Skip to main content

What is GST in India? Goods & Services Tax Bill Explained | Certicom

GST is an Indirect Tax that has replaced many Indirect Taxes in India. The Goods and Services Tax Law was passed in Parliament on March 29, 2017. This Act came into effect on July 1, 2017; The Goods & Services Tax Law in India is a comprehensive, multi-stage tax based on the objectives imposed on each value addition.

What is GST?

“GST (Goods and Services Tax) is India’s largest indirect tax reform. GST is a single tax on the supply of goods and services. This is a destination-based tax. GST has included taxes such as Central Excise Law, Service Tax Law, VAT, Entry Tax, Octroi, etc. GST is one of the largest indirect tax reforms in the country. GST is expected to unite the country’s economy and increase the country’s economic growth as a whole.

GST is one of the indirect taxes for all countries.

So, before the Goods and Services Tax, the tax collection pattern is as follows:
GST regime

Multi-stage

There are several changes of goods that enter through its supply chain: from manufacturing to final sales to consumers.

Let’s consider the following case:
  • Raw Material Purchases
  • Production or Manufacture
  • Warehousing of Finished Goods
  • Sold to Wholesalers
  • Product Sales to Retailers
  • Sales to End Consumers
GST Multi stage
Goods and services tax will be charged at each stage which makes it a multi-stage tax.

Value Addition

Manufacturers that make biscuits buy flour, sugar and other ingredients. The input value increases when sugar and flour are mixed and baked into biscuits.
manufacturer of Biscuit

Advantages of GST

GST will primarily remove the cascading effect on the sale of goods and services. Removal of the cascading effect will have a direct impact on the cost of goods. Because taxes on taxes are removed in this regime, the cost of goods decreases.
Benefits of GST

What are the GST Components?

There are 3 taxes that apply under this system: CGST, SGST & IGST.
CGST: Collected by the Central Government for Intra-Country sales (For example: transactions occur in Maharashtra)

SGST: Collected by the State Government for Intra-Country sales (For example: transactions occur in Maharashtra)

IGST: Collected by the Central Government for sales between countries (For example: Maharashtra to Tamil Nadu)

Comments

Post a Comment

Popular posts from this blog

How GST works in India? | Indirect tax structures | Certicom

GST is a Destination-based tax. GST follows a Multi-Stage collection mechanism. The Goods and Services Tax (GST) will be collected at each stage (from the product manufacturing stage to the delivery to the final consumer) and the tax credit paid in the previous stage is available as a set-off at the next stage of the transaction. This helps eliminate the system of “Indirect tax on taxes”. Indirect tax structures in India can be clearly understood from the following chart: Now GST (Goods and Services Tax) replaces all of these indirect taxes collected by the Central and State Governments. When the Goods and Services Tax is applied, there will be 3 types of applicable Goods and Services Taxes, namely CGST, SGST & IGST. CGST – Central Goods and Services Tax: Revenue will be collected by the central government SGST – State Goods and Services Tax:   R evenue will be collected by the state government for intra-country sales (that is, sales in certain...
Post a Comment
Read more

How Invoice Matching Works In GST?? | Businesses News | Certicom

Every month suppliers will be asked to upload their invoices to the GSTN portal and they will be matched with purchases from customers. So, matching invoices will be a monthly affair for businesses. The use of IT systems for bookeeping and tax compliance work will be seen even in many small and medium-sized businesses from now on. A well integrated IT system will also help suppliers and buyers to match their invoices effectively. Invoice matching is a very important part when it comes to trading. What Is Matching Invoice? Matching all supplies taxable , bought by a buyer and supplied by a supplier is known as Invoice Matching. According to finance minister, “It is through the invoice matching and automated return mechanism that the government can guarantee eligible input tax credit is accurately transferred between the states”. GSTN is working towards the GST web application which is hosted on the common portal to make invoice matching easy. How do Invoice Mat...
Post a Comment
Read more

How to E-file Income Tax Returns ( ITR )?

How to E-file Income Tax Returns ( ITR )? – Income Tax E-filing Guide Step 1:  E-filing ITR – Start Before starting, you must have the following document to speed up the process: PAN Adhaar Bank Account Details Form 16 Investment Details Step 2: Enter your Personal Information Enter Your Name, PAN, Date of Birth, and Father’s Name. Step 3: Enter your Salary Details 1)  Fill in Your Company Name and Type. 2)   Give your salary and TDS information. To enter your salary details in detail, ‘Click here’ . Step 4: Enter Details to Claim Reduction Enter investment details for the deductions to be claimed (Eg. LIC, PPF, etc., and other tax allowance claims here. Step 5: Enter the Details of Taxes Paid If you have any non-salary income, say, interest income or freelance income, then add tax payments that are already made. You can also add these details by uploading Form 26AS. Step 6: E-File Enter your bank account details and pr...
Post a Comment
Read more