Download Understanding GST: Definition, Council, Registration, and Rates and more Schemes and Mind Maps Economics in PDF only on Docsity!
MBA 206- Tally and GST Lab
Unit-I-GST Introduction and Definition of GST GST definition is easy to decode. It is a destination-based, multi-stage, comprehensive tax levied at each stage of value addition. Having replaced multiple indirect taxes in the country, it has successfully helped the Indian Government achieve its ‘One Nation One Tax’ agenda. The tax is levied on goods and services sold within India’s domestic boundary for consumption. Implemented by a majority of nations worldwide with respective customisations, the tax has been successful in simplifying the indirect taxation structure of India. GST is levied on the final market price of goods and services manufactured internally, thereby reflecting the maximum retail price. Customers are required to pay this tax on a purchase of goods or services as an inclusion in their final price. Collected by the seller, it is then required to be paid to the government, thus implying the indirect incidence. The GST rates on different goods and services are uniformly applied across the country. Goods and services have, however, been categorised under different slab rates for tax payment. While luxury and comfort goods are categorised under higher slabs, necessities have been included in lower and nil slab rates. The main aim of this classification is to ensure the uniform distribution of wealth among residents of India. Overview of GST / History of GST ack in 2000, the then Prime Minister of India introduced the concept of Goods and Services Tax. He also formed a committee to draft new indirect tax law. It, however, took 17 more years for its implementation. Meanwhile, the bill went through multiple introductions, amendments, and rescheduling. Committee set up by the PM for drafting law for India. A task force reported a need to implement this law and improve the indirect tax system in India. Goods and Services Tax introduction scheduled on 1st April 2010 by the Finance Minister of India.
Decision to phase out Central Sales Tax (CST). Consequently, CST rates were reduced to 3% from 4%. GST’s dual structure was finalised by the EC for separate legislation and levy. Postponement of introduction due to structural and implementation hurdles. A project launched for the computerisation of commercial taxes. Introduction of Constitution Amendment Bill for enabling the Goods and Services Tax Law. Discussion regarding the tax initiated by the Standing Committee stalled due to lack of clarity regarding Clause 279B. GST’s report presented by the Standing Committee. The Finance Minister of India reintroduces the Goods and Services Tax Bill to Parliament. The Lok Sabha clears the bill, but it is stalled in the Rajya Sabha. Goods and Services Tax Network (GSTN) went live. The law’s amended model passed in both Houses of Parliament and received a nod from the President of India. The Cabinet approves four supplementary bills on cleared by the Lok Sabha and the Rajya Sabha. The Goods and Services Tax Law was implemented on 1st July 2017. Reports on GST Process Statutory Reports in Tally.ERP 9 GST Reports in Tally.ERP 9
- In GST, Tally.ERP 9 provides GSTR-1, GSTR-2, GSTR-3B and e-Way Bill related reports. The GSTR-1 report in Tally.ERP 9 is designed exactly as the form GSTR-1 to make life easy for users.
- Business owners can see -
- Details of transactions participating in GSTR-
- Transactions not relevant for returns
- Transactions not participating because of incomplete information or mismatches
- Tally. ERP 9 gives comprehensive e-Way Bill reports to make life simpler for users. A user can view
- Transactions which have been exported for e-Way Bills
- Transactions which are yet to be exported for e-Way Bills
- e-Way Bill details of all the transactions for which e-Way Bills have already been generated. GST Council Constitution
According to Article 279A, it is on the part of the president to give the order to constitute the council of GST within 60 days from the 12th of September 2016 which is already notified by the Government. Following are the designated personnel, who will form the GST Council together:- The Union Finance Minister who will be the CHAIRMAN of the council; The Union Minister of State in charge of Revenue or Finance who will be the MEMBER of the council; ONE MEMBER from each state who is Minister in charge of Finance or Taxation or any other Minister and any one of them will be VICE CHAIRMAN of the GST Council who will be mutually elected by them. Note The Secretary of Revenue Department will work as EX-Officio Secretary to the GST Council, The Chairperson of the Central Board of Excise and Customs will be the permanent invitee in all the proceedings of the GST Council who will not have voting rights. Quorum and Decision-Making For a valid meeting of the members of the GST Council, at least 50 per cent of the total number of members should be present at the meeting. Every Decision made during the meeting should be supported by at least 75 per cent majority of the weighted votes of the members who are present and voting at the meeting. In “article 279A” a principle is there which divides the total weighted vote cast between Central Government and State Government:- o The vote of the Central Government shall have the weight of one-third of the total votes o The votes of the State Government shall have the weight of two-thirds of the total votes, cast in the meeting
On model law on GST, Principal of levy of GST and the principals which will govern the Place of Suppy Steps to be taken to start GST Steps for GST Registration - Steps by Steps For obtaining GST Registration a Company has to file an application a Form GST REG- at the GST common portal with required Details and documents for GST Registration. GST Registration is a 100% online process and there is no requirement of submission of physical documents to GST Department. GST Registration Steps STEP-1: Application at GST Common Portal The applicant declare his Permanent Account Number, mobile number, e-mail address and place of registration in Part A of Form GST REG-01 at the GST common portal. The Permanent Account Number shall be validated online by the common portal from the database maintained by the Central Board of Direct Taxes. The mobile number shall be verified through a one-time password sent to the said mobile number; an The e-mail address declared shall be verified through a separate one-time password sent to the said e-mail address. On successful verification of PAN, Mobile Number and E-mail address, a Temporary Reference Number (TRN) shall be generated and communicated to the applicant on mobile number and e-mail address. STEP-2: Submission of Documents at GST Common Portal Using the Temporary Reference Number (TRN), the applicant has to submit an application in Part B of Form GST REG-01 with required documents at the common portal duly signed and verified with Digital Signature STEP-3: Acknowledgement of Application
On receipt of an application an acknowledgement shall be issued electronically to the applicant in Form GST REG-02. STEP-4: Verification of the application and approval The proper officer shall examine the application and the submitted documents within three days application and if the same are found to be in order, shall approve the grant of registration to the applicant. The timeline may vary from time to time. However the result of processing will be generally available in 7-10 working days of application. If there is any deficiency in the application or if the officer requires any clarification on any information provided in the application or documents furnished, he may issue a notice to the applicant electronically in FORM GST REG- The Applicant has to file required details and clarification documents electronically, in FORM GST REG-04 within a period of 7 working days from the date of receipt of such notice. If there no reply is furnished by the applicant within the stipulated time or where the proper officer is not satisfied with the clarification, the application shall be rejected by the officer and the same will be communicated to the applicant electronically in Form GST REG-05. STEP-5: Issue of GST Registration certificate After verification of the application by the officer and if the application has been approved, a certificate of registration in Form GST REG-06 shall be issued to the applicant on the common portal and a Goods and Services Tax Identification Number (GSTIN) shall be assigned to the applicant. Certificate of GST Registration shall be duly signed or verified through electronic verification code by the officer under the Act. There will not be any physical certificate issued by the GST Department.
Certain Renewable Energy Devices 5% 12% Recorded media reproduction and print 12% 18% Broadcasting, sound recordings, and licensing 12% 18% Printed material 12% 18% Packing containers and boxes 12% 18% Scrap and polyurethanes 5% 18% Decrease in the GST Rates Category Old GST Rates New GST Rate If vehicles are equipped with retrofitting kits for disabled people, Applicability 5% Keytruda for cancer 12% 5% IGST is levied on goods sold at the Indo-Bangladesh border Applicability NIL Importance of GST #1 Easy to Use Online Procedure When you think of the GST process, you will quickly get an image of people standing in long queues at government offices, getting documentation done and so on. But that has exactly changed now. The process of registering for GST has now become technology driven.
The whole process of GST, be it registrations or filling GST returns, all can be done online within a few taps and it’s super simple. Apart from registration and return filing you also have the option to apply for refund online, respond to notices, and file consumer grievances. This online process has especially been very beneficial to the companies just starting out in the industry. Had it not been for GST, the companies would be going from pillar to pillar to get the VAT, service tax, all taxes separately. #2 Higher Threshold for Registration Before the introduction of the GST in India, in the VAT structure, any business with a turnover of more than Rs 5 lakh, in states was responsible to pay VAT. This value was different for every state. Additionally, service tax was excluded for organizations with a turnover of not as much as Rs 10 lakh. Under the GST system, be that as it may, this edge has been expanded to Rs 20 lakh, which excludes numerous small traders and service providers in the sector. Tax threshold limits #3 Easy Transportation of Goods for E- commerce Companies Earlier, it was the process of movement of goods from one place to another, especially for the eCommerce companies like Amazon, Flipkart and others. This time with the GST system, it has clearly mapped out the provisions applicable to the e-commerce sector.
This has assisted in doing away with the unnecessary extra costs that the companies have to bear. It has rather brought in a lot of benefits for organizations engaged in supply, production of goods. #6 No More “Tax on Tax” Here is a quick example to explain what we mean by no more to tax on tax with GST. Before GST regime Any official offering services for say, Rs 50,000 and charged a service tax of 15% to simplify, Rs 50,000 * 15% = Rs 7,500. Then, he would buy office supplies for Rs. 20, paying 5% as VAT which would be Rs 20,000 *5% = Rs 1,000. He had to pay Rs 7,500 output service tax without getting any deduction of Rs 1,000 VAT already paid on stationery. That makes his total outflow as Rs 8,500. Under GST: Development under GST #7 Composition Scheme Under GST to the Rescue of Small Companies Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore.
This scheme has cut down the expense and consistent trouble on numerous small ventures. To learn in depth about it, here is our article, Composition Scheme Under India GST. #8 Lesser Compliances Before GST there was VAT and service tax, each of which had its own returns and compliances. However, now there is just one, unified return to be filed. Therefore, the number of returns to be filed has drastically come down. Now, there are only about 11 returns under GST. Amongst these 11, there are 4 basic returns that apply to all taxable people under GST. The main GSTR-1 is manually populated and GSTR-2 and GSTR-3 will be auto-populated. #9 Corruption Free Tax Administration Wherever taxes are involved there are high chances of fraudulence by companies and , corruption, that can happen. With the introduction of GST, one of the main aims was to help reduce corruption and increase the level of transparency between the government and the companies. Following are some of the new developments that came with GST to make the taxations corruption proof: Syncing of GST registration and PAN Reporting and matching at the invoice level Reconciliation of credits Generation of e-way bills
The Central government levies CGST on the intra-state transactions of goods and services. It is levied alongside SGST or UGST, and the collected revenues are shared equally between the center and the state. IGST When a transaction of goods and services is inter-state in nature, an IGST is levied on them. It is applicable to imports and exports as well. Revenues generated through this tax are shared between the state and the central governments.
