GST is for the end consumer. The Goods and Services Tax has a fairly simple concept. Tax value is levied on the product right from the origin of its production until it reaches the end consumer. The benefit of this particular Goods and Services Tax is that the consumer only has to pay the tax levied by the last dealer. This causes some set-off profits or gains at all the stages of the product’s production. This tax has helped build a unified market in India.
It’s important to understand the basic concepts attached to the Goods and Services Tax so that you can handle your financial transactions with ease.
Here are some of the FAQ on GST.
Previously Existing Tax have been Absorbed by the Goods and Services Tax?
Taxes exercised by the Centre, such as taxes on goods of exceptional importance, taxes on medicinal and toilet products, taxes on textile and textile products, additional taxes on systems, and Service charges have been absorbed by the Goods and Services Tax.
Taxes exercised by the State, such as State Value Added Tax, Value Added Tax, Entry Tax, Entertainment, and Amusement Tax, taxes on advertisements, taxes on lotteries, betting and gambling are also absorbed under the Goods and Services Tax.
Why is Goods and Services Tax nicknamed “Destination Tax”?
The responsible authorities charge cumulative tax at the end of the production chain of the product. This endpoint of the chain is the destination.
How did Goods and Services Tax come into Existence?
The Goods and Services tax took 13 long years since it was discussed for the first time in the Kelkar report on indirect taxes. This happened in 2003 and a historic moment ensued when Kelkar introduced the idea of an all-consuming Goods and Services Tax, instead of numerous taxes.
The Committee of State Finance Ministers was given the tiresome task of proposing a road-map for the Centre as well as State authorities to levy GST. This committee released its findings in 2009.
There needed to be a Constitutional Amendment so that the Goods and Services Tax could come into play. The Parliament’s Standing Committee on Finance thoroughly examined the 115th Amendment bill.
On 8th November 2012, the ‘Committee on GST Design’ was appointed for the sole purpose of studying the Amendment process. They examined the Bill and recommended changes to it.
After lengthy discussions and countless changes, the concluding draft of the Bill went to the Empowered Committee for a final review. This happened in September 2013.
The Bill was sent to the Empowered Committee in June 2014, after the newly elected Government had given its approval.
Finally, the Bill was reintroduced in the Lok Sabha on the 19th of December, 2014. It was passed on 6th May 2015. This is the chronology of this Goods and Services Tax.
How are Small Taxpayers Benefiting from the Goods and Services Tax?
Small taxpayers who are making a cumulative of around 10 lakhs every financial payer, would be freed from these taxes. This turnover is calculated on an all India basis. This aggregate value of a person will include the cost of all the taxable supplies, every exempt supply, cost of exports of the goods/services, and all the supplies that take place between states.
Why should you Opt to Register under the Goods and Services Tax?
There are a lot of advantages of getting yourself registered under GST. You become a legally certified and recognized merchant or supplier of goods and services. You undergo procedural, financial accounting of the taxes paid on input goods and services. This can be used to pay the GST on supplying goods and services. You can legally charge tax from your customers and then forward the credit on these taxes paid on the goods/services supplied to purchasers.
What is GSTIN?
The Goods and Services Tax has brought all businesses under a single tax. They have been put on a single platform under GST. In doing so, approximately eight million taxpayers have been shifted to GST.
GSTIN stands for ‘Goods and Services Tax Identification Number’, which is a unique number that is allotted to each businessman. It’s a 15-digit number consisting of your State Code, PAN(Permanent Account Number), and a checksum digit for verification.
What is GST Billing Software?
A GST billing software gives you the GST invoice or bill with just one click. This software is secure and accessible. It also integrates all the already existing platforms along with the new developments in GST. It brings all your GST related data under one single roof. As all the information is in one place, it saves you time, money, and effort.