WHAT IS GOODS AND SERVICES TAX?

The constitution amendment bill for ‘GOODS AND SERVICE TAX’ (GST) was approved in the Parliament Session in August 2016 along with the confirmation by 50 percent of the state legislatures. Hence, all the existing indirect taxes levied by state and center were replaced with the proposed implementation of GST on 1st July 2017.

This move by the Government is the greatest tax reform since independence & is an added benefit to the Indian economy as it strives to eradicate the discrepancies of the existing tax structure & promotes single tax payment on the supply of all goods and services.

One of the much-awaited tax reforms to get launched in the Financial Year 2017-18, improving the ease of doing business for many micro and small businesses in India by reducing compliances. By incorporating multiple taxes into a single tax system, the complexities are bound to get reduced while the tax base would rise substantially.

Under the new GST process, all entities that are involved in buying or selling of goods or providing any services or both are required to obtain GST registration compulsorily. Entities without the registration of GST will not be permitted to collect GST from a customer or claim the input tax credit of GST paid. Also, the GST registration is mandatory once an entity crosses the minimum threshold turnover.

Most importantly, according to the GST Council, business entities situated in the Northeastern and hill states having an annual turnover of Rs.10 lakhs and above would be required to attain GST registration. For all the other business entities in the rest of India would be required to obtain GST registration, only if the annual turnover crosses Rs.20 lakhs.

Entities required to obtain GST registration as per the regulations must file for the registration within 30 days from the date on which the entity becomes liable for obtaining the GST registration. The average time taken to obtain GST registration is about 5 – 10 working days, subject to government processing time and submission of client documents.

• Central Excise duty.
• Service Tax.
• State VAT.
• Central Sales Tax.
• Entry Tax.
• Entertainment and Amusement Tax (except when levied by the local bodies).
• Purchase Tax.
• State Surcharges and Cess if related to supply of goods and services.
• Taxes on lotteries, betting, and gambling.

ADVANTAGES OF GST

1. Tax rates are relatively lower as the tax base will increase substantially.
2. GST will eliminate the cascading effect of taxes.
3. The prices of the goods and services will reduce eventually.
4. GST will promote a shift from unorganized to organized sector.
5. A consistent flow of Input tax credit.
6. Effective & efficient supply chain management.

DOCUMENTS REQUIRED

1. A scanned photograph of the applicant.
2. The Constitution of the Taxpayer (Example – Partnership deed, Registration certificate etc).
3. The proof of principle address of business (Electricity bills, Rent Agreement).
4. Scanned copy of Bank account details.