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GST-Related
What is GST?
GST (Goods and Services Tax) is a comprehensive, multi-stage, destination-based tax levied on every value addition. It replaced multiple indirect taxes like VAT, excise duty, and service tax in India, streamlining the taxation system.
Who needs to register for GST?
Businesses with an annual turnover of:
- Over ₹40 lakh (₹20 lakh for services) in most states.
- Over ₹10 lakh in special category states (e.g., Northeastern states, Himachal Pradesh, etc.).
Additionally, individuals involved in inter-state supply, e-commerce operators, and specific service providers must also register, regardless of turnover.
What are the types of GST?
There are four types of GST:
- 1.CGST (Central GST): Collected by the Central Government on intra-state sales.
- 2.SGST (State GST): Collected by the State Government on intra-state sales.
- 3.IGST (Integrated GST): Collected by the Central Government on inter-state sales.
- 4.UTGST (Union Territory GST): Collected in Union Territories without legislatures.
What is the GST rate structure?
GST has a multi-tier rate structure:
- 0%: Essential items like food grains and books.
- 5%: Basic items like footwear and processed foods.
- 12%: Goods like packaged foods, electronics.
- 18%: Standard rate for most goods and services, including restaurants (non-AC).
- 28%: Luxury and sin goods like cars, tobacco.
How is GST paid?
GST is paid online through the GST portal (www.gst.gov.in). Payment modes include net banking, NEFT/RTGS, credit/debit cards, and over-the-counter payment at authorized banks.
What are Input Tax Credits (ITC)?
ITC allows businesses to claim credit for the GST paid on purchases or inputs used in production. It ensures that tax is only paid on the value addition at each stage.
What is the GST filing process?
GST returns must be filed online through the GST portal. Common returns include:
- GSTR-1: For outward supplies (monthly/quarterly).
- GSTR-3B: Summary of monthly returns.
- GSTR-9: Annual return.
Businesses need to ensure accurate reporting of sales, purchases, and taxes paid/collected.
Are small businesses exempt from GST?
Yes, small businesses with an annual turnover below ₹40 lakh (₹20 lakh for services) are exempt from GST. Additionally, businesses with turnover up to ₹1.5 crore can opt for the Composition Scheme, paying a fixed rate of GST without ITC benefits.
Can freelancers and consultants register for GST?
Yes, freelancers and consultants earning above ₹20 lakh annually (₹10 lakh in special category states) must register under GST. They must file GST returns and charge GST on their invoices.
What happens if I do not register for GST?
Operating without GST registration when required can lead to penalties, including:
- A fine of 10% of the tax due (minimum ₹10,000).
- 100% penalty if tax evasion is detected
How can I cancel my GST registration?
You can apply for cancellation via the GST portal under Services > Registration > Application for Cancellation of Registration. This is applicable for businesses that have ceased operations or no longer meet the turnover threshold.
What is e-Invoicing under GST?
e-Invoicing is a system where businesses generate invoices in a standardized digital format and report them to the GST portal for validation. It is mandatory for businesses with turnover exceeding ₹5 crore from August 2023.
How does GST affect consumers?
GST replaced multiple indirect taxes, reducing cascading tax effects. While the overall tax burden has streamlined, the impact on consumers varies based on the type of goods/services.
Is GST applicable to exports?
Exports are zero-rated under GST. Businesses can claim refunds on the GST paid on inputs used in producing exported goods or services.
What is the penalty for late GST return filing?
The late fee for filing GST returns is:
- ₹50 per day (₹25 CGST + ₹25 SGST) for regular returns.
- ₹20 per day (₹10 CGST + ₹10 SGST) for nil returns.
The late fee for filing GST returns is:
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