Goods and Service Tax Awareness

GST Implementation Awareness Programme 2021

GST is known as a Goods and Service Tax. The Good and Service Tax  Act was passed in Parliament on 29 March 2017 and came into effect on 1st July 2017. The main moto of GST is levied on the supply of goods and services.  GST is a single domestic indirect tax law for the entire country.

The Components of GST:-

There are three taxes applicable under this system: CGST, IGST, SGST

  • CGST:- It is the tax collected by the Central Government on an intra- state sale (e.g., transaction happening within Maharastra)
  • IGST:- It is the tax collected by the Central Government for an inter-state sale (e.g., Maharastra to Tamil Naidu)
  • SGST:- It is the tax collected by the State Government on an intra-state sale (e.g,  transaction happening within Maharastra)

The Journey of GST in India

The GST journey is started in 2000 when the committee was set up to draft the law. It took 17 years from then for the law to evolve. In 2017, the GST bill was passed in Lok Sabha and the Rajya Sabha. On 1st July 2017, the GST law came into force.

Advantages of GST

GST has mainly removed the cascading effect on the sale of goods and services. Removing cascading effect has impacted the cost of goods.

Tax Laws before GST

In the earlier income tax regime, there were many indirect taxes which are d0ne by both state and center. States mainly collected tax in form of Valued Added Tax (VAT). Each State has a there own set of rules and regulations.
Inter-state sale of goods was taxed by the center. CST (Center State Tax) was applicable in the case of inter-state sales of goods. The indirect taxes such as the entertainment tax and local tax were levied by together state and center. These led to a load of overlapping of taxes levied by both state and center.

For example, when the goods were manufactured and sold, excise duties were charged by the center. Over and above the excise duty, Vat was also charged by the state.

The following is the list of indirect taxes in the pre-GST regime:

  • Central Excise Duty
  • Duties of Excise
  • Additional Duties of Excise
  • Additional Duties of Customs
  • Special Additional Duty of Customs
  • Cess
  • State VAT
  • Central Sales Tax
  • Purchase Tax
  • Luxury Tax
  • Entertainment Tax
  • Entry Tax
  • Taxes on advertisment
  • Taxes on lotteries, betting, and gambling

CGST, IGST, and SGST  have replaced all the above taxes.

Check Here For More Details:- GST Tax Rates and Slabs

What are the New Compliances Under GST?

Apart from the online filing of the GST returns, the GST regime has introduced several new systems along with it.

e-Way Bills

GST introduced a centralized system of waybills by the introduction of “E-way bills”. This system is launched on 1st April 2018 for inter-state movement of goods and on 15th April 2018 for intra-state movement of goods in a staggered manner.

Under the e-way bill’s system, manufacturers, traders, and transporters can generate e-way bills for the goods transported from the place of their origin to their destination on a common portal with ease. Tax authorities are also benefited as this system has reduced time at check-posts and help reduce tax evasion.

E-invoicing

The e-invoicing system was made applicable from 1st October 2020 for businesses with an annual aggregate turnover of more than Rs.500 crore in any preceding financial years(from2017-18). Further from, 1 January 2021, this system was extended to those with an annual aggregate turnover of more than Rs. 100 crore.

This business must obtain a unique invoice reference number for every business-to-business invoice by uploading it on the GSTN’s invoice registration portal. The portal verifies the correctness and genuineness of the invoice.

e-Invoicing allows interoperability of invoices and helps reduce data entry errors. It is designed to pass the invoice information directly from the IRP to the GST portal and the e-way bills portal.

Check here for details of GST Awareness

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