JP Gupta said that the increased tax collection is because of the improved sales across all sectors during Diwali.

    11 November 2021

  • 4% GST collection growth in Chandigarh for the month of October 2021

    The Goods and Services Tax (GST) collected in Chandigarh for the month of October 2021 is Rs.158 crores. This year’s collection is 4% higher than the revenue collected during the same period last year and Rs.6 crore more than the amount collected in September 2021. The night curfew is already been lifted by the administration in Chandigarh, and business activities are returning back to normal. The city has started picking up post relaxed restrictions, which has resulted in more business and an increased GST collection.

    11 November 2021

  • Real Estate Developers Contact Government Over GST on Redevelopment Projects

    Various real estate developers have asked the government to provide concessions as well as clarification on the problem of double GST payments in rehabilitation projects. The double GST payments has resulted in cost increases at a time when margins are already thin.

    According to industry trackers, after the implementation of GST in 2017, the redevelopment projects economy went awry. This redevelopment project is a type of urban real estate renewal method that works by taking over old building and rebuilding them.

    29 October 2021

  • Services provided by government, except agencies are exempt from taxes

    The services rendered by the State government, central government, Union territory or local authority are not taxable. However, there are a few exceptions such as business entities. The Authority for Advance Rulings (AAR) Telangana ruled that the transaction fee collected by an agency on behalf of the government will be taxable.

    Therefore, business entities collecting charges on behalf of the government or the services offered by them to the government will not be exempt from the goods and services tax (GST).

    28 October 2021

  • Pen Manufacturers request the Finance Ministry for a reduction in GST

    Pen manufacturers have requested the Finance Ministry to reduce the goods and services tax (GST). The government’s decision of imposing 18% GST on all pens has affected sales. Previously, ballpoint pens were subject to 12% GST while fountain pens and stylograph pens were taxed at 18%.

    Two pen manufacturing associations have asked the finance ministry for a reduction in GST. The government is striving for rate rationalisation.

    27 October 2021

  • The Authority of Advance Ruling says that GST will be applicable on Wellness packages

    The Authority of Advance Ruling (AAR) has recently stated that the packages offered by Wellness centres will be defined as ‘composite supply.’ Therefore, a Goods and Services Tax (GST) ranging between 5% and 12% can be levied on Wellness centres.

    The GST will be imposed based on the number of rooms in these Wellness centres and resorts. The AAR ruled that the centres will not be considered independent facilities because they are a part of the wellness packages that are offered to the customers.

    22 October 2021

  • Centre refrains from borrowing additional funds to fulfill GST compensation

    As per the officials, the government's current revenue position is improving with an increased contribution both in terms of direct and indirect taxes. Considering this steady rise, the Centre is sticking to its FY22 borrowing programme and is not tapping the market for additional funds to meet GST compensation. The total GST revenue collected in September 2021 is Rs 1,17,010 crore and the required run-rate for FY2022r to meet the estimated GST collection is Rs.1.18 lakh crore. Looking at the economy's steady recovery, achieving the target should not be a problem.

    21 October 2021

  • Calcutta HC says WFH due to Covid not an apt reason to cancel GST registration

    The order passed by the GST authority to cancel the registration of a company on the grounds that the firm did not have active office operating during the time of investigation due to Covid-19 has been set aside by the High Court of Calcutta.

    International Value Retail Pvt Ltd had filed a petition after their application for revocation of GST registration was revoked following which the court ordered the tax authority to grant a hearing opportunity to the firm and submit all the necessary documents and evidence following which the authority will have to pass an order within a period of thirty days.

    The firm’s application was rejected by the GST authorities on the ground that they did not have an active operational office at its place of registration as the company was following a Work from Home (WFH) model due to the outbreak of the Covid-19 pandemic.

    Rajat Mohan, senior partner AMRG & Associates, said that it is important that companies are allowed to follow the WFH model during a time when everything is digitalized. The cancellation of GST on such grounds is not appropriate as it will most likely stagnate the growth of the Indian industry.

    12 October 2021

  • GST to be levied on Diwali gifts

    The Authority for Advance Rulings (AAR) has stated that GST will be levied on goods given by companies as free gifts. Companies giving off products like refrigerators and gold coins will be considered as normal goods and GST will be imposed on them.

    12 October 2021

  • Central government releases Rs.1,15,000 crore to states as GST compensation

    There is a shortfall in the Goods and Services Tax (GST) compensation in the current financial year. For this reason, the central government has released Rs.1,15,000 crore as a back-to-back loan to all the union territories and states.

    A total of Rs.40,000 was released on Thursday and Rs.75,000 in July to the union territories with the legislature and states. In the fiscal year 2021-22, Rs.2.59 lakh crore will exceed the GST compensation amount.

    12 October 2021

  • Nirmala Sitharaman Requested to Postpone Raising the GST on Railway Products

    The Railway Suppliers Association (RASA) has urged Nirmala Sitharaman, the Union Finance Minister, to postpone the government's recent decision to raise the Goods and Services Tax (GST) on railway products to 18% from 12%. On 30 September 2021, the finance ministry announced that the GST rate for all railway products covered by Chapter 86 would be raised from 12% to 18%. In a letter to the minister, RASA president S Surulivel stated that the decision would hurt small industry suppliers due to rising raw material costs, which had increased manufacturing costs by 25-40%.

    12 October 2021

  • GST collections for September stand at Rs. 1.17 lakh crore

    On Friday, Finance Ministry stated that Goods and Services Tax (GST) collections for the month of September was Rs.1.17 lakh crore. It was 23 percent higher when compared to last year’s collection in the same month. The ministry in a statement said that the average monthly gross GST collection for the second quarter of the current year was 5 percent higher than the average monthly collection in the first quarter. It added that the enhanced GST collections indicate economic growth and action against anti-evasion activities. Of the Rs.1,17,010 crore, CGST is Rs.20,578 crore, SGST is Rs.26,767 crore, and IGST is Rs.60,911 crore. The total revenue of Centre and the States after regular settlements in the month stood at Rs.49,030 crore for CGST and Rs.50,907 crore for SGST. On Friday, Finance Ministry stated that Goods and Services Tax (GST) collections for the month of September was Rs.1.17 lakh crore. It was 23 percent higher when compared to last year’s collection in the same month. The ministry in a statement said that the average monthly gross GST collection for the second quarter of the current year was 5 percent higher than the average monthly collection in the first quarter. It added that the enhanced GST collections indicate economic growth and action against anti-evasion activities. Of the Rs.1,17,010 crore, CGST is Rs.20,578 crore, SGST is Rs.26,767 crore, and IGST is Rs.60,911 crore. The total revenue of Centre and the States after regular settlements in the month stood at Rs.49,030 crore for CGST and Rs.50,907 crore for SGST.

    7 October 2021

  • GST rates for licensing content rights increased to 18%

    The Goods and Service Tax (GST) Council has recommended hiking the GST rates on licensing services of recorded media to 18%. Earlier, the GST rates were at 12%. The main reason for increasing the GST rates is to bring parity between licensing services and distribution. The rates of GST and the classification codes are HSN 999614 for Option 2, which is at 18%, and HSN 997332 for Option 1, which is at 12%. Option 1 is for licensing services in the case of television programmes, sound recordings, and show original films. Option 2 is for the distribution services of motion picture, television programme, and videotape.

    6 October 2021

  • Aadhaar authentication mandatory for GST refund

    According to the government, it is mandatory to complete Aadhaar authentication in the case of Goods and Service Tax (GST) refund. The CBIC has made several changes to stop tax evasion. Any refunds will also be deposited to the bank account that is linked to the PAN that was submitted at the time of GST registration. The notification further added that any companies that have defaulted in the filing the summary returns and do not pay the monthly GST cannot file GSTR-1 sales returns for the next month. The new rules will come into effect from 1 January 2022. The decisions were made at the GST council meeting that was held on 17 September 2021.

    30 September 2021

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