What is GST?
The Goods and Services Tax (GST) was implemented at the beginning of 2017 and came into effect from 1st of July 2017. The Government managed to get this done through the 101st amendment of the Indian Constitution. This tax was seen as a major move since it replaced a bunch of other state and national taxes levied by state and national Governments. This indirect tax was levied on the supply of goods and services at every step of the production process. However, it is meant to be refunded to all parties at different steps of the production process. However, the final consumer is not part of the refund process. GST is divided into five different tax slabs, 0%, 5%, 12%,18% and 28%, with various products falling under varying tax slabs.
The rules and tax amounts are overseen by the GST council which comprises of the Finance Ministers of all the State Governments. The entire GST amendment has been put together to replace multiple smaller indirect taxes paid at various points throughout the production process. The Government claims that the move will reduce the amounts being spent throughout the process, improve the truck movement times since there won't be multiple payments throughout the journey because of interstate check posts.
Who should be paying GST?
The coming up of this new tax, the GST, caused a lot of confusion and raised a tonne of questions. To clarify these details, here is a list of the various entities who should be paying their GST.
- People registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)
- Businesses with turnover above Rs. 20 Lakhs (Rs. 10 Lakhs for North-Eastern States, J&K, Himachal Pradesh, and Uttarakhand)
- Casual taxable person / Non-Resident taxable person
- Agents of a supplier and Input service distributor
- Individuals and enterprises paying their taxes under the reverse charge mechanism
- A person who supplies via e-commerce aggregator, along with the e-commerce aggregator
- People supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person
After registering for GST, companies or individuals receive a GSTIN, which is their personal GST number. They can then use this number whenever invoicing entities so they know they are GST registered, and why they are being charged a little more. All GST amounts can be claimed later, as mentioned above. If a person doesn't register under GST, they have to pay giant fines and penalties, north of Rs. 10000. Or 10% of the tax amounts. If you fall under the categories of people who need to be paying your GST, register now.
How do companies apply for GST?
The process of registering for GST is long and tedious if you were to handle it offline. However, this was one of the few systems that came about with an online mechanism as soon as it was out. You can go to their official website and register through 11 long steps. However, if you do not like their complicated system and unnecessary documentation, try out the other alternatives for registering for GST.