GST is a single tax on the supply of goods and services (as opposed to the previous regime, where goods & services were separately taxed by state government and the center government), right from the manufacturer to the consumer.
A ‘taxable person’ under GST, is a person who carries on any business at any place in India and who is registered or required to be registered under the GST Act(s). Any person who engages in economic activity including trade and commerce is treated as taxable person.
‘Person’ included here are individuals, HUFs, companies, firms, LLPs, AOPs/BOIs, any corporation or Government company, body corporate incorporated under laws of foreign country, co-operative societies, local authorities, government, trusts, artificial juridical persons.
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Every person registered under the GST Act has to periodically furnish the details of sales and purchases along with tax collected and paid thereon, respectively, by filing online returns. Before filing the return, payment of tax due is compulsory otherwise such return will beinvalid.
GST return can be filed in different forms depending upon the nature of transaction and registration.Return Forms that are applicable for Normal Tax payers and their due dates are:
Monthly Details of outward supplies in FORM GSTR-1 by the 10th of next month.
Monthly Details of inward supplies in FORM GSTR-2 by the 15th of next month.
Monthly Filing of Return along with payment of tax due in FORM GSTR-3 by the 20th of next month.
Annual Filing of Return in FORM GSTR-9 by 31st December of next financial year.
For properly updating the invoices, Indian taxpayers and businesses have to file certain returns with the Government within certain time limit.
These returns have to be mandatorily filed as any non-compliance towards the same may lead to disallowance of input tax credit, apart from attracting penalties and interests, etc.
Proper filing of returns is a mandatory process for smooth flow of credit to the last recipient in the supply chain.
The returns have been designed so that all transactions are in sync with each other and that no transaction is left unattended between the buyer and the seller.
The chain starts from GSTR-1. All the data is stored in GSTN, which can be accessed by the users/taxpayers anytime online with their account.
The benefits of GST can be summarized as under:
GST (Goods and Service Tax) will ensure that the indirect tax rates and structures are common across India. Simply Speaking, GST would make doing business in the country tax neutral, irrespective of the state in which business in carried on.
A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. It removes the tax on tax effect.
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.
At the Central level, the following taxes are being subsumed:
Central Excise Duty,
Additional Excise Duty,
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,
Luxury tax, and
Taxes on lottery, betting and gambling.
The major features of the proposed payments procedures under GST system are as follows –
Common Accounting Codes for remittance.
Electronic payment process - no generation of paper at any stage.
Challan generation at single point- GSTN.
Payment can be made through electronic modes such as online banking, Credit Card/Debit Card, NEFT/RTGS and through cheque/cash at the bank
Common challan form with auto-population features.
Common set of authorized banks.
The major features of the proposed registration procedures under GST are as follows:
Existing dealers: Existing VAT/Central excise/Service Tax payers will not have to apply afresh for registration under GST.
New dealers: Single application to be filed online for registration under GST. The registration number will be PAN based and will serve the purpose for Centre and State.
Unified application to both tax authorities.
Each dealer to be given unique ID GSTIN.
Deemed approval within three days.
Post registration verification in risk based cases only.
The major features of the proposed returns filing procedures under GST are as follows:
Common return would serve the purpose of both Centre and State Government.
There are eight forms provided for in the GST business processes for filing for returns. Most of the average tax payers would be using only four forms for filing their returns. These are return for supplies, return for purchases, monthly returns and annual return.
Small taxpayers: Small taxpayers who have opted composition scheme shall have to file return on quarterly basis.
Filing of returns shall be completely online. All taxes can also be paid online.
The Additional Duty of Excise or CVD and the Special Additional Duty (SAD) presently being levied on imports will be subsumed under GST. As per explanation to clause (1) of article 269A of the Constitution, IGST will be levied on all imports into the territories. Unlike in the present rule, the States where imported goods are consumed will now gain their share from this IGST paid on imported goods.
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