What is Goods and Services Tax (GST)?
The Goods and Services Tax is a type of value-added tax imposed on goods and services sold domestically. It is to be paid to the government for goods and services bought or sold by consumers and businesses. The GST integrates different tax lines like Central Excise, Service Tax, Sales Tax, Luxury Tax, Special Additional Duty of Customs, etc. into one consolidated tax. The multiple tax layers imposed on goods and services is collectively determined as the GST. The implementation of GST, leads to a uniform tax and helps in creating a common national market. It helps in reducing litigation and regulating the unorganized sector, providing a smooth assessment of tax.
Different Types of GST Returns
- GST Types
- GSTR-1 – Tax returns for outward supplies of taxable goods and/or services.
- GSTR-2 – Return for inward supplies of goods and services. The return can be edited.
- GSTR-2A - Return for inward supplies of goods and services. The return is read-only and no action can be taken.
- GSTR-3 – Monthly return of outward supplies and inward supplies along with the payment of tax.
- GSTR-3B – The consolidated summary return of inward and outward supplies along with Input Tax Credit and payment of tax.
- GSTR-4 – Return filed by the taxpayers under the Composition Scheme.
- GST Types
- GSTR 5 – Return filed by a non-resident foreign taxpayer who is registered under GST.
- GSTR-6 – Return filed by an Input Service Distributor.
- GSTR-7 – Return filed by authorities deducting tax at source.
- GSTR-8 – Return filed by the e-commerce operators who are required to deduct Tax Collected at Source (TCS).
- GSTR-9 – Annual return filed by taxpayers registered under GST.
- GSTR-10 – Final return filed by taxpayers whose GST registration is cancelled or surrendered.
- GSTR-11 – Filed by every registered person who has been issued a Unique Identity Number (UIN) to get tax credits or refunds under GST.
GST Compliance Checklist
- You are liable to file your GST if your turnover is exceeding Rs. 40 lakhs (Rs. 10 lakhs for N.E and hill states).
- You will gain access toGet GST registered the latest tools and technologies that are used for payroll processing
- Identify your HSN (Harmonized System of Nomenclature) codes for goods and SAC (Services Accounting Code) codes for services and tax rates
- Track your GSTIN (Good and Services Tax Identification Number)
- File your GST returns
GST Registration Process
If you are registering for GST, you can also collect GST from your consumers. If you fail to register for GST, you can incur heavy penalties as it will be an offence under GST. Any business whose aggregate turnover exceeds Rs. 40 lakhs (Rs.10 lakhs for NE and hill states) are required to obtain GST registration. SetMyCompany, one of the leading GST compliance service providers in India, not only helps you with the company registration in India but also with the GST registration.
Composition Scheme
What is a composition scheme?
The composition scheme is a simple scheme under GST for taxpayers. This scheme is ideal for small taxpayers as they can pay GST at a fixed rate of turnover. If your turnover is Rs.1 crore, you can opt for a composition scheme. In the case of North-Eastern states, the limit is Rs. 75 lakhs.
Advantages of composition scheme
Businesses under composition schemes have a much lesser tax liability and higher liquidity as the taxes are set at a lower rate. Taxpayers opting for this scheme are eligible for less compliance. So, there is no requirement to maintain detailed records. In composition levy, a dealer doesn’t have to worry about his supplier filing return and will pay the tax at a nominal rate.
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