GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.
At first we need to know the multi-stage to reach a product to consumer. An item goes through multiple change-of-hands along its supply chain, Starting from manufacture until the final sale to the consumer.
- Purchase of raw Materials
- Warehousing of Finished Goods
- Selling to Wholesalers
- Selling to Retailers
- Selling to the end consumers
- CGST: The tax collected by the Central Government on an ‘Intra-state’ sale
- SGST: The tax collected by the State government on an ‘Intra-state’ sale
- IGST: Tax collected by the Central Government for an ‘Inter-state’ sale
GST tax Divided Rule: Goods and services are divided into five different tax slabs for collection of tax – 0%, 5%, 12%, 18% and 28%. However, petroleum products, alcoholic drinks, and electricity are not taxed under GST and instead are taxed separately by the individual state governments, as per the previous tax system.
HSN code: India is a member of World Customs Organization(WCO) since 1971. It was originally using 6-digit HSN codes to classify commodities for Customs and Central Excise. Later Customs and Central Excise added two more digits to make the codes more precise, resulting in an 8 digit classification. The purpose of HSN codes is to make GST systematic and globally accepted. HSN codes will remove the need to upload the detailed description of the goods. This will save time and make filing easier since GST returns are automated. There is many HSN code finder over internet. You can visit here.
GST Slabs: There are various types of Slabs in GST taxation system in India. => 3%, 5%, 12%, 18%, 28%
Search & calculate GST Here.
- Unorganized sectors are regulated under GST
- Improved Efficiency of logistics
- Defined Treatment for E-commerce businesses
- Online Procedure
- Easy for small Entrepreneurs
- Single taxation system
- Software purchase
- Complicated in maintenance
- Unorganized CA fraud
- GST Input & Output Complication
- SMEs are effecting for higher tax
- Increasing Operational Cost