understand gst

A Successful Guide to Understand GST Better

Is increasing day by day. We are aware of the term Tally, but what is Tally? You often used the term Tally while calculating big numbers or in schools when you were taught the use of Tally table to solve number problems. But, the term Tally which we are referring to is the name of the software which is preferred widely by small, mid-sized and large enterprises for accounting and inventory management. This is the most demanding software in today’s time as it provides complete business solutions to all. From filling GST to cheque printing to ratio analysis to comparative analysis to cash and fund flow statements do as much accounting related work you want.

Before we jump to other aspects of it, letís understand GST first.

What do We Mean by GST?

Good and Service Tax (GST) is the biggest tax reform in India. Moreover, the nation adopted a uniform tax system under the central authority, for the very first time. GST is applicable to all goods such as materials, commodities and articles, as well as services. The GST law has specific principles and is influenced by the GST systems of other countries such as Australia, the European Union and the (Organisational for Economic Co-operation and Development) OECD's recommended international guidelines. Since the government allows both the center and the states to impose taxes, there is a dual system in the GST system that allows the states and central taxes to operate independently.

Features of GST

    The striking features of GST are:
  • The Goods and services tax is under the authority of the GST Council, which is composed of all the states ' Finance Ministers and headed by the Union Finance Minister.
  • The center and the states have subsequent jurisdiction to impose GST.
  • For various products and service categories, GST has a four-tiered slab structure at 5 per cent, 12 per cent, 18 per cent, and 28 per cent. Some important categories like wheat and rice have Zero percent of GST.
  • For various products and service categories, GST has a four-tiered slab structure at 5 per cent, 12 per cent, 18 per cent, and 28 per cent. Some important categories like wheat and rice have Zero percent of GST.
  • Some goods and services are exempted from GST umbrella such as; alcohol, five petroleum products and the entertainment tax levied by local authorities.
  • GST is imposed on the amount value-added at each stage. The end customer bears the GST only of the final stage.
  • Imports and Interstate commerce will be imposed by the center under GST.
  • GST is easy to understand and learn, all you need to do is enroll in a Tally course in Delhi to instil expert GST filing methods.

This unified taxation system ensures that the same goods or services do not receive cascading and repeated tax levies. This will support the country's economic growth by reducing the time, effort and cost spent on taxation. It will contribute to the ease and accountability of business transactions.

Different Types of GST

Central Goods & Services Tax (CGST), State Goods & Services Tax (SGST), and the Integrated Goods & Services Tax (IGST) are the three major types of GST. The fourth one is the Union Territory Goods & Services Tax (UTGST).

Central Goods & Service Tax (CGST)

The Central Goods & Service Tax (CGST) replaced all the duties and taxes that were formally imposed. That taxes collected by the government body belongs to the central government. State governments are provided with the input tax within this head, so they have to pay the CGST to use it.

State Goods & Services Tax (SGST)

State Goods & Services Tax (SGST) is collected by the states. It replaces the taxes that were imposed by each of the state governments before the implementation of the GST. The central GST body also regulates the state authority.

Integrated Goods & Services Tax (IGST)

IGST is imposed on Goods & Services that are supplied from one state to another. This tax is collected by the center and can be changed whatever required by the Goods and Services Tax Council of India. These taxes are collected by the center and are subject to change whatever is needed by the Goods and Services Tax Council.

Union Territory Goods & Services Tax (UTGST)

Union Territory Goods & Services Tax (UTGST) replaces all the taxes that were imposed formerly by the Union Territories.

The Four Slabs of GST

GST has been imposed with a four slabs structure with an additional cess having different rates such as:

  • Zero Rate- 0%
  • Lower Rate- 5%
  • Standard Rate- 12% and 18%
  • Higher Rate- 28%
  • Additional Cess

Impact of GST on SMEs

The GST reforms have multifold impacts. For small and medium-sized enterprises the most imminent and substantial benefits are:

1. Easy to Comply

It was extremely difficult to understand and comply with the earlier taxation regime, especially for a business person not familiar with the rules of another state. The GSTN portal makes tax filing easy.

2. Transparent Registering System

The process of registration for new startups under GST is simple and transparent. It allows businesses to expand more beyond state borders.

3. Interstate Logistic is Simpler

The physical movement of goods across the state no longer requires endless paperwork and waiting in long queues at the border check. This makes doing interstate business easier and less expensive and risky than before.

4. Simple Tax Calculations

With the current integrated goods and services system, the tax is imposed on the sum that makes it easier for small and medium-sized businesses to measure and receive tax advantages for input goods and services.

5. Improved Threshold Limits for Startups

The new threshold cap for GST taxes on SMEs, especially startups is a huge success. The lower tax rate for smaller turnover businesses creates an ideal environment to help small organizations and startups thrive with a lower tax burden.

Who Needs to Register for GST?

It is very important for all applicable businesses or individuals to register for GST. you can apply online to do so. The following businesses/people requires registration under GST:

  • Any organization previously authorized for every kind of tax whether central or local.
  • Businesses with revenue above the imposed threshold limit.
  • A casual taxable individual.
  • A non-resident taxable individual.
  • Supply agents.
  • Service distributors.
  • Reverse Charge Taxpayers.
  • E-Commerce aggregator suppliers.
  • Online database information provider in India or from outside India.

Documents Needed for GST Registration

You can register for the GST regime online. The documents that must be submitted for GST registration are:

  • The PAN number of the applicant.
  • The Aadhaar card of the applicant.
  • Incorporation certificate.
  • Address proof and ID proof of the individual.
  • Address proof of the business.
  • Cancelled cheque/bank account statement.
  • Digital signature
  • Board resolution/letter of authorisation to authorities.

What Do We Mean By GST Return?

GST returns are filed by an individual with tax authorities and details of income. The tax return document includes:

  • Sales
  • Output GST
  • Purchases
  • Input tax credit

Therefore, the purchase and sales invoices should be made GST compliant. Businesses that arenít composition dealers need this to be done every month. Thus, making it two GST returns when CGST and SGST are filed every month.

Want to Learn the GST Filing Process?

If you are keen to learn GST filing methods, you can join Classes of Professional Studies for the best gst classes in Delhi. Here, with extensive gst training, we provide a GST course also. Whether you are looking to build a career out of GST or want to improve your skills, you are just a gst course away! Anybody with a desire to be an accountant or tally operator can join our gst institute in Delhi.