If you want to apply for GST but not
aware about the concept of GST in India then let’s have a look as before applying
for GST registration, one should clearly understand the new tax regime.
GST was implementing on 1St July 2017 in India. GST
is a multi-stage and destination based tax in India on the consumption of goods
and services. It has subsumed previous tax structure. It has been done for free
flow of tax credit on inter/intra state levels. GST is levied on all stages
from manufacturing level to the consumption level. Under this, credit of taxes
is available as set off which have been paid at previous stages. We can say
that tax will be charged on only value addition and final consumer will borne
the tax burden. GST will be accrued to that authority which has jurisdiction
over the place of supply.
Every business which falls under the
eligibility criteria has to apply for GST registration otherwise
they would have to pay heavy penalties.
*Note:
Place of supply is the place of consumption
GST
subsumed previous tax structure:
GST has subsumed center taxes such as
a) Central Excise duty
b) Excise Duties (Medicinal and Toilet
Preparations)
c) Additional Excise Duties (Goods of
Special Importance)
d) Additional Excise Duties (Textiles and
Textile Products)
e) Additional Custom Duties (commonly known
as CVD)
f) Special Additional Customs Duty (SAD)
g) Service Tax
h) Central Surcharge and Cessin relation to
supply of goods and services.
State taxes such as
a) VAT
b) Central Sales Tax
c) Entry Tax
d) Luxury Tax
e) Advertisement Tax
f) Entertainment Tax
g) Purchase Tax
h) Taxes on lotteries, betting and gambling
Recommendations shall be made by GST
council from time to time.
Commodities
not under the purview of GST
Alcoholic
liquor for human consumption is
outside the purview of GST as per Article
366(12A)of the Constitution of India whereas tobacco products will be subject to Central excise and GST. Tax on electricity consumption and sale fall
under the purview of state and not under the GST according to entry 53 in list
II of seventh schedule of constitution of India.
Below
mentioned petroleum products are
temporarily out of the purview of GST:
·
Petroleum
crude;
·
Motor
spirit (petrol);
·
High
speed diesel;
·
Natural
gas and
·
Aviation
turbine fuel.
*Note:
Previous tax structure is applicable on above till the decision of GST council.
GST
Model in India
GST act consist following:
·
SGST;
·
CGST;
·
IGST;
·
UTGST;
·
GST
(Compensation to States) Act
In India, there is a concurrent dual GST
model. Taxes are levied according to the
place of supply of goods & services.
CGST- Payable to Central Government.
SGST- Payable to State Government.
UTGST- Payable to administrator of Union
Territory.
*Note:
CGST and SGST also applicable in union territories such as Delhi & Puducherry.
SGST or UTGST also applicable on 12
nautical miles inside sea as it is a part of state or union territory. IGST is
payable in case supply is in between 12 nautical miles and 200 nautical miles.
IGST is applicable in case of inter-state
supply of goods or services. IGST rates are equivalent to addition of CGST and
SGST. It is levied by the central government and revenue generated from IGST is
distributed among union and state.
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