Goods and Services Tax(GST) is a consumption(or indirect) tax levied in india on the supply of goods and services. It is a multistage, destination based taxation system. It is imposed on all levels in the prodcution process, but it is refunded to all parties in the various stages of production other than the final consumer. It is collected at from the point of consumption, not unlike previous taxes which were collected at the point of origin. It has replaces almost all the taxes except a few state taxes in india.
Goods and services are divided into five different tax slabs for collection of tax: 0%, 5%, 12%, 18% and 28%. However, petroleum products, alcoholic drinks, and electricity are not taxed under GST and instead are taxed separately by the individual state governments, as per the previous tax system. There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold.
In addition a cess of 22% or other rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products.Pre-GST, the statutory tax rate for most goods was about 26.5%, Post-GST, most goods are expected to be in the 18% tax range.
The tax came into effect from 1 July 2017 through the implementation of the One Hundred and First Amendment of the Constitution of India by the Indian government. The GST replaced existing multiple taxes levied by the central and state governments.
GST Eligibility criteria for registration:
Under the GST regime, businesses whose turnover exceeds 40 lakhs INR(and 20 lakhs INR for the Northeastern states and Hill region states) during the previous financial year are compulsorily required to take registration under GST. Voluntary Registration can be done by an indivdual or a firm even if the persons/firms turnover does not exceed the above limit.
GST return
Once a person registers under the GST , they need to levy the GST on every sale that is made.
If the turnover is below 1.5 cr, the person or firm comes under the quarterly filing scheme(once every 3 months). They need to file their GST return(GSTR-1) on or before 11th of every quarter.
If the turnover exceed the 1.5 cr mark, the GST return(GSTR-1) needs to be filed every month, on or before 11th of the next month.
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