Goods and Services Tax (GST) www.gst.gov.in in India is a comprehensive indirect tax that was introduced on July 1, 2017. It replaced multiple cascading taxes levied by the central and state governments, such as excise duty, service tax, value-added tax (VAT), etc. GST is designed to streamline the taxation system, reduce tax evasion, and create a common market across the country. Here are some key points about GST in India:
Dual GST Structure
GST in India follows a dual structure, meaning it is levied by both the central and state governments. Central GST (CGST) is levied by the central government, and State GST (SGST) is levied by the state governments.
For interstate transactions, Integrated GST (IGST) is levied by the central government, and the revenue is shared between the center and the destination state.
Tax Slabs
GST in India has multiple tax slabs for different goods and services. As of latest update, there are four main tax slabs: 5%, 12%, 18%, and 28%. Some essential items are taxed at 0% or exempted from GST. For more details on latest tax rates in GST, click here.
GST Council
The GST Council is the governing body responsible for making decisions related to GST, including tax rates, exemptions, and administrative issues. It consists of representatives from the central and state governments.
GSTIN
Every business registered under GST is assigned a unique Goods and Services Tax Identification Number (GSTIN). This number is used for filing returns, claiming input tax credit, and other GST-related activities.
GST Returns
Registered businesses are required to file various GST returns, including GSTR-1 for outward supplies, GSTR-3B for monthly summary returns, and GSTR-9 for annual returns. The frequency of filing depends on the turnover of the business.
Composition Scheme
Small businesses with a turnover below a certain threshold can opt for the composition scheme under GST. They are required to pay tax at a flat rate and are subject to fewer compliance requirements.
E-Way Bill
For the movement of goods above a certain value threshold, an electronic waybill (e-way bill) is required under GST. It helps in tracking the movement of goods and preventing tax evasion.
Overall, GST has had a significant impact on India’s taxation system, simplifying processes for businesses, eliminating the cascading effect of taxes, and fostering a more unified market across states. However, it has also faced challenges in implementation and compliance, with ongoing efforts to address issues and improve the system.