GST or the Goods and Service Tax has been a move of symbolic importance in our country. This was a great move by the Indian Government to bring all the formats of indirect taxes under one roof, thereby reducing the process of many commodities across markets.
To further explain GST in more technical terms, GST is a form of value-added tax, collected by individual businesses at every level of the supply chain. This type of indirect tax covers the loophole that the earlier indirect tax failed to provide setting off the output tax liability.
From what is expected to be a win-win situation for both the government and the common people, GST is further segregated into 1300 goods and 500 services that is further segregated into four tax slabs, 5%, 12%, 18%, 28%. Furthermore, it is also divided into 4 categories:
Benefits of GST
Being one of the most significant reforms in modern India, GST registration and application is one of the biggest reforms to increase the GDP of the country.
1. Educated customer about Taxes and their rights:
The previous tax systems in India were laden with the calculation of taxes at multiple levels inside the state (VAT, Entertainment Tax, State Cesses, Entry Tax, betting and gambling, Taxes on lottery, Octroi, Luxury tax, and purchase tax). On the other hand, there were multiple taxes at the central level like Additional Customs Duty, Central Excise Duty, Service Tax, and Additional Excise Duties were also levied.
Having a varied number of taxes at every level would often confuse the customer in cases of filing for returns and often being overcharged. The introduction of GST services empowered and educated the country about one tax system which divided the products into categories, making calculating GST easy.
2. Reduction in costs on logistics:
Logistics have been the centre of intercity and interstate business activities ever since India faced a trade boom. Previously, the old taxes would be used to add on to the already tax claimed bills, thereby, increasing the cost for goods and ultimately increasing the cost of their logistics.
The introduction of GSTR gave way to one bill format that already included the necessary taxes that need to be paid that ultimately helped in saving the prices of carrying in logistics and empowering one of the most important sectors in the country. Thanks to the GST bill.
Interestingly, the Government of India is also working on a National Logistics Portal to bring all the key players under one platform. This move is expected to decrease the GDP by more than 4%, making it to less than 10% by 2022.
3. Two-way profit:
One of the major highlights of having a GSTIN registration is that it helps greatly in inducing exemptions to your total purchases. GST was designed, keeping in mind the common public to reduce prices by lowering unnecessary taxes.
Termed as profiteering, it happens when businesses still sell their products at the old excise rates @ 12%, GST eliminates such events and creates lower prices for consumers.
4. Real Estate:
Real Estate has been one of the sectors that have been infamous for charging its customers with multiple taxes at once creating a scenario for frauds. The Indian government took stern actions against the violation and to eliminate such events in the future, GST on real estate was introduced.
Under this, the real estate sector came under the tax slab of 12% / 8% in cases of ITC benefit and those without such benefits come under 5% / 1%. With the introduction of these new tax slabs, consumers only pay the price of the estate that is fair enough, without any discretion of suppliers.
5. Digitisation of taxes:
Another major benefit of introducing GST registration online was to strike a hit on the digitisation of taxes in India. As more and more people opt for new GST registration, they get to understand their taxes and also understand the working behind such taxes, which was not the case earlier.
Previously, the entire tax calculation was very opaque and offline, eliminating the chances of educating the mass about the entire tax system and also increasing the chances of false tax charges and tax frauds. Now, when the public is paying GST online, there are no chances of specialisation of evasion of taxes.
Benefits of staying updated with the changes in GST structure
While there are several formats of GSTR like GSTR9, GSTR7, GSTR4, and GSTR2 that revolve around the businesses and common taxes, it is crucial to stay updated around the same. Besides educating the consumers on the latest exemptions and benefits of GST filing online, it also keeps them updated with new changes around GST filing.
Some of the latest events around GST are listed below:
- As per the rules that were amended on August 21, 2020. For obtaining new GST registration, the applicants can now also access the option for aadhaar authentication.
However, under such a situation where Aadhar authentication is selected, it should be completed while submitting the application for the same. Consumers can either register for GST a day earlier the date of aadhaar authentication or 15 days after the submission of Part B of Form GST REG-01.
In the case of other individuals, physical verification of the place of business will be carried out.
- There’s an update in the GST site which now provided GST filing applicants with the option to get access to the invoice-wise details on the input tax after it has been auto-generated from Table 8A of GSTR 9. Interestingly, users can also get their GST details by clicking on the ‘Download Table 8A Document Details’ button, situated over the GSTR 9 return form.
- Excel tool which was previously used for GST filing of Form GSTR 4 under the Composition Scheme can now be downloaded from the GST portal.
- In case their previous form had been rejected, applicants can now file for another application for the Revocation of Cancellation of Registration.
Q. Is the new GST helpful for my business of fruits?
A. Yes, the new GST is helpful for your business of fruits as your product comes under the exempted list (in case it’s not packaged). Moreover, with the changes in taxation policy, the cost of logistics on such items has also decreased.
Q. What are the documents required to register for GST?
A. You need to have your PAN card, business proof, registration deed (if the company is a partnership), Returns file might also be needed in some cases.
Q. Can I use GST calculators available online to calculate my returns?
A. Yes, you can definitely use the online GST calculators. However, you need to do a re-check on the various calculation under each tax slab.
Considering the impact and ways GST has changed the face of the Indian Taxation system, it has surely been a great move in changing the ways taxes were being received in the country. The changes in the structure have also attracted a large number of FDI, ultimately improving the GDP of the country besides giving it an economic push on the same end. Lastly, considering the targets and valuation the Indian Government seeks to achieve with the implication of GST, it will surely lead the country towards prosperity.