Home > GST > Help Center > GST Premier Basics of Goods and Service TaxLast Updated: Dec 06th 2023
Understand Basics of GST from EZTax.in, a single window for all your tax needs. GST Enrollment, GST Conversion, GST Returns, Consultation, and other Value Services.
GST is a form of indirect tax for the whole nation which will make India into one unified market by implementing a uniform rate of tax across the country.
GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.
Benefits of GST Implementation can be availed by both, businesses and Government. Ultimately consumer will also be benefited. Following are some benefits:
At Central Level
At State Level
Position under pre-GST Tax Laws | Position under GST | ||
---|---|---|---|
Food Value | 1000 | Food Value | 1000 |
Service Charge | 100 | Service Charge | 100 |
Vat @ 14% on value of Good | 140 | GST @ 18% on total value of supply i.e.1100 | 198 |
Service tax @ 6% on value of food | 60 | The entire supply would be treated as a single composite supply under GST. | |
Service tax @ 15% on Service Charge | 14 | The same would be taxable as per supply of service @ 18% on the entire value of supply. | |
Total Taxes Paid | 215 | Other taxes need not levied as levied earlier |
Section 22 of the CGST/ SGST Act 2017, every supplier (including his agent) who makes a taxable supply i.e. supply of goods and/or services which are liable to tax under GST, and his aggregate turnover* in a financial year exceeds the threshold limit of twenty lakh rupees, shall be liable to register himself within 30 days in the State or the Union territory from where he makes the taxable supply.
In case of eleven special category states {as mentioned in Art. 279A (4) (g) of the Constitution of India}, this threshold limit for registration liability is ten lakh rupees.
Besides, Section 24 of the Act mentions certain categories of suppliers, who shall be liable to take registration even if their aggregate turnover is below the said threshold limit of Rs 20 lakhs in Services and/or 40L in Products. On the other hand, as per Section 23 of the Act, an agriculturist in respect of supply of his agricultural produce; as also any person exclusively making supply of non-taxable or wholly exempted goods and/or services under GST law will not be liable for registration.
* Aggregate Turnover:
Aggregate turnover shall include the aggregate value of all taxable supplies, exempt supplies and exports of goods and/or services and exclude taxes [viz. GST.] Aggregate turnover shall be computed on all India basis. For NE States and special category states, {Arunachal Pradesh, Assam, Jammu & Kashmir, Meghalaya, Manipur, Uttarakhand, Himachal Pradesh, Sikkim, Tripura, Mizoram, and Nagaland} the exemption threshold shall be [Rs. 10 lakhs]. All taxpayers eligible for threshold exemption will have the option of paying tax with input tax credit (ITC) benefits. Tax payers making inter-State supplies or paying tax on reverse charge basis shall not be eligible for threshold exemption.
* Casual Taxable Person: Casual Taxable Person has been defined in Section 2 (20) of GST Law. It means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.
** Non-resident Taxable Person :means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India in terms of Section 2 (77).
Note:It can be obtained from your respective Vat, service tax, sites login. For every assessee there is a unique Id and password given.
Ledgers to be maintained – State Specific
Cash Ledger linked to the registration
CGST, SGST and IGST to be disclosed separately.
Disclaimer: This article provides an overview and general guidance, not exhaustive for brevity. Please refer Income Tax Act, GST Act, Companies Act and other tax compliance acts, Rules, and Notifications for details.