Goods and Services Tax (GST) was introduced on July 1, 2017 and has now completed four successful years of its implementation. Over the years, there has been a reduction in the tax rates, simplification of procedures and a growing economy has also led to an exponential increase in the tax base.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

On the eve of completion of 4 years of the GST here are few things which one needs to know about GST.

 

See Zee Business Live TV Streaming Below:

1. What is Goods and Services Tax (GST)?

GST is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. 

In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer

2. How a particular transaction of goods and services would be taxed simultaneously under Central GST (CGST) and State GST (SGST)?

The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. 

Further, both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of CENVAT. While the location of the supplier and the recipient within the country is immaterial for the purpose of CGST, SGST would be chargeable only when the supplier and the recipient are both located within the State.

3. Who is liable to pay GST?

Under the GST regime, tax is payable by the taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the turnover threshold of Rs 20 lakhs (Rs 10 lakhs for NE & Special Category States) except in certain specified cases where the taxable person is liable to pay GST even though he has not crossed the threshold limit. 

The CGST / SGST is payable on all intra-State supply of goods and/or services and IGST is payable on all inter- State supply of goods and/or services. The CGST /SGST and IGST are payable at the rates specified in the Schedules to the respective Acts.

4. What is the advantage of taking registration in GST?

Registration under GST regime will confer following advantages to the business:

a. Legally recognized as supplier of goods or services.

b. Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business.

c. Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.

d. Getting eligible to avail various other benefits and privileges rendered under the GST laws.

5. Can a person without GST registration claim ITC and collect tax?

No, a person without GST registration can neither collect GST from his customers nor can claim any input tax credit of GST paid by him.

6. Who are the persons liable to take a Registration under the Model GST Law?

As per Section 22 of the CGST/SGST Act 2017, every supplier (including his agent) who makes a taxable supply i.e. supply of goods and / or services which are leviable to tax under GST law, and his aggregate turn over in a financial year exceeds the threshold limit of twenty lakh rupees shall be liable to register himself in the State or the Union territory of Delhi or Puducherry from where he makes the taxable supply.

In case of eleven special category states (as mentioned in Art.279A(4)(g) of the Constitution of India), this threshold limit for registration liability is ten lakh rupees.

Besides, Section 24 of the Act mentions certain categories of suppliers, who shall be liable to take registration even if their aggregate turnover is below the said threshold limit of 20 lakh rupees.

On the other hand, as per Section 23 of the Act, an agriculturist in respect of supply of his agricultural produce; as also any person exclusively making supply of non-taxable or wholly exempted goods and/or services under GST law will not be liable for registration. 

7. Which are the cases in which registration is compulsory?

As per Section 24 of the CGST/SGST Act, the following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit:

i) persons making any inter-State taxable supply;

ii) casual taxable persons;

iii) persons who are required to pay tax under reverse charge;

iv) electronic commerce operators required to pay tax under sub-section (5) of section 9;

v) non-resident taxable persons;

vi) persons who are required to deduct tax under section 51;

vii) persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise;

viii) Input service distributor (whether or not separately registered under the Act)

ix) persons who are required to collect tax under section 52;

x) every electronic commerce operator

xi) every person supplying online information and data base retrieval services from a place outside India to a person in India, other than a registered person; and,

xii) such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.