What is GST in India? What are Goods and service tax in India?

GST in India stands for Goods and service tax, This GST indirect tax has replaced lots of other taxes from first July 2017. GST has come up with great benefits for the consumers, as it relieves the cascading effect of the older tax regime and paves the way for a common national market. The overall tax responsibility will also be reduced, and it would be further transparent to the consumers and GST online portal is made easy for filing tax compliance for the taxpayers.

 

Who needs GST registration?

Based on turnover turnover 

1)A taxpayer with a turnover of more than 20 lakhs when doing services alone has to register.

Example: Mobile phone service business with more than 20 lakhs turnover has to register.

 

2) A taxpayer with a turnover of more than 40 lakhs purely selling goods has to register. 

Example: Mobile phone selling business with more than 40 lakhs turnover has to register.

 

3) A taxpayer with a turnover of more than 20 lakhs when selling both goods and services.

Example: when doing both selling mobile phones and doing mobile service with more than 20 lakhs must register under GST.

 

4) If the turnover is Rs.10 lakh for businesses that are present in hill states and North-Eastern states then GST needs to be registered.

 

Mandatory registration.

  1. E-commerce operators must register compulsorily.

      When doing business online, GST registration is mandatory.

  1. If a business doing inter-state supply, then GST registrations is a must.

  2. Non-resident taxable person.

  3. If you are required to pay tax under reverse charge.

  4. When you are required to pay tax under sec 9, sub-sec (5). 

 

 

GST Rates in India 

There are currently different GST slab rates in India, they are 0%,5%,12%,18% and 28%. The GST rates are decided by the GST council members which are headed by the union finance minister along with the 33 members including the state finance minister. The council will always implement nil or less GST rates to the essential food items, also negative and luxurious will attract heavier GST rates in India. 

 

0% GST rates

The commodities which attract 0% GST are such as milk, flour, salt, etc. 

5% GST rates

Some 5 % rate commodities are such as branded paneer, pizza bread, coal, etc.

12% GST rates 

The goods which attract 12% rates are spectacles, computers, etc.

18% GST rates

Some goods which attract 18% they are soap, ice-cream, electricals, etc.

28% GST rates

Goods such as automobiles, tempered glass, monitor screen more than 32 inches, etc.

Apart from these rates, there are other rate slabs such as 0.25%,1.5%, 28%+ cess. There is also a list of 

So to know GST rates of the products click here.

 

what is an Input tax credit?

 

The best thing about GST is the ITC, which stands for the Input tax credit, you can reduce the tax you have already paid on inputs and pay the balance amount. This scheme is not available for composition taxpayers. ITC is auto-populated in 2A at the GST portal.

 

what is GST composition scheme?

This scheme is for small tax taxpayers to get rid of tedious GST requirements. If a business has a threshold of fewer than 1.5 crores except in the North-Eastern states and Himachal Pradesh, then they can opt for this scheme.

 

A composition scheme taxpayer can’t make supplies to another state (No inter state supply)

 

This scheme is not for E-commerce operators.

 

A non-resident taxable person cannot opt for this scheme.

 

Cannot claim the input tax credit.

 

Cannot raise Tax invoice and must pay out of your pocket.

 

Benefits of composition scheme.

Under the composition scheme, the GST rates are lesser compare to the regular.

 

Manufacturer and traders 1% GST applicable

 

A restaurant without serving alcohol 5%

 

Another major service 6%.

 

 

E- waybill.

 

E-Way Bill is an Electronic Waybill for movement of goods to be generated on the eWay Bill Portal

When goods value exceeds 50000/-Rs or if the supplied supplies goods outside the state or union territory then the E-way bill is compulsory.

Therefore, E-Way Bills must be generated on the common portal for all these types of movements such as Supply, sale, transfer, exchange, and so on.