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Wednesday, July 5, 2017

Types of GST Returns and their Due Dates

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Does GST apply to me?

Does GST apply to me?
Our tax laws are preparing to go through a historic change. GST or Goods and Services Tax is being prepared to replace existing taxes such as VAT, service tax, excise duty and several local state taxes and levies.
GST is expected to have a far reaching impact. Whether you run a business or provide a service, however big or small, it is very likely GST will impact you.
The government is preparing for a start date of 1st July 2017 for GST.
GST applies to all Businesses
Businesses includes – trade, commerce, manufacture, profession, vocation or any other similar activity, irrespective of its volume or frequency. It also includes supply of goods/ services for starting or closure of a business.
Services means anything other than goods. It is likely that services & goods carry a different GST rate.
GST applies to all persons
Persons includes – Individuals, HUF, Company, Firm, LLP, AOP, Co-operative society, Society, Trust etc. However, GST does not apply to Agriculturists.
Agriculture includes floriculture, horticulture, sericulture, raising of crops, grass or garden produce. But does not include dairy farming, poultry farming, stock breeding, gathering of fruit or rearing of seedlings or plants.
GST registration required when
Having a PAN is mandatory to obtain GST registrationHowever, non-resident person can get GST registration on the of basis other documents, which the government may prescribe.
One registration shall be required for each state. The taxpayer can choose to get separate registrations for its different business verticals in the State.
GST registration is MANDATORY in the following cases –
TURNOVER BASIS
You must collect and pay GST when your turnover in a financial year exceeds Rs. 20lakhs. [Limit is Rs 10lakhs for some special category states]. These limits apply for payment of GST.
“Aggregate turnover” means the aggregate value of all taxable supplies,exempt supplies, exports of goods and/or services and inter-State supplies of a person having the same PAN, to be computed on all India basis and excludes taxes, if any, charged under the CGST Act, SGST Act and the IGST Act, as the case may be.
OTHER CASES [GST registration is mandatory irrespective of turnover]
  • Those making inter-state supply of goods/services
  • Any person who supplies goods/services in a taxable territory and has no fixed place of business – referred to as casual taxable persons. Registration issued to such a person is valid for a period of 90 days.
  • Any person who supplies goods/services and has no fixed place of business in India – referred to as non-resident taxable persons. Registration issued to such a person is valid for a period of 90 days.
  • Person required to pay tax under reverse charge mechanism. Reverse charge mechanism means where the person receiving the goods/services has to pay tax instead of the supplier.
  • Agents or any other person who makes supply on behalf of other registered taxable persons
  • Distributors or input service distributors. This person has the same PAN as the office of the supplier. This person is an officer of the supplier, he receives supplies and issues tax invoice to distribute credit of CGST/SGST/IGST.
  • E-Commerce Operator
  • Persons who supplies (except branded services) via an e-commerce operator
  • Aggregator supplying services under his brand name
  • Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person.

What is GST? Goods & Services Tax Law Explained for Beginners

The Goods and Services Tax or GST is scheduled to be launched on the 1st of July, and it is set to revolutionize the way we do our taxes. But what is GST and how will it reform the current tax structure? And most importantly, why does the country need such a huge overhaul in its taxation policies? We answer these pressing questions in this in-depth article.

Contents
# What is GST?
# Why is Goods and Services Tax so Important?
# How does GST work?
# How will GST help India and common man?
# GST Law in India – A Detailed History
# Summary

What is GST?

Goods & Services Tax is a comprehensivemulti-stagedestination-based tax that will be levied on every value addition.
To understand this, we need to understand the concepts under this definition. Let us start with the term ‘Multi-stage’. Now, there are multiple steps an item goes through from manufacture or production to the final sale. Buying of raw materials is the first stage. The second stage is production or manufacture. Then, there is the warehousing of materials. Next, comes the sale of the product to the retailer. And in the final stage, the retailer sells you – the end consumer – the product, completing its life cycle.
So, if we had to look at a pictorial description of the various stages, it would look like:
GST basics
Goods and Services Tax will be levied on each of these stages, which makes it a multi-stage tax. How? We will see that shortly, but before that, let us talk about ‘Value Addition’.
Let us assume that a manufacturer wants to make a shirt. For this he must buy yarn. This gets turned into a shirt after manufacture. So, the value of the yarn is increased when it gets woven into a shirt. Then, the manufacturer sells it to the warehousing agent who attaches labels and tags to each shirt. That is another addition of value after which the warehouse sells it to the retailer who packages each shirt separately and invests in marketing of the shirt thus increasing its value.
GST will be levied on these value additions – the monetary worth added at each stage to achieve the final sale to the end customer.
There is one more term we need to talk about in the definition – Destination-Based. Goods and Services Tax will be levied on all transactions happening during the entire manufacturing chain. Earlier, when a product was manufactured, the centre would levy an Excise Duty on the manufacture, and then the state will add a VAT tax when the item is sold to the next stage in the cycle. Then there would be a VAT at the next point of sale.
So, earlier the pattern of tax levy was like this:
ClearTax GST
Now, Goods and Services Tax will be levied at every point of sale. Assume that the entire manufacture process is happening in Rajasthan and the final point of sale is in Karnataka. Since Goods & Services Tax is levied at the point of consumption, so the state of Rajasthan will get revenue in the manufacturing and warehousing stages, but lose out on the revenue when the product moves out Rajasthan and reaches the end consumer in Karnataka. This means that Karnataka will earn that revenue on the final sale, because it is a destination-based tax and this revenue will be collected at the final point of sale/destination which is Karnataka.
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Why is Goods and Services Tax so Important?

So, now that we have defined GST, let us talk about why it will play such a significant role in transforming the current tax structure, and therefore, the economy.
Currently, the Indian tax structure is divided into two – Direct and Indirect Taxes. Direct Taxes are levies where the liability cannot be passed on to someone else. An example of this is Income Tax where you earn the income and you alone are liable to pay the tax on it.
In the case of Indirect Taxes, the liability of the tax can be passed on to someone else. This means that when the shopkeeper must pay VAT on his sale, he can pass on the liability to the customer. So, in effect, the customer pays the price of the item as well as the VAT on it so the shopkeeper can deposit the VAT to the government. This means that the customer must pay not just the price of the product, but he also pays the tax liability, and therefore, he has a higher outlay when he buys an item.
This happens because the shopkeeper has paid a tax when he bought the item from the wholesaler. To recover that amount, as well as to make up for the VAT he must pay to the government, he passes the liability to the customer who has to pay the additional amount. There is currently no other way for the shopkeeper to recover whatever he pays from his own pocket during transactions and therefore, he has no choice but to pass on the liability to the customer.
Goods and Services Tax will address this issue after it is implemented. It has a system of Input Tax Credit which will allow sellers to claim the tax already paid, so that the final liability on the end consumer is decreased.

How does GST work?

A nationwide tax reform cannot function without strict guidelines and provisions. The GST Council has devised a fool proof method of implementing this new tax regime by dividing it into three categories. Wondering how they work? Let our experts explain this to you in detail.
When Goods and Services Tax is implemented, there will be 3 kinds of applicable Goods and Services Taxes:
CGST: where the revenue will be collected by the central government
SGST: where the revenue will be collected by the state governments for intra-state sales
IGST: where the revenue will be collected by the central government for inter-state sales
In most cases, the tax structure under the new regime will be as follows:
TransactionNew RegimeOld RegimeComments
Sale within the stateCGST + SGSTVAT + Central Excise/Service taxRevenue will now be shared between the Centre and the State
Sale to another StateIGSTCentral Sales Tax + Excise/Service TaxThere will only be one type of tax (central) now in case of inter-state sales.

Example

A dealer in Maharashtra sold goods to a consumer in Maharashtra worth Rs. 10,000. The Goods and Services Tax rate is 18% comprising CGST rate of 9% and SGST rate of 9%. In such cases the dealer collects Rs. 1800 and of this amount, Rs. 900 will go to the central government and Rs. 900 will go to the Maharashtra government.
Now, let us assume the dealer in Maharashtra had sold goods to a dealer in Gujarat worth Rs. 10,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%. In such case the dealer has to charge Rs. 1800 as IGST. This IGST will go to the Centre. There will no longer be any need to pay CGST and SGST.

How will GST help India and common man?

The basis of Goods and Services Tax is the seamless flow of Input Tax Credit (ITC) along the entire value addition chain. At every step of the manufacturing process, businesses will have the option to claim the tax already paid in the previous transaction. Understanding this process is crucial for businesses. A detailed explanation here.
To understand this, let us first understand what is Input Tax Credit. It is the credit an individual receives for the tax paid on the inputs used in manufacturing the product. So, if there is a 10% tax that the individual must submit to the government, he can subtract the amount he has paid in taxes at the time of purchase and submit the balance amount to the government.
Let us understand this with a hypothetical numerical example.
Say a shirt manufacturer pays Rs. 100 to buy raw materials. If the rate of taxes is set at 10%, and there is no profit or loss involved, then he has to pay Rs. 10 as tax. So, the final cost of the shirt now becomes Rs (100+10=) 110.
At the next stage, the wholesaler buys the shirt from the manufacturer at Rs. 110, and adds labels to it. When he is adding labels, he is adding value. Therefore, his cost increases by say Rs. 40. On top of this, he has to pay a 10% tax, and the final cost therefore becomes Rs. (110+40=) 150 + 10% tax = Rs. 165.
Now, the retailer pays Rs. 165 to buy the shirt from the wholesaler because the tax liability had passed on to him. He has to package the shirt, and when he does that, he is adding value again. This time, let’s say his value add is Rs. 30. Now when he sells the shirt, he adds this value (plus the VAT he has to pay the government) to the final cost. So, the cost of the shirt becomes Rs. 214.5 Let us see a breakup for this:
Cost = Rs. 165 + Value add = Rs. 30 + 10% tax = Rs. 195 + Rs. 19.5 = Rs. 214.5
So, the customer pays Rs. 214.5 for a shirt the cost price of which was basically only Rs. 170 (Rs 110 + Rs. 40 + Rs. 30). Along the way the tax liability was passed on at every stage of transaction and the final liability comes to rest with the customer. This is called the Cascading Effect of Taxes where a tax is paid on tax and the value of the item keeps increasing every time this happens.
ActionCost10% TaxTotal
Buys Raw Material @ 10010010110
Manufactures @ 4015015165
Adds value @ 3019519.5214.5
Total17044.5214.5

In the case of Goods and Services Tax, there is a way to claim credit for tax paid in acquiring input. What happens in this case is, the individual who has paid a tax already can claim credit for this tax when he submits his taxes.
In our example, when the wholesaler buys from the manufacturer, he pays a 10% tax on his cost price because the liability has been passed on to him. Then he adds value of Rs. 40 on his cost price of Rs. 100 and this brings up his cost to Rs. 140. Now he has to pay 10% of this price to the government as tax. But he has already paid one tax to the manufacturer. So, this time what he does is, instead of paying Rs (10% of 140=) 14 to the government as tax, he subtracts the amount he has paid already. So, he deducts the Rs. 10 he paid on his purchase from his new liability of Rs. 14, and pays only Rs. 4 to the government. So, the Rs. 10 becomes his input credit.
When he pays Rs. 4 to the government, he can pass on its liability to the retailer. So, the retailer pays Rs. (140+14=) 154 to him to buy the shirt. At the next stage, the retailer adds value of Rs. 30 to his cost price and has to pay a 10% tax on it to the government. When he adds value, his price becomes Rs. 170. Now, if he had to pay 10% tax on it, he would pass on the liability to the customer. But he already has input credit because he has paid Rs.14 to the wholesaler as the latter’s tax. So, now he reduces Rs. 14 from his tax liability of Rs. (10% of 170=) 17 and has to pay only Rs. 3 to the government. And therefore, he can now sell the shirt for Rs. (140+30+17) 187 to the customer.
ActionCost10% TaxActual LiabilityTotal
Buys Raw Material1001010110
Manufactures @ 40140144154
Adds Value @ 30170173187
Total17017187
In the end, every time an individual was able to claim input tax credit, the sale price for him reduced and the cost price for the person buying his product reduced because of a lower tax liability. The final value of the shirt also therefore reduced from Rs. 214.5 to Rs. 187, thus reducing the tax burden on the final customer.
So essentially, Goods & Services Tax is going to have a two-pronged benefit. One, it will reduce the cascading effect of taxes, and second, by allowing input tax credit, it will reduce the burden of taxes and, hopefully, prices. 

GST Law in India – A Detailed History

GST is not a new phenomenon. It was first implemented in France in 1954, and since then many countries have implemented this unified taxation system to become part of a global whole. Now that India is adopting this new tax regime, let us look back at the how and when of the Goods and Services Tax and its history in the nation.
France was the world’s first country to implement GST Law in the year 1954. Since then, 159 other countries have adopted the GST Law in some form or other. In many countries, VAT is the substitute for GST, but unlike the Indian VAT system, these countries have a single VAT tax which fulfills the same purpose as GST.
In India, the discussion on GST Law was flagged off in the year 2000, when the then Prime Minister Atal Bihari Vajpayee brought the issue to the table. 
History of GST in India – Year by Year Events
gst

Summary

The idea behind having one consolidated indirect tax to subsume multiple currently existing indirect taxes is to benefit the Indian economy in a number of ways:
  • It will help the country’s businesses gain a level playing field
  • It will put us on par with foreign nations who have a more structured tax system
  • It will also translate into gains for the end consumer who not have to pay cascading taxes any more
  • There will now be a single tax on goods and services
In addition to the above,
  • The Goods and Services Tax Law aims at streamlining the indirect taxation regime. As mentioned above, GST will subsume all indirect taxes levied on goods and service, including State and Central level taxes. The GST mechanism is an advancement on the VAT system, the idea being that a unified GST Law will create a seamless nationwide market.
  • It is also expected that Goods and Services Tax will improve the collection of taxes as well as boost the development of Indian economy by removing the indirect tax barriers between states and integrating the country through a uniform tax rate.

50 Beautiful and Amazing Photos of India

The Beauty of India: 50 Beautiful and Amazing Photos of India





















 Nelliyampathy hill ranges
 gir national park
lakshman jhula
 shimoga waterfalls karnataka

  1. Thalaiyuthu

Padmasambhava Buddhist Center

 majali in assam
 europe waterfalls
 Pangong lake is located nearly 150kms away from Leh city
 Taj mahal - Agra
 Images for moonar
 Rameshwaram Pamban Bridge
 Images for kerala houseboat
 jammu and kashmir holy places
 Hampi
 Hussain Sagar


 Images for mahabaleshwar
 mohangarh fort
 rishikesh water rafting
 kerala kalari fight
 himalaya kanchenjunga
 darjiling toy train
 madhya pradesh khajuraho
 agra fort
 mysore palace

Chaukhamba is one the most beautiful peaks in Uttarakhand

 srinagar dal lake
 Images for murudeshwar karnataka
 mumbai sea link bridge
 guruvayur sri krishna temple
 kedhar nadeswaram temple

Images for indian navy aircraft

                                         
                                                      Punjab Amritsar - Golden temple


 
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