Skip to content
logo
  • Cryptocurrency
  • Finance Tips
  • Investing
  • Make Money Online
  • Work From Home
  • Quiz
  • About Us
  • Privacy Policy

Everything you need to know about GST in India

Posted on May 8, 2022March 21, 2022 By Avantika Ginodia No Comments on Everything you need to know about GST in India
Finance Tips

What is GST?

GST stands for Goods and Services Tax. It is a form of an indirect tax that was implemented to replace other indirect taxes such as VAT, service tax, purchase tax, excise duty, and so on. In India, GST is a single tax levied on the supply of certain goods and services throughout India.

History of GST in India

The Goods and Services Tax was imposed in India on July 1st, 2017. The process of adopting the new taxation system, on the other hand, began a long time ago. The Prime Minister of India at that time, Shri Atal Bihari Vajpayee, formed a committee to design the GST law in 2000. A task team decided in 2004 that a new tax structure should be implemented to improve the tax regime at the time.

In 2006, the then Finance Minister proposed the implementation of GST on April 1, 2010, and in 2011, the Constitution Amendment Bill was passed to facilitate the implementation of the GST law. The Standing Committee began discussing GST in 2012, and a year later, it tabled its GST report. Arun Jaitley, the new Finance Minister at the time, reintroduced the GST bill in Parliament in 2014, and it was enacted in Lok Sabha in 2015. However, the law’s implementation was postponed because it was not enacted in Rajya Sabha.

GST came into effect in 2016, and the updated model GST statute was approved by both houses. The Indian President also granted his approval. In 2017, four supplemental GST Bills were passed by the Lok Sabha which was approved by the Cabinet. Four extra GST Bills were then enacted by the Rajya Sabha, and the new tax regime came into action on July 1, 2017.

What are the types of GST?

The four types of GST are listed below:

  • The Central Goods and Services Tax (CGST) – levied on intra-state supplies of goods and services.
  • State Goods and Services Tax (SGST) – Similar to CGST, SGST is levied on the sale of goods or services within a state.
  • The Integrated Goods and Services Tax (IGST) – levied on interstate sales of goods and services.
  • Union Territory Goods and Services Tax (UTGST) – UTGST is levied on the supply of goods and services in any of the country’s Union Territories, including the Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep, and Chandigarh. UTGST is levied in addition with CGST. It is basically SGST levied in the Union Territories of India.

How does GST work?

  • Manufacturer: The manufacturer must pay GST on the raw materials acquired as well as the value-added to the product.
  • Service Provider: In this case, the service provider must pay GST on the amount paid for the product as well as the value-added to it. The manufacturer’s tax, on the other hand, can be deducted from the total GST that must be paid.
  • Retailer: The retailer must pay GST on the product purchased from the distributor as well as the margin that has been added. The retailer’s tax can be deducted from the total amount of GST that must be paid.
  • Consumer: GST must be paid by the consumer on the acquired product.

Eligibility Criteria

The following entities and persons are required to register for Goods and Services Tax:

  • Aggregators of e-commerce
  • Individuals that provide goods and services through e-commerce aggregators
  • Individuals who pay taxes in accordance with the reverse change mechanism
  • Input service distributors and suppliers’ agents
  • Individuals who are not residents of the United States yet pay taxes
  • Businesses with a greater-than-the-threshold-limit turnover
  • Individuals who registered prior to the implementation of the GST law

GST Registration

Any company that is GST-eligible must register on the GST site established by the Government of India. The registered entities will be assigned a unique registration number known as the GSTIN.

Registration is mandatory for all service providers, purchasers, and sellers. A business that generates a total income of Rs.20 lakhs or more in a fiscal year is obliged to register for GST. The processing time ranges from 2 and 6 working days.

Tags: Finance Tips Personal Finance

Post navigation

❮ Previous Post: Can You Generate Cryptocurrency?
Next Post: How cryptocurrency mining works ❯

You may also like

Finance Tips
Your Ultimate Guide to Capital Gains Tax
February 8, 2022
Finance Tips
The Best Renters Insurance Companies for 2022
October 1, 2022
Finance Tips
How to budget for a major purchase
September 11, 2022
Gold IRA
Finance Tips
Gold IRA (INDIVIDUAL RETIREMENT ACCOUNT)
February 5, 2022

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

You may also like:

  • What is RBI’s Digital Rupee?
  • Top Money Management Apps
  • Loan Settlement and How Does It Affect Your Credit Score?
  • How to avoid the Debt Trap?
  • Essential Tips for Money Management
  • Buy Now Pay Later vs Personal Loan vs Credit Card
  • Google Pay: Check Limit On Daily Remittance Across India
  • Tax Saving Bank FD Vs Post Office TD: Where Should You Invest To Earn High Returns?
  • Exhausted Section 80C? Here Are Other Ways To Save More Taxes
  • LIC IPO 2022
  • What is FIRE- Financial Independence/Retire Early
  • Beginner’s Guide: Decentralised Finance (DeFi)
  • How To Choose The Best Term Life Insurance Policy?
  • How To Buy, Sell and Gift Digital Gold Through Airtel Payment Bank?
  • What Elon Musk would do with Twitter
  • What Can You Do in Decentraland’s Metaverse?
  • Investing lessons from Raamdeo Agrawal
  • How to Calculate Your DeFi, NFT, and Airdrop Taxes for 2022
  • How to Become Eligible for Token Airdrops
  • Investing tips from V. Vaidyanathan
  • Cryptocurrency
  • Finance Tips
  • Investing
  • Make Money Online
  • Work From Home
  • Quiz
  • About Us
  • Privacy Policy