Here in this Blog, We are going to deal with GST Registration and some important updates.
GST is Goods and Service tax. It is the unified tax for one nation. GST was introduced on 1st July 2017. India adopted dual GST models which are administered by both union and state governments. Let us take a look at ITC (Input Credit Tax). The tax credit means the producer can reduce the tax on output. To calculate the ITC, one should follow the steps.
- Determine the percentage of use in commercial activity.
- If you are eligible to claim ITC.
- Determine the amount of GST/HST
- Calculate using a regular method.
When the buyer gets the product and pays for it, within 180 days from the time the invoice is released the GST can avail the input tax credit.
Process of GST Registration
You should Login into the GST portal. Click on the return, select the financial year and select GSTR 2A, Under that choose B2B invoices. GST is destination based tax. It requires the GSTIN. GSTIN means Goods and Service Tax Identification Number. It is basically a 15 digit number. You have to get registered in the GST portal, with your phone and email id. Once the verification is complete, Application Reference Number (ARN) is sent. When photographs and other proofs are uploaded, GSTIN is obtained and then you can have the GST registration.
There is another aspect called TIN, but TIN is given under VAT law. TIN is 11 digit numbers. The GSTIN consists of 15 digit numbers in which first two digits are state code, the next ten digit numbers is PAN number, next following number is the entity number of the same PAN holder in the state, next is alphabet ‘z’ by default and the last digit is check sum digit. This is the general format of GSTIN. If you obtain the GSTIN, then you are the legal recogniser as a supplier of Goods and Services.
You can register on an e-commerce site so that you can widen the business. You can carry out interstate sales without any conditions or restrictions. It also ensures that the company is compliant.
Types of Taxes
Before GST Registration, indirect taxes like, Central and States sales tax, central excise duty, service tax, additional customs duty, luxury, entertainment tax, purchase tax. Tax on gambling, betting and tax on advertisement were eliminated by the GST. After the imposition of GST, the tax structure is simple. The calculation of GST at various supply chains is now easy. The end user has to pay less tax and so it encourages the producers. The PAN India operations are also encouraged due to GST. There is an increase in the exports. The cascading effects are eliminated in the GST. SME is supported by the GST. The taxpayers and the shareholders can lodge their complaints if any in grievance redressal portal which is designed by the government. Also the government has introduced GSTR 3B, which ensures timely revenue collection and providing short term relief for the taxpayers.
Types of GSTR
GSTR specifies that tax invoice is another major concept. Two types of invoices are important. They are tax invoice and bill supply. When such things are done manually generally it is time consuming. The GST return is a format where the taxpayer has to file separately.
The types of GSTR are GSTR1, GSTR2A, GSTR2, GSTR3, GSTR 3B, GSTR4/CMP-08, GSTR5, GSTR6, GSTR7, GSTR8, GSTR9, GSTR 9A, GSTR 9C, GSTR 10, GSTR11.
The GSTR 1 details the outward supplies of taxable goods and services.
GSTR2 is the inward supply of goods and services.
GSTR3 describes the monthly return on the basis of outward and inward supplies.
GSTR 3B describes outward supply with ITC being declared.
The GSTR 4 is return of the taxpayer registered under section 10.
GSTR 5 is the tax paid by the foreign taxable person.
The GSTR 6 is the return of the input service distributor.
GSTR 7 is the return of the government authorities.
GSTR8 is the supply of the e-commerce operators.
Then here comes the return called GSTR 9 which is the return of the normal taxpayer.
The other form is called GSTR 9A, an annual return to be filed by the registered taxpayer.
GSTR 9C is the certified reconciliation statement. If the GST registration is cancelled, final return can be paid in GSTR 10.
The GSTR 11 is filled by the inward supplies. It should be filled by the person who is having a UIN and claiming a refund.
Recent updates on GST
Recently the 40th council meeting was held. It has been updated that taxpayers can resume the GST which was cancelled by registering before September 30 2020. And also it is applicable only if the registration gets cancelled before June 12, 2020.
Secondly the taxpayers having turnover up to Rs.5 crores will not be charged late fees too if they have filed the form GSTR 3B. Now due to the pandemic outbreak COVID-19, the GST rates should not be high on various essential commodities. But it has not yet been confirmed. Also it is expected that, withdrawing late fee or the penalty or the interest due to pandemic.
Recently the NBA which is the National Broadcast Association has requested the Finance Minister of India, to remove 18% of the tax and reduce it to 5%. Also it is said that the advertising agents are also pressurising the NBA that they cannot pay the due payments and asking for more time due to the pandemic COVID-19 outbreak. Of course the GST is planning for a relief package to face the impact of COVID-19. It includes six months suspension of GST payments for restaurants.
The GST regulates the unorganised sector. Also the number of compliances is lesser. There is enhanced logistics and creating a common national market is encouraged in India. Also due to implementation of GST registration the litigation is reduced. The demerits like Petrol products do not fall under GST. Also there is an increased burden of compliance. Let us see for various improvements in GST in future.
