The Goods and Services Tax: The fundamentals of GST

The Goods and Services Tax: The fundamentals of GST

You are probably a business owner or vendor, but you are clueless as to how to proceed under the Goods and Services Tax (GST) regime. The GST Act was implemented to subsume several indirect taxes like Excise, Entertainment tax, and so forth that were levied on taxable goods and services under the earlier tax structure.

You are probably a business owner or vendor, but you are clueless as to how to proceed under the Goods and Services Tax (GST) regime.

The GST Act was implemented to subsume several indirect taxes like Excise, Entertainment tax, and so forth that were levied on taxable goods and services under the earlier tax structure. If you are a business owner, you will be liable to make a GST payment online if your business turnover goes past Rs. 40 Lakh in a financial year. In special category states, the annual turnover threshold for a fiscal year is Rs. 20 Lakh.

What are the main types of GST?

The three types of GST are – IGST, CGST, and SGST.

Integrated Goods and Service Tax (IGST)

The central government imposes this tax on supplies that occur between states.

Central Goods and Services Tax (CGST)

The central government imposes this tax when you make transactions within a state.

State Goods and Service Tax (SGST)

The state government imposes this tax when an intra-state transaction takes place.

What are the Advantages of GST?

Here are a few advantages of GST you ought to know:

Reduction in Tax Leakages And Corruption

The taxpayer may sign, file taxes, and file returns using the GST portal online without having to answer or deal with the authorities. The GST portal boasts a vastly extensive database that is up-to-date with all the relevant details once you submit them. The added advantage is that such a system prevents tax evasion and fraud.

Eradication of Layered Taxes

GST is a unified and comprehensive tax that integrates various taxes like Utility Tax, Central Excise, Income Tax, Separate Extra Customs Duty, Luxury Tax, and so forth. It does not permit the imposition of different tax strata on goods and services that are taxable.

Easy and Efficient Administration

It is no secret that indirect taxes like VAT are challenging to calculate and manage, primarily because they vary with each state. However, the GST system has a consolidated GST network with easy access to data. It is much easier now for the government to handle tax payments and other related aspects.

Introducing the Goods and Services Tax Identification Number

A Goods and Services Tax Identification Number (GSTIN) is a unique identification number that you get after completing the GST online registration. This 15-digit number is exclusive to you.

Having a GSTIN is vital in a variety of ways. You need to maintain your authenticity in the eyes of the market and the government. Acquiring a GSTIN can cement your chances of getting recognized as a credible goods and service provider. You also use a GST number for GST return filing and preventing tax evasions. Aside from all of this, it maintains the safety and security of your transactions and keeps you away from fake companies.

How do I register for GSTIN?

Registering for a GST number is not nearly as hard as you think it is. This process involves the following steps:

  • Click on services and click on the new registration tab. Enter your details, including your email ID, phone number, and Personal Account Number (PAN) and continue.

  • In this step, you will receive an OTP. Enter this OTP and receive your Temporary Reference Number (TRN).

  • Head to the services tab, click on registration, and then hit new registration. Enter your TRN and the captcha code.

  • You will get a second OTP and then get redirected to the saved applications page.

  • Enter all the business-related specifics like business location, bank account details, and everything else. Also, submit the necessary documents along with the specifics.

Then, submit your application after completing your verification using methods like E-signature, Electronic Verification Code (EVC), or Digital Signature Certificate. Check your phone and email ID and see if you’ve received your 15-digit Application Reference Number (ARN). You will have to use your ARN if you wish to track your GST registration status.

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