GST Full Form, i.e., Goods and Services Tax, is a comprehensive tax applied on goods supplied from the manufacturer to the consumer. The tax is applied only in cases where there is a value addition to the goods en route from the manufacturer to the consumer. With the introduction of GST, all indirect taxes like Service Tax, Luxury Tax, Central Sales Tax, State VAT, Advertisement Tax, Purchase Tax, State Cess, Tax on lottery, etc., have been consolidated, and now there is only one indirect tax, i.e., GST.
GST eliminates the chain of Taxes that had to be paid in the earlier Tax system and has facilitated a common national market.
The existing taxation system in India has two segments, i.e.,
Income Tax, Estate Tax as well as Wealth Tax form a part of the Direct Tax. Under this segment, the tax is directly levied on the income of the assessee based on the declaration by way of filing Income Tax Returns. The assessee can be an individual, a firm, a Company, HUF or any other entity. The tax is paid to the government directly by the assessee on the taxable income indicated in the Income Tax Returns.
Under this segment, as the name indicates, the tax is not paid directly to the Government. Tax is indirectly levied on the purchaser for the purchase of goods and services from the seller. The seller then pays the Government the tax collected on the goods and services sold.
The taxation system before the introduction of GST was very complex. There were various Central and State Taxes levied based on the production that lacked clarity and was difficult to understand. The taxes levied differed from State to State, and consumers stayed perplexed. There were different taxes like Central Sales Tax, VAT, Luxury Tax, Entertainment Tax, State VAT and Cess, Advertisement Tax, Purchase Tax etc. Everything consolidated into a single indirect tax, i.e., GST, which is uniform across the country.
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After the introduction of GST, the various indirect taxes that were collected at the State and Central level got consolidated into one indirect tax, that is, the Goods and Services Tax. The taxation system is centralised now, and there is one uniform indirect tax across the nation, i.e., GST. There are 17 different taxes the Central and the State Governments levied which are replaced by GST. The introduction of GST in 2017 has made the taxation system simple.
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Consumers have benefitted in the following ways from the introduction of GST.
With the introduction of GST, it is a ‘One Nation One Tax’ policy that has resulted in a uniform structure for tax across the country. There is a lot of clarity, and the consumers are able to understand the taxation system better.
The following are the components of GST:
The GST Council is the regulatory body of GST and has 33 members.
The different slabs of GST are:
|Items under the slab-percentage||Category of items under the slab|
|5%||14%||Daily essentials and household articles|
|12%||17%||Items secondary necessity wise|
|18%||43%||Items that are relatively important|
If your business has a turnover of over Rs. 40.00 lakhs GST Registration is mandatory. Failing to register for GST will be treated as an offence. On registration, each taxpayer will be given a unique reference number, i.e., GSTTIN, which has to be quoted in all the business transactions.
GST Registration can be done on an online portal. You have to fill up the GST Registration form and upload the required documents. On completion of the registration process, you will be given the GSTTIN number.
GST Returns is a form that has to be filed. There are 22 different types of GST Returns, out of which only 11 are active, eight are enabled only for the view, and three are withdrawn. The type of GST Return you need to file depends on the category of GST Registration.
GST Returns can be filed monthly, quarterly or annually.
Follow the simple steps given below to file GST Returns.
Knowledge of GST Full Form, the implications and importance of GST, Registration of GST and Filing of GST Returns is very crucial if you are contemplating on starting a business. An in-depth reading of this article will give you a fair idea of everything you need to know about GST.
Filing of tax through GSTR Forms on the basis of the slabs and eligibility criteria is GST Returns. It will contain all the details regarding sales and purchases, tax collected on sales and tax paid on purchases. Subsequent to the filing of GST, Returns tax can be paid.
Yes. A Nil-Return has to be filed when there is no business activity for that particular period.