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Goods and Services Tax (India)

The Government of India has implemented an indirect tax, namely GST from 1st July 2017 on most domestic goods and services. The seller reduces the GST on the product and then forward the same to the Government. So, we can say GST is one tax, one nation and it is providing revenue to the government.

Any business offering sale of goods with annual turnover of Rs 40 lacs or service with annual turnover of 20 lacs would require the registration for GST and have a valid GST Number. Remember that the GST is levied on supply, not sales. Therefore, stock-taking, discounts and freebies also come under the GST net. Businesses selling to other states must register for GST, regardless of turnover.

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Features of GST

GST is a comprehensive, value added indirect tax on goods and services, which has made India a unified market.

    Dual tax structure

    There is a centre and state tax levied for every supply of goods and services and these are termed Centre GST (CGST) and State GST (SGST), respectively

IGST on inter-state supplies:
  • Integrated GST (IGST) on inter-state supplies where the revenue is shared by both the Centre and the Consumption state.
    • Supply between two establishments of same legal entity taxable
  • The supply of goods between the agent and the principal are taxable. The “gifts” given by employers to employees exceedding INR 50,000 are taxable
    • Imports and exports
  • All imports are treated as inter-state supplies and do attract IGST. all exports are zero rated.

    • HOW GST WILL TRANSFORM INDIA

    As GST removes the cascading effect of taxes and the economic barriers between the states, it will be beneficial for businesses and consumers.For instance, if a product has a tax rate of 20%, this is inclusive of central and state government’s taxes.GST helps government in creating a common market with common procedures, thereby reducing the corruption.