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GST: Complete ready reckoner

As the deadline draws closer, for implimentation of country's historic tax reform GST , we will present you with the finer points that will make you GST ready.

By Deepika
|
Google Oneindia News

The Goods and Services Tax or GST is scheduled to be launched on midnight of June 30,and it is set to bring transformational tax reform in the country. But what is GST and how will it reform the current tax structure? And most importantly, why does the country need such a huge revamp in its taxation policies?

We answer these pressing questions with pictorial description of the various stages that will make you GST ready

Aam Aadmi burden

Aam Aadmi burden

The aam aadmi's grocery bill may not rise as the GST Council, has decided to exempt food items or keep most of them at the lowest rate of 5%. More than 50% of the items in the Consumer Price Index basket would be exempted under GST and the remainder placed in the lowest bracket.

GST rates to stay secret till July 1

GST rates to stay secret till July 1

The GST may be set for a rollout but the tax rates will be kept a secret till the last minute.

The government plans to announce the GST rates for goods and services just a few hours before the rollout on July 1. This is to ensure that the manufacturers do not resort to a slowdown or increase in production after learning which commodity will be taxed at a lower or higher rate

System of Levying GST

System of Levying GST

The GST will have two components: one levied by the Centre ( and the other levied by the States. Rates for Central GST and State GST would beapproved appropriately, reflecting revenue considerations and acceptability.

GST registration number

GST registration number

GST registration number is a 15 digit idetification number that is alloted to each tax payer based on PAN and state of the applicant. In a GST registration number, the first two digits represents the state code, followed by the next 10 digits representing the PAN of the applicant., one digit representing entity code, one digit is left blank and the last digit is a check digit.

Multiple registration system

Multiple registration system

In GST regime, multiple registrations within a State for business verticals of a taxable person would be allowed. This provision should be subject to following specific stipulations

What is GSTN?

What is GSTN?

GSTN stands for Goods and Service Tax Network. A Special Purpose Vehicle called the GSTN has been set up to cater to the needs of GST. The GSTN shall provide a shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders for implementation of GST.

GST Tax ledger

GST Tax ledger

As per the Draft GST model law and the process documents issued by the Department of revenue. There is a reference of three ledgers that are electronic cash ledger, electronic credit ledger and tax liability ledger.

These 3 ledgers will be maintained for all the taxpayers and can be collectively known as Taxpayer ledgers.

Types of GST returns

Types of GST returns

Under the GST law, a normal taxpayer will be required to furnish three returns monthly and one annual return. Similarly, there are separate returns for a taxpayer registered under the composition scheme, taxpayer registered as an Input Service Distributor, a person liable to deduct or collect the tax.

Compliance Rating

Compliance Rating

Taxpayers registered under the new goods and services tax (GST) regime that is set to be implemented from 1 July will be assigned a rating, based on how promptly they upload invoices, pay taxes and file returns.

The ratings will be made public on the GST Network (GSTN) website as tax authorities seek to build peer pressure among companies to ensure compliance.

Exemtion limit for Small Scale Bussiness

Exemtion limit for Small Scale Bussiness

Traders with a turnover of less than Rs 10 lakh a year won't have to register for or pay the goods and service tax, while those with annual sales between Rs 10 lakh and Rs 50 lakh will need to pay the tax only at a rate lower rate than the standard GST rate.

Who has to register with GST compulsorily?

Who has to register with GST compulsorily?

As per GST Law, the following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit.

GST Composition Levy explained

GST Composition Levy explained

Small dealers and businesses could opt for the composition scheme known as Composition Levy. Under this scheme, a Composite Tax Payer pays tax only at a certain percentage of his turnover.

Anti Profiteering Measure

Anti Profiteering Measure

In GST, Anti Profiteering Measure every registered person is required to pass on the complete benefit accruing on account of additional input tax credit or reduced tax rate to the next level of supply chain.

GST council will recommend on

GST council will recommend on

The GST council, will have representation from the central government as well as all the state governments. subsume most of the indirect taxes of the centre and the states including excise duty, service tax, value-added tax, entertainment tax, luxury tax and octroi.

Why is an e-way bill needed under the GST regime

Why is an e-way bill needed under the GST regime

It is an electronic permit required to be presented for moving goods worth over Rs 50,000 within a state or between states.

The GST Council headed by Union Finance Minister comprising of state finance ministers as members have decided to set up a five-member anti-profiteering authority to decide on levying the penalty if businesses do not pass on the benefit of price reduction to consumers under GST regime.

GST: Complete ready reckoner

GST: Complete ready reckoner

The federal structure of the Indian polity keeps state taxes and central taxes separate. In GST, they would appear to merge in the context of inter-state sales, which is referred to as cross-utilisation.

Impact and pricing analysis

Impact and pricing analysis

With actual implementation of GST around the corner, the industry should quickly gear up and carry out GST impact analysis, as it will have a transformational impact on the Industry.

Training and Transitional issues

Training and Transitional issues

Training internal and external stakeholders would also be vital for the GST transition which will go a long way in ensuring that the effect of GST is correctly given and that compliances requirements are being met with appropriately.

How will GST reduce burden?

How will GST reduce burden?

There are many direct and indirect taxes imposed on goods/services, right from its manufacture to its sale and eventual consumption, both at central and state levels, thereby unrealistically increasing overall cost to the end user.The introduction of this transformational tax reform is expected to reduce the burden as it combines central excise duty, additional excise duty, service tax, state VAT and entertainment taxes under one banner

Credit: Gopal Krishna Raju, M/s. K. Gopal Rao & Co Raju can be contacted on: 98400 63269 or visit [email protected]

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