Facts about Indian GST

Goods and Services Tax (GST) is an indirect tax applicable throughout India which replaced multiple cascading taxes levied by the central and state governments. 

A single common "Goods and Services tax (GST)" was proposed and given a go-ahead in 1999 during a meeting between then Prime Minister Atal Bihari Vajpayee and his economic advisory panel, which included three former RBI governors IG Patel, Bimal Jalan and C Rangarajan.  Vajpayee set up a committee headed by the then finance minister of West Bengal, Asim Dasgupta to design a GST model.

In 2014, the NDA government was re-elected into power, this time under the leadership of Narendra Modi. With the consequential dissolution of the 15th Lok Sabha, the GST Bill – approved by the standing committee for reintroduction – lapsed. Seven months after the formation of the Modi government, the new Finance Minister Arun Jaitley introduced the GST Bill in the Lok Sabha, where the BJP had a majority. In February 2015, Jaitley set another deadline of 1 April 2016 to implement GST. In May 2015, the Lok Sabha passed the Constitution Amendment Bill, paving way for GST.

It was introduced as The Constitution (One Hundred and First Amendment) Act 2017, following the passage of Constitution 122nd Amendment Bill. The GST is governed by a GST Council and its Chairman is the Finance Minister of India. Under GST, goods and services are taxed at the following rates, 0%, 5%, 12%, 18% and 28%. There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold. In addition a cess of 15% or other rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products

           

           

Indirect taxes which are subsumed in GST:

1. Service Tax

2. Central Excise duty

3. State VAT

4. Central sales tax

5. Octroy and entry tax

6. Purchase tax

7. Entertainment, Advertisement and luxury tax

8. Taxes on lottery, betting and gambling

Liable to register if he is:

With a turnover >20lakhs in a financial year(10 lakhs if place of supply is in a special category state-Arunachal Pradesh, Assam, J&K, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, HP, Uttarakhand)

COMPOSITION SCHEME:

The composition scheme allows qualifying taxpayers — those whose turnover in the preceding financial year was less than 50 lakhs — to pay a percentage of their yearly turnover in a state as tax. This relieves the taxpayers from collecting tax from their customers directly and provides other benefits as well. 

The composition scheme enables small taxpayers to:

• File a single quarterly return in place of multiple monthly returns
• Report turnover pertaining to outward supplies in a single line item on the return
• Pay a lower rate of tax, thus offering a competitive advantage
• Follow relaxed rules around maintaining books of accounts and records under GST

Conditions for applicability include:

• Must be a registered taxpayer
• Goods held in stock must not have been purchased from outside the state or from outside India
• Goods held in stock must not have been purchased from an unregistered dealer; if so, the taxpayer shall pay tax on the goods
• Aggregate turnover in the preceding financial year must have been less than 50 lakhs. Aggregate turnover includes the value of taxable and non-taxable supplies, and exempted and exported supplies. It does not include taxes levied under GST or the value of inward supplies

If more than one registered persons have the same PAN, then a registered person shall not be eligible for the composition scheme unless all registered persons under the same PAN opt in for the composition scheme

Those not eligible for the composition scheme include:

• Service providers
• Suppliers of non-taxable goods
• Taxpayers engaged in the interstate supply of goods
• Those engaged in supply of goods through an eCommerce operator
• Manufacturers of notified goods
• Casual taxable persons or non-resident persons

If it turns out that an ineligible taxpayer enters into the composition scheme, he will later be liable to pay the differential tax along with a penalty.

       

Under this scheme the rates are as follows

• Manufacturer       - 1%
• Composite supplier of food or drink for human use -2.5%
• Others----0.5%

GST identification number is a 15 digit code.

• The first 2 digits indicate state code (For AP-28)
• Next 10 digits indicate PAN number
• 13th digit indicates no. of registrations an entity has within a state for the same PAN (alpha-numeric number)
• 14th digit-Z

• The last digit will be a check code which will be used for detection of errors

                                                      

GST Acts       

CGST- Central GST Act                                - Central Govt.

SGST- 29 state laws                                       -State Govt.

IGST-Integrated Goods and Service tax        - Central Govt

Thank you friends next time we will meet in next post……….Bye…. 

Thanks & Regards,

R G Harsha Vardhan. 

–All the above contents only for Public reference and not for any other purpose. Therefore, I can’t take any responsibility for the results or consequences of any attempt to use or adopt any of the information presented on this blog—

(Source: Wikipedia)