GST Quick Refresher 2024: Indirect tax regime was initiated in 1986 by Vishwanath Pratap Singh through MODVAT (Modified Valued Added Tax) concept. Taking forward this improvement of torch further GST has now been introduced by Indian Government in this technological age. Business dynamics were become so turbulent that it was already missioned and could have made out in last few years for introduction of streamlined tax administration, which can barely be achieved without bringing necessary constitutional amendments. now get more details for GST Quick Refresher from below….
GST Quick Refresher
What are the basic feature of GST?
1. GST is an indirect tax.
“Indirect” means that it is levied on the supply of goods and services, rather than directly on income.
2. GST is a consumption Tax.
“Consumption tax” means, in economic terms, that the tax is ultimately borne by consumers, not by suppliers (producers, traders or service providers).
Business Entity, in reality, act as collector of tax for Government.
3. GST is also a VALUE ADDED TAX.
Value Added Tax refers to
… any national tax by whatever name it is known such as GST
… that embodies the basic features of a value added tax, i.e,
…. a tax on final consumption
…. Collected form, but in principle not borne by,
businesses through a staged Collection process.
What is GST?
GST (Goods & Services Tax) is a blanket indirect tax that will replace existing indirect and state taxes like VAT, Excise Duty, Service Tax, etc. Being likely to be at 18% levy is expected to be effective from July 1st, 2017. It is a destination based tax, which means charged when goods consumed instead of goods produced. The manufacture or wholesaler will pay the GST but can also claim through tax credit method. Since it is destination based tax, consumer is the one who is last in supply chain has to bear this tax.
Objectives of GST:
The main objective of GST shall be to maintain the uniform tax across the states in country & to reduce cascading effect of taxes (earlier we must have seen cascading impact in state VAT).It can be sensed from their approach that government has laid a principle of consumption based taxation while drafting GST Act.
Components of GST:
Alike from State VAT/CST, we shall still be having separate tax components under GST purview, as explained below:
Central GST (CGST): It will be levied on supply of all goods and / or services within a particular state, by the Central Government.
State GST (SGST): It will be levied on supply of all goods and /or services within a particular state, by the respective State Government.
Integrated GST (IGST): It will be levied on all interstate supplies of goods and/or services, by the Central Government.
Salient Features of GST:
- It is proposed that PAN will be linked with GSTIN with their 15 digits, which will help to track activities across government inter departments.
- Threshold limit is marked at 9 lacs INR, except for part of North East India including Sikkim for which limit is to be set at 5 lacs INR.
- Registration will be done state wise separately.
- Single & Centralized registration will no more be in the picture.
GST Enrolment Process:
- First taxpayer has to obtain GSTN login id and password from aces.gov.in
- Then taxpayer has to login on to gst.gov.in
- User has to complete enrolment process with required validations and needs to upload required documents.
- One will get application reference number.
- Finally, taxpayer obtains provisional GSTIN on any appointed date.
Click here to know detailed procedure for GST Registration
Returns under GST:
Earlier we used to file 50 returns for Vat/CST/ Service tax together on a monthly/quarterly/annually basis. Under GST, this figure has changed from 50 to 37. Below are the details of GST return to be filed.
| Form | Return | Due Date | Applicable on |
| GSTR – 1 | Outward Supplies | 10th of Subsequent Month | Registered Taxable Supplier |
| GSTR – 2 | Inward Supplies claiming input tax credit | 15th of Subsequent Month | Registered Taxable Recipient |
| GSTR – 3 | Monthly Summary Return of Inward & Outward Supplies with tax payment details | 20th of Subsequent Month | Registered Taxable Person |
| GSTR – 4 | Quarterly return for compounding Tax Payer | 18th of Subsequent Month of following quarter | Composition Supplier |
| GSTR – 5 | By N.R.I | 20th of Subsequent Month | For N.R.I |
| GSTR – 6 | Input Service Distributor | 13th of Subsequent Month | Input Service Distributor |
| GSTR – 7 | Return for authorities deducting tax at source | 10th of Subsequent Month | Tax Deductor |
| GSTR – 8 | Supplies effected through Ecommerce and Tax collected at source | 10th of Subsequent Month | Ecommerce Operator/Tax Collector |
| GSTR – 9 | Annual Return | 31st Dec of Next Financial Year | Registered Taxable Person |
| GSTR – 10 | Final Return | Within 3 months of the date of cancellation or date of cancellation order, whichever is later | Taxable person whose registration has been surrendered or cancelled. |
| GSTR – 11 | Details of inward supplies to be furnished by a person having UIN | 28th of the month following the month for which statement is filed | Person having UIN and claiming refund |
Indian Industry Expectations from GST:
- As a way forward, any change in point of taxation or rates should be made with mutual agreements between State and Central Governments to conduct smooth and successful operations.
- Businesses expects GST provisions, rates, returns & administrative proceedings to be simple and straight to accommodate and accomplish tax targets without consuming much time.
- Economic growth & business support will mark the increase in revenues and in turn tax collections. This can only be achieved in the long run from a fully computerized tax administration & compliance system that will boost up the Digital India Initiative of the government.
- Being a single levy as GST alike VAT, Service Tax, Central Excise, duty, it is expected that refunds will make a quick and easy way to businesses without further blocking working capitals.
- All the inputs credits for any GST levied on interstate transactions needs to have proper mechanism so that there should not be any cascading impact.
- Due to its expected structure and cost savings in tax liability, foreign investments and currency inflows are expected in India to set up another tranche of manufacturing facility.
Exemptions from GST:
There are certain lines of products which are kept outside from GST purview as below.
- Alcoholic liquor for human consumption is exempt from GST.
- Also in initial phase, GST will not be applicable to Petroleum crude, Natural Gas, Aviation turbine fuel, Motor spirit (petrol) and high speed diesel.
- Tobacco and tobacco products will be subject to GST. Excised duty can also be levied on tobacco by Centre.
Know more
- List of all Services Exempted in GST
- List of Goods Exempted in GST (0%) (Full List)
Conclusion:
Cabinet has cleared changes in GST Constitutional Amendment Bill by dropping further 1% in manufacturing tax. They have also provisioned guarantee to make compensation to states for any revenue loss in the first five years of roll out of the proposed indirect tax administration.
Written By: Amit Khiyani (CA, LCS, IFRS, BCom)
Myself Amit Khiyani an qualified CA, LCS, Diploma holder in IFRS with BCom graduate having experience of Financial Reporting, Financial Accounting, Financial Analysis, USGAAP, IFRS, and Internal Audit & Risk Management across diverse sectors, exploring Finance world by reaching and accessing all streams through passion of writing.
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