The Ultimate Guide to GST (Goods and Services Tax)

Introduction to GST?

GST stands for Goods and Services Tax. GST will be a single consumption tax to replace existing taxes, including service tax, Octroi, sales tax, VAT (Value-added tax), excise duty, etc. Any business which’ supplies ‘ products and/or services to any individual or entity in India will be required to pay GST. GST is a tax, based on consumption. Exported goods and services are not subject to GST, because the place of consumption is outside India. The taxes you pay on input goods/services/capital goods may be used as Input Tax Credit (ITC) against outbound supply obligations.

Introduction to GST
Goods and Services Tax

What are the different types of GST?

Depending on the type of transaction, there are four types of GST, ie. Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Integrated Goods and Services Tax (IGST), and Union Territory Goods and Services Tax (UTGST).

  • Sale Within the Same State are known as CGST and SGST
  • The interstate sale is known as IGST

What is GSTIN?

The Goods and Services Tax Identification Number (GSTIN) is a 15-digit state-wise PAN-based number used to identify businesses registered under the GST.

What is the input credit? 

Input credit means that you can reduce the tax already paid on the input at the time you pay the output tax.

GST Registration Process

An important point to remember before applying for GST registration

  1. Every person, other than a non-resident taxable person who wants to register under GST, has to provide his PAN, mobile number and e-mail address in Part A of GST REG-01.
  2. On successful verification of PAN, mobile number and e-mail address, an application reference number (ARN) are generated and sent to the provided mobile number and e-mail address.
  3. Part B of the form GST REG – 01 has to be submitted, using the generated ARN. It must be signed and documents specified in the form must be submitted directly or through a facilitation center on the general portal.

Documents required for GST registration

  1. Provisional ID received from State / Central Authorities
  2. Password is obtained from state / central authorities
  3. Valid Email Address
  4. Valid mobile number
  5. Bank account number
  6. Bank IFSC

Who are exempted from GST Registration?

  1. Any specialized agency of UNO (United Nations Organization) or any multilateral financial institution and Organization notified under the United Nations Act, 1947
  2. Consulate or Embassy of foreign countries
  3. Any other person notified by the Board/Commissioner
  4. The central government or state government may be based on the recommendation of the GST council, notify exemption from registration to specific persons

Enrollment of corporations, foreign companies, Limited Liability Partnership (LLPs) and International Limited Liability Partnership (FLLPs) are compulsorily obligated to electronically sign the DSC enrollment application

How do I pay for GST?

GST is operated through the GST Network. Both taxes will be paid online, and returns will not be filed manually.

What mode of payments can taxpayers pay their taxes through?

  1. Online (Netbanking)
  2. RTGS / NEFT
  3. Over the Counter (Branch)

On what value do we have to pay GST?

GST will be payable at the transaction value. The value of the transaction is actually paid or payable for the supply of goods and/or services between the parties belonging to the un-related parties. Transaction value is also required to include all sales-related expenses such as packing, commission, etc.

How do I apply for an input tax credit in the GST?

In order to enable the purchaser to claim an input tax credit, the GST Inter-alia law stipulates that the supplier should deposit the GST and file the GST returns. Effectively, through this provision, the purchaser of goods/services will have to ensure that GST and file returns are paid by all its vendors.

How will GST affect me as a service provider?

A service provider was required to pay service tax. This amount was to be paid to the central government. Going further, in the GST regime, the service provider will have to pay GST on services based on ‘place of supply’. Also, the registration requirement in GST will be state wise.

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