GST (Goods and Services Tax)

GST – Introduction

Goods and Services Tax (GST) is a comprehensive indirect tax introduced in India on 1st July 2017. It replaced multiple indirect taxes like VAT, Service Tax, and Excise Duty with a single unified tax. GST is destination-based, meaning tax is collected at the place of consumption.

It applies to the supply of goods and services across India and is governed by the CGST, SGST/UTGST, and IGST Acts. Businesses with turnover above prescribed limits must register under GST and file regular returns.

Objective

Goods and Services Tax (GST) is a comprehensive, destination-based indirect tax levied on the supply of goods and services in India. It was introduced to unify multiple indirect taxes like VAT, Service Tax, Excise Duty, etc., and create “One Nation, One Tax”.

• Implemented On: 1st July 2017
• Governing Law: CGST Act, SGST/UTGST Act, and IGST Act

Key Features of GST

• Unified Tax: Replaces multiple indirect taxes
• Destination-Based: Tax collected at consumption point
• Dual Structure: CGST & SGST/UTGST (intra-state), IGST (inter-state)
• Input Tax Credit (ITC): Claim credit on taxes paid on inputs
• PAN-based Registration: PAN-linked and state-specific
• Online Compliance: Registration to returns all online
• Threshold Exemption: Turnover-based registration exemption
• Composition Scheme: For small taxpayers

Who Should Register for GST?

• Businesses with turnover > ₹40 lakhs (goods) or ₹20 lakhs (services)
• Inter-state suppliers
• E-commerce sellers (Amazon, Zomato, etc.)
• Casual taxable persons and non-residents
• Input Service Distributors (ISD)
• Entities registered under previous tax laws

Types of GST Registration

• Regular Taxpayer: Normal taxable businesses
• Composition Scheme: For small turnover
• Casual Taxable Person: Supplies at exhibitions, etc.
• Non-Resident Taxable Person: Foreign suppliers
• E-commerce Operator: Flipkart, Swiggy, etc.
• Input Service Distributor (ISD): Distributes ITC among branches

Documents Required for GST Registration

For Sole Proprietor / Individual

• PAN Card
• Aadhaar Card
• Photograph
• Bank Proof
• Business Address Proof

For Partnership Firm / LLP

• PAN Card of Firm
• Partnership Deed / LLP Agreement
• PAN + Aadhaar + Photo of Partners
• Business Address Proof
• Bank Account Proof
• Authorization Letter

For Private Limited Company

• Certificate of Incorporation
• PAN of Company
• MOA & AOA
• Director’s PAN + Aadhaar + Photo
• Address Proof of Premises
• Board Resolution
• Bank Details

GST Registration Process

1. Visit https://www.gst.gov.in
2. Fill Part A of Form GST REG-01
3. Fill Part B with documents
4. Receive ARN
5. Verification by officer
6. Receive Form GST REG-06

GST Fee Structure

• Registration – FREE
• Return Filing – No govt fee
• Composition Registration – FREE
• Amendments/Cancellation – FREE

GST Return Types

Input Tax Credit (ITC)

Claim ITC on business-related purchases with valid invoice. Not allowed on personal expenses or blocked credits. Conditions:

• Valid Invoice
• Supplier filed GSTR-1
• Tax paid to Govt

Penalties for Non-Compliance

• No Registration: ₹10,000 or 100% of tax due
• Late Filing: ₹50/day (₹20 for nil return)
• Fraud: Up to ₹1,00,000 + prosecution

Composition Scheme

• Turnover < ₹1.5 Cr (goods), ₹50L (services)
• Lower tax: 1% traders, 5% restaurants, 6% services
• No ITC
• Quarterly payment, Annual return

GST Identification Number (GSTIN)

A 15-digit number:

• First 2: State Code
• Next 10: PAN
• 13th: Entity Code
• 14th: Default Z
• 15th: Checksum

Example: 27ABCDE1234F1Z5

Important Points

• Separate registration for each state
• GSTIN on invoices is mandatory
• E-invoicing compulsory for turnover > ₹5 Cr
• E-way Bill for goods > ₹50,000
• Use correct HSN/SAC codes

Need Help with GST?

• Customized Document Checklist
• GST Invoice Format
• Filing Guide
• Compliance Calendar