WELCOME TO DEZINE INDIA-GST SUVIDHA CENTER

The main objective of GST is to remove cascading effects of taxes and keep check on unorganized sector by regulating it. How a person would assess whether he is liable to pay taxes in GST or not.

GST(Goods & Services Tax)

The Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods and services. In effect, GST provides revenue for the government.

 TAX

Tax is an amount of money that you have to pay to the government so that it can pay for public services. There are two types of taxes :

    DIRECT TAX    INDIRECT TAX

    Direct Tax : The tax which is directly pay to the government. Earlier there are various types of direct taxes like Wealth tax, Gift tax but now we have only one direct tax i.e. Income Tax.

    Indirect Tax : The tax which is indirectly i.e. with the help of third party pay to the government.

Earlier there are various types of indirect taxes like VAT tax, Sales tax, Entertainment tax but now we have only one indirect tax i.e. GST.

​

What are the benefits of GST?

The major benefits of GST are:

1. Make compliance easy by providing all tax payer services like registration, returns, payment etc. online through use of Information Technology.

2. Same tax structure across country making One Nation, One tax.

3. Seamless flow of credit of all taxes paid in earlier stage and therefore reduce inflation by removing cascading effect.

4. More transparency in “Doing Business” and creating competitiveness in Industry.

5. Uniformity of taxes and Compliances will reduce compliance costs for industry.

6. Less chances to avoid taxes and more control over tax evaders will help in better administration.

7. More revenue collection and decrease cost of collection due to use of IT by GSTIN.

8. Tax burden will reduce due to seamless credit and prices of commodities and services will reduce eventually.

When would one be liable to pay taxes under GST?

A person would be liable to pay taxes, if he is registered or liable to be registered under GST. A person would be liable to be registered in GST:

1. If he is mandatorily required to be registered under GST.

2. If he is making a taxable supply of goods or services or both and his aggregate turnover under same PAN in the entire country exceeds the threshold limit as provided in GST.(Threshold limit in GST is Rs.40 Lakh/ 20 Lakh (For Normal Category States/ For Special Category States)

The concept of liability of a person liable to pay tax in GST revolves around registered person or person liable to be registered under the law.

"A person would have to register himself within 30 days from the day when he becomes liable to be registered. He can also register himself voluntarily under GST."

Taxable Person in GST

1.Who is liable to pay taxes under GST?

A taxable person is liable to pay tax under GST.

2.Who is a taxable person in GST?

A person is registered or is liable to be registered under the law would be a taxable person in GST.

A person would be liable to be registered under the law under two categories:

1. Person liable to be registered mandatorily.

2. Person liable to be registered provided aggregate turnover of supply of goods or services or both exceeds threshold limit.

Generally, a person is liable to pay tax on the supply of goods or services made by him. Whether in any case, a person is liable to pay tax on these supplies received by him?

The tax is generally paid by the person on the supply of goods or services made by him. This is called Forward charge of Tax.

In some of the cases, a person is liable to pay tax on the goods or services received by him. The law casts the responsibility to pay tax on the person receiving the supply of goods or services rather than the person supplying the goods or services. This is called Reverse charge of tax.

Importance of GST in Indian Economy:

GST Regime:

GST is one of the biggest indirect tax reforms in the country. GST is expected to bring together state economies and improve overall economic growth of the nation.

GST is a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by states and Central.

There are around 160 countries in the world that have GST in place. GST is a destination based taxed where the tax is collected by the State where goods are consumed. India is going to implement the GST from July 1, 2017 and it has adopted the Dual GST model in which both States and Central levies tax on Goods or Services or both.

SGST – State GST, collected by the State Govt.

CGST – Central GST, collected by the Central Govt.

IGST – Integrated GST, collected by the Central Govt.

Need for GST in India:

Introduction of GST is considered to be a significant step in the reform of indirect taxation in India. Amalgamating of various Central and State taxes into a single tax would help mitigate the double taxation, cascading, multiplicity of taxes, classification issues, taxable event, and etc., and leading to a common national market.

VAT rates and regulations differ from state to state. On the other hand, GST brings in uniform tax system across all the states. Here, the taxes would be divided between the Central and State government.

GST Tax Rate: What are Rate of Taxes under GST?

In India, there is wide socio-economic gap and it would not be feasible to levy same rate of tax for necessary items like milk and luxury items like BMW Cars. Therefore, it was critical to set different rates for different class of items.

There are four slabs fixed for GST Rates - 5%, 12%, 18% and 28%.

​

"Items exempted under GST:-Milk, eggs, curd, buttermilk, Fresh vegetables and fruits, Un-branded wheat and rice, un-branded flour, Puja Items."

​

Items under 5% -Frozen Vegetables and fruits, branded wheat and rice, branded flour, hand-made safety matches, cotton, cotton fabrics, Footwear below Rs.500.

​

Items under 12%-Butter, Cheese, Dry fruits, mobile phones, ayurvedic products,

Items under 18%-Biddi wrapper leaves, biscuits, footwear exceeding Rs. 500, man-made fibre, hair oil, soap, toothpaste.

Items under 28%-Biris, LED TV, AC, Cars, tobacco products, cement.

Types of GST in India:

There would be three different types of levies in GST:

1. CGST

2. SGST/UTGST

3. IGST

SGST would be leviable along with CGST on the supply made by a registered person within a State.

Just as SGST is leviable along with CGST on the supply made by registered person within a State, UTGST would be levied along with CGST on the supply made by a registered person within a Union Territory.

However, in no case, both SGST and UTGST would be leviable on an invoice of supply of goods or services or both. It would either be SGST or UTGST along with CGST would be leviable on the invoice.

IGST would be leviable on Import or Inter-State supply of goods or services or both. IGST would be equivalent to sum total of CGST and SGST/UTGST.

​

​

What is GST Registration

In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration.

For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.

​

Who Should Register for GST?

​

• Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)

• Businesses with turnover above the threshold limit of Rs. 40 Lakhs* (Rs. 10 Lakhs for North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)

• Casual taxable person / Non-Resident taxable person

• Agents of a supplier & Input service distributor

• Those paying tax under the reverse charge mechanism

• Person who supplies via e-commerce aggregator

• Every e-commerce aggregator

• Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person.

​

​