graph

Goods and Services Tax

economy, iip, iip inflation

Adi Godrej, Chairman, Godrej group

Photo: Shutterstock

Gold discounts fall as arbitrage window shrinks; consumer demand still low

Govt sanguine about GST passage minus Cong leg-up

<div>
	The Goods and Services Tax (GST) is a uniform indirect tax levied on goods and services across the country. GST, as an umbrella tax, replaced central taxes like central excise, service tax, additional duties of excise &amp; customs, special additional duty of customs, besides cesses and surcharges, on supply of goods and services.</div>
<div>
	&nbsp;</div>
<div>
	<strong>Central GST and State GST</strong></div>
<div>
	&nbsp;</div>
<div>
	CGST is levied on intrastate supplies by the central government and SGST is levied on intrastate supplies by respective state governments.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	<strong>Integrated GST</strong></div>
<div>
	&nbsp;</div>
<div>
	IGST is levied on interstate supplies by the Centre (equal to CGST + SGST combined on supplies made within the state).</div>
<div>
	&nbsp;</div>
<div>
	Any supply of goods or services or both on interstate basis typically attracts IGST on the consideration thereof.</div>
<div>
	&nbsp;</div>
<div>
	<strong>Key features of GST</strong></div>
<div>
	&nbsp;</div>
<div>
	* GST envisages all transactions and processes to be done only through the electronic mode, to achieve a non-intrusive administration. This minimises the taxpayer&#39;s physical interaction with tax officials.</div>
<div>
	&nbsp;</div>
<div>
	* GST provides for the facility of auto-populated monthly returns and annual return.</div>
<div>
	&nbsp;</div>
<div>
	* It also facilitates taxpayers by prescribing grant of refund within 60 days, and provisional release of 90 per cent refund to exporters within 7 days.</div>
<div>
	&nbsp;</div>
<div>
	* Further facilitation measures include interest payment if refund is not sanctioned in time, and refund to be directly credited to bank accounts.</div>
<div>
	&nbsp;</div>
<div>
	* Comprehensive transitional provisions for ensuring smooth transition of existing taxpayers to GST regime, credit for available stocks, etc.</div>
<div>
	&nbsp;</div>
<div>
	* Other provisions include system of GST compliance rating, etc.</div>
<div>
	&nbsp;</div>
<div>
	* Anti-profiteering provisions for protection of consumer rights: Any benefit by way of reduction in rate of tax or increase in input tax credit arising due to introduction of GST are passed on to customers (through reduction in sale price) by way of commensurate reduction in prices.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	* Under the GST regime, exports are zero-rated in entirety, unlike the earlier system where refund of some of the taxes did not take place due to fragmented nature of indirect taxes between the Centre and states.</div>
<div>
	&nbsp;</div>
<div>
	* GST is largely technology-driven and reduces the human interface to a great extent</div>
<div>
	&nbsp;</div>
<div>
	* GST is believed to have improved ease of doing business in India.</div>
<div>
	&nbsp;</div>

RELATED BUDGET TERMS

Learn what is meant by Goods and Services Tax, GST definition, types of GST, GST rates and more GST news here at Business Standard.

What is GST, Types of GST, GST News, Goods and Services Tax Updates

What is Goods and Services Tax

<div>
	Every registered taxpayer in India, according to law, is required to file returns for a prescribed tax period before a specified due date. Like all earning individuals have to file income-tax returns (ITR), all business owners, dealers, traders and taxpayers registered under the Goods and Services Tax (GST) system need to file GST returns. They have to furnish business information like purchases, sales, tax collected, tax paid and others on the GST portal. This procedure is carried out by filing GST return online on a periodic basis by using appropriate GST return forms.</div>
<div>
	&nbsp;</div>
<div>
	For instance, if you are a business owner, you must declare the income that you get from carrying out business transactions. GST returns contain all the details of your purchases, sales, tax collected on sales (output tax), and tax paid on purchases (input tax). The taxpayer has to file a summary of self-assessed liabilities, input tax credit (ITC) and details of tax payment. Once you file GST return, you will need to pay the resulting tax liability (money that you owe the government).<br />
	<br />
	<div>
		<strong>What is GST?</strong></div>
	<div>
		&nbsp;</div>
	<div>
		PM Narendra Modi-led Bharatiya Janata Party (BJP) government introduced GST in a historic midnight session of Parliament on July 1, 2017. Touted as the biggest tax reform in India, GST was brought in with the aim of rolling out &lsquo;One Nation, One Tax&rsquo;.&nbsp;</div>
	<div>
		&nbsp;</div>
	<div>
		GST eventually replaced all indirect taxes levied on goods and services by the central and state governments, in a bid to make the indirect taxation structure easier. The GST system subsumed Central Excise Law, Service Tax Law, State VATs, Entry Tax, Luxury Taxes, entertainment tax, etc. Under the GST, there is only a single tax on the supply of goods and services across the country, which means, the consumer will pay only the GST charged by the last dealer in the supply chain.&nbsp;</div>
</div>
<div>
	&nbsp;</div>
<div>
	<strong>How to file GST return?</strong></div>
<div>
	&nbsp;</div>
<div>
	1. Visit the GST portal gst.gov.in to file the GST return online.</div>
<div>
	&nbsp;</div>
<div>
	2. Keep GST-compliant sales and purchase invoices ready while filing GST return</div>
<div>
	&nbsp;</div>
<div>
	3. Log on to the GST portal with valid credentials</div>
<div>
	&nbsp;</div>
<div>
	4. After logging in, perform the following steps by clicking on: Services &gt; Returns &gt; Returns Dashboard command</div>
<div>
	&nbsp;</div>
<div>
	5. &lsquo;File Returns&rsquo; page will appear, select the financial year and the return filing period (month) for which you want to file the return and click on &lsquo;Search&rsquo;</div>
<div>
	&nbsp;</div>
<div>
	6. You will receive a 15-digit GST identification number based on your state code and PAN number</div>
<div>
	&nbsp;</div>
<div>
	7. Upload the invoices, and an invoice reference number will be issued against each invoice</div>
<div>
	&nbsp;</div>
<div>
	8. Now select the return you want to file and click on &lsquo;Prepare online&rsquo;</div>
<div>
	&nbsp;</div>
<div>
	9. Fill all the required details, including the amount and late fee, if applicable</div>
<div>
	&nbsp;</div>
<div>
	10. Once you have filled in all the details, click on &lsquo;Save&rsquo; and you will see a success message displayed on your screen</div>
<div>
	&nbsp;</div>
<div>
	11. Now click on &lsquo;Submit&rsquo; at the bottom of the page to file the return.</div>
<div>
	&nbsp;</div>
<div>
	12. When the status of your return changes to &lsquo;submitted&rsquo;, scroll down and click on the &lsquo;Payment of tax&rsquo; tab</div>
<div>
	&nbsp;</div>
<div>
	13. Click on &lsquo;Check balance&rsquo; to view cash and credit balance, so that you know these details before paying tax for respective minor heads</div>
<div>
	&nbsp;</div>
<div>
	14. To clear your liabilities, mention the amount of credit you want to use from the credit already available. Then click on &lsquo;Offset liability&rsquo; to make the payment</div>
<div>
	&nbsp;</div>
<div>
	15. When a confirmation is displayed, click on &lsquo;OK&rsquo;.</div>
<div>
	&nbsp;</div>
<div>
	16. Check the box against the declaration and select an authorised signatory from the drop-down list. Now click on &lsquo;File form with DSC&rsquo; or &lsquo;File form with EVC&rsquo; and then click on &lsquo;Proceed&rsquo;</div>
<div>
	&nbsp;</div>
<div>
	17. Make the payment in the next step for your respective GST form</div>
<div>
	&nbsp;</div>
<div>
	<strong>From GSTR-1 to GSTR-11, there are at least 12 types of GST forms. Here is the key usage of each of these forms:</strong></div>
<div>
	&nbsp;</div>
<div>
	a. GSTR-1 requires the taxpayer to furnish details of outward supplies or sales</div>
<div>
	&nbsp;</div>
<div>
	b. GSTR-2 requires furnishing details of inward supplies or purchases</div>
<div>
	&nbsp;</div>
<div>
	c. GSTR-3 requires furnishing monthly return</div>
<div>
	&nbsp;</div>
<div>
	d. GSTR-3B is a summary return for the month of July and August</div>
<div>
	&nbsp;</div>
<div>
	e. GSTR-4: is required by &lsquo;Composition Tax Payers&rsquo; to file GST return</div>
<div>
	&nbsp;</div>
<div>
	f. GSTR-5 is required by Foreign Non-Resident Taxpayer to file GST return</div>
<div>
	&nbsp;</div>
<div>
	g. GSTR-6 is required by Input Service Distributor to file GST return</div>
<div>
	&nbsp;</div>
<div>
	h. GSTR-7 is required by a &lsquo;Tax Deductor&rsquo;</div>
<div>
	&nbsp;</div>
<div>
	i. GSTR-8 is statement for Tax Collection at Source</div>
<div>
	&nbsp;</div>
<div>
	j. GSTR-9 is an &lsquo;Annual Return&rsquo; to be filed by &lsquo;Composition Dealers&rsquo; and the last date to file this time is 31 August 2019</div>
<div>
	&nbsp;</div>
<div>
	k. GSTR-10 is the &lsquo;Final Return&rsquo;&nbsp;&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	l. GSTR-11 is the Inward supplies statement for people having &lsquo;Unique identification Number&rsquo; (UIN)&nbsp;</div>

Learn how to file GST return online in India, types of GST returns, GST return filing dates, steps to file gst return and more here at Business Standard.

How to file GST Return Online, Types of GST Returns, GST Return Filing Date

File GST return

<div>
	An indirect tax is one that is not paid directly by a person to the government but collected by an intermediary and passed on to the government. Indirect taxes are imposed on goods and services on the basis of production, supply, sale or purchase of products or provision of services, in the form of goods and services tax (GST).</div>
<div>
	&nbsp;</div>
<div>
	GST, rolled out in 2017, replaced various indirect tax laws that previously existed in India, such as import and export duty, excise, sales tax, value-added tax (VAT), service tax, entertainment tax, electricity duty, tax on passenger fares, freights etc.</div>
<div>
	&nbsp;</div>
<div>
	<strong>How are indirect taxes collected?</strong></div>
<div>
	&nbsp;</div>
<div>
	An indirect tax is collected from the consumer by an intermediary, such as manufacturer, trader or service provider. The intermediary files a tax return and forwards the tax proceeds to the government with the tax return. The consumer bears the final economic burden of the tax by paying more for the product.</div>
<div>
	&nbsp;</div>
<div>
	By comparison, direct taxes are imposed on persons and collected by the government directly from those on whom they are imposed.</div>
<div>
	&nbsp;</div>
<div>
	In indirect taxation, the obligation of tax payment varies from one consumer to another, as these taxes are levied by the government on goods and services &mdash; not on the income, profit or revenue of an individual. These taxes can be shifted from one taxpayer to another. This is unlike direct taxes, which are borne by the person on whom the tax is levied.</div>
<div>
	&nbsp;</div>
<div>
	<strong>What is GST?</strong></div>
<div>
	&nbsp;</div>
<div>
	GST was rolled out on July 1, 2017, as India&rsquo;s most comprehensive indirect tax reform. It consolidated multiple indirect tax that existed previously into a single one. The implementation of GST aimed to make the indirect tax system more unified across the many states of the country. Read more... (https://www.business-standard.com/about/what-is-goods-and-services-tax)&nbsp;</div>

Learn what is Indirect tax, Indirect tax Calculation, Definition and more Indirect tax news here at Business Standard.

What is Indirect tax, Indirect tax News, Budget 2020 News, Indirect tax Calculation

Indirect Tax

<div>
	Service tax was an indirect tax levied by the government on services offered by service providers. Introduced under Section 65 of the Finance Act, 1994, service tax was on July 2017 replaced by Goods and Services Tax (GST), which subsumed the various types of indirect taxes.</div>
<div>
	&nbsp;</div>
<div>
	Service tax was paid to the government in exchange for different services received from service providers. Though the tax was paid by service providers, it was recovered from customers who bought or availed of the taxable services. It was set, more recently, at 15% for transactions that occurred on or after June 1, 2016.</div>
<div>
	&nbsp;</div>
<div>
	<strong>Rollout of service tax: </strong>Service tax had been introduced in Union Budget 1994, and rolled out with effect from July 1, 1994. Following this, services that were included under the service tax were increased gradually from 1994. Services provided by air-conditioned restaurants, lodging (both long and short term), guest houses and other amenities were included under the tax. Going by regulations, the tax was levied on companies as well as individual service providers. While companies paid it on the basis of accrual, individuals paid the tax via cash. However, it was paid only if the total value of the service provider by an entity exceeded Rs 1 million in a given financial year. The erstwhile state of Jammu &amp; Kashmir was exempt from this addition to the service tax rules.</div>
<div>
	&nbsp;</div>
<div>
	The service tax payment was made via GAR 7, which was the erstwhile TR6 Challan. Designated banks&rsquo; branches accepted the payments for service tax. Another option of making the service tax payment was through the e-payment facility.</div>
<div>
	&nbsp;</div>
<div>
	<strong>The tax invoice would have the following:</strong></div>
<ul>
	<li>
		Serial number</li>
	<li>
		Name and address of the service receiver</li>
	<li>
		Name, address and registration number of the service provider</li>
	<li>
		Classification, description as well as taxable service value of the service that is rendered</li>
	<li>
		Payable service tax amount to be mentioned on the invoice</li>
</ul>
<div>
	<strong>Abolition of service tax: </strong>Service tax was abolished with the rollout of GST on July 1, 2017, as the new tax subsumed service tax in addition to many other indirect taxes.</div>

Learn what is meant by Service tax, its definition and more tax related news here at Business Standard.

What is Service tax, Service tax Meaning, Budget News, Service tax Rules

Service Tax

<div>
	Value-added tax (VAT) is a type of indirect tax levied on goods and services for value added at every point of production or distribution cycle, starting from raw materials and going all the way to the final retail purchase. VAT was introduced on April 1, 2005. Under it, the amount of value addition is first identified at each stage, and then tax is levied on the same. Ultimately, the end consumer has to pay the complete VAT while buying goods; buyers at earlier stages of production receive reimbursements of tax they have paid. Because the consumer bears the entire tax, VAT is also a consumption tax.</div>
<div>
	&nbsp;</div>
<div>
	State-wise VAT laws: Each state has its own VAT laws for proper implementation and levying. Different states apply different VAT rates according to their implied laws.</div>
<div>
	&nbsp;</div>
<div>
	<strong>Why was VAT introduced?</strong></div>
<div>
	&nbsp;</div>
<div>
	The main aim behind the introduction of VAT was to eliminate the presence of double taxation and the cascading effect from the then existing sales tax structure. A cascading effect is when there is tax levied on a product at every step of the sale. The tax is levied on a value which includes tax paid by the previous buyer, so the consumer ends up paying tax on already-paid tax.</div>
<div>
	&nbsp;</div>
<div>
	No exemptions can be made under the VAT system. Levying tax at each stage of the production process ensures better compliance and fewer loopholes to exploit.</div>
<div>
	&nbsp;</div>
<div>
	<strong>Disadvantages of VAT</strong></div>
<div>
	&nbsp;</div>
<div>
	VAT also has some disadvantages. Though it was brought in to eliminate the cascading effect of taxes, it has not been able to do so fully. It is not possible to claim input tax credit (ITC) on service under VAT. Different VAT rates and laws in states made it one of the most complex taxation systems.</div>
<div>
	&nbsp;</div>
<div>
	<strong>Has GST totally subsumed VAT?</strong></div>
<div>
	&nbsp;</div>
<div>
	To completely eliminate the cascading effect of taxes and to make the indirect tax structure simpler, the union government introduced the Goods and Services Tax (GST) in July 2017. Though GST replaced VAT on most goods, some goods are still not covered under the new regime. VAT continues to be the tax levied on such goods.</div>

Learn what is Value-added tax, Value-added tax Definition, VAT tax and more Value-added tax news here at Business Standard.

What is Value-added tax, What is VAT, Budget News, Value-added tax Definition

Value-added tax (VAT)

<div>
	Taxation is the primary source of income for the government. The most important revenue receipts for the government, taxes are involuntary fees levied on individuals and corporations to finance government activities. Revenue receipts can be of two types &mdash; non-tax revenue and tax revenue. Tax revenue is the income gained by the government through taxation.</div>
<div>
	&nbsp;</div>
<div>
	Tax revenue forms a part of the Receipt Budget, which in turn is part of the Annual Financial Statement of the Union Budget.</div>
<div>
	&nbsp;</div>
<div>
	Tax revenue is the result of the application of a tax rate to a tax base. Total tax revenue as a percentage of GDP indicates the share of the country&#39;s output collected by the government through taxes. Tax revenue can be regarded as one measure of the degree to which the government controls the economy&#39;s resources.</div>
<div>
	&nbsp;</div>
<div>
	Taxes collected from both direct tax and indirect tax are the government&rsquo;s tax revenue. It includes collections from income tax, corporation tax, customs, wealth tax, tax on land revenue, etc.</div>
<div>
	&nbsp;</div>
<div>
	Direct tax is the tax that is paid directly to the government by the person or company on whom it is levied. Income tax, wealth tax, corporation tax and property tax are some examples of direct tax. Indirect taxes are those that are collected by intermediaries from individuals and corporations who bear the burden of the tax and passed on to the government. Goods and Services Tax (GST) is an example of indirect tax. Corporation tax forms a large chunk of the government&rsquo;s tax revenue.</div>
<div>
	&nbsp;</div>

Learn what is Tax revenue, Tax revenue Definition, Tax revenue News and more here at Business Standard.

Page 56 - Latest Updates on Goods and Services Tax

GST hiccups: Rush job may cause more pain later

India destined to 6.6% GDP growth but GST dampens outlook: Reuters poll

Despite teething troubles, GST will boost GDP in next 6 months: Godrej

Centre, states look to iron out differences at GST meeting

GST rollout to make household jewellery 18% cheaper

GST to be simple with 1% additional tax removal, say experts