Tax-GST Lawyers

Goods & Service Tax Laws

Common Questions on Goods and Service Tax

1. What is GST?
2. Who needs to pay GST?
3. What if I don’t pay GST?

What is GST?

Goods & Service Tax (hereinafter referred to as the GST) is a comprehensive tax mechanism wherein all the major indirect taxes have been clubbed as one. It aims at the reduction of the cascading effects of taxes. GST eases the process of doing business.

Alcohol, Petroleum Products, and Tobacco Products are not included in the purview of GST. Stamp Duty, Property Tax, Toll Tax, Electricity Tax are some other things that are not affected by the introduction of GST. GST has been acquainted with supplant numerous indirect taxes collected by State and Central Governments keeping in mind the end goal to disentangle the indirect tax framework. GST has supplanted about 17 of the current state and central indirect taxes (more to come later on, for example, central excise duty, extra customs duty, VAT, entertainment tax, service tax and so on.

Types Of GST

There are 3 prime models of GST, they are Central GST, State GST, and Dual GST. There are 3 major types of GST; Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), and Integrated Goods and Services Tax (IGST).

There have been certain legislations related to the subject of Goods & Service Tax, some of them are Central Goods and Services Tax Act 2017, Integrated Goods and Services Tax Act 2017, Union Territory Goods and Services Tax Act 2017, Goods and Services Tax (Compensation to State) Act 2017, and so on.

As per the policies of GST, the taxpayer is provided with a State wise PAN based 15 digit Goods and/or Services Taxpayer unique Identification Number (GSTIN).

Starting from the left- 1^st two digits indicate the State Code

3^rd to 12^th digit indicates the PAN number

13^th digit indicates the Entity Code

14^th digit ________

15^th digit indicates the check digit

Who needs to pay GST?

As per the decision of the GST Council, businesses in the North-eastern and hill states with an annual turnover not exceeding Rs. 10 Lakh are exempted from the GST net, while the threshold for the exemption in the rest of India is an annual turnover of Rs. 20 lakhs.

Goods and Service Tax (GST) is a one single tax on the supply of products and enterprises, right from the Manufacturing to a definitive conveyance to customer. Credits of input tax paid at each stage will be accessible in the ensuing phase of significant worth expansion, which makes GST basically a tax just on value expansion at each stage and therefore abstaining from cascading effect. The last consumer will accordingly bear just the GST charged by the last dealer in the supply chain, with set-off advantages at all the past stages.

Penalty for Non-Payment of GST

Penalty for delay in filing GSTR- Late fee is Rs. 100 per day per Act. So, it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day. Maximum is Rs. 5,000. There is no late fee on IGST.

Penalty for not filing GSTR- Penalty 10% of tax due or Rs. 10,000 -whichever is higher.