What is GST – GST (Goods and Services Tax) is the indirect tax which is taken from the public by supplying goods and services in India. It replaces multiple taxes like VAT, Excise Duties, and Service Tax. The government wanted to make this an easy process, that’s why the government adopted the One Nation One Tax theory on 1 July 2017.
Historical Background of Taxation in india before GST
Historical Background of Taxation in india before GST – The government used to take taxes in the form of VAT, Excise Duty, and Service Tax, which were collected by the state government. There were many types of taxes and slabs, and the public was confused about which slab applied to them. That’s why GST was introduced.
Types of GST
Types of GST : There are 4 types of GST ( Goods and Service Tax ). These Taxes will be applied based on their Locations.
- CGST– Central Goods and Service Tax – This is the part of Gst. and this tax is collected by Central goverment for intrastate transections. for an example if seller is from Rajasthan and buyer is from also rajasthan. it means this transection nature is intrastate ( with in a state ). so here CGST will be applied.
- SGST-State Goods and Services Tax – This is a part of GST, and this tax is collected by the State Government for intrastate transactions. For example, if the seller is from Rajasthan and the buyer is also from Rajasthan, it means the nature of the transaction is intrastate (within a state). So, SGST will be applied.
- IGST- Integrated Goods and Service Tax- this tax is collected by Central Government for an interstate transections.
- for an example if seller is from Rajasthan and buyer is from Uttar Pradesh.
- it means this transection nature is Interstate ( Out of State )
- so here only IGST will be applied.
- UTGST- Union Territory Goods and Services Tax –
- This tax is collected by the Union Territory government, like Delhi, Goa, Kashmir, etc.,
- for intra–Union Territory transactions. For example, if the seller is from Delhi and the buyer is also from Delhi, it means the nature of the transaction is intra–Union Territory (within a Union Territory). So, only UTGST will be applied
GST Registration
GST Registration- Many small businesses have doubts about whether they are eligible for GST registration or not. So, don’t worry, here we will help you understand. If your monthly turnover (gross sales) is above 40 lakhs for goods, or if you are a service provider and your monthly turnover is above 20 lakhs, then you should get a GST number. If you are below these criteria, you do not need to take a GST number.
GST Registration Mendetory for Selected Business – There are some businesses where it is mandatory to have a GST number. If you are working on e-commerce sites, you are required to take a GST number. Also, if your business provides goods and services interstate, you are required to take a GST number.
Documents Needed : Many people have doubts about which documents they should keep to get a GST number. So, here are the details of the required documents.
- Aadhar Card
- PAN
- Bank Passbook
- Electric bill ( if not you can submit NOC) or Rent Agreement too.
- Passport size photo
GST Rates and Slabs
There are mainly 5 types of GST slabs the government has categorized:
0% – In this slab, the government has included all kinds of essential items required for living, like unpacked milk, fresh vegetables, unpacked meals, etc.
5% – This slab includes essential products that are sold as packaged items, like packed milk, packed meals, and education services are also included in this slab.
12% – Mobile phones and similar items fall under this slab.
18% – This slab covers all types of services and electronic items that are not considered luxury.
28% – Luxury goods and tobacco come under this highest slab.
Cess – When the government wants to charge more than 28% tax, they apply a cess on certain products and services, like petrol and wine.
Benefits of GST
Benefits of GST- When Goods and Services Tax was applied, everyone was wondering what would happen from 1 July 2017 because we were used to the old tax formats. But after the introduction of GST, we understood that taxes were made much easier to understand. We no longer need to remember multiple types of taxes like entertainment tax, VAT, etc. We only need to keep track of Goods and Services Tax. Even a normal person can check their details on the GST portal, making it very easy to understand. We can also view our audits and don’t need to depend entirely on a C.A. It is really very transparent.
Challenges of GST
Challenges of GST- There are many benefits of GST, but there are also many challenges. A small business person can’t keep data of sales and purchases every month easily. They have to deposit sales and purchase data regularly, which is a very time-consuming process. There are many types of returns, so a normal person often gets stuck and confused. In India, most small business owners do not have financial knowledge, so they have to hire an accountant, which can be very costly for them.
Conclutions
Gst is very neccesory for our country because of it our country has got highest goods and sevide tax collections and ultimately this money will be also invested into our country. and shri Ram G also said tax should be taken like a son from tax . because sun takes water from earth this is tax . and sun mostly takes water from ocean and it gives back through rain . means tax should be taken from big bull business not small business. and that money should be invested to grow small business. tax is neccessory but always should be taken who can give. govt should make too easy for normal business.
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