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Goods and Services Tax (India) - An Overview

The Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. GST is an indirect federal sales tax that is applied to the cost of certain goods and services. The business adds the GST to the price of the product and a customer who buys the product pays the sales price plus GST. The GST portion is collected by the business or seller and forwarded to the government. In effect, GST provides revenue for the government.

GST is India’s first major sweeping tax reform in decades. This regime has rationalised tax collection and simplified compliance procedures to a great extent. Businesses that once had to register for a wide range of taxes, i.e., VAT, Excise Duty, Service Tax, CST, Octroi, Luxury Tax and Entertainment Tax, -- now only require a GST registration. GST is strictly an Indirect tax applied to the cost of certain goods and services while Income tax comes under Direct tax. This value-added tax is levied on all goods and service providers in the domestic market. However, not all businesses require a registration.

Businesses that supply goods or services over a value of Rs. 20 lakh (Rs. 10 lakh in North Eastern states) are eligible for GST registration. Remember that the GST is levied on supply, not sales. Therefore, stock-taking, discounts and freebies also come under the GST net. Businesses selling to other states must register for GST, regardless of turnover.

Why GST? Benefits

Some of the benefits of GST are:

  • Decreased compliance burden
  • Removal of cascading effect on taxes
  • Increase in demand for goods, thereby leading to increase supply of goods
  • Simplification of taxes
  • Decrease in cost incurred for manufacturing
  • Increase of government revenues
All the fields are monidatory.

Registration Process

Online Registration

Features of GST

GST is a comprehensive, value added indirect tax on goods and services, which has made India a unified market.

Some of the key features of GST are:

  • 1.Dual tax structure:

    There is a centre and state tax levied for every supply of goods and services and these are termed Centre GST (CGST) and State GST (SGST), respectively

  • 2. IGST on inter-state supplies:

    Integrated GST (IGST) on inter-state supplies where the revenue is shared by both the Centre and the Consumption state.

  • 3. Supply between two establishments of same legal entity taxable:

    The supply of goods between the agent and the principal are taxable. The “gifts” given by employers to employees exceedding INR 50,000 are taxable.

  • 4. Imports and exports:

    All imports are treated as inter-state supplies and do attract IGST. all exports are zero rated.

  • 5.Tax administration:

    An online system for tax, however, there are GST Facilitation centres, GSPs, ASPs that assist taxpayers in filing the returns, registrations, etc.

Composition Scheme

The GST regime offers reduced tax liabilities to businesses under the composition scheme. These businesses must have a supply turnover of under Rs. 50 lakh, and will also not be able to avail of input-credit. This scheme will not, however, apply to the service industry or to businesses making inter-state sales.

What is GST in India ?

In March 29, 2017 the Indian government declared the Goods and Service Tax to unify the state economies and enhance the overall economic growth of the country. Act according to which the GST is an indirect tax that subsumes all other taxes. This Act became effective on July 1 2017 and since then GST has replaced all the taxes that were existed previously. GST is a comprehensive tax that is imposed at every stage of sale.

How the GST system works in India

GST is a comprehensive, value-added tax imposed on manufacture, sale and consumption of goods and services. GST is a single unified system that is applied across the country.

HOW GST WILL TRANSFORM INDIA

As GST removes the cascading effect of taxes and the economic barriers between the states, it will be beneficial for businesses and consumers. For instance, if a product has a tax rate of 20%, this is inclusive of central and state government’s taxes. The seller can manufacture in one state and supply to other states with no taxes. Also, the consumers would be subject to only this indirect tax and no other taxes. GST helps government in creating a common market with common procedures, thereby reducing the corruption.

Goods and Services tax council

Why do we need a GST Council ?

The GST Council in India is a governing body that regulates the GST act and all its further amendments. The Council takes the key decisions related to GST, which includes changes in tax rates, tax laws, tax deadlines, etc. The GST Council regularly notifies the finance ministry of all the improvisations. One of the primary responsibilities is to ensure that there is one uniform tax across India.

How is the GST Council Structured ?

According to the Article 279A (1), GST council has to constituted by the President within 60 days of the commencement of the Article 279A. It also states Creation of GST Council Secretariat, Appointment of the Secretary, Inclusion of the Chairperson and an Additional Secretary and four Commissioners in the GST Council Secretariat.

GST Download

Every business that has an annual turnover of more than Rs 20 lakh has to mandatorily register for GST. Other businesses which fall under “special” category are also required to register for GST. Once registered, the GST taxpayer will get a GST registration certificate in Form GST REG-06, which can be downloaded from the GST portal. It has to be noted that the government does not issue physical certificate.

Use our GST calculator, to calculate Goods & Service Tax Amount and submit GST returns without any hassle.

GST notification & circulars

Regular notifications and circulars on GST orders are provided to people. Orders, that are related to compliance, which need immediate attention are issued. The orders and circulars of 2018 are:

  • Integrated tax circulars
  • Central tax orders
  • Integrated tax circulars

Which countries collect GST?

The Goods and Services tax was first introduced in France in the year 1954. Other countries that followed suite are Singapore, UK, New Zealand, Malaysia, Canada, etc. Also, many countries had protests and compliance burdens for short terms. The GST concept is the same all around the world and only the rate differs. In the case of Canada, it is a dual GST similar to India and the standard rate ranges from 13-15%.

India's adoption of GST

India decided to join the other leading countries which have successfully implemented GST. Hence, one of the significant Indian tax reforms, GST is regarded as a “one tax, one nation” that subsumes all indirect taxes. GST facilitates global competitiveness among businesses, simplifies tax collection process, reduces corruption across the nation and make interstate selling of goods easy. The dual GST set up came into force on July 2017, abolishing the complex tax structures that were existing for decades. The main idea of GST was to eliminate the cascading effect of taxes, i.e., tax on tax or double taxes right from manufacturing phase till it reaches the consumer.

How to register on www.gst.gov.in?

This must be done on GST portal gst.gov.in. It is a simple 11-step process

What is GST Registration ?

GST refers to Goods and Services Tax which subsumes all taxes such as Sales tax, Service tax, Excise duty etc. into GST.

GST registration is required primarily if your annual sales are more than Rs. 20 Lakh. Even if your sales are less than Rs. 20 Lakh, we suggest that you voluntarily opt for GST registration because:

  • You will not get any tax refunds on purchases (e.g. if you buy goods worth Rs 1 lakh in a year, and tax rate is 28% – you will lose tax refund of Rs. 28,000).
  • You cannot sell outside your state
  • GST registration typically takes between 2-6 working days. You need to file your application with the department and sign it with your digital signature.

How can we help? Why legal Registration?

We help you get a secure GST Identification Number.

We make it easy for you to get your GST from the comfort of your own home. We do the entire process online.

We will file your returns and complete all other compliances as and when required.

Legal Registration GST advantages

Legal Registration is using the internet to simplify time-consuming paperwork. Over the past five years, we have helped tens of thousands of start-ups register themselves, protect their intellectual property, secure funding from Venture Capitalists & comply with the many regulations of the MCA.

STARTUP-FRIENDLY

3% of all business registrations and climbing

COST-EFFICIENT

9 crore in professional fees saved every year

TIME-SAVING

42,000 hours freed up for Indian business owners

CONTINUOUS SUPPORT

4160-strong team available for assistance

SATISFACTION GUARANTEED

140,000+ happy customers since inception

Why Legal Registration

1 BUSINESS DAY

Legal Registration can connect you with a GST expert in just one working day. And if you're not totally satisfied, we'll take another day to find a replacement. All at the lowest price, both online and offline.

9.1 CUSTOMER SCORE

We make your interaction with government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.

160 STRONG TEAM

Our team of experienced business advisors are a phone call away, should you have any queries about the process. But we'll try to ensure that your doubts are cleared before they even arise.

FAQs on LLP Registration

Any individual, or even a company or an LLP, can become a partner. However, only an individual can become a ‘designated partner’ in an LLP.

Yes, non-resident Indians and foreign nationals who are willing to enter into an LLP partnership can do so, provided they submit the necessary documents after getting it notarized by the concerned authorities. Although, at least one of the designated partners in an LLP should be an Indian national.

Any group of persons who have or want to invest money in a business can start an LLP. A person or an investor becomes a partner, according to the LLP agreement, as provided in the Act of 2008. Also, the investors/partners are owners of the business started under the LLP.

An LLP agreement is one that is made between the partners and the LLP regarding the relationship between the individual partners in the LLP. An LLP agreement usually consists of management policies, inclusion of new partners, policy making strategies, and so on.

According to the LLP Act, a minimum of two designated partners are required to start an LLP. The designated partners are responsible for fulfilling all the essential requirements involved in starting and running an LLP.

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