Manufacturing any product requires the conversion of raw materials into the final product with the help of some aspects like technology, labor, land, packaging, etc. The more changes, the more is the “value-addition”. This value-addition comes with its own cost. Not only in the manufacturing industry, but this applies to the service industry as well.
GST or Goods and Services Tax is levied on every stage where this value-addition takes place. It is an indirect tax that has replaced VAT at many places; and brought into effect on July 01, 2017.
How Many Types of GST?
The GST act has three parts:
It stands for Central Goods and Services Tax. It is a tax that is levied on the transaction of goods and services which take place within a state. The Central government collects the charge under the CGST Act.
It stands for State Goods and Services Tax. It is a tax that is levied on the transaction of goods and services which take place within a state, but the State government collects the charge.
It stands for Integrated Goods and Services Tax. It is a tax levied on the transaction of goods and services which take place between the states. The charge under the IGST act is shared between both the state and central governments.
Let’s Understand this With the Help of an Example
Suppose there is a dealer A in Madhya Pradesh who sells his product worth Rs 20,000 to a dealer B in Madhya Pradesh. Since, this is an intrastate transaction, according to the CGST Act, there will be CGST as well as SGST tax levied on this product. Hence, the amount of CGST tax will go to the central government while the amount of SGST act will go to the Madhya Pradesh government.
Now, when this dealer B resells this product to another dealer C in Maharashtra, there will be IGST imposed. The tax collected will go to the Centre government.
When this dealer C resells the same product to another dealer D in Maharashtra, there will be SGST and CGST taxes levied, according to the SGST and CGST Act respectively. The SGST money will go to the Maharashtra government while the CGST will go to the central government.
GST Portal Services
GST has not only simplified the taxes and brought everything under one shed, but has also made procedures like tax-filing, searching taxpayers, tracking application status, etc. very easy with the help of a new space, called as GST portal.
It is a portal where taxpayers come together to perform tasks that would otherwise have been quite cumbersome to perform offline. Instead of visiting offices or branches, standing and waiting in lines for hours, making repeated visits or calls to check the status of an application, you can easily register yourself on this portal and get your work done in no time.
The services provided by the GST portal are:
You can now fill up your application to register as an ordinary taxpayer, casual dealer as well as an input service distributor. No need to take the form from the office manually, attach photocopies of your documents and go through such an elaborative process. Everything can be achieved online through this portal. Not only for the categories as mentioned above, but any person who wants to be a certified GST practitioner can also apply for registration through this portal.
For small businesses, it is terrifying to adhere to strict rules and provisions by the government. Hence, the composition scheme kicked in to reduce the burden off their shoulders.
Under this scheme, the registered user whose annual turnover is less than Rs. 50 lakhs can choose to pay a pre-determined and constant amount of their turnover as fees in place of GST.
GST portal offers you to opt-in for this composition scheme, as well as opt-out of it according to your requirements.
After getting yourself registered as a user, you can quickly start filing your GST returns through this portal. Using particular GST billing software, you can raise invoices and create bills, and present the calculated sum at home!
Payment of GST Returns
Using GST portal, you can pay for your GST taxes as well as track your payment status. No need to go to the bank or any particular office, and settle in cash/cheque. Secured e-payments will be possible within seconds.
Filling Transition Forms
Using transitions forms, one can transfer his or her last set of ITC (Input Tax Credits) before the CGST Act came into the picture, to claim them and carry them forward even under the new GST model.
Transition forms like TRAN-1, TRAN-2, TRAN-3, are available on this GST portal and can be filled online.
It is probably the most time-consuming procedure if done by visiting GST centres. But, there’s no need to get annoyed because even this service is available on the GST portal!
If any taxpayer has paid tax in excess amount or has paid the money was not countable to be taxed, it can be easily claimed back under the refunds section.
The division of GST act into SGST, IGST and CGST Act has been quite beneficial. This modification has straightened the complexities of previous taxation systems and has simplified the process of putting a tax on value-additions. The GST portal has simplified the concept even more through its numerous services available online.
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