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Everything you need to know about Goods and Services Tax (GST)

Do you also find it difficult to understand the new Goods and Service Tax (GST) system in India? Don’t worry! You are at the right place. Be with us for the next few minutes and you will get answers of all the questions which you may have in your mind.     

WHAT IS GST?

GST is known as the Goods and Services Tax. It is an indirect tax applicable to all over India and as it reflects from its name itself, it is levied on supply of goods and service. Earlier, there were around 17 types of indirect taxes in India such as Custom Duty, Excise Duty, Service tax, Sales Tax, VAT etc., which have been replaced by the GST in the year 2017. Even the rates for the similar types of taxes were different in all the states. When GST was introduced in India it was propounded as the idea of “One Nation One Tax” but the same was not completely correct because the GST has only replaced the numerous indirect taxes in India and you are still required to pay the direct taxes such as Income tax, Property Tax, Wealth Tax, Gift Tax etc.

WHAT WAS THE OBJECTIVE TO INTRODUCE GOODS AND SERVICE TAX?

  • TO ACHIEVE THE IDEOLOGY OF ‘ONE NATION, ONE TAX

One Nation One Tax was one of the most popular arguments propounded in support of the GST. In simple words we can say the idea was to bring a uniform tax policy all over India so that the rate for a particular product or service could be uniform in all the states. Tax compliance would also get easier as tax payers will get rid of numerous return forms and deadlines. Better uniform laws and policies related to tax can be introduced for all the states.

  • TO REPLACE THE NUMEROUS INDIRECT TAXES

The other objective of introducing GST was to replace the multiple indirect taxes such as VAT, Central Excise etc. with one, as it would reduce the compliance burden on taxpayers and further makes tax administration easier for the government.   

  • TO CONTROL TAX EVASION

GST law in India is more comprehensive and codified law in comparison to the former indirect tax laws, as under GST taxpayers can claim an input tax credit only on invoices uploaded by their respective suppliers consequently the chances of claiming input tax credit on fake invoices are very less. Thus GST helps the government to curb tax evasion and reduce tax frauds.

  • TO INCREASE THE TAXPAYER BASE

Before GST there were certain unorganized sectors which can easily wriggle out from the tax net as earlier each of the tax laws had a different threshold limit for registration based on turnover. However after implementation of GST due its consolidated tax policy which levied on both goods and services it has helped the government in widening tax base in India.

  • ONLINE PROCEDURES FOR EASE OF DOING BUSINESS

As we all know before GST, filing of return, assessment and refund procedures are the most hectic task for the taxpayers as most of the work was to be done offline. Earlier, taxpayers had to struggle a lot to do their compliances and it was also one of the reason due to which the taxpayers choose to avoid tax compliances. But GST makes the entire task easier for the taxpayers as almost all the procedures under GST are online. From registration to return filing to refunds to e-way bill generation, all can be done with a click of button. 

TYPES OF TAXES UNDER GST:

There are three types of taxes applicable under this system: 

  • CGST: It is the tax collected by the Central Government on an intra-state sale (e.g., a transaction happening within Rajasthan)
  • SGST: It is the tax collected by the state government on an intra-state sale (e.g., a transaction happening within Rajasthan)
  • IGST: It is a tax collected by the Central Government for an inter-state sale (e.g., Rajasthan to Punjab)

WHO ARE REQUIRED TO REGISTER UNDER GST

  • E-commerce aggregators
  • Individuals who supply goods through an e-commerce aggregator.
  • Individuals who pay tax under the reverse charge mechanism
  • Input service distributors and agents of a supplier
  • Non-Resident individuals who pay tax
  • Businesses that have a turnover that exceeds Rs.40 lakh. In the case of Uttarakhand, Himachal Pradesh, Jammu & Kashmir, and North-Eastern states, the turnover of the business should exceed Rs.10 lakh.
  • Individuals who have registered under the tax services before the GST law came into effect.

ADVANTAGES OF REGISTRATION UNDER GST:

  • Registration under GST increases the brand value of the business.
  • Goods and services can be sold online across the country.
  • Benefit of Input Tax credit facility can be availed.
  • A current bank account can be opened with GSTIN.
  • GST registration acts as valid proof as it is a legal entity registration.
  • It is a kind of legal proof which recognizes an individual as a certified provider of goods and services.
  • Makes an individual eligible for all the benefits and advantages under GST.

PROCESS FOR GST RESGISTRATION:

Any individual who falls under the category as mentioned herein above is required to register under GST and the same can be done by following the below mentioned steps:

Step 1: Visit the GST portal – https://www.gst.gov.in

Step 2: Click on the ‘Register Now’ link under the ‘Taxpayers’ tab

Step 3: Select ‘New Registration’.

Step 4: Fill the required details.

Step 5: On the next page, enter the OTP that was sent to the email ID and mobile

             number in the respective boxes.

Step 6: Once the details have been entered, click on ‘Proceed’.

Step 7: You will be shown the Temporary Reference Number (TRN) on the

            screen. Make a note of the TRN.

Step 8: Visit the GST portal again and click on ‘Register’ under the ‘Taxpayers’

             menu.

Step 9: Select ‘Temporary Reference Number (TRN)’.

Step 10: Enter the TRN and the captcha details.

Step 11: Click on ‘Proceed’.

Step 12: You will receive an OTP on your email ID and registered mobile number.   

     Enter the OTP on the next page and click on ‘Proceed’.

Step 13: The status of your application will be available on the next page. On the

               right side, there will be an Edit icon, click on it.

Step 14: There will be 10 sections on the next page. All the relevant details must

               be filled, and the necessary documents must be submitted.

Step 15: Visit the ‘Verification’ page and check the declaration, then submit the

               application.

Step 16: Once completed, a success message will be shown on the screen. The

               Application Reference Number (ARN) will be sent to the registered  

               mobile number and email ID.

Step 17: You can check the status of the ARN on the GST portal.

DOCUMENTS REQUIRED FOR GST REGISTRATION:

  • PAN card.
  • Aadhaar card.
  • Business address proof.
  • Bank account statement and cancelled cheque.
  • Incorporation Certificate or proof of business registration.
  • Digital Signature.
  • Director’s or Promoter’s ID proof, proof of address, and photographs.
  • Letter of Authorization or Board Resolution for Authorized Signatory

HOW TO CHECK THE STATUS OF APPLICATION FOR GST REGISTRATION?

Now as you have completed your registration process for GST, many questions may arise in your mind like whether the application has been accepted or rejected? Whether GST number has been allotted or not? Whether any query has been raised on the application? What is the status of your application?

Here are the two simple methods by which you can yourself check the status of your GST application online:

By ARN (APPLICATION REFERENCE NUMBER):

It is a 15 digit unique number which has been sent to you on your registered mobile number after submitting the application for GST registration.

Step 1: Visit the GST portal – https://www.gst.gov.in

Step 2: Click on ‘Registrations’.

Step 3: Click on Track application Status.

Step 4: A new page will open and you will be asked to enter ARN.

Step 5: Enter ARN. Click on Proceed.

By TRN (TEMPORARY REFERENCE NUMBER):

It is the number which has been sent to you on your registered mobile number when you initiated the process of New Registration.

Step 1: Visit the GST portal – https://www.gst.gov.in

Step 2: Click on Registrations

Step 3: Select New Registration. A new page will open.

Step 4: Click on TRN.

Step 5: Enter TRN.

Step 6: Enter captch as shown. Click on Proceed and you will get an OTP.

Step 7: Enter OTP. Click on Proceed.

WHAT IS GSTIN?

GSTIN stands for GST Identification number. It is an exclusive 15 digit code which will be provided to you when your application for GST registration is accepted by the GST department. The first two digit of GST number will represent the state code according to Indian Census 2011. The next 10 digit of the GST number will be your PAN number. 13th digit represents the number of registrations you have within the state for the same PAN number. The 14th digit will be Z by default. The last 15th digit will be a check code used for detection of errors.


WHAT IS GST CERTIFICATE?

Like GST number, a digital GST Certificate in Form GST REG-06 will also be provided to you when your application for GST registration will be accepted by the GST department. You can download the GST Certificate from the official GST Portal. GST Certificate contains GSTIN, Legal Name, Trade Name, Constitution of Business, Address, Date of liability, Period of Validity, Types of Registration, Particulars of Approving Authority, Signature, Details of the Approving GST officer, and Date of issue of a certificate.

WHAT FEE YOU ARE REQUIRED TO PAY FOR GST REGISTRATION?

You will be happy to know that you are not required to pay any fee for GST registration. You just need to fill your application online and upload your necessary documents and you will get your GST number.