All about GST implementation and GST Tax Slabs

GST stands for Goods and Services Tax. GST is the tax which is imposed on the goods and services sold for local consumption.

What is GST implementations and GST Tax Rates?

What is GST?

GST is a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by states and Central.

            Most of us  when search about GST finds this definition of GST, which is quite confusing and complicated. So in this blog, you will get a simple description about GST,GST implementations and GST Tax Rates.

            Also, you will get the answers to questions which commonly asked about GST. The most frequently asked question about GST is,

What is actually GST?

            GST stands for Goods and Services Tax. GST is the tax which is imposed on the goods and services sold for local consumption.

            GST is transmitted to the government by the businesses selling the goods and services which is paid by the consumers. Being in effect, GST acts like an income for the government.

What is the meaning of GST in India?

            GST is a tax collected when a consumer buys any sort of good or service.GST is the tax which has replaced many indirect taxes in India. The main aim of current tax regime is to incorporate all the filtered indirect taxes into a single payable tax that is GST tax.

 

 

 

 

 

What are the types of GST in India?

            There are  different types of GST levied in India,namely:

            1)CGST.

            2)SGST

            3)UTGST.

            4)IGST.

Now when we are familiar with what is GST is, we will focus on other important things related to GST,GST implementation and Tax rates.

How does the GST works in India?

            The value or selling price of the poducts is charged with GST by a registered person only, the registered person can deduct the amount of GST charged on input tax from the amount of output tax.

So the question arises who are the person payable to the GST tax.

Mainly, the registered supplier of goods or services will need to pay GST. In some cases the liability will depend on the recipient under the reverse charge mechanism.

In other cases like intra-sate supply of services the liability to pay GST can be on e-commerce operators through which such services are supplied.

What is GST implementations?

The GST implementation in India was not an overnight thought. The idea of GST was first coined by Atal Bihari Vajpayee, in 2000 who was then Prime Minister of India.

            In 2005,the requirement of tax reforms in India in the area of indirect taxation which was announced by the then finance minister P. Chidambaram.

            Further in 2010, the then finance minister, Pranab Mukherjee, in his budget session addressed to the nation that the GST will be introduced in April 2011.

            In 2011,the 115th constitutional amendment bill was introduced in the Lok Sabha for imposing the GST on all goods and services.

            Ultimately, in 2014, the GST bill was passed in Lok Sabha as the 122ndconstitution bill. And in 8th august 2016, the bill was passed in the Rajya Sabha as well.

 

GST  Implementations Date

 On 12 April 2017, the Central Government sanctioned four GST bills:

1) Central GST (CGST) Bill

2) Integrated GST (IGST) Bill

3) Union Territory GST (UTGST) Bill

4) The GST (Compensation to States) Bill

Was GST implementations easy in India?

            Not really, states had autonomy in collecting state taxes. They had the feeling of losing their rights. They wanted to keep liquor ,fuel out of GST tax system. If GST implementation happens they knew they have to share their powers of taxing with the union government, which means they will be no longer in the position to increase the taxes as and when the wanted.

Why was GST implemented?

GST can boost economic growth by as much as 2 percentage points, according to Finance Minister Arun Jaitley. Greater tax compliance has the potential to boost revenues for the government, helping narrow Asia's widest budget deficit and allowing more funds to be allocated to schools and highways.

 

            In India, if you run a business you will have to register for GST if your turnover is over 20 Lakhs per annum. If you already have a Indirect tax registration, you have to convert that into a GST Registration.

 

Once you register for GST, you must:

  • charge GST at on all your sales, except for exempt supplies
  • give tax invoices to GST-registered persons within 30 days
  • keep GST invoices and receipts when you buy goods or services for your business
  • keep GST invoices to claim a GST credit for a supply
  • keep any other records and paperwork to support the figures in your GST returns
  • calculate your sales and income and your purchases and expenses
  • make additional GST calculations, if applicable, eg for GST adjustments and provisional tax
  • calculate your GST total

 

What are the Steps to file returns under GST?

§  The  GST returns will have to be filled electronically only, every business will have to file 3 returns every month.

§  You will first have to declare your supplies (sales and service revenues) only and the input for purchases are automatically populated based on your vendor submissions.

§  In any case, if your  vendor fails to declare your sale,the credits to that transactions will be denied.

How can I learn more about GST?

Govt of India is updating GST very frequently, and keeping yourself updated on GST is very important, and hence the best way to learn GST updates is to stay in touch with here GST Video Courses. Here you will get best videos on GST in a proper structured form, you can also take tests on GST related topics.

Here is a step-by-step procedure to file returns:

  • 10th of every month, you will declare your sales in GSTR-1
  • Between 11th – 15th, Your purchase (inward supply) will get auto-populated and you are allowed to make corrections in GSTR-2A
  • On 20th, the auto-populated GSTR-3 will be available for filing and payment

 

 

 

Lets take a look at the GST Tax Rates.

There are four slabs fixed for GST rates - 5%, 12%, 18% and 28%.

Apart from these slabs some items are exempted under GST which listed below,

            -Milk, eggs, curd, buttermilk, Fresh vegetables and fruits, Un-branded wheat and rice, un-branded flour, Puja Items.

For better understanding of GST Tax rates,GST Tax Rates are classified as GST Tax rates for goods and GST Tax rates for services.

GST Tax Rates for Goods:

Exempted: Electrical energy, Newspapers, Milk, Duty credit scrips, Food grains.

5%: Apparels valued less than INR1,000,Fly ash, Fishing net and fishing hooks, Aircraft engines, Bio-gas

12%: Articles of apparels exceeding INR1,000, Bio-diesel, Printing ink, Specified parts of sewing machine, Furniture wholly made of bamboo or cane

18%: Fork lifts, lifting and handling equipment, Electrical apparatus for radio and television broadcasting, Chocolates, Slabs of marbles and granite

28%: Paints and varnishes, Refrigerators, Air-conditioners

28% +  Cess: Cars, Pan masala, Cigars

 

GST Tax Rates for Services:

      Exempted: Education, Healthcare, Residential accommodation ,Hotel/ Lodges with tariff below INR 1000

 

      5%: Goods transport, Rail tickets (other than sleeper class), Economy class air tickets

 

12%-18%: Works contract, Business Class air travel, Telecom services, Financial services,Hotel/ Lodges with tariff between INR 1000 and 7500

 

28%: Betting, Gambling, Hotel/ Lodges with tariff above INR 7500

 

  • GST rate on pearls, precious or semi-precious stones, diamonds (other than rough diamonds), precious metals (like gold and silver), imitation jewellery, coins – 3%
  • GST rate on rough diamonds – 0.25%

 

            So that brings you to the end of this blog post, I hope I have managed to simplify the complicated topic of GST implementation and GST tax rates and answer few of your answers. Did you find this blog post helpful?

 

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