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Goods & Services Tax: The Ultimate FAQ Guide

. 4 min read
Goods & Services Tax: The Ultimate FAQ Guide

Frequently asked questions on GST

The Goods and Service Tax Law of India took the country by storm when it first came to implementation. Many considered it a boon for their businesses while a few raised their voices for the opposite. But the major problem has always been with a brief understanding of the procedure along with the reason for bringing into the market.

The GST is paid by users but is forwarded to the government by the stores selling the goods and services. Let's address some of the commonest asked questions, and queries from small-town merchants who are a part of this system.  

What is GST?

GST or the Goods and Services Tax is a tax that combines several indirect taxes being levied by State & Central governments, which ended in complicated receipts, payments, agreements being needed for interstate, and intrastate businesses.

GST is a widespread indirect tax on production, sales, and consumption of goods and services throughout the country to reinstate taxes levied by the government.

It is levied on most goods and services. The main importance of GST bill in India is to centralise taxation for businesses to release them of the compliance burden and manage their finances better.

What all taxes were replaced after GST came into action?

The GST has replaced several indirect taxes like-

  1. Special Countervailing Duty
  2. Value Added Tax (VAT)
  3. Entertainment Tax
  4. Luxury Tax
  5. Central Sales Tax (CST)
  6. Octroi
  7. Purchase Tax
  8. Tax on Lotteries
  9. Entry Tax
  10. Central Excise Duty
  11. Service Tax

How many types of GST are there in India?

The government has introduced 3 types of GST in India namely-

SGST- For intra-state goods

CGST- For central government

IGST- For interstate and integrated goods and service tax

How to get GST number?

  1. Visit the official GST Portal- https://www.gst.gov.in/
  2. Click on Services, then Registration > New Registration
  3. Enter all your official documents and details like PAN number, contact information, and email address.
  4. Click Proceed.

How to download GST certificate?

Here are the basic steps for GST Certificate download:

  1. Open the official GST website.
  2. Log in with your credentials.
  3. Click on Services> then click User Services and finally click on View/Download Certificates.
  4. You might get the REG-06 form for getting the GST certificate. Click on download.

How to file GST return?

GST returns are filed by dealers/business people for sales, purchases, Input tax credit & Output GST. For every return filed all invoices and compliance sales receipts are compulsory to submit.

Go to the official GST portal- https://www.gst.gov.in/help/returns where you can select your desired option and file your GST return.

How to calculate GST?

The GST Calculator process for all transactions is done with keeping in mind the following percentages:

Electronics, Cinema Theatres, Alcohol- 28% and above

Public transportation, food, dairy, restaurants, and fuel- 5%

Handicrafts, textiles, retail, and telecom services- 18%

Luxury items, shopping, and dining- 30%

Along with that, you have to calculate on the types of GST, the bill is generated for i.e, CGST, SGST, UTGST, & IGST.

To add GST:

GST Amount = (Original Cost x GST%)/100

Net Price = Original Cost + GST Amount

To remove GST:

GST Amount = Original Cost – [Original Cost x {100/(100+GST%)}]

Net Price = Original Cost – GST Amount.

When was GST implemented in India?

The GST was implemented in India on 1st July 2017 by Prime Minister Narendra Modi. This segregation has given the benefit of paying a specific amount of tax for every purchase. ONE TAX FOR ALL was the main aim of this law.

How to check GST no?

Step 1- Go to the official website. Click on the login page and enter your valid credentials to begin.

Step 2- Click on the Search Taxpayers dropdown

Step 3- Click on the search button by GSTIN/UIN and click on enter the GST Number specified on the statement in the search column.

What are the advantages and disadvantages of GST?

The following are the benefits or advantages of GST:

  1. It has eliminated the cascading impact of tax and increased the threshold for registration.
  2. Online payment and purchase procedure has become easier.
  3. Advanced performance of logistics and regulation of unorganised sectors between companies.
  4. Encouraged in lowering prices and helping the poor and middle class.
  5. Same pricing for branded products across the country and transparency amongst buyers.

Disadvantages

The only issues that are being overcome with time are increased costs for the purchase of software, an increment in operational costs, and making the entire tax system online.

How to apply GST online?

  1. Visit the official GST Portal- https://www.gst.gov.in/
  2. Click on the Services Tab.
  3. Then open Registration> New Registration
  4. Add your details and receive your GST invoice in your mail.

What is GST number?

The Goods and Services Tax Identification Number also known as GSTIN is a specially allocated 15-digit number, that came in replacement of TIN(Tax Identification Number).

Any businesses registering under GST will be provided this number, which will be a part of the login credentials.

How GST works?

Before GST many companies, restaurants, organisations, and services had previously provisioned various kinds of taxes that included VAT, Service, Tips, etc. which made the final billing of any commodity way higher than the average MRP.

This also affected small town merchants and consumers who used to deal in wholesale hence intentionally levying heavy taxes. By registering yourself, you can charge and collect your GST on the taxable supply of goods and services.

How does GST affect small businesses?

Every retail business that is registered under GST, has to record all account invoices the same way other businesses do. All goods and services that are under-sale or stock updates are compulsory to be taxed at a fixed rate of 5% or less depending on the type of commodity.

GST for small shopkeepers will help them-

Go digital

Avoid indirect taxes

No hidden charges

Maintain accounts online with OkCredit

This policy has simplified the taxation regimen and will make every common businessman's entry to the Indian and international market an easier process.

What items are exempted from GST?

The services exempted or not applicable for GST Law are- Poultry, Hotels priced under 1000, Stationary, Handlooms, Contraceptives, Education, and Healthcare.

Keep checking this page, on more insights about GST.

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