Goods and Services Tax (India) - An Overview
The Government of India has implemented an indirect tax, namely GST from 1st July 2017 on most domestic goods and services. The seller reduces the GST on the product and then forward the same to the Government. So, we can say GST is one tax, one nation and it is providing revenue to the government.
GST is India’s first major sweeping tax reform in decades. This regime has rationalised tax collection and simplified compliance procedures to a great extent. Businesses that once had to register for a wide range of taxes, i.e., VAT, Excise Duty, Service Tax, CST, Octroi, Luxury Tax and Entertainment Tax, -- now only require a GST registration. GST is strictly an Indirect tax applied to the cost of certain goods and services while Income tax comes under Direct tax. This value-added tax is levied on all goods and service providers in the domestic market. However, not all businesses require a registration.
Any business offering sale of goods with annual turnover of Rs 40 lacs or service with annual turnover of 20 lacs would require the registration for GST and have a valid GST Number. Remember that the GST is levied on supply, not sales. Therefore, stock-taking, discounts and freebies also come under the GST net. Businesses selling to other states must register for GST, regardless of turnover.
Features of GST
GST is a comprehensive, value added indirect tax on goods and services, which has made India a unified market.
Some of the key features of GST are:
1.Dual tax structure: There is a centre and state tax levied for every supply of goods and services and these are termed Centre GST (CGST) and State GST (SGST), respectively
2. IGST on inter-state supplies: Integrated GST (IGST) on inter-state supplies where the revenue is shared by both the Centre and the Consumption state.
3. Supply between two establishments of same legal entity taxable: The supply of goods between the agent and the principal are taxable. The “gifts” given by employers to employees exceedding INR 50,000 are taxable.
4. Imports and exports: All imports are treated as inter-state supplies and do attract IGST. all exports are zero rated.
5. Tax administration: An online system for tax, however, there are GST Facilitation centres, GSPs, ASPs that assist taxpayers in filing the returns, registrations, etc.
Composition scheme
The GST regime offers reduced tax liabilities to businesses under the composition scheme. These businesses must have a supply turnover of under Rs. 50 lakh, and will also not be able to avail of input-credit. This scheme will not, however, apply to the service industry or to businesses making inter-state sales.
What is GST in India ?
In March 29, 2017 the Indian government declared the Goods and Service Tax to unify the state economies and enhance the overall economic growth of the country. Act according to which the GST is an indirect tax that subsumes all other taxes. This Act became effective on July 1 2017 and since then GST has replaced all the taxes that were existed previously. GST is a comprehensive tax that is imposed at every stage of sale.
How the GST system works in India
GST is a comprehensive, value-added tax imposed on manufacture, sale and consumption of goods and services. GST is a single unified system that is applied across the country.
How GST Will Transform India
As GST removes the cascading effect of taxes and the economic barriers between the states, it will be beneficial for businesses and consumers. For instance, if a product has a tax rate of 20%, this is inclusive of central and state government’s taxes. The seller can manufacture in one state and supply to other states with no taxes. Also, the consumers would be subject to only this indirect tax and no other taxes. GST helps government in creating a common market with common procedures, thereby reducing the corruption.
How to register on www.gst.gov.in?
This must be done on GST portal gst.gov.in. It is a simple 11-step process
What is GST Registration?
GST refers to Goods and Services Tax which subsumes all taxes such as Sales tax, Service tax, Excise duty etc. into GST.
GST registration is required primarily if your annual sales are more than Rs. 20 Lakh. Even if your sales are less than Rs. 20 Lakh, we suggest that you voluntarily opt for GST registration because:
- You will not get any tax refunds on purchases (e.g. if you buy goods worth Rs 1 lakh in a year, and tax rate is 28% – you will lose tax refund of Rs. 28,000).
- You cannot sell outside your state
- GST registration typically takes between 2-6 working days. You need to file your application with the department and sign it with your digital signature.
How can we help? Why bigvakil?
We help you get a secure GST Identification Number.
We make it easy for you to get your GST from the comfort of your own home. We do the entire process online.
We will file your returns and complete all other compliances as and when required.
Bigvakil GST advantages
Bigvakil is using the internet to simplify time-consuming paperwork. Over the past five years, we have helped tens of thousands of start-ups register themselves, protect their intellectual property, secure funding from Venture Capitalists & comply with the many regulations of the MCA.
STARTUP-FRIENDLY
3% of all business registrations and climbing
COST-EFFICIENT
9 crore in professional fees saved every year
TIME-SAVING
42,000 hours freed up for Indian business owners
CONTINUOUS SUPPORT
160-strong team available for assistance
Why bigvakil
1 Business Day
bigvakilcan connect you with a GST expert in just one working day. And if you're not totally satisfied, we'll take another day to find a replacement. All at the lowest price, both online and offline.
9.1 Customer Score
We make your interaction with government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.
160 Strong Team
Our team of experienced business advisors are a phone call away, should you have any queries about the process. But we'll try to ensure that your doubts are cleared before they even arise.
Documents required for GST Advisiory
In India, GST Advisiory cannot be done without proper identity and address proof. These documents will be needed for all the directors and the shareholders of the company to be incorporated. Listed below are the documents that are accepted by MCA for the online company registration process acceptable.
Identity And Address Proof
- Scanned copy of PAN Card or Passport (Foreign Nationals & NRIs)
- Scanned copy of Voter’s ID/Passport/Driver’s License
- Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
- Scanned passport-sized photograph specimen signature (blank document with signature [directors only])
For the foreign nationals, an apostilled or notarized copy of the passport has to be submitted mandatorily. All documents submitted should be valid. The residence proof documents like the bank statement or the electricity bill must be less than 2 months old.
Registered Office Proof
For online company registration in India, the company must have a registered office in India. To prove admittance to the registered office, a recent copy of an electricity bill or the property tax receipt or water bill must be submitted. Along with the rental agreement, utility bill or the sale deed and a letter from the landlord with her/his consent to use the office as a registered office of the company should be submitted.
- Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
- Scanned copy of Notarized rental agreement in English
- Scanned copy of No-objection certificate from the property owner
- Scanned copy of sale deed/property deed in English (in case of owned property)
Note: Your registered office need not be a commercial space; it can be your residence too.
