All over answers are here so, please be with this blog and read the full article, you can understand easily about GST and you can explain easily to your friends and family.
First of all, some basic about GST is here:
GST said ‘’ one nation, one text’’, but it’s an incomplete truth because the only indirect text is replaced with GST, still, Direct tax like income tax, corporation tax, property tax, inheritance tax, gift tax, wealth tax, etc are alive.
There were two types of tax before GST: 1. Direct tax and 2. Indirect tax, some are listed below
|Direct tax||Indirect tax|
|1. income tax||1. Custom duty|
|2. corporation tax||2. Excise duty|
|3. gift tax||3. Service tax|
|4. wealth tax||4. Sales tax|
|5. inheritance tax||5. VAT|
2.What is Direct Tax:
Direct tax is a tax an individual pay to government on basis of income and profits, and it is directly paid to the government. Income-tax, corporation tax, property tax, inheritance tax and gift tax, or taxes on assets are examples of direct tax.
3.What is Indirect Tax or GST?
It is a tax paid to the Government on goods and services and not on the income, profit, or salary of an individual and it can be shifted from one taxpayer to another. Custom duty, excise duty, service tax, sales tax, VAT, etc are a total of 17 different types of example of indirect tax.
BUT now indirect tax is replaced by GST:
4.Some details of GST:
|1.||THE first GST start by France in 1954|
|2||Implement in India 1 July 2017|
|3||India implements a dual GST model, meaning that taxation is run by both the central and state governments.|
|4||17 types of indirect tax are involved in GST|
|5||As per the Government, Imprisonment of 5 years for Offences under GST if the taxpayer is not able to pay above 5 crores of tax.|
|6||8 September 2016 Indian president had signed the GST bill|
|7||I-GST is implemented for inter-state supply in Article 269A|
|8||Article 279A: GST Council- The GST Council is an apex member committee to switch, reconcile, or to acquire any law or regulation|
5.Who Should File GST Returns?
1. GST returns must tax be filed by every business units whose turnover above 20 lakhs
2. if you doing business between one state to another state of rupees 1 or above, then you must be filed GST
3. Online business-like E-Commerce company, then you must be filed GST
for example Zomato, swigy, Amazon, Flipkart, etc E-Commerce platform.
6.What is SGST, CGST, UTGST, IGST?
Types of GST
1. C-GST (Central goods and service tax):
C-GST is the tax that are impose by central government.
For example, if you made a product in Gujarat state and also sell the same product in Gujarat state, then you have to pay C-GST and S-GST (State goods and service tax). This means a total of 18% tax you need to pay as per the taxes slab, 9% of tax goes to the central government and another 9% tax goes to the state government.
2. S-GST (State goods and service tax):
S-GST is the tax that are impose by State government.
For example, if you made a product in Gujarat state and also sell the same product in Gujarat state, then you have to pay C-GST and S-GST (State goods and service tax). This means a total of 18% tax you need to pay as per the taxes slab, 9% of tax goes to central government and another 9% tax goes to state government.
3. UT-GST (Union territory goods and service tax):
UT-GST is the tax that are impose by Union territory government.
For example, if you sell a product in union territories like Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli and Daman and Diu, National Capital Territory of Delhi, Jammu and Kashmir, Lakshadweep, Ladakh, and Puducherry, then you have to pay UT-GST and C-GST as per taxes slab. This means a total of 18% tax you need to pay as per the taxes slab, 9% of tax goes to the central government and another 9% tax goes to the UT government.
4. I-GST (Integrated goods and service tax):
Tax is applied to the business between two-state. For example, you made a product in Gujarat and sell it in Rajasthan state then you need to pay tax to the central government and state government of Rajasthan.
7.What is the input tax and output tax?
Input tax: Tax paid on purchases.
For example, you have bought goods worth 100 rupees and you give 10% GST on that goods, that means you give 110 rupees for that goods.
Goods = ₹100
₹100 + 10% GST = ₹110 (it is called INPUT GST)
Where, GST = 10% of ₹100 = ₹10
Output tax: Tax collected on sales.
For example, you sell the same goods to someone on price of ₹150 (₹40 your profit) and the buyer give 10% GST on that goods, that means buyer gave 165 rupees for that goods.
Goods = ₹150
₹150 + 10% GST = ₹165 (it is called OUTPUT GST)
Where, GST = 10% of ₹150 = ₹15
But conclusion is that you already given 10% of GST when the time of you bought a goods, so you don’t need to pay 10% of GST when you sold a goods to someone, this time you have to pay only OUTPUT – INPUT = Whatever.
GST pay = output – input = ₹5
= ₹15 – ₹10 = ₹5
You have to return ₹5 to the government after you sold product.
8.What is GSTR?
GST return is a document that will include all the details of your income, sales, purchases, tax collected on sales (output tax), and tax paid on purchases (input tax) which a taxpayer is required to file with the tax administrative authorities. Once you file GST returns, you’ll need to pay the resulting liabilities (money that you simply owe the government).
9.GST slab rate list:
|Sugar, tea,||Butter, ghee,||Hair oil, soap,||Consumer|
food for babies,
|cashew||capital goods,||chewing gum,|
|fresh vegetables||condensed milk,|
|fruit juice,||pasta corn|
|Thorium oxalate||agarbatti, Bio-|
Petrol, diesel, gas, electricity, wine/alcohol etc are not included in GST.
10.GSTIN- GST identification number:
11.GSTN (Goods and service tax network):
Goods and Service Tax Network (GSTN) is a private sector company whose owners are the Central Government, the State Governments, and Financial Institutions.
GSTN will administer the GST.
• Single agency to administer GST that will replace multiple Central and State Government departments.
• The tax administration will shift online with the facility to reconcile with bank accounts.
12.Below is the detail of shareholders of GSTN:
|State government & EC||24.5%|
|NSE strategic investment co.||10%|
|LIC housing finance ltd||11%|
13.Some myths and realty of GST
|1. Need to generate all invoices on|
computer/ internet only
|1. Invoices can be generated|
|2. Need internet all the time to do|
business under GST
|2. Internet would be needed only|
while filling monthly return of GST
|3. Only have a provisional id but waiting|
for final id to do business
|3. Provisional ID will be your final|
|4. My item was earlier exempt, so I’ll|
need new registration
|4. Continue doing business, get|
registered within 30 days
|5. There are 3 returns per months to|
|5. Only 1 return with 3 parts – 1st part|
filed by dealer, other 2 parts will be
auto-populated by computer
|6. Even small dealers will have to file|
invoice wise details in the return
|6. Those in retail business (B2C) need|
to file only summary of total sales
|7. New GST rate is higher compared to|
|7. All invisible taxes like Excise Duty have|
been subsumed in GST, so it appears like higher.
14.What are the benefits of GST:
- Final price of goods to be lower.
- A relatively large segment of small retailers will either be exempted from tax or will suffer very low tax rates.
- Generate more employment.
- The average tax burden on firms to come down.
- it Will boost foreign investment.