GST is a comprehensive tax that is levied on the supply of goods and services. It has overcome the value addition at each station of state and central level's indirect taxes and complying with many departments.
Obtaining GST registration and GST filings becomes mandatory after a specific limit of turnover of the business.
GST TAX COLLECTION: GST is charged in two method RCM (Reverse Charge Mechanism) and FCM (Forward Charge Mechanism)
RCM (REVERSE CHARGE MECHANISM): The buyer of the goods or service is liable to pay GST under this method.
Reverse charge mechanism is applicable for specific services like Insurance Agent, Manpower Supply, Goods Transport Agency, Advocate etc. and business activity such as Imports, Purchase from a GST UN-REGISTERED dealer, Supply of notified goods and service etc.
FCM (FORWARD CHARGE MECHANISM): Under FCM GST, GST is charged in the sales invoice by the supplier, and the same is collected from the purchaser and finally deposited to govt. All normal sale transactions as examples of Forwarding charge.
TYPES OF GST: SGST, CGST, and IGST are the integrated part of GST.
SGST (STATE GOODS AND SERVICES TAX): A tax levied on Intra State supplies of both goods and services by the State Government and governed by the SGST act.
CGST ( CENTRAL GOODS AND SERVICES TAX): A tax levied on Intra State supplies of both goods and services by the Central Government and governed by the CGST Act.
IGST (INTEGRATED GOODS AND SERVICES TAX): It is a tax levied on all Inter-State supplies of goods and services and will be governed by the IGST Act. IGST will apply to any collection of goods or services in both import and export cases from India.
HSN ( HARMONISED SYSTEM OF NOMENCLATURE): Almost all goods in India are classified using the HSN classification code, which facilitates HSN numbers for calculations of the Goods and Service Tax (GST).
ITC (INPUT TAX CREDIT): Tax paid at the purchase, when reduces the liability of tax payable from the sale value, is known as ITC.
There are three types of GST scheme to meet different kinds of business profile.
Here are brief looks at them.
Our tax/finance advisor team available in Guwahati & Shillong to serve tax payers of North-East.
GST compliance we make easy by following a process of appropriate filling.
REGULAR SCHEME allows taxpayers to issue an invoice with the collection of GST, inter and intrastate supply, pay tax after adjustment of input tax credit (ITC). One can opt for a regular scheme on crossing the threshold turnover limit of 0.75/1.5 cr (as per geographical location) or as per business requirements.
Any taxable person whose aggregate turnover in the preceding financial year is less than Rs. 1.5 Crores and less than Rs. 75 lakhs for the North Eastern States can opt for a simplified composition scheme where tax will become payable at a concessional rate on the turnover in a state without the benefit of the Input Tax credit.
“Casual taxable person” means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.
It is a common GST scheme opted by the dealers in the supply network of interstate and intrastate.
Registration in this scheme is mandatory for a dealer who wants to start a business network in distribution, supply, Export, Import or any form of business where an invoice needed to be issued.
A composition scheme dealer to be converted to a Regular scheme by law on crossing aggregate turnover of 1.5cr. ( 75 lakh North East).
A dealer registered under GST Regular scheme is allowed to
There are numerous compliances under GST regular schemes to comply with a process of filings discussed below.
It is a scheme that simplifies compliance for small taxpayers with an aggregated turnover up to Rs. 5 crores at PAN level, opting for quarterly GSTR-1 and GSTR-3B filing. The payment of tax (GST) to be made monthly based on self-assessment, Filed GSTR3B of past returns by a simple challan in FORM GST PMT-06.
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A taxpayer registered under a composition scheme has to pay an amount equal to a certain fixed percentage of the annual turnover as tax. This tax has to be paid quarterly. However, such a taxpayer does not have to maintain detailed accounts and records instead of two monthly statements and a return.
Aggregate turnover will be computed based on turnover on an all India basis and will include the value of all taxable supplies, exempt supplies and exports made by all persons with the same PAN, but would exclude inward supplies under reverse charge as well as central, State/Union Territory and Integrated taxes and cess.
The option to pay tax under composition levy would remain valid so long as conditions mentioned in section 10 of the CGST Act, 2017 and Rule 3 to 5 of the CGST Rules, 2017 remain satisfied.
A dealer is required to pay tax in a quarterly statement CMP-08 by the 18th of the month after the end of the quarter. Also, a return in form GSTR-4 has to be filed annually by 30th April of the next financial year from FY 2019-20 onwards. GSTR-9A is an annual return to be filed by 31st December of the next financial year.
This scheme needs to be converted to a regular scheme on crossing a specific limit of turnover of 1.5 cr. (75 lakh for North Eastern states). A dealer registered under a regular scheme also can convert into composition schemes if turnover falls below 1.5 cr. (75 lakh North East)
The following are the advantages of registering under the composition scheme:
There is no threshold limit for registration. Casual Taxable persons making the supply of specified handicraft goods need to register only if their aggregate turnover crosses Rs. 20 Lakh (Rs. 10 lakh for North East)
The applicant has to apply for registration at least five days before commencing his business in India.
A casual taxable person has to make an advance deposit of tax in an amount equivalent to his estimated tax liability for the period for which the registration is sought.
The casual taxable person required to furnish his returns prescribed return formates such as GSTR-1, GSTR-2, GSTR-3, GSTR-3B
It may be mentioned that presently only FORM GSTR-1 and FORM GSTR-3B is required to be filed.
However, a casual tax person shall not be required to file an annual return as required by a normally registered taxpayer.
The government has notified that the registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year shall furnish the details of the outward supply of goods or services component in the formate prescribed department.
The casual taxable person is eligible for a refund if any balance of the advance tax deposited by him after adjusting his tax liability. The balance advance tax deposit can be refunded only after all the returns have been furnished, in respect of the entire period for which the certificate of registration was granted to him had remained in force.
GST information shared here might different in some matters due to the Governments amendments. GST compliance is based on the Business profile, nature, etc., and after considering various applicable modifications. So we recommend taxpayers consult with an expert before tax filing.
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