Introduction of GST?

  • Historical Date in Indian Taxation System 1st July 2017
  • “One Tax, One Nation, One Market”
  • GST is a tax imposed on sale, manufacturing and usage of goods and services
  • GST is charged at the same rate at national level on similar products.
  • GST replaces almost all the current indirect taxes imposed by the central & states
  • GST is a consumption-based tax meaning tax paid at the point of sale

Highlights of GST

  • Common threshold limit across the country
  • Continuity of tax credit across the supply chain till it reaches the consumer.
  • Elimination of tax cascading effect
  • Pan Based Registration
  • ‘on Supply’ tax liability instead of ‘Removal/Sale’
  • Valuation method broadly as ‘Transaction Value’
  • Branch transfers taxable and credit eligibility
  • Tax credit eligibility on inward supply of goods/services for Inter-state transaction
  • No declaration forms (Form- C, F, etc……)

Features of Constitution Amendment Act

  • Concurrent jurisdiction for levy & collection of GST by the Centre (CGST) and the States (SGST)
  • Centre to levy and collect IGST on supplies in the course of inter-State trade or commerce including imports
  • Compensation for loss of revenue to States for five years
  • GST on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas & aviation turbine fuel to be levied from a later date on recommendations of Council

Registration – Threshold Limit

Regular Dealer

Aggregte TurnoverRegistration RequiredApplicability
Earlier Limits- For the sale of Goods/Providing Services
Exceeds Rs. 20 LakhYes- For Normal Category StatesUp to 31st March 2019
Exceeds Rs. 10 LakhYes- For Special Category StatesUp to 31st March 2019
New Limits – For Sale of Goods
Exceeds Rs. 40 LakhYes- For Normal Category StatesUp to 1st April 2019
Exceeds Rs. 20 LakhYes- For Special Category StatesUp to 1st April 2019
New Limits – For Providing Services
There has been no change in the threshold limits for service providers. Persons provinding services need to register if their aggregate turnover exceeds Rs. 20 lakh (For normal Category states) and Rs 10 lakh (for special category states).

Special Category States/UT

Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand

Rest States/UT are Normal Category States/UT

Composition Scheme

Composition Scheme is simple and easy scheme under GST for taxpayers. Small Taxpayers can rid of tedious GST formalities and pay GST at a fixed rate of turnover.

Composition Dealer

This is an option available to small businesses and taxpayers having a turnover less than Rs. 1.5 Crore. In case of North-Eastern states and Himanchal Pradesh, the limit is now Rs 75 Lakh. As per the CGST (Amendment) Act, 2018

  • File summarized returns on a quarterly basis instead of multiple monthly returns
  • Pay tax only to 1% for manufacturers & Traders (Goods), 5% for restaurants not Serving alcohol, 6% for other Service providers.
  • Cannot collect any tax from or issue tax invoice to customers
  • Cannot avail input tax credit

Composition levy is available to only small businesses. It is not available to interstate sellers, e-commerce traders, and operators.

Indirect Tax Structure (Before 1st July 2017)

Taxes Likely to be subsumed under GST

Taxes Not Likely to be subsumed under GST

Central Taxes:State Taxes
Customs DutyRoad & Passenger Tax
Other Customs Duty like anti-dumping duty , Safeguard duty etc.,Toll Tax
Export DutyProperty Tax
 Electricity Duty
 Stamp Duty & Registration Fees
  

Goods Not Covered Under GST

  • 5 Petroleum Products
    • Petrol
    • Diesel
    • Petroleum Crude
    • Aviation fuel
    • Natural Gas
  • Alcohol for Human Consumption
  • Power Sector

Comparison of Tax Scenario under Current & GST regimes

So let’s understand how GST helps in bringing down prices paid by the final consumers.

Saving to the customer= Rs. 22,500

What is GST Number? – Know your 15 Digits GSTIN

GSTIN, known as GST Identification Number, is assigned to every GST Registered Person.

Official GST Website: https://www.gst.gov.in/

Format of GSTIN

Direct Tax v/s Indirect Tax

Direct Tax
The incidence of which cannot be shifted on another person. E.g. Income Tax, RTO Tax, Municipal Taxes

Indirect Tax
The incidence of which can be shifted on another person. E.g. VAT, CST, Excise, Service Tax, GST  

Intra –State Sales

  1. Intra State Sales are Local Sales or Sales within States.
  2. For e.g. I am a doing business in Bihar and I am selling goods (with 18% GST) to the customer who is also in Bihar, then it is called Local sales or Intra-State Sales
GST on Intra-State Sales
INVOICEAMOUNT
Item 16,000
Item 24,000
Sub Total10,000
CGST 9%9,00
SGST 9%9,00
Invoice Total11,800

Inter –State Sales

  1. Inter State Sales are transaction between Two States.
  2. For e.g. I am a doing business in Bihar and I am selling goods (with 18% GST) to the customer who is in Jharkhand , then it is called Inter-State Sales
GST on Inter-State Sales
INVOICEAMOUNT
Item 16,000
Item 24,000
Sub Total10,000
IGST 18%1,800
Invoice Total11,800

STEP 1: ENABLING GST  IN TALLY PRIME

GOT > F11: Feature    Enable Goods & Services Tax (GST)


STEP 2: CREATE GST MASTERS

Ledger NameUnder Group
PurchasePurchase
SalesSales
CGSTDuties & Taxes
SGSTDuties & Taxes
IGSTDuties & Taxes

GOT  >  Create    >   Ledger 

1st Ledger

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