Scheme of GST
Before we proceed with the finer nuances of Indian GST, let us first understand the basic concept of GST.
GST is a value added tax levied on manufacture, sale and consumption of goods and services. GST offers comprehensive and continuous chain of tax credits from the producer’s point/service provider’s point upto the retailer’s level/consumer’s level thereby taxing only the value added at each stage of supply chain. The supplier at each stage is permitted to avail credit of GST paid on the purchase of goods and/or services and can set off this credit against the GST payable on the supply of goods and services to be made by him. Thus, only the final consumer bears the GST charged by the last supplier in the supply chain, with set-off benefits at all the previous stages. Since, only the value added at each stage is taxed under GST, there is no tax on tax or cascading of taxes under GST system. GST does not differentiate between goods and services and thus, the two are taxed at a single rate.
It can be understood in following points
Dual Model:
India has adopted a dual GST which is imposed concurrently by the Centre and States, i.e. Centre and States simultaneously tax goods and services. Centre has the power to tax intra-State sales & States are empowered to tax services. GST extends to whole of India including the State of Jammu and Kashmir.
CGST/SGST/UTGST/IGST
GST is a destination based tax applicable on all transactions involving supply of goods and services for a consideration subject to exceptions thereof. GST in India comprises of Central Goods and Service Tax (CGST) – levied and collected by Central Government, State Goods and Service Tax (SGST) – levied and collected by State Governments/Union Territories with State Legislatures and Union Territory Goods and Service Tax (UTGST) – levied and collected by Union Territories without State Legislatures, on intra-State supplies of taxable goods and/or services. Inter-State supplies of taxable goods and/or services are subject to Integrated Goods and Service Tax (IGST). IGST is approximately the sum total of CGST and SGST/UTGST and is levied by Centre on all inter-State supplies.
Carry forwards of CENVAT and VAT credit:
It is expected that in transition phase, the credit is allowed to be carried forward
Common Threshold Limit:
GST Registration:
Every supplier of goods and/ or services is required to obtain registration in the State/UT from where he makes the taxable supply if his aggregate turnover exceeds Rs 20 lakh during a FY. Click Here to following link to check more details about GST Registration
GST Invoice:
Return:
The taxpayer would need to submit common format for periodical returns, to both the Central and to the concerned State GST authorities
GST Payment:
Collection of GST being dominant source of revenue therefore it should be designed in such a periodic manner that it ensures proper flow of revenue to both Centre and State and at the same time minimize the burden on the taxpayer
GST Rates:
Combined GST rate is being discussed by the Government. The Revenue neutral rate is expected around 18 %. After the total GST rate is arrived the centre and state will decide on the CGST and SGST rate. Check out GST Rates
GST Refund:
Refund of unutilized CGST and SGST is to be completed in time bound manner. The procedure and timeline are yet to be clarified. check out details for GST Refund
