GST is a single indirect tax on the supply of goods and services in the entire chain right from the manufacturer to the supplier. Good and Services Tax [GST], since its effect has left multiple emotions in the mind of the common man, there are a number of questions which need  answers in order to understand GST.

Image Source – GST

Let us understand the difference between GST and other taxes which were in effect before its applicability.

VAT [Value Added Tax] was  considered to be the first generation reforms introduced in April 2005. The existing sales tax was replaced with VAT. Central Sales Tax, Excise Duty, Customs Duty, Service Tax became part of VAT.

Goods and Services Tax is considered to be the second generation of tax reforms. The VAT system was merged with Luxury tax, entertainment tax and renamed as State Goods and Services Tax [SGST]. Furthermore, Central Sales Tax, Excise Duty, Customer Duty, Service Tax have been incorporated under a single umbrella as Central Goods and Services Tax [CGST]. There is no major segregation between the VAT and GST, the taxes have been clubbed together and brought under a single umbrella.

What are GST rates and when is it levied ?

As per the Act, all goods and services have been placed in five brackets – 0%, 5%,12%,18%, and 28%. The tax is levied on the sale of goods and services. Each bracket has multiple items  falling under it, which are a taxed accordingly.

The tax applied is ‘Value Driven’ i.e. it is applied on goods or services at every stage where the value of the goods or services increases or is added. The tax will be levied where the goods or services are consumed. For example, if the goods are created or manufactured in Maharashtra and sold in Andhra Pradesh, then the tax would be levied in Andhra Pradesh.

What are the types of GST ?

GST is destination based. Basis the same, these are the following  types of GST:

  • SGST – State Goods and Services Tax
  • CGST- Central Goods and Services Tax
  • IGST- Interstate Goods and Services Tax

The sale of goods and services intra-state would levy central and state GST. The inter-state sale of goods and services would levy inter-state GST.

Is GST same for all ?

GST is different for different businesses. The application of GST for different businesses is also different.

Mostly, all businesses, whether manufacturing or e-commerce have been brought under the purview of tax regime. Registration forms an important part of GST. It is important for businesses to register and procure tax number in order to file tax as per the stipulated norms.

Is GST registration mandatory ?

There is a stipulated threshold for businesses to register which is an aggregate turnover of INR 20 lakh in a financial year. If the businesses are under that threshold, it is not mandatory for these businesses to register. In such cases, the registration is voluntary.

As per the Act, if the registered seller sells the goods and services to the unregistered buyer, he is supposed to pay GST for the unregistered buyer. If your business is registered under VAT or service tax or excise duty, you should migrate to GST.

The GST explained above is the basic know how about the new tax. It is also important to understand the tax regime appropriately and file the tax when due. The assessee can login into the Government of India website, which provides necessary information in regards to the changed tax regime.

After a lot of back and forth, the GST bill was passed in April this year, and in what can only be called a true show of grit and determination, the Prime Minister and the Finance Minister have worked hard to ensure a roll out as smooth as can be expected in country of a billion plus individuals with as many aspirations.

The two facts that really elucidate the benefits of GST the most are the increased employment because of the boost in production, stimulated by the increased demand for products nationwide, and reduced prices actuated by lower cost of interstate commerce [due to the abolition of interstate taxes] and increased competition among the small and medium businesses. Naturally, with the growth in demand and production, will come the growth in GDP – a growth that could be as much as 4.2%.

While the benefits of the GST are expected across the board, entities that stand to gain the most are the start-ups and the SMBs, which, for quite a long time, have been considered to be the chief development agent of the Indian economy. They are not only the leading source of employment, but also contribute more than half of the nation’s production and over 40% of its exports. Thus it’s a given that the advantages of actualising GST on SMBs will have a serious impact on India’s economy in the coming years.

To begin with, GST has made starting a business a whole bunch easier, simpler, more standardized by eliminating the need to register for VAT. VAT was particularly problematic for business with operations in multiple states, as it required registration in all the states where the business had operations. Moreover, online registration further eases and improves the efficiency of the process, while also making it a whole lot cheaper.

Secondly, while VAT required registration fee to be paid by all business with annual turnover of more than INR 5 Lacs, GST has increased this limit to INR 20 Lacs – meaning, any business making less than INR 20 Lacs per annum can enjoy exemption from the tax. While the monitory benefits of this are apparent, the benefit that is less apparent is that SMEs can now enjoy expedited delivery of goods at interstate check points, thus making interstate trading a lot less financially taxing. Considering the fees, octroi charges, logistics expenses, and customer charge-backs [for delayed deliveries] and DSO costs, an SME can now expect cost savings of as much as 20%.

Added transparency in the taxation process is another benefit that small businesses can expect after the GST roll-out. This will be enabled by the digitization of the compliance and refund process. By removing the more manual and complicated processes of the yesteryear’s, GST mandates all tax returns to be filed electronically, and all input tax credits and tax liability adjustments to happen automatically. This mandate will not only expedite the process, but will also improve liquidity for small businesses.

GST has also raised the bar on total amount of input tax credit that can be claimed in the year of the purchase itself from the earlier 50% to 100% now; a move that will help free-up much needed capital for small business. But the biggest advantage of them all, perhaps, is the clarity of what constitutes products and services. By removing the distinction between sales and services, the GST greatly simplifies simplifying the tax assessment process, which in turn boosts tax compliance.

About the only complication for the small and medium businesses that has increased because of GST is the number of filings that will now have to do in a year. It might seem like a lot of work at the first glance, and the draft GST return format provided by the government is not easily comprehensible by those who have little or no accounting knowledge. That said, at the end of the day, it is a compliance issue, and, besides, a lot of automation has gone into the system to make things easy for the small business. But a lot of people might still find the process cumbersome and confusing, and understandably so.

Experts at RevMyStartup have extensively studied the GST law, and will be more than happy to answer any questions you may have on GST Registration or GST Return Filing to ensure you are fully GST compliant. To know more, call RevMyStartup today to get your GST registration and filing done in the right and best manner, at reasonable prices.

About the Author – This article is contributed by Vaibhav Tripathi, content writer at RevMyStartup.

[If you would like to contribute to this blog as a Guest Writer, please email us at himanshu.sheth@gmail.com with the relevant content].

The Institute of Chartered Accountants of India will be conducting Technology enablement conclaves throughout the country for both member as well as non-member Chartered Accountants. Tally Solutions, the premier Indian software company will support the initiative as technology partner.

The theme of the conclave will be based on Information technology in GST – Enabler or necessity. The sessions aim to highlight how the use of right technology will help CAs manage GST compliance for themselves and their clients in a smooth and efficient manner. The first of these events was held on 29th July in New Delhi at the India habitat Centre.

GST is widely acknowledged as a taxation regime with technology as its backbone. Right from registration, to billing, filing and even payment of taxes are happening online facilitated by a business system. Under such circumstances, businesses need to adopt this new way of managing their transactions and compliance and Chartered accountants are being banked on by them to help them with the same. In addition, the change in the tax structure has brought with it its fair share of challenges for the CA community. These conclaves have been designed to equip Chartered accountants with knowledge on how technology can solve their existing problems and enable them to serve their clients effectively.

Speaking on the occasion, CA Nilesh Shivji Vikamsey, President – ICAI said

I am happy to know that IT committee of the Institute of Chartered Accountants of India has initiated the series – ‘Information Technology in GST- Enabler or Necessity‘. I am very clear in my mind that Technology in GST is a necessity. We need to equip our members [Chartered Accountants] to partner with the technology providers, so that the ultimate aim of the government of a smooth GST implementation, is achieved. For the first time in Indian history a Joint federal tax system has come between the Centre and the States. It’s a path breaking law, where tax is jointly going to be levied. With GST, I am sure India as a nation will grow to greater heights.

Bharat Goenka, Managing Director, Tally Solutions, added

GST is the first tax regime which is fully technology based.  This will leap-frog India as one of the best indirect tax regimes in the world, and Chartered Accountants areplaying a very important and appreciable role to make this transition successful for the country.  We are proud and delighted to be workings with the ICAI on this journey, and look forward contributing in the pan-India conclaves with them. The aim is to hear the challenges on the ground, and provide perspectives on how technology will help simplify their lives, and those of their clients.

While CA Atul Gupta, Chairman IT Committee of ICAI and Former Chairman Indirect Taxes Committee of ICAI, shared the important role Chartered Accountants are playing in taking this reform into all corners of country.

With just 5 days to go for the roll out of GST, the GST common portal opened inviting fresh registrations of first time taxpayers including those to be registered as TDS/TCS and enrollment of GST Practitioners. It is also open for existing taxpayers to complete their enrollment process.

The Goods & Services Tax has been referred to as the most significant tax reform in India post independence. The new regime will usher in a common national market by doing away with a complex web of local and central taxes and incorporating them into a single levy.

The GST portal has already opened two windows for enrolments – first between November 8 to April 30 and then from June 1 to June 15. This is the third window to allow all taxpayers enough time to migrate to the new regime.

As the technology provider of the regime, GSTN has been working tirelessly to ensure there are no delays in the commencing of the ambitious indirect tax regime. The GSTN has set up a robust portal already equipped to handle as many as 2.6 billion transactions every month.

The GST Common Portal will enable taxpayers to meet the GST compliance requirement like filing returns and making tax payments.

About Goods and Services Tax Network [GSTN]

Goods and Services Tax Network [GSTN] is a Section 8 [under new companies Act, not for profit companies are governed under section 8], non-government, private limited company. Instituted in March 2013, the Company has been set up primarily to provide IT infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the Goods and Services Tax (GST). The Government of India holds 24.5% equity in GSTN and all States of the Indian Union, including NCT of Delhi and Puducherry, and the Empowered Committee of State Finance Ministers (EC), together hold another 24.5%. Balance 51% equity is with non-government financial institutions. For more information, please visit GSTN

With the second round of GST enrollment set to close tomorrow, the GST Network, the company providing the IT backbone for GST, announced that it will re-open the process of enrollment on June 25 to allow all taxpayers to smoothly complete the process.

Image Source – GST

More than three fourths of the total 80 lakhs existing tax payers under VAT, Service Tax, Central Excise and other taxes that are being subsumed under GST have already successfully enrolled themselves on to the new digital platform in two rounds of enrollment.

The exercise started from November 8 and continued till April 30 by when around 60.5 lakh taxpayers had enrolled. More than 4 lakh of the remaining taxpayers have completed their enrollment during the second window that opened on June 1. However, for the remaining tax payers, there will still be another opportunity to accomplish the task.

Navin Kumar, Chairman, Goods & Services Tax Network (GSTN) said

We realize that when we are implementing a change of this magnitude, taxpayers must be given sufficient time and opportunity to smoothly join the new online platform that will usher in a unified tax structure. Already, a majority of taxpayers have enrolled themselves for GST. Yet, those who might still be left due to any circumstances or technical inability need not panic with the closing of this window as we will open another round of enrolments from June 25.

Notably, the process of enrolment is not a highly time consuming one, with the total time taken in the entire process being not more than 15~20 minutes.

The Goods & Services Tax has been referred to as the most significant tax reform in India post independence. The new regime will usher in a common national market by doing away with a complex web of local and central taxes and incorporating them into a single levy.

With rumors of a possible delay in roll out doing the rounds, the government yesterday clarified that the GST regime is very much on track to roll out from June 25, its designated date.

As the technology provider of the regime, GSTN has been working overtime to ensure there are no hiccups in the commencing of the ambitious indirect tax regime. The GSTN has set up a robust portal already equipped to handle as many as 3.2 billion transactions every month.

All taxpayers, who have valid a PAN and are currently registered under any State or Central taxes that will be subsumed in GST, are being migrated to GST under this process of enrolment, which essentially implies validating the data of existing taxpayers and filling up the remaining key fields at the GST Common Portal, which will serve as a one-stop shop for all tax payers.

The GST Common Portal will enable taxpayers to meet the GST compliance requirement like filing returns and making tax payments.

GST Suvidha launches E-book on “GST at a glance“; a simple guide to better understand new tax regime. As India moves towards a 4 slab goods and services taxation policy called ‘GST’, many still struggle to understand the intricate details entailing GST and how to go about with the various taxation details. Bringing forth the many details that the new tax regime will be offering to the Indian masses, this is going to become the future guide and reference point for all students, citizens, organisations and other entities.

The book written by non-other than the Shyam Kedia, owner of GST Suvidha, the book is written with a view to give practical exposure in goods and services tax to professionals like chartered accountants, cost accountants, company secretaries, lawyers and students of these courses as well as MBA, B.COM, BBA and other graduate/post graduate students.

Any reader can gain basics to advanced insight of the new indirect tax regime while reading this book. It a comprehensive guide, covering nearly all the dimensions in GST. It will be a big resource for the public to understand GST. This book is written considering the demand and needs in industry and to make the economy GST Ready.

E-Book on GST launched by Shyam Kedia, CEO GST Suvidha

There is a huge demand in the industry for people with knowledge on GST. This certification will help job-seekers in getting jobs in the industry and adding a value to their resume. The certification mentioned in their resume will give them an added advantage over other candidates for a given position in an organisation.

Commenting on the launch of the E-book, Shyam Kedia, owner of GST Suvidha, said

I am excited and delighted to have authored this e-book. It has been done keeping in mind the multitude of questions that we as Indians will be asking chartered accountants and our taxation officer soon when GST is in motion. It will serve as a handy book and guide for the many student and young officers looking for jobs. It is a revolutionary product. With new tax regime – GST comes a huge change to the economy of the country and I am so happy to be a part of this changing face of India.

About GST Suvidha

GST Suvidha, a complete GST Solution is a startup, founded in December 2016 by a cross functional team of experts including CA, CS, CMA & IT Professionals. It is working for a smooth transitioning in the GST tax regime from current tax regime and GST Post Implementation handling. GST Suvidha was founded in December 2016 by a cross functional team of experts including CA, CS, CMA and IT Professionals.

Introduction of GST will turn Indian indirect tax structure into a wholly IT based Network. GST Suvidha is catering to the complex and tedious concepts of GST. It has a regular and constructive engagement with Central government, State governments, industry bodies and think tanks. It brings the latest thinking and experience with an agile approach to address the evolving GST landscape. For more information, please visit GST Suvidha

Exotel, one of India’s leading cloud telephony companies announced the launch of their new campaign that focuses on helping ERP and Tax Accounting Software companies manage leads and make the process smooth and efficient.

As lawmakers are in process of clearing out decks for the rollout of GST, Tally along with 33 other companies has recently been appointed as GST Suvidha Providers to help businesses transition to new regime. According to industry reports, less than 10 percent of SME’s are in a GST-ready position, it is undoubtedly a busy time of the year for these companies. The one problem that these partners face right now is, missing out on potential customers due to missed calls or a busy tone.

Exotel’s cloud telephony services will help these companies manage the high volume of incoming leads from companies who would like to become GST ready.

Speaking about the campaign, Shivakumar Ganesan, CEO & Founder, Exotel, said

With the new GST rules rolling out, we anticipated that there will be disruption in businesses as many SME’s are unlikely to be GST-compliant and the ERP and Tax Accounting Software companies would be receiving numerous calls in a day. One of the critical things for any business is to not miss any leads, at Exotel, we wholeheartedly believe in automations being the best way to combat this problem.

Exotel’s cloud telephony

  • Enables efficient functioning – every customer who calls  will be greeted with a professional IVR greeting, and connected to the right person, whether he is in the field or in office. The reseller’s service will be equivalent to a large company irrespective of the size.
  • Is economical – No capital investment. So no infrastructure or maintenance cost
  • Allows payment as you go – you can pay and use for however long you require the services
  • Ensures businesses never miss a lead – every single call you receive is captured by Exotel. No more missing out on a lead because of a missed call. The customer never hears a busy tone.
  • Facilitates easy IVR automation – You can set up a simple IVR greeting and a call flow in less than 15 mins.
  • Supports Click-to-Call feature – Now include click-to-call buttons in your website & email campaigns.

About Exotel

Exotel is the most reliable and scalable cloud telephony platform in India. Founded by Shivakumar Ganesan, Ishwar Sridharan and Siddharth Ramesh in 2011, it powers voice communication for over a 1000 businesses including brands like Ola, Uber, Flipkart etc. Voice & Data picked Exotel as the Editor’s Choice Emerging Company of the Year 2014. Nasscom’s Emerge Product conclave picked Exotel as one of the top 10 emerging startups in India. For more information, please visit Exotel