Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax that is levied on every value addition in the supply chain of goods and services. GST is a single tax that subsumes various indirect taxes such as excise duty, VAT, service tax, etc. that were previously applicable in India.

Why GST is important for India?

GST is a major tax reform that aims to create a unified and simplified tax system in India. GST has several benefits for the economy, such as:

• Eliminating the cascading effect of taxes, which means avoiding tax on tax.
• Increasing the tax base and improving compliance.
• Reducing the cost of doing business and enhancing competitiveness.
• Promoting ease of doing business and facilitating trade across states.
• Boosting the revenue collection and fiscal consolidation.

How GST works in India?

GST is charged on the consumption and supply of goods and services in India. The government collects it from the ultimate point of consumption or the end user. GST is divided into five tax slabs: 0%, 5%, 12%, 18% and 28%. Some goods and services are exempt from GST, such as fresh food, education, healthcare, etc.

GST has three components: Central GST (CGST), State GST (SGST) and Integrated GST (IGST). CGST and SGST are levied on intra-state transactions, while IGST is levied on inter-state transactions. The revenue from CGST goes to the central government, while the revenue from SGST goes to the respective state governments. The revenue from IGST is shared between the central and state governments according to a formula.

How to register for GST in India?

Any person who is engaged in the supply of goods or services or both in India, whose aggregate turnover exceeds Rs. 20 lakh (Rs. 10 lakh for special category states) in a financial year, is required to register for GST. The registration process can be done online through the GST portal (https://www.gst.gov.in/). The applicant has to provide basic details such as PAN, Aadhaar, bank account, business address, etc. and upload the required documents. The applicant will receive a provisional GSTIN (GST Identification Number) after submitting the application. The final GSTIN will be issued after verification by the tax authorities.

How to file GST returns in India?

A registered person under GST has to file monthly, quarterly and annual returns to declare his/her income, expenses, tax liability and input tax credit. The returns can be filed online through the GST portal or through a GST Suvidha Provider (GSP). The returns have to be filed within the due dates specified by the government. The main returns under GST are:

• GSTR-1: To report the outward supplies of goods or services or both.
• GSTR-2A: To view the inward supplies of goods or services or both made available by the suppliers.
• GSTR-2B: To view the input tax credit available for a tax period.
• GSTR-3B: To report the summary of outward supplies, inward supplies, tax liability and input tax credit.
• GSTR-4: To report the turnover and tax liability by composition taxpayers.
• GSTR-5: To report the outward supplies by non-resident taxable persons.
• GSTR-6: To report the input tax credit received and distributed by input service distributors.
• GSTR-7: To report the tax deducted at source by deductors.
• GSTR-8: To report the tax collected at source by e-commerce operators.
• GSTR-9: To report the annual consolidated details of outward supplies, inward supplies, tax liability and input tax credit.
• GSTR-9A: To report the annual consolidated details of turnover and tax liability by composition taxpayers.
• GSTR-9C: To report the reconciliation statement and audit report by taxpayers whose turnover exceeds Rs. 5 crore.

How to comply with GST in India?

Compliance with GST involves fulfilling various obligations such as:

• Obtaining GST registration and displaying GSTIN on signboards, invoices, etc.
• Charging and collecting GST on taxable supplies of goods or services or both.
• Issuing proper invoices and receipts for every transaction.
• Maintaining accurate books of accounts and records for at least six years.
• Filing timely and accurate GST returns and paying taxes before due dates.
• Claiming input tax credit on eligible purchases and expenses.
• Reconciling input tax credit with suppliers' data and rectifying any mismatches or errors.
• Following the rules and procedures for reverse charge mechanism, e-way bills, anti-profiteering, etc.
• Cooperating with the tax authorities during audits, inspections, assessments, etc.
• Resolving any disputes or grievances through the GST portal or the appellate authorities.

Conclusion

GST is a landmark tax reform that has transformed the indirect tax system in India. GST has brought uniformity, simplicity and transparency in the taxation of goods and services. GST has also enhanced the ease of doing business and facilitated trade across states. GST has improved the tax compliance and revenue collection in the country. GST is expected to boost the economic growth and development of India in the long run. Goods and Services Tax (GST) in India

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