Introduction of GST
GST is one indirect tax for the whole nation, which will make India one unified common market.
GST is on supply of goods and services rather than on production, trading or service rendered. It is destination based tax i.e. it is taxable in state in which goods or services are consumed.
It is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages. Presently most of the items are levied at 40%-50% tax rates but due to introduction of GST flat tax rate shall be applicable which will reduce tax burden on consumers.
Applicability of GST
- With the 101st Constitution Amendment Act coming into force on 8th September, 2016 and notification of the GST Council on 15th September the road to GST rollout is clear. Government is keen on introducing GST the biggest indirect tax reform, with effect from 01 April 2017. One of the biggest challenges is to train the indirect tax officials of both Centre and State, as well as the trade on the concepts, processes and procedures of GST.
- GST shall be applicable on following persons:
- Manufacturers who produces and sells (local or inter-state) goods
- Traders who sells good (within state or interstate)
- Service provider or Service Receiver in case of Reverse Charge
- Commodities that are kept outside the purview of GST-: There are some commodities are kept outside the purview of GST, they are alcohol for human consumption, petroleum products and electricity. In such commodities the existing taxation system (VAT & central excise) will be continue. However in case of tobacco and tobacco products GST will also be levied and the central government also have the power to levy the central excise.
- Manufactured goods could become cheaper due to Lower logistics and tax costs
- Less developed states get a lift
- Logistics, inventory costs will fall
- It is destination based tax
- Life gets simpler as GST will replace 17 indirect tax levies and compliance costs will fall
- More transparency
- Due to less evasion of tax the revenue of government will get a boost
GST Registration& Procedure
- Every taxpayer should get registered within 30 days of becoming liable for registration however for casual tax payer and non-resident they must get registered within 5 days prior to the commencement of business.
- Taxpayers having single PAN have business in different state have to take registration each state, however if any person have vertical business in same state then he may opt for different registration.
- The threshold limit for the taxability is whose turnover exceeds Rs. 20 Lakhs and Rs.10 Lakhs for north east state.
- These are the list of compulsory registration:
- Persons making any inter-state taxable supply
- Casual taxable persons
III. Person who are required to pay tax on reverse charge basis
- Non-resident taxable persons
- Person who are required to deduct tax under sec 37
- Persons who supply goods or services on behalf of other registered taxable person whether as an agent or otherwise
VII. Input service distributor
VIII. Person who supply goods or services other than branded services, through electronic commerce operator
- Every electronic commerce operator
- An aggregator who supplies services under his brand name or his trade name
- Such other person or class of persons as may be notified by the central Govt. or a state Govt. on the recommendation of the council.
- Paperless procedure: The whole system of enrollment will be paperless; hence, no hard copies shall be entertained by the department. Further, all the aforesaid registered taxpayers will need to visit the GST system portal. Further, it is mandatory for every person to register if the annual turnover is more than Rs 20 lakh, the exemption limit.
- Provisional ID and password: Before visiting the GST system portal, you must have the provisional ID and password given to you by your concerned state authorities. Contact your ward officer to complete the online pre-registration under GST.
Information & Documents Required
Before enrolling with the GST Common Portal, you must ensure to have the following information:
- i) Provisional ID received from State/ Central Authorities
- ii) Password received from the State/ Central Authorities
iii) Valid E-mail Address
- iv) Valid Mobile Number
- v) Bank Account Number
- vi) Bank IFSC
1) Proof of Constitution of Business
2) Photograph of Promoters/ Partners/ Karta of HUF
3) Proof of Appointment of Authorized Signatory
4) Photograph of Authorized Signatory
5) Copy of Bank Statement
Note: If the information and the provided documents are found in order, then authorities shall approve and grant registration within three common working days, if not so then the authorities will communicate deficiency to the applicants. In case no deficiency is communicating within three common working days then registration shall deemed to be granted and the portal will automatically generated.
- Single registration instead of multiple registrations
- Less compliance
- Small taxpayers are not liable to get registered.
- PAN based registration
- GST is Fully Online without any Manual Intervention
Conclusion: For more information visit www.rbgconsultants.com