One Country One Tax
GST is one indirect tax for the whole nation, which will make India one unified common market. GST 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.
The benefits of GST can be summarized as under:
For business and industry-
Easy compliance: A robust and comprehensive IT system would be the foundation of the GST regime in India. Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which would make compliance easy and transparent.
Uniformity of tax rates and structures: GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business.
Removal of cascading: A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce hidden costs of doing business.
Improved competitiveness: Reduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry.
Gain to manufacturers and exporters: The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.
For Central and State Governments-
Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being replaced by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre and State levied so far.
Better controls on leakage: GST will result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders.
Higher revenue efficiency: GST is expected to decrease the cost of collection of tax revenues of the Government, and will therefore, lead to higher revenue efficiency.
For the consumer-
Single and transparent tax proportionate to the value of goods and services: Due to multiple indirect taxes being levied by the Centre and State, with incomplete or no input tax credits available at progressive stages of value addition, the cost of most goods and services in the country today are laden with many hidden taxes. Under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final consumer.
Relief in overall tax burden: Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers.
At the Central level, the following taxes are being subsumed:-
• Central Excise Duty,
• Additional Excise Duty,
• Service Tax,
• Additional Customs Duty commonly known as Countervailing Duty, and
• Special Additional Duty of Customs.
At the State level, the following taxes are being subsumed:-
• Subsuming of State Value Added Tax/Sales Tax,
• Entertainment Tax (other than the tax levied by the local bodies),
• Central Sales Tax (levied by the Centre and collected by the States),
• Octroi and Entry tax,
• Purchase Tax,
• Luxury tax, and
• Taxes on lottery, betting and gambling.
Keeping in mind the federal structure of India, there will be two components of GST – Central GST (CGST) and State GST (SGST). Both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and services. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State. The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage. Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output. No cross utilization of credit would be permitted.
For the implementation of GST in the country, the Central and State
Governments have jointly registered Goods and Services Tax Network (GSTN) as a not-for-profit, non-Government Company to provide
shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders.
The key objectives of GSTN are to provide a standard and uniform interface to the taxpayers, and shared infrastructure and services to Central and State/UT governments.
A team is working on developing a state-of-the-art comprehensive IT infrastructure including the common GST portal providing front-end services of registration, returns and payments to all taxpayers, as well as the backend IT modules for certain States that include processing of returns, registrations, audits, assessments, appeals, etc.
All States, accounting authorities, RBI and banks, are also preparing their IT infrastructure for the administration of GST.
There would no manual filing of returns and all taxes can also be paid online.
All mis-matched returns would be auto-generated, and there would be no need for manual interventions since most returns would be self-assessed.
BillMade is GST-Ready accounting software. That have following fields like:-
• Easy capturing of GSTIN of Vendor and Customer,
• Reconcile bank transaction,
• Track inventory,
• File GST return effortlessly,
• Reporting is very easy,
• Instantly see how much you are making,
• All your accounts in one place,
• It is rich with modules & features to manage all the functions,
• It is fast & easy to implement,
• It is extensively customisable,
• Easy business accounting and GST filing,
• Simplified tax collection,
• User can simply see break up of taxes on,
• Automatic Ledger impact bifurcation for CGST, SGST and IGST,
• User can easily modify GST Tax rates,
• Registered/Unregistered Supplier,
• Tax bifurcation,
which makes you friendly with GST. Download now. Watch videos
All existing taxpayers registered under any of the Acts as specified in Q1 will be transitioned to GST. Enrolment for GST will ensure smooth transition to GST regime. The data available with various tax authorities is incomplete and thus fresh enrolment has been planned. Also, this will ensure latest data is available in GST Database without any recourse to amendment process, which is the norm to update the data under tax statutes today.
The Harmonized Commodity Description and Coding System generally refers to “Harmonized System
of Nomenclature” or simply “HSN”. It is a multipurpose international product nomenclature developed by the World
Customs Organization (WCO). It first came into effect in 1988.
HSN codes are given to all categories of product for easy classification and identification. All products under the same HSN code will have the same rate of GST.
These codes are uniform throughout the country and also in sync with the global classification. This greatly reduces chances of error made while doing inner-state trades as previously, every state had its own code for each product (for purchase and sales of the product).
GST cover both goods and services so these are codes to identify services too. They are called Services Accounting Codes (SAC).
GSTIN (GST Identification Number)- The GSTIN is composed of 15 digits, which alpha-numeric. This State-wise PAN based GSTN (GST Number) is allotted to each taxpayer.
An invoice of a bill is a list of good sent and services provided, along with the amount due for payment. Use can create GST compliant Invoice free of cost using BillMade Software.
If you are a GST registered business. You need to provide complaint invoices to your clients for sale of good and service. Your GST-Register vendor will provide GST-Compliant purchase invoice to you.
A tax invoice is generally issued to charge the tax and pass on the input tax credit.
A GST Invoice must have the following mandatory fields:
1. Invoice number and date
2. Customer name
3. Shipping and billing address
4. Customer and taxpayer’s GSTIN (if registered)**
5. Place of supply
6. HSN code/ SAC code
7. Item details i.e. description, quantity (number), unit (metre, kg etc.), total value
8. Taxable value and discounts
9. Rate and amount of taxes i.e. CGST/ SGST/ IGST
10. Whether GST is payable on reverse charge basis
11. Signature of the supplier.
In GST there are four slabs. 5%, 12%, 18% and 28% GST slabs. there are some things which are free.